1

AM
M1
OFFICE OF THE CITY MANAGER
NO LTC os7 201 LETTRR llON
1
TY CL IJA
1 OFF ICE
TO Mayor Matti Herrera Bower and Members of the City Commission
FROM Jorge M Gonzalez City Manager

DATE March 23 2011

SUBJECT ANALYSIS OF BUDGET TO ACTUA EVENUES AND EXPENSES FOR THE

THREE MONTHS ENDED DECEMBER 31 2010 WITH OPERATING BUDGET
PROJECTIONS THROUGH SEPTEMBER 30 2011 FOR THE GENERAL FUND

The purpose of this LTC is to provide the Mayor and Commission with
the status of the FY
2010 budget to actual revenue and expenses at the end of the first gparter with
1
projections through September 30 2011 Based on the review it is projectedthat overall
that General Fund revenues will essentially equal General Fund if the City
expenditures
does not fully expend its operating contingency While we rarely fully expend the operating
contingency by the end of the fiscal year at this stage of budget we
projections take a more
conservative approach and assume that the contingency will be fully expended If the
operating contingencyis fully spent there will be an operating budget shortfall of 1
2 million
5 in the General Fund It is important to note that this is despite a projected revenue
0
shortfall of 1
6 million and pension contributions in excess off budget by approximately
000 as explained further below This represents already the absorption of nearly 2
665
million in deviations
from budget once again reflecting the proactive initiatives taken by the
City to reduce expenses below the adopted budget
At thisstage of projecting the fiscal year end there are many issues still to be determined
The first 3 months of any
fiscal year are not necessarily the most reliable indication of the
remainder of the year but do give us a first glance of potential Tissues As you know
balancing the budget for FY 2010
11 was an extremely challenging exercise over a series of
committee meetings Certain assumptions on both revenue and expenditures were made
that are still developing and will be adjusted in later projectionsThose assumptions as well
as our continued effort at managing the City s resources and continued adjustments to
revenues and expenditures line items throughout the year will affect our projections going
forward

Overview

An analysis of the actual

three month operating revenues and expenditures for the period
October 1 2010 through December 31 2010 reveals
st
an operating budget surplus of
571 670 While the surplus as of December 31 seems unusual as compared to the
49
shortfall projected for the year ending on September 30
th it should be noted that the City
receives a greater percentage historically approximately 60 of its ad valorem taxes in the
firstquarter Ad representing approximately 47 of total revenues
valorem tax revenues
have been almost 69 received as of the first quarter of the fiscal year a level slightly
higher than the same
period lastyear The remaining 53 of revenues are approximately at
the 23 0 level as of December 31 St as compared to 22 as of the first quarter of last fiscal
year
LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31 2010 WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30 2011 FOR THE
GENERAL FUND
Page 2

Expenditures are at approximately 24 of the FY 2010

11 budget
however there are often
delays in expenditures in the first quarter of the year

FY 2010
11 Budget
Actual as of Variance Over
General Fund Adopted Budget 4 of
1 Budget 10
31
12 Under
Revenues 114
518
237 529
379
59 817
044
106 288
665
46
Expenditures 114
518
237 529
379
59 147
473
56 906
2
382
SurplusDeficit 670
571
49 670
571
49
Note The adopted budget reflected above is prior to the budget amendment that was adopted in February
2011 This amendment authorized the use of 1 95 million in reserves to be set aside for the FY 2011
12
budget and has no impact on the net of revenues versus expenditures The amendment will be reflected as of
the second quarter analysis of actual revenues to expenditures

The projected yearend operating revenues and expenditures through September 30 2011
is therefore a more realistic snapshot of anticipated shortfall at this point in time Further
while the actual revenues and expenditures presented are as of December 31 2010 the
projections have incorporated more recent information as available

A summary of preliminary projected General Fund Revenues and Expenditures as of

September 30 2011 is as follows

FY 2010
11 Budget
Over
General Fund Adopted Budget Projected Budget Projected Under
Revenues 114
518
237 770
900
235 617
1
344 7
0

Expenditures 114
518
237 069
960
235 558
1
045 7
0

SurplusDeficit 299
59 299
59
Operating Contingency 100
1
000
Net surplus Deficit 1
Prior to Expenditure of Operating Contingency

While property tax revenues were significantly reduced in FY 2008

09 and
FY 2009
10 2 3
and 1
6 below budget at yearend respectively we are projecting full collections this year
Although the exact amounts are unknown the FY 2008
09 and FY 2009
10 property tax
revenues were impacted by appeals year These
that continued into the current fiscal
outcomes from these appeals are therefore accruing to the FY 11
2010 fiscal year and may
increase current property year tax revenues as evidenced by the year to date collections
being above prior years On the other hand there may be an impact from FY 2009 10
appeals that will result in revenues that will not be collected until FY 2011
12 however at
this point the extent and amount of the impact is unknown

