06/20/2005 BWS - 6077�
To: William W. Burns, City Manager ��
From: Richard D. Pribyl, Finance Director
Re: Financial Analysis
Date: June 17, 2005
Per your request the finance staff has prepared the attached information for presentation to
the City Council on Monday June 20, 2005.
We provided a review of the projected fund balances for those funds that are the most
critical to the city's financial health.
The General Fund is a focus of concern. This fund receives transfers from the Police
Activity Fund, Liquor Fund, and also the Closed Bond Fund. As you can see the ending
General Fund fund balance is on a continuing downward spiral until the entire fund balance
is exhausted by 2009. The balance of the Police Activity fund will be fully expended during
2007. These projections were based on revenues and expenses increasing at a rate of
2.5%. Should either of these rates of increase change it would create an effect on the rate
of consumption of fund balance.
In order to maintain the level of the General Fund's fund balance we would need to
increase the support to the General Fund by the other three funds shown in the analysis.
As you can see the Capital Improvement Fund's fund balance appears to be fairly stable
over the period of projection and remains to be a fund at Council's discretion. At this point,
Council has not opted to use any of the fund's within the Capital Improvement Fund to
support the General Fund, but as stated it is discretionary and could be used for this
purpose should the need arise. The Liquor Fund always has been used as support for
General Fund operations. The projections show that we are continuing to transfer
$500,000 per year based on our current operations. The cash balance of this fund shows,
that it will continue to grow at a small rate based on the $500,000 annual transfer and no
change to the current retailing operation. Should an additional store be added this number
would certainly grow. Should the State Legislature tinker with Municipal Liquor, we could
lose this $500,000 also. A continuing source of funds for the General Fund has been the
Closed Bond Fund. The projections show that with the $250,000 annual transfer being
made, the fund balance will shrink by approximately $90,000 per year. I do feel that as
interest rates begin to rise, this reduction of fund balance will be eliminated and the
balance will remain stable.
The General Fund fund balance shortfall can be supported annually by increasing the
amount of the transfers to this fund, but on the longer term, additional revenues need to be
developed or expenses reduced.
RDP/me
Attachment
2.s��o FUND BALANCE PROJECTIONS
Assumption for Rev & Exp Increases
� � � � �
GENERAL FUND
Beg Fund Balance $4,163,836 $4,152,327 $3,749,379 $3,336,357 $1,953,845
Revenues 11,165,061 11,446,438 12,087,476 11,639,663 11,180,655
Expenditures 12,414,853 13,108,555 13.436,269 13,772,176 14,116,480
End Fund Balance Before Transfers: $2,914,044 $2,490,210 $2,400,586 $1,203,845 ($981,980)
Transfers From Other Funds
Liquor Fund
Closed Bond Fund
Police Activity Fund
Total Transfers:
Ending Fund Balance
CAPITAL IMPROVEAAENT FUND
Beg Fund Balance
Revenues
Expenditures
Ending Fund Balance
LIQUOR FUND
Beg Cash Balance
Revenues
Expenditures
Transfer To Gen Fund
Ending Cash Balance
500,000 500,000
250,000 250,000
488,283 509.169
$1,238,283 $1,259,169
$4,152,327
$7,207,891
1,408,037
1,835,000
$6,780,928
500,000 500,000 500,000
250,000 250,000 250,000
185,771 0 0
$935,771 $750,000 $750,000
$3,749,379 $3,336,357 $1,953,845
$6,780,928 $6,803,633 $6,626,963
1,011,705 722,330 717,471
989,000 899.000 682,000
$6,803,633 $6,626,963 $6,662,434
$898,328 $895,661
6,045,176 6,045,176
5,547,843 5,527,255
500,000 500.000
$895,661 $913,582
($231,980)
$6,662,434
718,447
748,000
$6,632,881
$913,582 $944,451 $988,592
6,196,305 6,351,213 6,509,993
5,665,436 5,807,072 5,952,249
500.000 500,000 500.000
$944,451 $988,592 $1,046,336
CLOSED BOND FUND
Beg Fund Balance $6,459,900 $6,371,398 $6,280,682 $6,187,699 $6,092,392
Interest Income (2.5%) 161,498 159,285 157,017 154,692 152,310
Transfer To Gen Fund 250.000 250.000 250.000 250.000 250.000
Ending Fund Balance $6,371,398 $6,280,682 $6,187,699 $6,092,392 $5,994,702
�.
