#6 Financial statement December 2009ACCOUNTING DIVISION MEMORANDUM
February 17, 2010
TO: City Council
FROM: Patty Lynch, Comptroller
SUBJECT: Financial Statement for the Month of December 2009
The City prepares its Financial Statements in accordance with generally accepted
accounting principals using the modified accrual method of accounting and is audited
annually by Baker Tilly Virchow, Krause & Company, LLP. As the auditors will begin their
fieldwork at the end of February, the information presented in the December report will be
subject to auditor adjusting entries.
Key operating funds include the General Fund, Water and Wastewater Utilities, and
Sanitation. A summary of their performance to budget, as compared a three-year average,
is presented in the following graphs.
EXPENDITURE SUMMARY
The graph below indicates expenditures are being made according to budget. Sanitation
fund exceeded budget due to a transfer of funds to the DNR long-term care escrow
account.
Year-To-Date December ExpendituresCompared to Three-Year Average
Current YTD3 Yr. Avg.
120%
Percent of Total Budget
100%
80%
60%
40%
20%
0%
General FundWater -Wastewater -
OperatingOperatingSanitation
December 2009 Financial Statement
February 17, 2010 Page 2
REVENUE SUMMARY
The graph below indicates General Fund revenue has been earned as anticipated. Water
Utility sales were 8.8% less than budgeted in 2009, and the Wastewater Utility sales were
6.5% less than budgeted metered consumption. The Sanitary Lanfill tonnage collected was
10% below the 2009 budget, the prior year trend shows tonnage 30% above budget
amounts.
Year-To-Date December RevenuesCompared to Three-Year Average
Current YTD3 Yr. Avg.
140%
120%
Percent of Total Budget
100%
80%
60%
40%
20%
0%
General FundWaterWastewaterSanitation
Other items of interest in the Financial Statement are as follows:
Proprietary Funds (pages 4)
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Water Utility—The Utility was able to generate net operating income of $304,380,
compared to $556,449 from the year before. The Utility implemented a 15% rate
increase on 10/13/2009, which was intended to generate a 5.35% rate of return on
investment based on a 1/1/2009 implementation date. The Utility’s actual 2009 rate of
return on investment was 2.60%. The lower rate of return is due to the delayed rate
increase implementation and a water sales shortfall.
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Wastewater Utility—In 2009, the Utility had net operating income of $1,145,868
compared to $595,514 in 2008. An 8.84% rate increase was implemented on 1/1/2009
in order to maintain the financial integrity of the utility.
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Stormwater Utility—The Stormwater Utility was able to generate net operating income
of $279,193 compared to a net operating loss of $223,831 in 2008. The net operating
income is used to pay debt service requirements. The unrestricted cash has a deficit of
$371,483 at 12/31/09. This deficit is due primarily because revenue is billed on a
quarterly basis after expenditures have been made.
December 2009 Financial Statement
February 17, 2010 Page 3
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Transit System— Transit required an operating subsidy from the General Fund of
$679,397 which is $25,823 less than the 2009 budget. The Transit operation budget of
$2,817,220 was under expended by $87,653 (3.1%). This is primarily due to diesel fuel
below the budget amount $168,841 offset by overages in Contractual Maintenance
Service ($17,751), Regular Service ($30,397), Paratransit ($24,977), and Night Service
($6,283). Transit fare box revenue was under realized causing a $63,511 (15.16%)
operating revenue shortfall. Transit reports a negative cash balance of $158,142 due to
the timing of grant reimbursements. State and Federal Grants Receivable are $228,495
at 12/31/09.
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The Vehicle Operations and Maintenance Fund operating budget is under expended by
$112,815 primarily due to gas and diesel cost less than budget ($308,351) offset by
vehicle maintenance parts ($120,943) and contracted repairs ($83,063) exceeding the
budgeted amounts. A transfer was made to the Capital Projects fund in the amount of
$1,162,000 for the purchase of VOM capital assets.
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The Insurance Fund has net operating income, before the incurred but not reported
claims liability (IBNR) adjustment, of $483,012. The City incurred favorable health
claims experience, offset by higher than expected workers compensation claims in
2009.
Special Revenue Fund Balance (page 5)
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The Hedberg Public Library reports unrealized revenue of $7,695, or 0.2%, less than
the 2009 budget. The actual expenditures were $108,039, or 2.8%, less than the 2009
budget. The Library’s 2009 budget included the usage of $100,000 of applied funds.
The actual fund balance returned was $344 because of favorable budget variances.
Hedberg Public Library has an ending fund balance at 12/31/09 of $436,529.
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JATV 12 under realized the operating revenue budget by $7,236 in 2009. Operating
expenditures were $29,504 under the 2009 budget level. At year-end JATV has an
ending equity of $260,117, of which $214,663 is designated for the purchase of capital
items.
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The Sanitation Fund under realized their revenue budget by $111,225, or 1.92%, due
to a 10% decrease in tonnage received at the landfill, offset by higher fees imposed by
the Department of Natural Resources which are passed through to the State of
Wisconsin. Operating expenses were under budget by $37,974. Transfers were made
from surcharge reserve to the Landfill –RFIS/RDRA ($61,268), to the Long-term Care
of Site 3023 ($226,000), to pay Sanitation debt service ($64,268), and to the General
Fund ($400,000). The fund balance decreased by $736,858, for an ending
undesignated balance of $2,032,200.