In addition the projections assume decreased telephone and electricity franchise taxes
Other Taxes primarily due to the expiration of an additional fuel surcharge on electrical
bills decreased interest earning and decreased revenues previously anticipated from the
Commercial Pole Banner Program and corporate sponsorships which are still being pursued
and negotiated In addition fines and forfeit revenues are projected to be below budget
primarily due to red light camera revenues not performing at the level previously anticipated
 i

LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31 2010 WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30 2011 FOR THE
GENERAL FUND
Page 3

as reported to you at the March 2011 Commission meeting These are partially offset by
increased sales tax revenues Intergovernmental Revenues increased Business Tax
Receipts and Building Permits Licenses and Permits and increased Rents and Leases
based on yeartodate collections

As noted above the expenditure for pension contributions is expected to be approximately

000 above budget for the following reasons
665

2 pension contribution from FY 2009

The 10 for AFSCME GSA Unclassified and
Other employees previously anticipated to reduce the ARC payment for FY
11 is now anticipated to accrue to FY 2011
2010 12
Further other than the pension plan savings resulting from no costof living
adjustments to the FOP and 1AFF bargaining units other Fire and Police pension
plan savings anticipated for FY 2010
11 are pending the outcome of the litigation
between the City and the Fire and Police Pension Board

However as in the last few years since the economic decline the expenditure projection
continues to reflect the impact of proactive initiatives by the City to reduce expenses below
the adopted budget These initiatives included close scrutiny of major purchases and
continuous evaluation of opportunities to reduce costs in all departments

For a detail of General Fund Revenues by category and Expenditures by Department see
attached schedule Detailed comments on those revenue and expenditure categories with
significant variances over 300
000 are shown below

General Fund Operating Revenues

As of December 31 2010 revenues collected were approximately 45 of budget or

044 Historically the City receives approximately 60 of its ad valorem taxes in
106
the first quarter which must be considered when analyzing actual revenues and formulating
yearend revenue projections Yearend projections through September 30 2011 which total
770 indicate that revenues will be below budget by 1
900
235 6 million or approximately
7
0 Significant variances to budget in excess of 300
000 by revenue category are
explained below

1 Intergovernmental
J Revenues This category includes sales tax revenues including
local option sales taxes and is projected to be in excess of budget by 548
284 and in
excess of prior year intergovernmental revenues by over 800
000 reflecting continuing
improvement in the economy

2 Other Taxes This category includes franchise and utility taxes on services
Projections indicate that yearend collections will be below budget by over 2 million
8 This is primarily due to a decrease of approximately 1 5 million in revenues due
to the expiration of a fuel surcharge on electric ity as well as almost 500
000 decrease
in telephone utility taxes based on trends for the first three months of the fiscal year

3 Licenses and Permits This category includes licenses and building and special use
permits and is projected to be above budget by approximately 1
2 million primarily due
to continued increases in revenues from Business Tax Receipts as a result of
increased compliance with Business Tax Receipt requirements as well as increases in
LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31 2010 WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30 201 1 FOR THE
GENERAL FUND
Page 4

revenues related to Certificate of Use and the building development process across all
departments involved also estimated to be as a result of an improving economy

4 Fines and Forfeits Projections indicate that yearend collections will be below budget
by 26 or 847
000 This is mainly due to lower than expected revenues from red light
cameras as reported to you at the March 2011 Commission meeting

5 Miscellaneous This category includes concessions planning fees and other

reimbursements Projections indicate that yearend revenues will be 5 below budget
or 577
000 This is due primarily to lower than anticipated revenues from the
Commercial Pole Banner Program and corporate
sponsorships which are still being
pursued and negotiated

General Fund Operating Expenditures

As of December 31 2010 actual expenditures were approximately 24 of budget or

147 Yearend projections through September 30 2011 indicate that expenditures
473
56
will be 237 million approximately 450
000 or 0
2 under budget assuming operating
contingency is fully expended

It is important to note that the budgets at the time of adoption the City was at impasse with
the Communication Workers of America CWA bargaining unit and the budget included the
impact of several initiatives that would have significantly reduced expenditures related to
CWA employees through contracting conversion to parttime schedules for more efficient
scheduling etc Plan B The firstyear savings from these initiatives amounted to over
000 in the General Fund across various departments Not being able to anticipate the
200
outcome of these negotiations at the time of adopting the budget an increased operating
contingency was budgeted under the Citywide Accounts Subsequent to the adoption aa
agreement was reached with CWA that included several employee give backs that fully met
our budgeted savings in exchange fora nolayoff provision Therefore the proposed plan B
initiatives will not be implemented and some departments could see variations in their
budget

