City of Lawrence, Kansas
First Quarter Report – 2005
Purpose of Report
The following information summarizes the financial activities of the City of Lawrence for the first three months of 2005 and advises the City Commission as to current budgetary issues that may become a concern. In the first 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 second section provides tables that compare year to date financial activities to the budget and prior year results for the same period. Included in the third section is a summary of the investment activities for the period. The fourth section summarizes the amount of outstanding debt. The final section provides information on capital project financing.
I. BUDGETARY HIGHLIGHTS
General Fund
● General Fund revenues are 32% of budget and increased by $1.0 million or 7.6% compared to the same period last year.
● The $1.0 million increase in revenue is partially the result of a $380,000 rise in property taxes. The property tax increase can be attributed primarily to the growth in assessed valuation.
● Another component of the increase in General Fund revenue is a $390,000 rise in miscellaneous income. This is the result of ambulance reimbursements being timelier in 2005.
● The remaining significant increase in General Fund revenue is a $112,000 or 9.8% increase in court fines.
● General Fund expenditures are less than 25% of budget but increased by 15% over the same period last year. As a reminder, over $600,000 of budgeted capital outlay expenditures were moved from the General Fund to the Equipment Reserve Fund in 2004.
Special Revenue Funds
● Recreation Fund service charges are $13,000 more than the previous year. The increase is primarily the result of a $14,000 increase in indoor pool revenue compared to the previous year.
● Recreation Fund expenditures will increase during the summer recreation season. Annual Recreation Fund expenditures are typically less than 95% of budget.
● Public Transportation Fund expenditures are only 9.4% of budget. It is anticipated that fund’s expenditures will finish the year significantly below budget because the MV Transportation contract is typically less than budgeted . The mill levy in the Transportation Fund was reduced by 0.4 mills in 2005.
Enterprise Funds
● Water and Sewer Fund revenue is $100,000 less than the same period last year. The lower water rate for small volume users affecting more users prior to the summer irrigation season may be a reason for lower water revenue. However, sanitary sewer revenue is up over $160,000 in the quarter. Note: The new water/sanitary sewer rates were not effective until January, 2005 and due to the delay that occurs between meter readings and billing, the new rates were not in effect for the full first quarter of 2005.
● Water and Sewer Fund expenses are up significantly from the prior year due to an increase in the transfer to cash finance capital projects. Operating expenses are over 25% due to debt service payments and encumbrances for chemicals and maintenance items.
● Golf Course Fund revenue is only 10% of budget due to the seasonality of rounds played. Revenue is up 16% over the first quarter of 2004. The revenue increase is likely the result of the closure of the public side of the Alvamar Golf Course.
● Golf Course Fund expenses are only 13% of budget and $105,000 more than revenue for the first nine months of 2004. The decrease in expenditures is due to the delay in 2005 interest expense until September.
II. REVENUE – EXPENDITURE TABLES
First Quarter Fund Analysis
|
|
|
20041st Qtr. |
% of budget |
20051st Qtr. |
% of budget |
|
General Fund |
|
|
|
|
|
|
|
Revenue Source |
|
|
|
|
|
|
Taxes |
$6,319,076 |
40.2 |
$6,700,192 |
45.6 |
|
|
Sales Tax |
5,237,124 |
29.3 |
5,270,579 |
26.4 |
|
|
