Loading...
05/01/2012 07 2011 Year-End Budget Revenue and Expenditure Report VI i ` '' — — ' 'A wl e.. .) BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. - 7 For Meeting of: May 1, 2012 ITEM TITLE: 2011 Year -End Budget Revenue and Expenditure Report SUBMITTED BY: Michael Morales, Interim City Manager Cindy Epperson, Finance Director CONTACT Michael Morales, 575 -6040 PERSON /TELEPHONE: Cindy Epperson, 576 -6771 SUMMARY EXPLANATION: As previously projected, actual 2011 budget performance was effectively managed in the midst of an economic downturn and overall departmental expenditures have again been restrained below authorized budget levels. As a result of these factors, the City's final year- end 2011 financial position stayed within minimum guidelines. General Fund revenues were $48.4 million -- exceeding budget by about $375,000 (or 0.8 %). In addition, expenditures of $48.3 million were contained below budget by $1.1 million (or 2.2 %), primarily because of salary savings from position vacancies, including the Police Chief for the full year, and partial year for the City Manager; Assistant City Manager, Director of Community and Economic Development; and the Fire Chief. The General Fund virtually "broke even" in 2011, adding about $133,000 to reserves in 2011, ending with a balance of $4.6 million, which is 9.3% of the 2012 adopted budget. Parks and Streets funds (the other tax - supported funds) were much closer to the margins. The Parks fund exceeded budget by about $150,000. Several factors combined to cause this overrun, including additional hours of operation coupled with a persistent water leak at Franklin Pool, increased participation in the "Beyond the Bell" after school program, and assisting in the installation of a new irrigation system in the Upper Kiwanis Park project. Historically, variances in Parks program costs were absorbed (i.e. positive variances exceeded negative variances), but with recent budget reductions, the net variance exceeded the total budget. An additional property tax allocation was made to maintain the ending fund balance of $0.3 million, or 7.4% of the 2012 adopted budget. The Streets Fund was slightly under budget. The net result for the 3 General Government funds was a use of reserves of slightly over $35,000, resulting in an ending fund balance of $5.9 million (10.1 % of the 2012 adopted budget). After encumbrances for projects, goods and services that were included in the 2011 budget but not received or completed by year- end are carried forward (about $214,000), the ending reserve balance is about $5.7 million. Even though a national recession was identified as beginning in December, 2007, Yakima's general economy started softening in mid -2008, although not as severely as some governments in the state and nation. Sales tax and permit fees dropped substantially in 2009 and continued at the lower levels through 2011. Even though the revenue stream has seemed to flatten and begin to improve, future revenue growth is not expected to increase at the same pre- recession pace. In the absence of sustained growth in existing City revenues, Council approved an increase in the Water, Wastewater and Refuse utility taxes, dedicated to maintain service levels in Public Safety, and otherwise adopted an austere 2012 General Government budget, to maintain a balanced budget and acceptable reserves. Total 2011 actual expenditure for all funds was $169.4 million compared to the 2011 amended budget of $209.2 million -- $39.8 million or approximately 19% less than the City Council's authorized appropriation level, primarily due to deferred spending for major Capital Improvement Projects, which are or will be re- budgeted for 2012. All other funds ended 2011 with fund balances at expected /acceptable levels. Conclusion: Given the current state of the local and national economy, the state of the worldwide affairs and the related potential impacts to all government entities, City management has taken a strict and conservative approach to budgeting of revenues and continues to maintain tight controls on expenditures. Overall, the 2011 year -end fiscal position reflects that the City of Yakima was able to effectively manage its economic environment. Resolution Ordinance Other 2011 Year -End (specify) Report Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding N/A Phone: Source: APPROVED FOR E City Manager SUBMITTAL: rt STAFF RECOMMENDATION: Accept Report BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download El 2011 Year -End Budget Revenue and Expenditure Report Memo - Parks & Rec 2011 Budget Overage MEMORANDUM April 24, 2012 TO: The Honorable Mayor and Members of the City Council . FROM: Michael Morales, Interim City Manager Cindy Epperson, Director of Finance & Budget SUBJECT: 2011 Year -End Budget Revenue and Expenditure Report "n accordance with past practice, we are submitting for your review, the City of Yakima's 2011 year -end actual compared to budgeted Revenue and Expenditure Report for both Operating and Capital Budgets. Balances shown are subject to final adjustments made as a result of the year -end closing process, which will not be officially concluded until the State Auditor's work is completed. We do not, at this time, expect that any adjustments will materially affect the balances represented in this report. Year -end information is reported by fund, in the following order: • City -Wide Overview • General Government Budget Results • Other Operating / Enterprise Funds • Capital Funds • Reserve Funds • Operating Reserves • Bond Redemption Funds • Conclusion PDFConvert. 1091 .1.2011_Year - End_Report.docx 1 of 30 This page was intentionally left blank. PDFConvert. 