City of Lawrence, Kansas
Third Quarter Report – 2006
Purpose of Report
The following information summarizes the financial activities of the City of Lawrence for the first nine months of 2006 and advises the City Commission as to current budgetary conditions.
A new section has been added to the report. The first section now provides an update on implementation of our new management system, including our work on collecting and reporting performance measures. In the second section, the budgetary highlights from the major funds of the City are itemized, including the General, Recreation, and Transportation Funds, which are partially funded by property taxes, and the Water & Sewer, Sanitation, Storm Water and Public Golf Course Funds, which are enterprise funds supported by user fees. The third section provides tables that compare year to date financial activities to the budget and prior year results for the same period. Included in the fourth section is a summary of the investment activities for the period. The fifth section summarizes the amount of outstanding debt. The final section provides information on capital project financing.
I. MANGEMENT SYSTEM IMPLEMENTATION UPDATE
Since May, staff has been working toward implementation of a new management system that includes gathering data for a set of performance measures and a Balanced Scorecard. We received the final report from Management Partners, Inc. in September and staff has already begun work on data collection. The City Manager’s office will begin meeting monthly one-on-one with each department head in November. An RFP for the development and conducting of a citizen satisfaction survey was sent out and seven responses were received. On October 24, the City Commission authorized the City Manager to enter into negotiations with ETC Institute. Staff hopes to have a contract to the City Commission for their approval soon.
II. BUDGETARY HIGHLIGHTS
General Fund
· General Fund revenues are just over 85% of budget and increased by $2.3 million or 6% compared to the same period last year.
· The $2.3 million increase in revenue was partially the result of a $449,000 rise in property taxes. The property tax increase was the result of a 6.5% growth in assessed valuation over 2005.
· Another component of the increase in General Fund revenue was a $483,000, or 3.1%, rise in sales tax distributions over 2005. Not including use tax, year to date city and county sales tax distributions are 77.5% of budget.
· The General Fund did experience a decrease in revenue of $147,817 in court fines over the same period in 2005. However, revenues from fines as of the end of the third quarter are over 85% of budget.
· Interest continues to exceed budget. Year to date, over $1 million in revenue has been generated, which is 266.5% of budget.
· General Fund expenditures were less than 75% of budget but increased by $5.6 million, or 16.5%, over the same period last year.
· Departments or divisions that have exceeded 75% of their budgets include:
o City Manager’s Office (96.8%) – due to increased expenses related to personnel changes
o Risk Management (77.3%) – due in large part to the timing of payment of insurance premiums.
o Health Department (87.5%) – due to the timing of the bi-annual allocations of funds to the Health Department and a large encumbrance for janitorial services.
o Street Maintenance (89.5%) – mostly due to large encumbrances for overlay and crack sealing.
Special Revenue Funds
· Recreation Fund revenues are at 83.8% of budget. This is primarily due to the timing of outdoor pool revenue.
· Recreation Fund expenditures are at 69.6% of budget and should finish the year below budget.
· Public Transportation Fund expenditures were only 53.5% of budget. The amount includes an encumbrance of the payments to MV Transportation through the end of the year.
Enterprise Funds
· Water and Sewer Fund revenue increased 16.8% over the same period last. The increase was primarily the result of the increase in water and sewer rate over 2005.
· Water and Sewer Fund expenses were down from the prior year due to a decrease in the transfer to cash finance capital projects in 2006. Operating expenses were just over 70% despite large encumbrances for chemicals and maintenance items.
· Sanitation expenditures to date exceed revenues to date by $740,005. However, this is due to over $900,000 of encumbered landfill charges.
· Golf Course Fund revenues increased by 12.4% over the third quarter of 2005 and represent 84.4% of budget.
· Golf Course Fund expenses were 84.8% of budget. The amount represents a decrease of $40,000 compared to 2005.