CIP FUND BALANCE PROJECTIONS DETAIL
2005 2006 2007 2008 2009
GENERAL CAPITALIMPROVEMENTS
Beg Fund Balance $251,690 ($260,276) ($379,434) ($514,868) ($529,027)
Revenues 455,034 82,842 (10,434) (14,159) (14,548)
Expenditures 967,000 202,000 125.000 0 0
Ending Fund Balance ($260,276) ($379,434) ($514,868) ($529,027) ($543,575)
STREETS CAPITAL IMPROVEMENTS
Beg Fund Balance $5,012,938 $5,074,576 $5,274,127 $5,279,165 $5,284,342
Revenues 806,638 764,551 570,038 570,177 570,319
Expenditures 745.000 565.000 565,000 565.000 615.000
Ending Fund Balance $5,074,576 $5,274,127 $5,279,165 $5,284,342 $5,239,667
PARKS CAPITAL IMPROVEMENTS
Beg Fund Balance �1,943,263 $1,966,628 $1,908,940 $1,862,666 $1,907,119
Revenues 146,365 164,312 162,726 161,453 162,676
Expenditures 123,000 222.000 209.000 117.000 133.000
Ending Fund Balance $1,966,628 $1,908,940 $1,862,666 $1,907,119 $1,936,795
TOTAL CAPITAL IMPROVEMENTS
Beg Fund Balance $7,207,891 $6,780,928 $6,803,633 $6,626,963 $6,662,434
Revenues 1,408,037 1,011,705 722,330 717,471 718,447
Expenditures 1,835,000 989.000 899.000 682.000 748.000
Ending Fund Balance $6,780,928 $6,803,633 $6,626,963 $6,662,434 $6,632,881
Cash
Accumulated Depreciati�on
Operating lncome {Loss)
Net Income {Loss} After Transfers
Cash
Accumulated Deprecisfion
Operating Incane (Loss) _
Net Irtcome (Loss) A� Traasf+ers =
Cash
Accumulated Depre�ciafion
Operating Income (l.oss)
Net Income (Loss) After Transfers
Cash
Accumutabed De{Neciation
Operating income (Loss)
Net Income (Loasj Atter Transfers
ANALYSIS OF UTILITIES
WATER
20� 2� 2003
3.147.364 2.979.187 2.797.134
6.817,767 7,266,877 7.793,516
i59.8:i� (150.28� ('103.540)
i�.�esl C��.� i��.�
SEWER
Audited
2004
3.583.805
8.183.085
(108.284)
(242.�8�
/Eudited
Z001 �, 2QQ4 2004
3,248,886 2,858.116 2,888.092 3.021,215
3.603.076 3,�1.8b2 4.120.442 4,390,502
(111.682) (15.648) (234,45'n 2.610 '
53,562 61.198 (177.414} 51,�5 '
STORM WATER
2001 �2� �
1,A46,560 1,343,348 1,322,547
2,968,G25 3,137,997 3,3f9,874
26.8'38 23.5�44 29.543
, 44
4�.�os cs7,�rn cs, z��
COMBtNED
� 0�0 2�
7,842.810 7,280.661 7.007.773
13,390.468 14,20B.726 15,233,832
(144,881) (142,401) (308.454)
s2.o� (2a7.�z� f�ss.ss�
Audited
�
1.289,876
3,502,9�.s7
64.599
css.s3�
���
2004
7,894.896
16.078,544
(40.873�
C15�.a2s�
Estitnated
2008
3,022.786
9.115,378
(166,81�
(2T9.81�
�
2006
2.490,250
4,�82,410
(218,420)
(164,421)
��
?�OS
1,124,8q
3,691.078
32.342
m.�m
���
�
6.637.898
17,498.86B
(350.896)
(521,95�
EsWnabed
2006
2.683.166
9,788,213
(155.�i1)
a01.�I
Estimated
�
2.493,851
4,998,205
(223.094)
(1�,�
��
�
1.047.783
3.878,911
57.087
E9.81�
��
�
6,224,900
18,867,329
(321,938}
(379,36�
2001-06
Total
(744.70�
(1.155,5�
2001-06
Toml
(798�691)
C�.�
��
�
Y33.&53
�.�
�,�
�
(1.3��545)
i1,753.48�
' The ineome shown for 2004 is due io MCES undercharging all munk�p�Rties due to lower flows for ihe Ume psriod billed. In order to corted for tlus, the�r
changed ihe waY ttreY charge. and are rrow guaranteed a s� S amount, so this situation wront happen again in ihe fuEUre.
' The net income (bss) aR� transfers compared %o ftre operatin8 income (b�). aPPe�s tio be mwe favorabile in it�e s�rer tund due to there bang mur�
less debt service in tfie sewer iund compared ta tlre water and stam water funds.
l
emo
To: William W. Burns, City Manager ��
�
From: Deborah Dahl, Human Resources Director
Date: June 17, 2005
Re: 2006 PERSONAL SERVICES BUDGET
The 2006 budget prepared for the June 20, 2005, Council Work Session includes market adjustments
for several positions, along with a 3% cost of living adjustment, standard step increases, a significant
increase in PERA contributions, and a 13% increase in health insurance premiums. Listed below are
some of the details concerning the proposed amounts under Personal Services.