1091 .1.2011_Year- End_Report.docx 2 of 30 CITY -WIDE OVERVIEW As previously projected, actual 2011 budget performance was effectively managed in the midst of an economic downturn and overall departmental expenditures have again been restrained below authorized budget levels. As a result of these factors, the City's final year -end 2011 financial position stayed within minimum guidelines. The City of Yakima started to experience the national recession with a downturn in sales tax during the last quarter of 2008. Cost containment measures in General Government (i.e. tax - supported) funds were implemented mid -year 2009, 2010 and 2011 to address revenue reductions. The 2012 revenue budget was developed based on projections that the revenues would remain relatively flat and assumed a 1% growth rate over 2011. This assumption for revenue resulted in additional budget reductions for 2012, because of the increase in outside costs, such as fuel, pension rates and insurance (medical, property and liability). In response to the potential reductions in Public Safety services, Council approved an additional 6% tax of the water, wastewater and refuse utilities dedicated to Public Safety which is estimated to generate about $2 million in 2012. Through the first quarter of 2012, sales tax is slightly above 2011 (about 2 %), and the final property tax levy should meet or exceed budget estimates, depending on collection rates. Additionally, we have - ecently been notified that the state shared revenue distributions are only going to be reduced by about $250,000, instead of the original proposal of over $500,000, so state shared revenue will likely exceed the adopted budget. Therefore, management is not recommending additional cost containment measures at this time. The 2012 fuel budget was developed assuming a similar annual average price as 2011, which was 11% more than the original 2011 budget. Ultimately this expense will depend on the severity and length of the spikes in costs in comparison to 2011 - -this expense will be monitored for a possible appropriation later in the year. Also, the election bill exceeded the $150,000 budget by almost $37,000 —an appropriation will be submitted in the near future. The Council is continuing to review the sustainability and prioritization of City services, within the Council's "Priorities of Government" Model. As illustrated in Chart I, General Government 2011 actual expenditures were $57,658,073 compared to the amended budget of $58,590,515 — $932,442 or 1.6% less than budget authorizations. By operational unit, the largest contributor to the positive variance in General Fund expenditures is the Police Department, which had position vacancies, including the Police Chief for the entire year. The Fire budget was the next largest contributor to the positive variance also because of position vacancies, including the Fire Chief, and cost containment efforts to reduce overtime. Total 2011 actual expenditures for all funds was $169,429,092 compared to the 2011 amended budget of "209,223,763 — $39,794,671 or approximately 19.0% less than the City Council's authorized ppropriation level, primarily due to deferred spending for major Capital Improvement Projects, which are or will be rebudgeted for 2012. PDFConvert. 1091 .1.2011_Year- End_Report.docx 3 of 30 City -Wide Overview (Continued...) Chart I 2011 EXPENDITURE COMPARISON (Budget vs. Actual) Variance Amended 2011 Budget Actual Amount Percent General $49,328,886 $48,251,948 $1,076,938 2.2% Parks and Recreation 4,042,938 4,194,991 (152,053) (3.8 %) Street & Traffic Operations 5,218,691 5,211,134 7,557 0.1% General Government Subtotal 58,590,515 57,658,073 932,442 1.6% • Community Development 4,144,771 2,795,552 1,349,219 32.6% Utilities /Other Operating 61,743,539 58,981,793 2,761,746 4.5% Capital Improvement 53,760,457 26,621,321 27,139,136 50.5% G.O. Bonds/Notes 3,635,077 3,392,009 243,068 6.7% Water /Sewer Revenue Bonds 2,862,054 2,862,052 2 0.0% Employee Benefit Reserves 14,411,113 14,090,891 320,222 2.2% Operating Reserves 9,902,608 2,896,076 7,006,532 70.8% Trust and Agency Funds 173,629 131,325 42,304 24.4% Total $209,223,763 $169,429,092 $39,794,671 19.0% (1) Encumbrances: General Government encumbrances (which are not shown here) are $214,334 which reduces that variance to $718,108 or a 1.2% variance from budget. Total encumbrances for all funds are $3,206,666, which reduces the total variance to $36,588,005 or a 17.5% variance from budget. Most of this variance is the result of the timing of capital projects. If the capital projects are removed from the calculation, the remaining operating budgets were under spent by about 8.1 %. PDFConvert. 1091 .1.2011_Year- End_Report.docx 4 of 30 GENERAL GOVERNMENT BUDGET RESULTS In the City of Yakima, General Government is the term used to describe basic tax - supported activities, which are included in three funds: General Fund; Parks and Recreations Fund; and Street Fund. Chart II below summarizes actual performance compared to the amended budget for each of these funds individually, and in total. _ Chart II 2011 GENERAL GOVERNMENT PERFORMANCE (Budget vs. Actual) General Parks & Rec Street Fund (1) Fund Fund Total Beginning Balance Amended Budget $4,480,899 $385,681 $1,088,323 $5,954,903 Actual Beginning Balance 4,480,899 385,681 1,088,323 5,954,903 (Gain) Loss 0 0 0 0 Revenue Amended Budget 48,010,665 4,034,485 5,086,810 57,131,960 Actual 48,384,614 4,106,110 5,131,770 57,622,494 Gain (Loss) 373,949 71,625 44,960 490,534 Expenditures Amended Budget 49,328,886 4,042,938 5,218,691 58,590,515 Actual 48,251,948 4,194,991 5,211,134 57,658,073 Difference 1,076,938 (152,053) 7,557 932,442 Revenues Over /(Under) Exp. Amended Budget (2) (1,318,221) (8,453) (131,881) (1,458,555) Actual (2) 132,666 (88,881) (79,364) (35,579) Ending Balance Budgeted 3,162,678 377,228 956,442 4,496,348 Actual 4,613,565 296,800 1,008,959 5,919,324 Less: Encumbrances 200,548 0 13,786 214,334 Net Balance $4,413,017 $296,800 $995,173 $5,704,990 (1) Actual General Fund expenses, including encumbrances, were $67,882 more than actual General Fund revenues. (2) Estimated use of reserves at the time of 2011 budget Adoption was $245,000. PDFConvert. 