II. REVENUE – EXPENDITURE TABLES
Third Quarter Fund Analysis
|
|
|
20053rd Qtr. |
% of budget |
2006 3rd Qtr. |
% of budget |
|
General Fund |
|
|
|
|
|
|
|
Revenue Source |
|
|
|
|
|
|
Taxes |
$14,050,722 |
87.7 |
14,499,680 |
87.6 |
|
|
Sales Tax |
15,698,754 |
78.5 |
16,181,900 |
77.5 |
|
|
Licenses & Permits |
743,184 |
96.5 |
856,288 |
92.3 |
|
|
Intergovernmental |
541,304 |
84.3 |
526,895 |
79.0 |
|
|
Service Charges |
490,218 |
127.5 |
1,016,610 |
179.5 |
|
|
Fines |
2,012,325 |
99.6 |
1,864,508 |
85.7 |
|
|
Interest |
615,641 |
153.9 |
1,066,052 |
266.5 |
|
|
Miscellaneous |
2,797,585 |
87.7 |
3,212,742 |
89 |
|
|
Transfers |
1,210,831 |
76.2 |
1,252,497 |
76.9 |
|
|
Total Revenue |
38,160,564 |
84.6 |
40,477,171 |
85.4 |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
|
|
General Government |
11,859,802 |
72.6 |
13,211,073 |
72.0 |
|
|
Public Safety |
15,280,391 |
68.5 |
17,776,070 |
70.5 |
|
|
Public Works |
4,945,123 |
74.0 |
6,382,949 |
76.5 |
|
|
Parks & Recreation |
1,927,749 |
66.1 |
2,254,737 |
68.3 |
|
|
Total Expenditures |
34,013,065 |
70.5 |
39,624,828 |
71.8 |
|
|
|
|
|
|
|
|
|
Revenues over Expenditures |
4,147,499 |
|
852,343 |
|
Does not include Use Tax
|
|
|
20053rd Qtr. |
% of budget |
2006 3rd Qtr. |
% of budget |
Recreation Fund |
|
|
|
|
|
|
|
Revenue Source |
|
|
|
|
|
|
Taxes |
$292,068 |
93.2 |
306,241 |
87.9 |
|
|
Service Charges |
1,233,793 |
91.9 |
1,237,547 |
92.0 |
|
|
Miscellaneous |
2,553 |
|
|
|
|
|
Transfers |
978,000 |
75.0 |
1,050,000 |
75.0 |
|
|
Total Revenue |
2,506,414 |
84.1 |
2,593,788 |
83.8 |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
|
|
Parks & Recreation |
2,173,497 |
67.3 |
2,377,250 |
69.6 |
|
|
|
|
|
|
|
|
|
Total Expenditures |
2,173,497 |
67.3 |
2,377,250 |
69.6 |
|
|
|
|
|
|
|
|
|
Revenues over Expenditures |
332,917 |
|
216,538
|
|
|
|
|
20053rd Qtr. |
% of budget |
20063rd Qtr. |
% of budget |
|
||||||
|
Transportation Fund |
|
|
|
|
|
|
||||||
|
|
Revenue Source |
|
|
|
|
|
||||||
|
|
Taxes |
$981,742 |
90.4 |
532,660 |
88.1 |
|
||||||
|
|
Service Charges |
121,466 |
141.2 |
139,845 |
93.2 |
|
||||||
|
|
Miscellaneous |
0 |
0.0 |
42,982 |
214.9 |
|
||||||
|
|
Total Revenue |
1,103,208 |
90.4 |
715,487 |
92.3 |
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Expenditures |
|
|
|
|
|
||||||
|
|
Public Transportation |
1,154,099
|
56.9 |
1,386,818 |
53.5 |
||||||
|
|
Total Expenditures |
1,154,099 |
56.9 |
1,386,818 |
53.5 |
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Revenues over (under) Expenditures
|
(50,891) |
|
(671,331) |
|
|
||||||
|
2005 Enterprise Funds |
Water & Sewer |
|
Sanitation |
|
Storm |
|
Golf |
|
|
|
|
% |
|
% |
|
% |
|
% |
Revenue Sources |
|
|
|
|
|
|
|
|
|
Service Charges |
$18,239,829 |
85.7 |
$6,260,750 |
78.4 |
$2,096,596 |
82.2 |
$816,351 |
75.2 |
|
Interest |
537,901 |
179.3 |
65,628 |
109.4 |
57,535 |
383.6 |
0 |
|
|
Intergovernmental |
0 |
|
0 |
|
0 |
|
0 |
|
|
Miscellaneous |
120,542 |
241.0 |
120,708 |
243.9 |
7,129 |
|
1,189 |
|
|
Total Revenues |
18,898,272 |
87.4 |
6,447,086 |
79.7 |
2,161,260 |
84.3 |
817,540 |
75.1 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Operations |
22,585,054 |
65.5 |
6,985,001 |
70.4 |
2,278,902 |
59.9 |
874,935 |
74.6 |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
(3,686,782) |
|
(537,915) |
|
(117,642) |
|
(57,395) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 Enterprise Funds |
Water &Sewer |
|
Sanitation |
|
Storm |
|
Golf |
|
Revenue Sources |
|
|
|
|
|
|
|
|
|
Service Charges |
20,647,117 |
97.1 |
6,502,139 |
77.5 |
2,128,190 |
80.3 |
918,258 |
84.1 |
|
Interest |
1,392,908 |
464.3 |
108,351 |
238.1 |
58,785 |
250.1 |
|
|
|
Intergovernmental |
0 |
|
21,250 |
|
61,104 |
|
|
|
|
Miscellaneous |
35,650 |
|
113,904 |
123.8 |
236 |
|
3250 |
|
|