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At December 31, 2009, the TIF districts have a combined deficit fund balance of
$1,768,793, compared to the combined deficit fund balance of $2,025,520 at
12/31/2008. However, TIF projections indicate the districts will reach a positive fund
balance before they expire.
December 2009 Financial Statement
February 17, 2010 Page 4
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Landfill long-term care of site #3023 ($110,151) will be reimbursed by an insurance
policy we have in place for post closure care.
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Funds are on deposit for the long-term care of the new landfill with the Wisconsin
Department of Natural Resources. The balance is $1,436,154 at December 31, 2009.
Capital Projects Fund (page 6)
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The Riverfront Property Acquisition account received $241,000 via a Janesville
Foundation Riverfront Reclamation Grant in December.
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The Reuther Way Project has a deficit balance of $57,510 at 12/31/09. It is anticipated
funding will be provided with 2010 General Obligation note issue.
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The City incurred expenditures in conjunction with road projects on Highway 11 from
Wright Road to Highway 14 ($186,799). These costs will be funded with future special
assessments or General Obligation note issue.
General Fund Unreserved Balance (pages 7-10)
The Statement of General Fund Budget Receipts (page 7) indicates that the City received
$230,737, or 0.9%, more than the amount budgeted for 2009. This net over-realization of
revenue was primarily generated from the following revenue accounts:
Water Utility Taxes $107,000
Hotel / Motel Taxes -$88,756
Community Development Permits -$175,581
Interest on General Investments -$120,332
Fire Department Service Charges $248,676
Miscellaneous $216,998
Operating Transfer In $156,857
The Water Utility Tax exceeded the budget by $107,000, or 11.9%, due to an increase in
the net effective tax rate where none was projected.
Hotel/ Motel Room tax revenue took a 14% decline from 2008. The revenue collected was
$88,756 less than the 2009 budget.
Community Development Permits under realized the budget by $183,726, or 13.6%. In
2009, 63 permits were issued for new construction of single and two family residences, this
is a 31% decrease from 2008, and a 75% decrease from an annual average number of
259. In addition, there was a 30% decrease in the number of commercial permits.
We experienced a positive variance of total Fire Department Service Charges in the
amount of $248,676, or 19.3%. The average net bill was 9% higher than 2008, and the
ambulance runs were 16% over the budget estimate.
December 2009 Financial Statement
February 17, 2010 Page 5
December 2009 Financial Statement
February 17, 2010 Page 6
Miscellaneous revenue exceeded our budget projection by $216,998. This positive budget
variance resulted from the City’s share of dissolved TIF district #15 of $92,675, and an
easement from ANR Pipeline Company of $111,552.
Transfers In is comprised of TIF #3’s repayment of funds previously advanced by the
General Fund ($285,955), a budgeted transfer from the Sanitation Fund ($400,000) and
transfers from closed debt service TIF funds ($20,902). The TIF #3 transfer is the sixth in a
series of eight annual payments. The remaining transfer anticipated from TIF #3 is
approximately $470,000.
Council Policy Statement #68—Investment of City Funds requires that the Administration
submit an annual investment report. Please find attached the report that recaps our
investment program results for 2009 (Exhibit 1).
Council Policy Statement #73—Accounts Receivable requires that the Administration
submit an annual report on the progress of delinquent account collections. Please find
attached the 2009 annual report for accounts receivable write-offs (Exhibit 2).
After applying a Supplemental Appropriation of $345,000 as approved in Resolution
#2010-674, the Statement of 2009 Budget Appropriation Expenditures indicates that actual
expenditures were $802,549, or 1.93%, less than the amount appropriated. After the
supplemental appropriation to fund December snow removal, the resulting program
budgets are in accordance with the General Fund’s appropriation resolution. The table
below shows the unexpended balances at December 31, 2009.
Amount Percentage
Unexpended Unexpended
General Government
$157,889 4.65%
Public Safety
(including Police and Fire) 309,107 1.39%
Public Works
(including Public Works
Administration, Engineering, Street Maintenance
120,415 2.28%
& Repairs, Public Buildings and Parking Facilities,
Traffic Management, Transit Operating Subsidy
and Sanitation Fund Subsidy)
Leisure Services
(including Leisure Services
Administration, Senior Citizens Center, Aquatics,
73,761 2.50%
Youth and Adult Recreation, Parks and Ice
Skating Center)
Community Development
(including Economic
140,719 8.83%
Development, Community Development and
Property Maintenance)
Other
(including Economic Adjustments,
Employee Fringe Benefits and Insurance,
658 0.07%
Contingency Account and Special Assessments
Transfer)
General City Debt Service
0 0.00%
December 2009 Financial Statement
February 17, 2010 Page 7
TOTAL
$802,549 1.93%
Please find attached a General Fund Equity Analysis, which provides information
concerning the status of our Fund Balance for the years 2005-2009 (Exhibit 3). The
General Fund Balance has decreased by $542,714 for a total fund balance of $7,231,529
at December 31, 2009, of which $6,540,962 is Unreserved Fund Balance.
A representative of the Administrative Services Department will be available at the Council
th
Meeting on February 22 to respond to any questions Council may have relative to these
reports. Once Council is satisfied, acceptance of the Financial Statement by consent and
placing them on file would be in order.
/Attachments
cc: Jacob J, Winzenz, Director of Administrative Services/Assistant City Manager
Eric J. Levitt, City Manager