COLA
While the City has not concluded negotiations with the Fire Union for 2005, and has not yet started
negotiations with the sergeant's and patrol unions for 2006, I have proposed a 3% adjustment for a11
groups, which amounts to $125,819.
MARKET 1NCREASES
As you recall, at the final budget review meeting in October of 2005, the Council approved $40,000
to be restored to the 2005 budget to: 1) provide for a compensation audit; 2) conduct a job evaluation
and review of Pay Equity compliance; and, 3) to make adjustments for positions falling behind in the
market. Compensation Consultant Rod Kelsey of Riley, Dettmann and Kelsey, has recently been
contracted to assist us in this effort.
Since this study has just begun, the results and final recommendations will not be ready in time for
this initial budget meeting in June; therefore, I ha�e included $33,000 in market adjustments in the
2006 budget, pending the results of the study. This budget already takes into account that we will
have spent the $40,000 in 2005 for market adjustrnents.
I expect the results of the study and final recommendations to be available prior to the adoption of the
final budget this fa11 and will be implemented only upon your approval.
^� w
HEALTH INSURANCE INCREASES
While it is still very early in the year, our insurance brokers, Financial Concepts, have estimated
a minimum of 13% increase in trend and claims for our health insurance costs. At this time, I
expect to stay with HealthPartners and offer a third option to employees in 2006 (a consumer-
driven health plan called a Health Reimbursement Account) to help control the costs of health
insurance. In addition to this increase, we always anticipate changes from employees switching
between plans, which will amount to an overall increase of 20.73% to the health insurance line
item.
Premium Costs: At a 13% increase in premiums in 2006, the single rate for the Base Plan will
be $411.42 per month (the City will contribute 100%) and the family rate will be $1,151.79 (the
City will contribute 80% as in past years, which will be $921.43 per person).
PERA INCREASES
As you know, the legislature was looking to significant increases of City contributions to the PERA
Coordinated Fund (an additional.5%) and Police and Fire Funds (an additiona14.2%). PERA
attributed the increase due to changes in actuarial assumptions on life expectancies when
employees retire and use disability benefits, combined with the poor market investments which
required additional funding to balance the funds.
Because it seemed very likely the bill would pass, staff budgeted an additional $163,133 for
PERA increases in the 2006 budget. The House, however, ran out of time to take action on the bill,
and as of yesterday, I was informed by League attorneys that this bill is not likely to be considered in
special session. If this happens, the City would realize a significant savings to this prepared budget.
I will be available at the Council Work Session to address any concerns or questions you or the
Council may have with regards to Personal Services.
� �
• Page 2
Memo to: The Mayor and Council
Fram: William W. Surns, City Manager
Subject: Alezandra House Request
Date: 6-18-QS
Earlier this year, probably about March, I met with Connie Moore to discuss their funding plight.
The bottom line is that the Stacre has cut much of their funding and told them to find it among the
cities that use their services. They subsequently developed a fair share plan for Anoka County
cities based on usage. I've attached the plan. It requests $35,337 from us. I ttunk we should
assume tlyat this will be an ongoin� request.
At the time we met, I told them that finding new funding for anything would be tough in view of
State cut backs. I did promise to bring it before you during our budget work session.
While I've asked Don Abbott to get me information on what other cities are doing, I do not ha.ve
Don c�r the infvrmation today. I've also called both Jerry 5plirrter and Ran Waods to see whatt
Coon Rapids and Blaine are doing. I should hear back from them on Monday.
Alexandra House, Inc.
City of Fridley Budget
1-1-06 to 12-31-06
INCOME AMOUNT
State of Minnesota - Office of Justice Programs $ 98,013
United Way - Grant $ 238,414
United Way - Donations $ 45,000
Foundations & Corporations $ 58,573
UnitylMercy Hospitals $ 10,000
To Be Raised $ 250,000
TOTAL INCOME $ 700,000
EXPENSES
Salary $ 412,366
Fringe Benefits 8� PR Taxes $ 96,644
Contract Services $ 82,482
Mileage $ 6,710
Program Transportation $ 2,000
Activities & Supplies $ 4,000
Property Maintenance $ 1,392
Copier $ 5,178
Outside Printing $ 6,390
Office Supplies $ 3,500
Postage $ 2,835
Telephone $ 18,745
Utilities $ 1,920
Other Insurance $ 2,813
Office Space $ 31,967
Fumiture/Equipment $ 8,250
Staff Development $ 3,525
Dues & Subscriptions $ 828
RecruiURetention/Recognition $ 1,505
Depreciation $ 6,600
Miscellaneous $ 350
TOTAL EXPENSES $ 700,000
Total Community Program Budget $ 700,000
# of Full Time Community Staff 12
Average Cost per Staff $ 58,333
Average Cost per Hour 28.04
# of Client Served $ 360
# of hours per client $ 10
Total cost to serve clients $ 100,962
Amount paid by other sources $(65,625)
AMOUNT OF REQUEST $ 35,337
4/29/2005
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