Licenses & Permits |
232,763 |
36.4 |
193,064 |
25.1 |
|
|
Intergovernmental |
175,346 |
27.3 |
192,282 |
29.9 |
|
|
Service Charges |
96,613 |
26.0 |
178,344 |
46.4 |
|
|
Fines |
563,182 |
37.5 |
618,184 |
30.6 |
|
|
Interest |
94,603 |
18.9 |
114,476 |
28.6 |
|
|
Miscellaneous |
532,502 |
17.9 |
921,432 |
27.9 |
|
|
Transfers |
339,625 |
27.0 |
441,444 |
27.8 |
|
|
Total Revenue |
13,590,834 |
33.5 |
14,629,997 |
32.4 |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
|
|
General Government |
3,377,435 |
23.5 |
3,837,030 |
23.5 |
|
|
Public Safety |
4,498,843 |
21.3 |
5,171,765 |
22.3 |
|
|
Public Works |
837,814 |
16.4 |
1,025,518 |
17.8 |
|
|
Parks & Recreation |
564,937 |
21.2 |
638,200 |
21.9 |
|
|
Total Expenditures |
9,279,029 |
21.5 |
10,672,513 |
22.1 |
|
|
|
|
|
|
|
|
|
Revenues over Expenditures |
4,311,805 |
|
3,957,484 |
|
|
|
|
20041st Qtr. |
% of budget |
20051st Qtr. |
% of budget |
Recreation Fund |
|
|
|
|
|
|
|
Revenue Source |
|
|
|
|
|
|
Taxes |
$158,574 |
42.8 |
$152,227 |
48.6 |
|
|
Service Charges |
308,842 |
22.9 |
323,246 |
23.9 |
|
|
Miscellaneous |
66 |
|
0 |
|
|
|
Transfers |
300,000 |
25.0 |
326,000 |
25.0 |
|
|
Total Revenue |
767,482 |
26.3 |
801,473 |
26.9 |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
|
|
Parks & Recreation |
565,544 |
18.2 |
597,525 |
18.5 |
|
|
|
|
|
|
|
|
|
Total Expenditures |
565,544 |
18.2 |
597,525 |
18.5 |
|
|
|
|
|
|
|
|
|
Revenues over Expenditures |
201,938 |
|
203,948 |
|
|
|
|
20041st Qtr. |
% of budget |
20051st Qtr. |
% of budget |
|
Transportation Fund |
|
|
|
|
|
|
|
Revenue Source |
|
|
|
|
|
|
Taxes |
$580,202 |
46.5 |
$490,285 |
45.1 |
|
|
Service Charges |
34,788 |
36.7 |
38,560 |
44.8 |
|
|
Miscellaneous |
0 |
0 |
0 |
0.0 |
|
|
Total Revenue |
614,990 |
45.8 |
528,845 |
43.3 |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
|
|
Public Transportation |
230,105 |
11.4 |
189,778 |
9.4 |
|
|
Total Expenditures |
230,105 |
11.4 |
189,778 |
57.0 |
|
|
|
|
|
|
|
|
|
Revenues over (under) Expenditures |
384,885 |
|
118,703 |
|
|
2004 Enterprise Funds |
Water & Sewer |
|
Sanitation |
|
Storm |
|
Golf |
|
|
|
|
% |
|
% |
|
% |
|
% |
Revenue Sources |
|
|
|
|
|
|
|
|
|
Service Charges |
$5,211,508 |
26.0 |
$1,977,961 |
26.3 |
$651,998 |
27.2 |
$91,896 |
7.7 |
|
Interest |
130,709 |
32.2 |
20,832 |
34.7 |
9,786 |
97.9 |
53 |
1.8 |
|
Intergovernmental |
0 |
|
|
|
0 |
|
0 |
|
|
Miscellaneous |
28,685 |
|
37,146 |
86.9 |
0 |
|
420 |
|
|
Total Revenues |
5,370,902 |
28.9 |
2,035,939 |
26.7 |
661,784 |
27.5 |
92,369 |
7.8 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Operations |
6,222,759 |
19.5 |
2,054,164 |
22.7 |
269,672 |
10.7 |
229,079 |
19.3 |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
(851,857) |
|
(18,225) |
|
392,112 |
|
(136,710)) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 Enterprise Funds |
Water &Sewer |
|
Sanitation |
|
Storm |
|
Golf |
|
Revenue Sources |
|
|
|
|
|
|
|
|
|
Service Charges |
$5,110,625 |
24.0 |
$2,033,498 |
25.5 |
$663,222 |
26.0 |
$106,786 |
9.8 |
|
Interest |
72,518 |
24.2 |
10,060 |
16.8 |
5,470 |
36.5 |
0 |
|
|
Intergovernmental |
0 |
|
0 |
|
0 |
|
0 |
|
|
Miscellaneous |
42,664 |
|
39,027 |
78.0 |
7,129 |
|
1,120 |
|
|
Total Revenues |
5,225,807 |
24.2 |
2,082,585 |
25.7 |
675,821 |
26.3 |
107,906 |
9.9 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Operations |
9,234,620 |
26.8 |
2,371,458 |
23.9 |
662,460 |
17.4 |
153,611 |
13.1 |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
(4,008,813) |
|
(288,873) |
|
13,361 |
|
(45,705) |
|
III. INVESTMENTS
Short term investment rates have increased significantly in the last year. As a result, our interest earnings are greater than the first quarter of 2004. Interest revenue should meet or exceed the budget in 2005 for most funds.