1091 .1.2011_Year- End_Report.docx 5 of 30 General Government Budget Results (Continued...) • The total General Government 2011 year -end balance, net of encumbrances, equals $5,704,990, 9.7% of the amended budget and $249,913 less than the beginning balance. The cash reserve position at the end of 2011 was $5,919,324, which is $35,579 less than the beginning balance. In other words, actual expenditures were virtually the same as actual revenues. Chart III presents a historical perspective of the total General Government reserve. In 2010, total expenditures exceeded total revenues by $444,050, thereby dropping the reserve balance. The 2011 budget was adopted using about $245,000 of reserves — the encumbrance ordinance of about $415,000, and other appropriations including the significant increase in outside jail costs and fuel prices of about $845,000 increased the budgeted reliance on reserves to $1.5 million. The Preliminary Budget Executive Summary induded the year -end estimates for revenues slightly exceeding the budget, and expenditures coming in below budget, which would have produced a projected use of reserves of $343,000. Actual revenues were $290,000 more than the estimate (primarily because of stronger construction activity in the 4th quarter), while expenditures virtually matched the estimate, which resulted in a reduced use of reserves (only $35,579) and a balancing of revenues to expenditures. For the ten years prior to 2010, revenues have exceeded budget from a minimum of $536,000 to a maximum of $1,984,000, annually averaging $1,340,000. During this same time, expenditures have remained below budget in the range of $1,155,000 to $2,152,000, averaging $1,662,000. Therefore, over the last decade prior to the "Great Recession ", an estimated use of reserves of about $3.0 million ended up being the "break even" level. 2009 was the first time in many years that revenue did not even meet expected levels. Even though revenue estimates were reduced for 2010, the economy continued to languish, so that revenues were again below budgeted levels. For 2011, the revenue budget was again dropped, so that the actual results exceeded budget, but only by less than $500,000 — not to the pre - recession levels mentioned above. With budgets tightening, savings on expenditures are also less than the historical average levels so it has become necessary to match revenue and expenditure budgets more closely as budgets are being adopted. PDFConvert. 1091 .1.2011_Year- End_Report.docx 6 of 30 General Government Budget Results (Continued...) Chart III GENERAL GOVERNMENT RESERVES (Usage and Balance Comparison) (1) (2) (3) (4) (5) 2011 2011 2011 Wrap -up Actual 2010 Amended Year -End as of Variance Actual Budget Estimate 4/1/2012 (4 -2) Beg. Reserve Balance $6,413,707 $5,954,903 $5,954,903 $5,954,903 Revenue 57,461,599 57,131,960 57,333,155 57,622,494 Total Resources 63,875,306 63,086,863 63,288,058 63,577,397 $490,534 Expenditure Budget 57,930,333 58,590,515 57,675,801 57,658,073 (932,442) Ending Reserve Balance (1) 5,944,973 4,496,348 5,612,257 5,919,324 % of Annual Expenditures 10.3% 7.7% 9.7% 10.3% Incr. / (Decr.) in Res f/ Prior (468,734) (1,458,555) (342,646) (35,579) % of Expenditure Budget -0.8% -2.5% -0.6% -0.1% (1) The appropriation for one -time encumbrances from the 2011 General Government Budget will utilize $214,334 of the 2011 actual beginning balance. PDFConvert. 1091 .1.2011_Year- End_Report.docx 7 of 30 General Government Budget Results (Continued...) The following chart illustrates the General Government Amended 2011 budgets in comparison to actual results for major revenue categories and total expenditures. Immediately following this table is a narrative review of the actual performance of our major'resource categories. Chart IV 2011 GENERAL GOVERNMENT REVENUE (Budget vs. Actual - December Year -to -Date) 2011 2010 Amended Actual Variance Actual Budget To -Date Amount Percent General Fund Property Tax 9,190,326 $9,398,000 $9,595,175 $197,175 2.1% Criminal Justice Sales Tax Inc .3% 1,626,432 1,602,000 1,672,596 70,596 4.4% Criminal Justice Sales Tax .1% 927,461 905,000 939,530 34,530 3.8% Retail Sales and Use Tax 12,653,993 12,333,000 12,590,563 257,563 2.1% Franchise Fees 44,520 42,000 44,569 2,569 6.1% Utility Tax 11,991,269 11,934,500 11,499,662 (434,838) (3.6%) Business License Tax 511,926 510,000 518,363 8,363 1.6% Gambling Tax 843,004 871,000 847,764 (23,236) (2.7 %) Dangerous Bldg Tax Assessment 4,927 5,000 14,263 9,263 185.3% Leasehold Excise Tax 7,173 4,000 7,863 3,863 96.6% Police Federal Grants 155,471 65,000 75,518 10,518 16.2% Criminal Justice Funds 498,430 340,000 446,828 106,828 31'4% Liquor Excise Tax 420,824 427,700 439,981 12,281 2.9% Liquor Profits 679,326 630,500 635,747 5,247 0.8% School Resource Officers 291,150 280,000 261,756 (18,244) (6.5 %) Other Intergovernmental 767,956 698,330 693,476 (4,854) (0.7 %) Licenses and Permits 768,469 765,800 842,272 76,472 10.0% Charges for Service 4,917,224 5,096,985 5,343,249 246,264 4.8% Fines and Forfeitures 1,658,467 1,721,400 1,569,946 (151,454) (8.8 %) Misc. Revenue 338,922 339,450 305,493 (33,957) (10.0 %) Non- Revenue 51,000 1,000 0 (1,000) (100.0 %) Transfers From Other Funds 40,000 40,000 40,000 0 0.0% Total General Fund Revenue 48,388,270 48,010,665 48,384,614 373,949 0.8% Plus: Beginning Balance 4,612,886 4,480,899 4,480,899 0 0.0% Total General Fund Resources 53,001,156 52,491,564 52,865,513 373,949 0.7% Less. Expenditures 48,530,187 49,328,886 48,251,948 (1,076,938) (2.2 %) Ending Balance 4,470,969 3,162,678 4,613,565 1,450,887 45.9% Less Encumbrances 378,640 0 200,548 200,548 Net General Fund Balance 4,092,329 $3,162,678 $4,413,017 $1,250,339 PDFConvert. 1091 .1.2011_Year - End_Report.docx 8 of 30 General Government Budget Results /Chart IV (Continued...) 2011 2010 Amended Actual Variance Actual Budget To -Date Amount Percent Parks & Recreation Fund Property Tax 1,665,500 $1,546,000 $1,725,983 $179,983 11.6% Intergovernmental 139,555 107,700 85,374 (22,326) (20.7 %) Charges for Services 930,907 963,365 907,145 (56,220) (5.8 %) Misc. Revenue/Non- Revenue 221,835 238,420 246,260 7,840 3.3% Transfers From Other Funds 1,150,565 1,179,000 1,141,348 (37,652) (3.2 %) Total Parks/Rec. Fund Revenue 4,108,362 4,034,485 4,106,110 71,625 1.8% Beginning Balance 339,555 385,681 385,681 0 0.0% Total Parks/Rec. Fund Resources 4,447,917 4,420,166 4,491,791 71,625 1.6% Less: Expenditures 4,062,236 4,042,938 4,194,991 152,053 3.8% Ending Balance 385,681 377,228 296,800 (80,428) (21.3 %) Less: Encumbrances 0 0 0 0 Net Parks & Recreation Fund Balance 385,681 $377,228 $296,800 ($80,428) Streets & Traffic Funds Property Tax 3,375,700 $3,513,000 $3,524,307 $11,307 0.3% County Road Tax 27,411 0 217 217 Fuel Tax - Street 1,253,503 1,250,000 1,289,527 39,527 3.2% Other Intergovernmental 0 45,000 47,725 2,725 Charges for Services 227,461 215,760 215,478 (282) (0.1 %) Misc. Revenue/Non- Revenue 80,892 63,050 54,516 (8,534) (13.5 %) Total Street/Traffic Fund Revenue 4,964,967 5,086,810 5,131,770 44,960 0.9% Beginning Balance 1,461,266 1,088,323 1,088,323 0 0.0% Total Street/Traffic Fund Resources 6,426,233 6,175,133 6,220,093 44,960 0.7% Less: Expenditures 5,337,910 5,218,691 5,211,134 (7,557) (0.1 %) Ending Balance 1,088,323 956,442 1,008,959 52,517 5.5% Less: Encumbrances 35,586 0 13,786 13,786 Net Streets & Traffic Fund Balance 1,052,737 956,442 995,173 38,731 General Government Summary Beginning Fund Balance 6,413,707 $5,954,903 $5,954,903 $0 0.0% Revenues 57,461,599 57,131,960 57,622,494 490,534 0.9% Expenditures 57,930,333 58,590,515 57,658,073 (932,442) (1.6 %) Ending Fund Balance 5,944,973 4,496,348 5,919,324 1,422,976 31.6% Less: Encumbrances 414,226 0 214,334 214,334 Net General Government Fund Balance 5,530,747 $4,496,348 $5,704,990 $1,208,642 PDFConvert. 