Total Revenues |
22,075,675 |
102.3 |
6,745,643 |
79.1 |
2,248,314 |
84.1 |
921,509 |
84.4 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Operations |
21,283,523 |
70.3 |
7,485,648 |
61.1 |
2,825,865 |
84.8 |
866,918 |
84.8 |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
792,152 |
|
(740,005) |
|
(577,551) |
|
54,591 |
|
|
|
|
|
|
|
|
|
|
|
III. INVESTMENTS
Short term investment rates have increased significantly in the last year. As a result, our interest earnings are greater than the first nine months of 2005. Interest revenue should meet or exceed the budget in 2006 for most funds.
As of September 30, 2006, the City of Lawrence had over $141 million in cash and investments. A total of $120.5 million was invested in securities. The amount of cash was unusually high due to the sale of both general obligation bonds and notes at the end of the quarter. The investments were 28% in certificates of deposits, 38% in government agencies and 15% was in cash. The City’s investment policy limits the portfolio to a maximum of 30% in any one financial institution’s certificates of deposit. The City’s certificates of deposit are with Commerce Bank, Sunflower Bank and U.S. Bank. The average rate of return on our investments during the second quarter was 3.44%.
Over 96% of the City’s portfolio has an original maturity of less than twelve months. Only 2% of our securities had a maturity longer than twenty four months. The City plans on holding its investments to maturity and has sufficient cash and short-term investments to avoid a liquidity crisis that would force the sale of the longer-term investments.
IV. DEBT ISSUANCE
For the period of time covered in this report (first nine months of 2006), the City has issued $17,130,000 in general obligation bonds and $16,345,000 in temporary notes. The City closed on its most recent general obligation debt issuance on September 28, 2006.
The following table shows the current total outstanding debt for the City and the different funding sources. A preliminary analysis has shown that the City can issue approximately $4.5 – 5.0 million in at-large general obligation annually without having an adverse impact on the debt levy.
|
City of Lawrence Estimated Debt 9/30/06 |
||||
|
|
GO Debt |
Enterprise |
Less Enterprise Portion of GO Debt |
Total |
|
Long term debt, 1/1/06 |
$ 77,080,000 |
$ 83,838,065 |
$(10,957,188) |
$ 149,960,877 |
|
|
|
|
|
|
|
Debt, added September 2006 |
17,130,000 |
209,766 |
(209,766) |
17,130,000 |
|
|
|
|
|
|
|
Debt, added, Kansas Water Supply Loan |
- |
0 |
- |
0 |
|
|
|
|
|
|
|
Less: Principal paid in 2006 |
(9,140,000) |
(3,644,002) |
1,215,799 |
(11,568,203) |
|
|
|
|
|
|
|
Total long term debt, 9/30/06 |
$ 85,070,000 |
$ 80,403,829 |
$ (9,951,155) |
155,522,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long term debt is composed of: |
|
|
|
|
|
Enterprise fund portion |
$ 9,951,155 |
$ 70,452,674 |
$ - |
$ 80,403,829 |
|
Sales tax portion |
8,598,206 |
- |
- |
8,598,206 |
|
Benefit District Debt (estimated) |
13,036,051 |
- |
- |
13,036,051 |
|
Net long term debt, city at large, 9/30/06 |
53,484,588 |
9,951,155 |
(9,951,155) |
53,484,588 |
|
Total long term debt, 9/30/06 |
85,070,000 |
80,410,443 |
(9,951,155) |
155,522,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Future long term debt will result from: |
|
|
|
|
|
Notes currently outstanding which will be bonded (includes fall note issue) |
$16,345,000 |
$ - |
$ - |
$ 16,345,000 |
V. CAPITAL BUDGET
As of September 30, 2006 expenditures in the capital project fund totaled $31.8 million. Funding sources for these projects consisted of $16.3 million temporary notes, $5.8 million in cash, and $9.7 million in general obligation bonds. The list does not include projects funded by the Water and Sewer Fund.