At this time no department is anticipated to be significantly over budget despite absorbing

the pension expenditure impacts and the impacts from no layoffs of CWA employees as
r

described above

Details on expenditures by department are provided in the attached schedule

CONCLUSION

This analysis of budget to actual operating revenues and expenses for the General Fund
with pro1ections through September 30 2011 provides the status of the FY 2010
11 General
Fund Budget as of the first three months of the Fiscal Year The Administration will continue
to monitor revenues and expenses to ensure that we close the fiscal year in a positive
position with overall revenues exceeding overall expenses 4

JMG KGB JC
 FY 2010
11 General Fund Operating Summary Projection
Adopted Actual as of Projected Proj Adptd
FY 2010
11 Dec 31 2010 FY 2010
11 Over Under

REVENUES
Ad Valorem Taxes 100
022
222 678
952
68 100
022
222 0
Ad Valorem TaxesS Pte Costs 339
145
10 979
6
986 339
145
10 0
Ad Valorem Renewal
Cap Replace 777
1
5
2 4 222
1
749 777
1
254 0
Ad Valorem Taxes Norm Shores 517
100 156
69 517
100 0
Other Taxes 600
417
25 037
2
4 38 256
368
23 344
0
2 49
Licenses and Permits 15
204
506 844
7
145 129
679
16 172
1
925
Intergovernmental 618
9
140 736
1
548 424
166
10 548
284
Charges for Services 843
4
895 332
936 439
8
4 51 544
7
Golf Courses 504
5
155 271
1
643 533
5
155 000
29
Fines and Forfeits 211
3
263 223
452 364
2
126 847
137
Interest 000
5
3 52 851
942 459
3
000 000
93
Rents and Leases 892
4
352 826
839 084
5
188 836
191
Miscellaneous 781
392
11 462
2
709 329
815
10 452
577
Other Resort Tax contribution 24
440
465 116
6
360 440
465
24 0
Other Non
Operating revenues 065
8
443 979
1
574 065
8
443 0
Reserve Building Department Ops 546
1
709 0 546
1
709 0
FY 09 YearEnd Surplus Set Aside 657
3
000 0 657
3
000 0
Prior Yr Surplus from Parking Oper Fd 600
3
000 0 600
3
000 0
Fund Balance 0 0 0 0
TOTAL REVENUES 114
518
237 817
044
106 770
900
235 61 7
1 344

EXPENDITURES
Mayor and Commission 534
1
322 380
094 487
1
824 498
46
City Manager 894
3
2 50 083
497 611
1
2 98 152
283
Communications 482
878 399
206 716
889 234
11
City Clerk 500
1
597 573
333 460
1
187 40
410
Finance 124
4
205 289
971 703
0
4 85 502
38
Office of Budget Perf Improve 820
1
829 639
434 750
1
219 610
70
Human Resources Labor Relations 697
1
128 146
407 945
7
1 10 13
817
Procurement 238
969 251
107 794
979 556
10
City Attorney 642
0
4 02 121
913 038
4
783 141
36
Real Estate Housing Comm Dev 768
776 054
216 458
784 690
7
Community Services 093
430 348
105 430
093 0
Homeless Services 337
759 690
167 337
759 0

Building 316
9
891 967
1
2 04 355
9
014 123
38
Code Compliance 146
4
931 966 791
3
4 11 860
164
Planning 113
3
588 704
098 186
3
731 143
73
Tourism Cultural Development 624
6
2 43 896
673 584
2
534 59
090
Parks and Recreation 891
648
21 674
4
724 374
479
21 517
169
Golf Courses 123
6
820 046
2
696 994
5
386 129
Public Works 372
6
884 359
1
810 268
6
714 170
104
Capital Improvement Program 520
4
748 011
1
191 325
4
000 748
195
Fire 331
115
56 14
316
208 814
013
56 517
101
Police 529
920
88 067
430
22 548
100
89 019
180
Citywide Accounts 508
5
9 78 409
1
459 914
9
561 053
336
Citywide Acc Operating Contingency 321
1
902 0 0 321
1
902
Citywide Accounts Normandy Shore 678
157 0 157
678 0
Citywide Accounts Transfers 915
000 0 000
915 0
i
Capital Renewal Replacement 777
1
254 0 777
1
254 0
TOTAL EXPENDITURES 114
518
237 147
473
56 069
960
235 558
1
045
I
EXCESS OF REVENUES OVER
UNDER EXPENDITURES 0 670
571
49 299
59 299
59
i

Citywide Ac6
Operating Contingency 0 0 100
1
000 100
1
000

EXCESS OF REVENUES OVER

EXPENDITURES NET OF
UNDER I
OPERATING CONTINGENCY 0 670
571
49 159
1
299 159
1
299