1091 .1.2011_Year - End_Report.docx 9 of 30 General Government Budget Results (Continued...) General Government Resources In total, General Fund 2011 actual revenue was over the amended budget by $373,949. Significant individual categories demonstrating changes from the amended budget included: Utility Taxes — down ($434,838); Sales Tax — up $257,563; and Charges for Services - up $246,264. Property Tax is allocated in each budget cycle to General, Parks, Streets, Fire Capital Debt Service, and Fire Pension funds. The Citywide budget for 2011 was $16,247,765, while actual collections totaled $16,543,947, a variance of $296,182 or 1.8 %. Receipts were estimated to be negatively impacted because of the continued recession and crisis in the housing market, but actual collections ended up higher than average. It should be noted that Property Tax is the only major revenue source allocated to each of the General Government operating funds. Therefore, a re- allocation of property tax was made to Parks and Streets funds to shore up these fund balances which resulted in the variances displayed in the prior chart. Sales Tax of $12,590,563 is virtually flat compared to the 2010 actual of $12,653,993, but still more than the 2011 budget. The downward trend in sales tax receipts started in the 4th quarter of 2008, extending for 18 months into 2010. April 2010 was the first month of a slight upward turn. For the next few months, the sales tax was up and down, with no obvious trend. Because of the continued uncertainty in this revenue and some economists calling for a "double -dip" in the economy, the budget for 2011 was conservatively reduced. To put this in historical perspective, 2006 actual sales tax was $12,698,230 — more than 2011 actual, 5 years later. Criminal Justice Sales Tax distributions experienced similar trends. The 2012 budget was conservatively developed assuming sales tax would remain at its 2011 level. Fortunately, sales tax is higher than 2011 by about 2% through the first quarter. Utility Taxes of $11,499,662 was below budget by ($434,838) or (3.6 %), ending up (4.1 %) less than 2010 actual. The cellular and telephone utility taxes were under budget by over 10 %, because providers are looking closely at the categorization of their charges between phone and data —data (i.e. internet) charges are not subject to the utility tax. The City's Water and Wastewater utilities have been affected by the move toward water conservation, so that our internal taxes were below budget as well. The lower trends were noted during the budget development process, however, actual receipts still came in about ($190,000) less than the final revised estimate. In general, utility taxes vary because of usage fluctuations and /or rate adjustments. Criminal Justice Funds received from the state experienced an increase of $106,828 from the amended budget. The major component of this distribution is tied to the City's crime rate as compared to other cities. Recent improvements in our crime rate dropped the city out of the high crime formula as of July 2010, so that the distribution was budgeted at the lower level for 2011. The City came back into the distribution formula as of July 2011, so the 2 half of the year exceeded the budget. This additional revenue was noted during budget development, so that the year -end estimate and 2012 budget were increased accordingly. Charges for Service came in over budget by $246,264 or 4.8 %. Most of this overage can be attributed to the volume of Engineering charges for both internal and external projects and Plan Checking Fees, as construction projects are slowly rebounding after the economic /real estate recession. PDFConvert. 1091 .1.2011_Year - End_Report.docx 10 of 30 General Government Budget Results (Continued...) Fines and Forfeitures was under budget by ($151,454) or (8.8 %). This revenue can fluctuate depending on the deployment of the police department, and the nature of the citations being issued. This reduction was also noted early in the year, and the year end estimate was reduced accordingly. Miscellaneous Revenues consist primarily of interest earnings. Because rates of return for eligible investments continued to drop throughout the year, 2011 ended ($33,957) below budget. The General Fund 2011 year -end balance was originally estimated to be $4,226,072 in the 2012 Adopted Budget. However, the net effect of some unanticipated revenue in excess of budget, expenditure savings and outstanding unpaid purchase orders increased this balance by $387,495 to a total of S4,613,567. Bear in mind, however, that the 2012 budget has been amended to provide for $214,334 in year -end encumbrances, (e.g., 2011 expenditures carry -over to 2012). The General Fund revised balance for year -end 2012 is estimated to be $4,816,207, and is to be maintained as a cash flow reserve, and as a reserve for unanticipated fiscal impacts, such as the continuing reductions in revenues because of the ongoing recession and reductions in state - shared revenue allocations; potential labor settlements; and escalation in fuel prices., After including encumbrances, a total of $202,642 is being held back for potential budget amendments. When 2011 General Fund revenues (excluding beginning fund balances) are compared to prior year, here is a slight decrease of $3,657 or 0% from $48,388,271 to $48,384,614, at the end of a national recession. General Fund expenditures saw a decrease of ($278,239) or (0.6 %) from 2010 actual levels, a result of cost containment measures approved at the beginning of the 2011 budget cycle, coupled with position vacancies. With revenues continuing to feel the pressure of the national recession and expenditures responding to the economic issues listed above, General Fund was virtually balanced for 2011. However, it