As of March 31, 2005, the City of Lawrence had over $105 million in cash and investments. Over $91 million was invested in securities. Approximately 24% of our investments were in certificates of deposits, 61% in government agencies and 13% 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 and Corner Bank. The average rate of return on our investments during the third quarter was 2.55%.
Over 85% of the City’s portfolio has an original maturity of less than twelve months. Only 3% 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
The City closed on its most recent general obligation debt issuance on September 27, 2004. The issues included a $15,745,000 temporary note that matures on October 1, 2005. In addition, two general obligations bonds were sold, one totaling $10,600,000 for storm and street improvements (including W. 6th), and another for $1,600,000 for airport improvements.
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 $4.0 – 5.0 million in at-large general obligation annually without having an adverse impact on the debt levy.
|
City of Lawrence Estimated Debt 3/31/05 |
||||
|
|
GO Debt |
Enterprise |
Less Enterprise Portion of GO Debt |
Total |
|
Long term debt, 1/1/04 |
$ 74,885,000 |
$ 64,853,123 |
$(6,745,305) |
$ 132,992,818 |
|
|
|
|
|
|
|
Debt, added Summer 2005 |
0 |
- |
- |
0 |
|
|
|
|
|
|
|
Debt, added Fall 2005 |
0 |
0 |
(0) |
0 |
|
|
|
|
|
|
|
Debt, added, Kansas Water Supply Loan |
- |
0 |
- |
0 |
|
|
|
|
|
|
|
Less: Principal paid in 2005 |
(0) |
(1,189,704) |
0 |
(1,189,704) |
|
|
|
|
|
|
|
Total long term debt, 3/31/05 |
$ 74,885,000 |
$ 63,663,419 |
$ (6,744,083) |
$ 131,803,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long term debt is composed of: |
|
|
|
|
|
Enterprise fund portion |
$ 6,745,305 |
$ 56,918,114 |
$ - |
$ 63,663,419 |
|
Sales tax portion |
11,391,210 |
- |
- |
11,391,210 |
|
Benefit District Debt (estimated) |
11,430,297 |
- |
- |
11,430,297 |
|
Net long term debt, city at large, 3/31/05 |
45,318,188 |
6,745,305 |
(6,745,305) |
45,318,188 |
|
Total long term debt, 3/31/05 |
74,885,000 |
63,663,419 |
(6,745,305) |
131,803,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Future long term debt will result from: |
|
|
|
|
|
Notes currently outstanding which will be bonded (includes fall note issue) |
$15,745,000 |
$ - |
$ - |
$ 15,745,000 |
V. CAPITAL BUDGET
As of March 31, 2005 active projects in the capital improvement budget totaled $24.5 million. Funding sources for these projects consisted of $15.7 million temporary notes, $3.9 million in cash, and $4.9 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 NAME |
AMOUNT |
FINANCED |
OTHER |
TOTAL RECEIPTS |
EXPENDITURES |
ENCUMB |
AVAILABLE BALANCE |
|
2004 KLINK 6th st, Az to Ak |
350,000 |
325,134 |
199,500 |
524,634 |
524,214 |
|
420 |
|
W. 6th St., Wakarusa to SLT |
3,295,000 |
5,132,602 |
209,927 |
5,342,530 |
736,649 |
|