Detailed information on the status of the projects is shown in the following table.
|
PROJECT NAMEME |
AMOUNT |
FINANCED |
OTHER |
TOTAL RECEIPTS |
EXPENDITURE |
ENCUMB |
AVAILABLE BALANCE |
|
KLINK Iowa and 23rd St |
400,000 |
354,274.33 |
0.00 |
354,274.33 |
498,377.66 |
0.00 |
(144,103.33) |
|
W. 6th St., Wakarusa to SLT |
4,800,000 |
5,132,602.28 |
209,927.44 |
5,342,529.72 |
5,718,554.74 |
0.00 |
(376,025.02) |
|
Kasold Bridge Improvement |
|
- |
1,321,000.00 |
1,321,000.00 |
1,321,000.00 |
- |
- |
|
KU Fire Station, 23rd & Iowa, STA 5 |
5,000,000 |
5,467,369.99 |
1,360.00 |
5,468,729.99 |
5,260,083.86 |
70,365.86 |
138,280.27 |
|
Monterey Way, Stetson Dr |
2,750,000 |
2,187,404.81 |
521.00 |
2,187,925.81 |
2,086,565.90 |
19,969.84 |
81,390.07 |
|
2004 Fire Truck Purchase |
300,000 |
301,200.00 |
0.00 |
301,200.00 |
278,683.19 |
20,893.00 |
1,623.81 |
|
2005 Fire Truck Purchase |
700,000 |
704,060.78 |
0.00 |
704,060.78 |
695,271.00 |
0.00 |
8,789.78 |
|
23rd & Harper Geometric Imps |
400,000 |
404,884.95 |
0.00 |
404,884.95 |
28,377.45 |
532.40 |
375,975.10 |
|
2006 Overlay, Phase II |
700,000 |
708,851.63 |
0.00 |
708,851.63 |
700,000.00 |
0.00 |
8,851.63 |
|
Airport Runway Reconstruction |
|
0.00 |
1,536,501.00 |
1,536,501.00 |
1,502,228.40 |
1,386,337.04 |
(1,352,064.44) |
|
Kasold, 15th to Clinton Parkway |
3,750,000 |
5,171,940.31 |
0.00 |
5,171,940.31 |
1,788,128.56 |
3,336,544.34 |
47,267.41 |
|
Hanscom Tappan, 2nd Plat |
350,000 |
108,049.51 |
26,803.56 |
134,853.07 |
133,566.06 |
0.00 |
1,287.01 |
|
Stoneridge South, 6th to Silver |
1,600,000 |
1,619,539.78 |
0.00 |
1,619,539.78 |
- |
30,100.29 |
1,589,439.49 |
|
3rd St, Alabama to Illinois |
140,000 |
87,249.32 |
0.00 |
87,249.32 |
85,457.51 |
0.00 |
1,791.81 |
|
Overland Dr |
2,220,000 |
2,247,111.44 |
0.00 |
2,247,111.44 |
22,969.86 |
84,010.64 |
2,140,130.94 |
|
2002 Traffic Signals |
200,000 |
203,545.04 |
0.00 |
203,545.04 |
209,685.77 |
0.00 |
(6,140.73) |
|
Stoneridge, 6th to Overland |
725,000 |
0.00 |
0.00 |
0.00 |
21,854.64 |
87,436.86 |
(109,291.50) |
|
N. 2nd & Locust Geometric |
240,000 |
243,138.68 |
0.00 |
243,138.68 |
71,293.90 |
160,528.10 |
11,316.68 |
|
Lake Pointe, Clinton Parkway to 22nd |
1,166,250 |
806,897.92 |
147,663.97 |
954,561.89 |
954,687.40 |
0.00 |
(125.51) |
|
KTA Sidewalks |
200,000 |
202,442.47 |
0.00 |
202,442.47 |
- |
0.00 |
202,442.47 |
|
Monterey Way, Peter to GV |
2,620,000 |
1,491,758.73 |
0.00 |
1,491,758.73 |
1,366,182.78 |
55,014.85 |