took directed budget constraints to accomplish this. Because of the concern of ongoing sustainability of services, the Council continues to review General Government operations. Staff will continue to monitor revenues and expenditures. Overall, General Fund Resources, which include the Beginning Fund Balance, were $373,949 or 0.7% more than the 2011 Amended Budget; and were within 0.4% or $190,131 above year -end estimates presented in the 2012 Budget. General Fund expenditure savings, after providing for year -end encumbrances and adjustments, amounted to $876,390 or 1.8% of the authorized 2011 budget. Parks and Recreation actual resources were $71,625 or 1.8% above the amended budget for 2011. Major components of this variance include the reallocation of property taxes from General Fund to maintain an adequate reserve balance. Expenditures exceeded the authorized amended budget for 2011 by $152,053 or 3.8 %. (A detailed explanation follows the General Government expenditure summary). The year -end balance for the Parks and Recreation Fund of $296,800 is ($88,881) less than the beginning balance. he 2012 budget assumes revenues will slightly exceed expenditures. Therefore, the Parks Fund revised balance for year -end 2012 is now estimated to be $345,868. PDFConvert. 1091.12011_Year- End_Report.docx 11 of 30 General Government Budget Results (Continued...) Street Fund resources were $44,960 or 0.9% more than the amended budget with an increase in fuel tax being the major variance. Expenditures were under budget levels by 0.1% or $7,557. The year -end balance is decreased by $79,364 to $1,008,959. After considering encumbrances of $13,786, the Street Fund's revised balance for year -end 2012 is now estimated to be $1,108,898. A major snow event in January of 2012 caused the Snow and Ice Control service unit to be overspent, and will likely require an appropriation of around $350,000. This would drop the reserve balance to around $760,000, which is still 14% of the amended budget. The Street fund reserve balance is maintained at a higher level primarily to cover unexpected snow storms. The following chart summarizes the actual status of General Government expenditures through year- end 2011, and compares these expenditures to amended budget authorization levels. Chart V 2011 GENERAL GOVERNMENT EXPENDITURES (Budget vs. Actual) 2011 2011 Year -end Unexpended/ Percent Amended Expenditures Encum- Uncommitted Spent Budget To 12/31/11 brances Balance Committed , Police $22,718,620 $22,412,167 $36,612 $269,841 98.8% Fire 8,929,340 8,747,587 24,026 157,727 98.2% Information Systems 2,568,136 2,488,928 139,910 (60,702) 102.4% Transfers To Other Funds 2,412,275 2,311,919 0 100,356 95.8% Police Pension 1,404,590 1,471,511 0 (66,921) 104.8% Financial Services 1,386,046 1,395,184 0 (9,138) 100.7% Code Administration 1,330,361 1,255,439 0 74,922 94.4% Utility Services 1,305,084 1,218,380 0 86,704 93 4% Municipal Court 1,234,194 1,151,934 0 82,260 933% Legal 1,139,157 1,046,653 0 92,504 91.9% Engineering 757,250 730,127 0 27,123 96 4% Planning 678,679 643,195 0 35,484 94.8% City Manager 509,913 484,875 0 25,038 95.1% Indigent Defense 480,000 471,740 0 8,260 98.3% Purchasing 452,835 447,447 0 5,388 98.8% Human Resource:; 447,436 446,132 0 1,304 99.7% Records 411,556 412,182 0 (626) 100.2% City Hall Maintenance 352,127 346,080 0 6,047 98.3% Intergovernmental 257,439 256,848 0 591 99.8% Nonrecurring Expenses 208,287 193,841 0 14,446 93.1% City Council 203,061 193,161 0 9,900 95.1% State Examiner 103,000 114,213 0 (11,213) 1109% Urban Area Hearings Exam. 39,500 12,405 0 27,095 31 4% Total General Fund 49,328,886 48,251,948 200,548 876,390 98.2% Parks & Recreation Fund 4,042,938 4,194,991 0 (152,053) 103.8% Street & Traffic Ops. 5,218,691 5,211,134 13,786 (6,229) 100.1% Total General Government $58,590,515 $57,658,073 $214,334 $718,108 98.8% PDFConvert. 1091 .1.2011_Year - End_Report.docx 12 of 30 As 2011 progressed, the City experienced an increase in outside jail costs as a result of a change in pilling practices by Yakima County, along with an escalation in fuel costs. Budget amendments were made to estimate the cost of these outside influences on. the City's operations. Notable deviations from budgetary authorizations, after including year -end encumbrances, were as follows: Police Department expenditures after encumbrances were below the amended budget by $269,841 or 1.2 %, due primarily to savings from position vacancies, including the Police Chief for the entire year. Fire Department, the 2nd largest General Government budget, ended the year less than the amended budget by $157,727; 98.2% of its approximately $8.9 million budget. This can be attributed to the vacancy of the Fire Chief, and a concentrated effort to reduce overtime. Information Systems came in $60,702 or 2.4% over budget primarily because of unexpected costs relating to the implementation of the new Public Safety systems and the required contribution to YAKCORPS. Transfers to Other Funds was under- budget by $100,356, as the underlying utility revenue that is the basis for a major transfer to Parks and Recreation came in a little lower than expected. Financial Services spent $9,138 or 0.7% more than the 2011 budget, primarily because of higher than anticipated credit card and other banking fees. Several operating divisions in the General Fund ended 2011 under budget primarily due to salary savings: Note: The Director of Community and Economic Development position was vacant for most of 2011, as the incumbent was called upon to be Interim /Assistant City Manager throughout the transitions in the City Manager's office. This position is split among Planning, Code Administration, Engineering and City Hall Maintenance in General Fund. • Code Administration had vacancies throughout the year, resulting in a savings of $74,922 from the 2011 budget. • Utility Services ended 2011 under budget by $86,704 or 6.6 %, because of several turnovers in the existing staff. Note: This amount is reimbursed 100% by the utilities. • Municipal Court saved $82,260 or 6.3% due to a combination of position vacancies and other cost containment measures including the elimination of using Corrections Officers on overtime as a security presence in the court rooms. • Legal Department also experienced vacancies and exercised cost containment measures to limit outside legal costs, bringing expenditures $92,504 or 8.1% less than budget. • Engineering was $27,123 or 3.6% under budget, attributable primarily to the CED Director vacancy and reduced use of temporary staff. PDFConvert. 