4,605,881 |
|
Carnegie Library Renovation |
400,000 |
313,951 |
71,069 |
385,020 |
418,847 |
3,812 |
-37,638 |
|
KU Fire Station, 23rd & Iowa, STA 5 |
5,000,000 |
331,320 |
0 |
331,320 |
282,806 |
4,510,155 |
-4,461,642 |
|
Monterey Way, Stetson Dr |
4,850,000 |
2,120,375 |
|
2,120,375 |
405,277 |
41,622 |
1,673,476 |
|
2004 Fire Truck Purchase |
|
|
|
0 |
|
299,993 |
-299,993 |
|
O'Connell Road, 23rd - 31st |
2,300,000 |
628,067 |
111,834 |
739,901 |
569,629 |
50,837 |
119,435 |
|
Airport Runway Reconstruction |
|
|
1,261,836 |
1,261,836 |
1,000,673 |
180,121 |
81,043 |
|
Kasold, 15th to Clinton Parkway |
6,750,000 |
|
|
0 |
116,491 |
121,963 |
-238,454 |
|
2004 Overlay, Phase II |
473,781 |
696,078 |
|
696,078 |
342,192 |
|
353,886 |
|
2002 Traffic Signals |
200,000 |
202,734 |
|
202,734 |
122,534 |
13,000 |
67,200 |
|
Overland, Congressional to Queens |
1,500,000 |
995,000 |
|
995,000 |
979,335 |
|
15,665 |
|
Congressional, North of 6th |
700,000 |
423,500 |
|
423,500 |
416,919 |
|
6,581 |
|
Lake Pointe, Clinton Parkway to 22nd |
1,166,250 |
|
|
0 |
67,387 |
4,844 |
-72,231 |
|
Orchard's Conservatory Easement |
280,000 |
281,000 |
151 |
281,151 |
277,064 |
|
4,086 |
|
Monterey Way, Peter to GV |
2,620,000 |
169,000 |
|
169,000 |
163,113 |
3,440 |
2,447 |
|
23rd St Access Management |
550,000 |
|
|
0 |
6,648 |
142,950 |
-149,598 |
|
Peterson, Kasold to Monterey Way |
3,420,000 |
212,000 |
|
212,000 |
203,017 |
5,763 |
3,219 |
|
Riverside Business Park Sanitary Sewer |
900,000 |
374,651 |
|
374,651 |
286,874 |
|
87,777 |
|
Kasold & Peterson Rd Intersection |
300,000 |
24,000 |
|
24,000 |
15,124 |
8,540 |
336 |
|
Kasold, Peterson to KTA |
770,000 |
|
|
0 |
35,457 |
171,003 |
-206,460 |
|
7th & Kentucky |
50,000 |
27,108 |
|
27,108 |
99,840 |
|
-72,732 |
|
Harvard Rd, East of GWW |
550,000 |
46,250 |
7,172 |
53,422 |
46,725 |
380,366 |
-373,670 |
|
Barker, 16th to 22nd |
550,000 |
557,678 |
|
557,678 |
490,371 |
|
67,307 |
|
George Williams Way, 6th to Harvard |
2,500,000 |
2,508,000 |
|
2,508,000 |
731,605 |
838,158 |
938,237 |
|
19th & Louisiana Traffic Signal |
315,000 |
67,822 |
|
67,822 |
|
37,108 |
30,714 |
|
Bob Billings & Wakarusa |
200,000 |
|
|
0 |
4,800 |
|
-4,800 |
|
Public Works Facility - Site Development |
300,000 |
302,416 |
|
302,416 |
129,752 |
|
172,664 |
|
Folks Rd, 6th to Harvard |
1,820,000 |
67,300 |
|
67,300 |
433,616 |
8,422 |
-374,738 |
|
Art Center Expansion |
|
|
53,650 |
53,650 |
|
|
53,650 |
|
Investments |
|
|
1,832,829 |
1,832,829 |
|
|
1,832,829 |
|
Misc. private projects |
|
|
133,698 |
133,698 |
119,929 |
|
13,768 |
|
900 New Hampshire TIF District |
8,650,000 |
8,747,408 |
5,251 |
8,752,659 |
8,258,889 |
621,218 |
-127,447 |
|
Fire Station #4 2121 Wakarusa |
150,000 |
|
15,000 |
15,000 |
65,822 |
51,767 |
-102,589 |
|
|
|
|
|
|
|
|
|
|
|
|
24,553,394 |
3,901,918 |
28,455,312 |
17,351,602 |
7,495,081 |
3,608,629 |