70,561.10 |
|
23rd St Access Management |
550,000 |
155,965.87 |
0.00 |
155,965.87 |
139,822.14 |
34,275.50 |
(18,131.77) |
|
Peterson, Kasold to Monterey Way |
3,420,000 |
2,521,291.96 |
0.00 |
2,521,291.96 |
2,411,146.29 |
21,744.07 |
88,401.60 |
|
Wakarusa Service Center |
43,094 |
43,620.28 |
0.00 |
43,620.28 |
41,092.18 |
37,360.07 |
(34,831.97) |
|
Kasold & Peterson Rd Intersection |
300,000 |
148,426.89 |
0.00 |
148,426.89 |
21,365.42 |
119,249.70 |
7,811.77 |
|
O'Connell Road, WB left turn |
328,960 |
332,152.43 |
0.00 |
332,152.43 |
22,833.76 |
1,072.00 |
308,246.67 |
|
Kasold, Peterson to KTA |
1,200,000 |
1,194,511.45 |
0.00 |
1,194,511.45 |
282,670.17 |
11,754.68 |
900,086.60 |
|
Harvard Rd, East of GWW |
550,000 |
375,814.24 |
77,827.99 |
453,642.23 |
448,522.11 |
0.00 |
5,120.12 |
|
Delaware Commons Stormwater, sidewk |
80,000 |
111,343.36 |
0.00 |
111,343.36 |
4,634.81 |
58,863.96 |
47,844.59 |
|
2005 Traffic Signal Renovation |
300,000 |
303,923.35 |
0.00 |
303,923.35 |
16,645.00 |
0.00 |
287,278.35 |
|
George Williams Way, 6th to Harvard |
2,500,000 |
1,725,639.68 |
6,136.87 |
1,731,776.55 |
1,721,780.59 |
0.00 |
9,995.96 |
|
City Hall HVAC 2nd Floor |
199,680 |
202,291.38 |
0.00 |
202,291.38 |
199,680.00 |
0.00 |
2,611.38 |
|
19th & Louisiana Traffic Signal |
315,000 |
59,322.44 |
0.00 |
59,322.44 |
39,006.79 |
0.00 |
20,315.65 |
|
Bob Billings & Wakarusa |
200,000 |
107,817.06 |
0.00 |
107,817.06 |
102,411.25 |
0.00 |
5,405.81 |
|
Public Works Facility - Site Development |
300,000 |
302,416.01 |
0.00 |
302,416.01 |
131,561.97 |
0.00 |
170,854.04 |
|
Delaware Commons Sanitary Sewer |
110,000 |
80,976.99 |
0.00 |
80,976.99 |
82,775.69 |
6,399.30 |
(8,198.00) |
|
Folks Rd, 6th to Harvard |
1,820,000 |
1,068,684.74 |
42,064.76 |
1,110,749.50 |
1,094,038.76 |
0.00 |
16,710.74 |
|
Art Center Expansion |
|
0.00 |
53,650.29 |
53,650.29 |
15,000.00 |
0.00 |
38,650.29 |
|
Investments |
|
0.00 |
2,278,043.99 |
2,278,043.99 |
- |
0.00 |
2,278,043.99 |
|
Misc. private projects |
|
0.00 |
136,389.52 |
136,389.52 |
119,929.40 |
0.00 |
16,460.12 |
|
Carnegie Rehab - SAT grant |
600,000 |
607,327.42 |
0.00 |
607,327.42 |
29,267.50 |
49,632.50 |
528,427.42 |
|
Fire Station #4 2121 Wakarusa |
2,750,000 |
2,783,875.51 |
15,850.00 |
2,799,725.51 |
2,140,573.82 |
350,327.03 |
308,824.66 |
|
KLINK Iowa and 23rd St |
400,000 |
|
0.00 |
354,274.33 |
498,377.66 |
0.00 |
(144,103.33) |
|
Total |
|
39,567,723.03 |
|
|
31,,807,726.33 |
5,942,412.09 |
7,671,325.06
|