1091 .1.2011_Year- End_Report.docx 13 of 30 General Government Budget Results (Continued...) Planning experienced savings of $35,484 or 5.2% below the 2011 budget which consisted of both the CED Director vacancy and a reduced volume of land use change requests which affected line items such as postage, advertising and printing costs. City Manager spent $25,038 or 4.9% less than its 2011 budget, primarily because of turnover in three of the four positions, including the retirement of the City Manager, the resignation of the Assistant City Manager, and the transfer of the Executive Secretary to the City Clerk's office. Some of the savings were used for recruiting expense, but the division was still able to come in below budget. Indigent Defense spent $8,260 or 1.7% less than the 2011 budget, which can vary dependent on the number of appeals requiring indigent defense. Records (i.e. City Clerk) was over budget by ($626) or 0.2 %. The cost of publishing the City Charter amendments prior to the election put the legal ad publishing account over by about $13,000. This overrun was made up in other areas, including the retirement and subsequent vacancy of the Deputy City Clerk. City Council ended 2011 $9,900 or 4.9% below budget, mostly because of a concentrated effort to reduce mobile communication and travel /training costs. State Examiner exceeded the 2011 budget by $11,213, as the State Auditor's Office was finishing the prior year audit in the beginning of 2011 - their 2010 budget was under spent by more than $10,000. Additionally, the Federal ARRA grants had specific regulations that required more audit procedures. Urban Area Hearings Examiner was under budget by $27,095. Hearing Examiner services are provided through a professional contract for land use regulatory items related to zoning, subdivision street vacation and certain appeals. Since 2010, some of the land use cases that would have been reviewed by the Hearing Examiner have been referred to the City of Yakima Planning Commission (a voluntary advisory group) as a cost containment measure. Parks and Recreation exceeded budget by $152,053 or 3.8 %. Several factors combined to create this overage: • The expanded area and added lighting at Franklin Pool allowed for extended hours at the pool. Lions Pool was also utilized beyond original expectations. Total staff salaries exceeded the budget in the Aquatics service unit by $103,000. • There was also a leak at Franklin Pool that caused the water bill to be $10,000 over budget. This is being fixed before the pool opens for the 2012 season. • The "Beyond the Bell" after school program was extremely popular, and the number of staff needed to safely supervise the children was greater than expected. The Community Recreation service unit was overspent by $36,000 because of this program. • The use of temporary staff and supplies to assist in the installation of the new irrigation system in the Upper Kiwanis Park ballfield project, pending the final accounting of total project costs compared to available funding. PDFConvert. 1091 .1.2011_Year - End_Report.docx 14 of 30 General Government Budget Results (Continued...) A memo from the Parks and Recreation Manager is attached to this report with an expanded explanation. Historically, the fluctuations of specific program budgets would balance out by year -end. In 2011, after three years of tightening the budget, there was no capacity to absorb these budget hits. An additional allocation of Property Tax of $175,000 was made from General Fund to Parks and Recreation to maintain a minimum reserve balance in the fund. Staff is looking at these areas of operations, and may propose either a reduction in hours of operation or additional fees or sponsorships to maintain prior levels of service in 2012. Street and Traffic Operations expenditures were $7,557 — 0.1% less than budget before the encumbrances. The encumbrance ordinance included one purchase order in the amount of $13,786 for video upgrades for the Downtown traffic signals. Overall, the Streets and Traffic Operations fund was right at its spending target. PDFConvert. 1091 .1.2011_Year- End_Report.docx 15 of 30 OTHER OPERATING / ENTERPRISE FUNDS The following chart represents the status of the Operating and Enterprise Funds. CHART VI OTHER OPERATING / ENTERPRISE FUNDS (Budget vs. Actual) ' Actual Revenue Appropriations Ending Beg Bal Amended Actual % Amended Actual % Balance Fund 1/1/2011 Budget Revenue Recd Budget Exp Exp'd 12/31/2011 Economic Development $198,520 $575,000 $349,528 60.8% $669,372 $323,706 48.4% $224,342 Neighborhood Development 283,879 4,154,993 2,781,420 66.9% 4,144,771 2,795,552 67.4% 269,747 Community Relations 901,959 474,950 522,537 110.0% 656,954 575,933 87.7% 848,563 Community Services 15,560 108,215 66,760 61.7% 108,215 82,320 76.1% 0 Growth Management 23,116 3,485 0 0.0% 26,601 23,116 86.9% 0 Cemetery 81,766 237,550 222,889 93.8% 262,463 259,983 99.1% 44,672 Emergency Services 64,511 1,120,476 1,135,400 101.3% 1,121,904 1,121,899 100.0% 78,012 Public Safety Comm 248,820 3,410,860 3,352,604 98.3% 3,341,497 3,005,894 90.0% 595,530 Police Grants 331,146 1,351,044 1,086,039 80 4% 1,341,682 1,147,768 85.5% 269,417 P.B.I.A. (Parking & Bus Impr) 21,823 237,170 228,967 96.5% 236,451 231,655 98.0% 19,135 Trolley 4,551 135,598 47,912 35.3% 135,277 36,103 26.7% 16,360 Front Street Bus Impr Area 7,618 3,535 2,835 80.2% 5,000 3,531 70.6% 6,922 Convention Center Conv Center (Tourist Promo) 178,564 1,389,500 1,461,626 105.2% 1,415,148 1,408,969 99.6% 231,221 PFD- Convention Center 169,918 621,750 648,562 104.3% 605,000 604,381 99.9% 214,099 Tourism Promotion Area 414 403,205 413,459 102.5% 403,205 413,459 102.5% 414 Capitol Theatre 114,877 280,177 268,340 95.8% 285,527 285,527 100.0% 97,690 PFD - Capitol Theatre 23,857 467,960 488,741 104.4% 468,000 469,486 100.3% 43,112 Recovery Grants Program 0 426,989 345,521 80.9% 426,989 345,521 80.9% 0 StormwaterOperatingFund 814,689 2,101,200 2,220,905 105.7% 2,225,207 1,983,311 89.1% 1,052,283 Transit 784,711 7,348,815 7,501,023 102.1% 7,472,066 7,389,946 98.9% 895,788 Refuse 348,088 4,881,500 4,817,679 98.7% 4,980,374 4,900,989 98.4% 264,778 Wastewater Operating 2,625,444 17,622,972 16,650,692 94.5% 18,830,905 18,445,018 98.0% 831,118 Water Operating 1,919,415 7,644,337 7,413,897 97.0% 7,895,628 7,596,797 96.2% 1,736,515 Irrigation 325,055 1,556,600 1,585,637 101.9% 1,541,669 1,492,488 96.8% 418,204 Equipment Rental 4,370,747 5,396,361 5,614,265 104.0% 5,633,318 5,365,398 95.2% 4,619,614 Environmental 602,021 135,000 172,540 127.8% 485,934 342,950 70.6% 431,611 Public Works Admin. 348,803 1,185,331 1,184,331 99.9% 1,169,153 1,125,645 96.3% 407,489 Total Other Operating Funds $14,809,872 $63,274,573 $60,584,109 95.7% $65,888,310 $61,777,345 93.8% $13,616,636 PDFConvert. 1091 .1.2011_Year- End_Report.docx 16 of 30 Other Operating / Enterprise Funds (Continued...) The Economic Development Fund revenues of $349,528 consists of the allocation approved by the state legislature for economically challenged communities ($52,000); the CD Block Grant payment for code compliance in the target area ($170,000); and a one -time right -of -way vacation from Memorial Hospital ($127,000). Expenditures were $323,706 or 48.4% of budget. A portion of the budget was to fund studies in the sawmill redevelopment area, but a new capital fund was created mid -year, so all revenues and expenditures for this program were re- budgeted in the new fund. This fund includes professional services related to the HUD Section 108 loan program (such as appraisals, title reports, etc.), and other economic development efforts. The code compliance effort funded by the Block Grant is paid from this fund, along with a small portion of the Community & Economic Development administrative staff costs. The ending fund balance is $224,342, which will continue to be used to support programs which promote economic development. The Neighborhood Development Fund is used to account for the Federal HUD programs. It ended 2011 with a fund balance of $269,747. Actual expenditures equaled $2,795,552 - 67.4% of budget, and revenues amounted to $2,781,420 - 66.9% of amended budget. Because of the timing of project costs, this fund typically is under spent in comparison to total grant authority in arty particular year. The encumbrance ordinance included $1,758,654 to carry - forward into the 2012 budget, which represents the unspent balance of Federal grants awarded in 2011 and prior. The single family home rehabilitation programs and support for infrastructure improvement are major components in the mspent balance. Community Relations revenues of $522,537 were 110.0% of the amended budget, because cable franchise fees were 10% more than originally estimated. Expenditures equaled $575,933 - 87.7% of the 2011 amended budget authorization which is tied to the timing of equipment replacement. The year- end fund balance of $848,563 includes the carry forward of capital grant resources from the cable TV franchise provider, per contract. The Community Services Fund includes the Healthy Families Yakima grant funded program. The program was completed in June of 2011, and expenditures of $82,320 and revenues of $66,760 closed out the program. Growth Management Fund had expenditures of $23,116 leaving a year -end balance of $0. The last grant related to growth management was fully expended in 2011. Cemetery Fund revenues were $222,889 - 93.8% of amended budget estimates and expenditures equaled $259,983 - under the amended budget by 0.9 %. The year -end Cemetery fund balance is $44,672. Revenues included a subsidy of $50,000 from the Parks and Recreation Fund that was required to maintain an adequate fund balance. Emergency Services Fund actual revenues equaled $1,135,400 - 101.3% of budget estimates. The EMS ivy is an allocation of the countywide property tax based on population and call volume. - xpenditures equaled $1,121,899 - 100.0% of budget. The year -end balance is $78,012. PDFConvert. 1091 .1.2011_Year- End_Report.docx 17 of 30 Other Operating / Enterprise Funds (Continued...) Public Safety Communications revenues were $3,352,604 — 98.3% of budget and expenditures equaled $3,005,894 — 90.0% of budget, primarily due to position vacancies. The ending fund balance is $595,530. Police Grants fund was opened in 2009 in order to account for narcotics forfeitures upon the dissolution of the City - County Narcotics Unit (CCNU), and the federal ARRA police- related operating grants. Both of these programs have extensive tracking /reporting requirements, and by nature are variable so that isolating the programs outside of General Fund will assist in accounting for applicable expenditures and reducing volatility in the General Fund. Grant and program revenues in 2011 were $1,086,039, and expenditures were $1,147,768, leaving $269,417 as a fund balance. Parking and Business Improvement (PBIA) Fund actual revenues of $228,967 were 96.5% of budget estimates and expenditures were $231,655 — 98.0% of budget. The contract with the Committee for Downtown Yakima calls for them to receive all DYBID receipts less administrative costs. The prior PBIA expired in the 4th quarter of 2011, and was reinstated for 2012, so that assessment revenues were short by one quarter. However, parking revenue exceeded budget. The year -end balance is $19,135. Trolley Fund total revenue was $47,912 while expenditures were $36,103 or 26.7% of budget. The year -end balance is $16,360. The budget included a reimbursable grant to refurbish the trolley barn which is being carried forward into 2012 in the amount of $63,653. Front Street Business Improvement Area (FSBIA) total revenue was $2,835 — 80.2% of budget and expenditures for marketing /improving the area were $3,531. The year -end balance is $6,922. Convention Center (Tourist Promotion Fund) actual revenues were $1,461,626 or 105.2% of budget estimates, as convention volume exceeded expectations. Operating expenditures came in at $1,408,969 — 99.6% of the amended budget for 2011. The year -end fund balance is $231,221. Public Facilities District — Convention Center Fund realized revenues of $648,562 — 104.3% of the 2011 budget, as sales taxes stabilized in 2011. Expenditures were $604,381 — 99.9% of budget. The ending fund balance is $214,099. Tourism Promotion Area Fund receipts and expenditures amounted to $413,459 or 102.5% of the 2011 budgets. The ending balance at December 31, 2011 is $414. This fund does not build reserves. Its purpose is to promote Yakima as a tourism destination, and all funds received each month are forwarded to the Yakima Visitors and Convention Bureau for that purpose. The Area was reformed in 2011 because Selah and Union Gap establishments withdrew. The rate structure was also increased at the request of the hotels, and the higher rates went into effect on October 1, which was remitted to the City in December. An appropriation was done in the amount of $25,000 in November as an estimate of the additional revenue, but this did not entirely cover the additional revenue. Because revenues exceeded budget by $10,254, expenditures also exceeded budget by the same amount. PDFConvert. 1091 .1.2011_Year- End_Report.docx 18 of 30 Other Operating / Enterprise Funds (Continued...) Capitol Theatre Fund actual revenues of $268,340 were 95.8% of amended budget estimates because of a drop in Cable TV Utility Tax, resulting from an allocation by the provider of revenues associated with internet service in their bundled rates coupled with the market effects of an extended recession. Expenditures were $285,527. The balance at year -end is $97,690. Public Facilities District - Capitol Theatre Fund realized revenues of $488,741 - 104.4% of the 2011 budget, as sales tax stabilized in 2011. Expenditures include transfers of $6,000 to the Capitol Theatre operating fund and $450,000 to make required debt service payments on the 2009 bond issue, along with administrative expenses were $469,486 - 100.3% of budget. The $1,486 overage was the result of the State Auditor's Office conducting an audit of the PFD for the first time since the inception of the PFD (which reported no deficiencies). This cost was not contemplated in the 2011 budget, and came late in the year. Since revenues exceeded expenditures, the ending fund balance grew to $43,112. Recovery Grants Program Fund was reactivated to account for Federal ARRA grants that cross fund /functional boundaries. The City was awarded a Department of Energy grant for conservation efforts in late 2009. About half of the grant award was spent in 2010, and $345,521 was spent in 2011. Matching grant revenue is also recorded, so that there is no fund balance. The balance of grant activity of about $74,000 was included in the encumbrance ordinance, to be carried forward into 2012. itormwater Operating Fund concluded 2011 with revenue of $2,220,905 or 105.7 %. As this is being billed through Yakima County on the property tax bills, the better collection rate on property taxes discussed previously applies to this revenue, too. Expenditures were $1,983,311 or 89.1% of budget. The largest variance was in the area of Yakima County regional administration, as the County received grants to defray a portion of their costs. This fund also experienced salary savings from position vacancies, as the program is still in its start -up phase, and allocation of personnel is still being balanced. The ending balance is $1,052,283, which will be available for cash flow purposes, as the stormwater receipts follow the property tax cycle (i.e. most receipts are in April and October). Transit Operating Fund revenues of $7,501,023 were 2.1% more than budget estimates. Approximately $4.2 million of Transit Sales Tax was allocated to this budget, while State and Federal operating grants were $2.3 million. The remaining $1.0 million is derived from fares, including the contract with Selah, vanpool, advertising, etc. Expenditures were $7,389,946 - 98.9% of the amended budget. Most of this variance can be attributed to a lower than expected usage of the Dial -a -Ride program. The year -end fund balance is $895,788. Refuse Fund revenues were $4,817,679 - 98.7% of the budget estimate. Several factors delayed the last utility billing cycles of 2011, so that revenue did not quite meet estimates. Actual expenditures were $4,900,989 - 98.4% of budget. The year -end fund balance is $264,778, which is only 5.3% of budget. Staff estimates that if the billing had been recorded on time, the ending balance would meet the 7% minimum guideline. PDFConvert. 1091 .1.2011_Year - End_Report.docx 19 of 30 Other Operating / Enterprise Funds (Continued...) Wastewater Operating Fund actual revenues equaled $16,650,692 - 5.5% below amended budget estimates, notably from the billing delay noted above; conservation efforts by customers both large and small; and a slow -down of new connections. Expenditures were $18,445,018 - 98.0% of authorized levels to maximize transfers to capital funds. The year -end fund balance is $831,118. As described for the Refuse Fund, if the billing delay is factored in, the fund balance would meet minimum guidelines. Water Operating Fund actual revenues were $7,413,897 for 2011- 97.0% of budget estimates, driven by the billing delay. Expenditures were $7,596,797 - 96.2% of authorized budget levels, as this fund experienced salary savings, along with other operational efficiencies. The year -end fund balance is $1,736,515. Irrigation Fund actual revenues equaled $1,585,637 - 101.9% of budget estimates. Expenditures were $1,492,488 or 96.8% of budget. The balance at year -end was $418,204. Equipment Rental Fund expenditures equaled $5,365,398 and were 95.2% of the amended budget. Revenues of $5,614,265 were 104.0% of budget estimates, as actual costs and charges to the operating divisions for fuel was higher than anticipated. The replacement for the refuse truck that burned had not yet come in at year end, so the encumbrance ordinance includes $273,619 to be carried forward into 2012. The operating component of the budget was virtually balanced. The $4,619,614 year -end balance primarily represents the City's Equipment Replacement Reserve. Environmental Fund revenues equaled $172,540 or 127.8% of budget estimates, as the balance of grant - funded projects were done in 2011, but not originally budgeted. Expenditures were $342,950 or 70.6% of budget, as the fuel capacity expansion project was not completed. The encumbrance ordinance includes $34,389 to complete this project, and $50,000 for fuel tank removal at the airport. The year -end fund balance is $431,611. Public Works Administration Fund actual revenue for 2011 was $1,184,331 - 99.9% of budget estimates. Actual expenditures totaled $1,125,645 - less than the amended budget by 3.7% due to position vacancies and other cost containment efforts. The year -end fund balance is $407,489. Summary Other Operating and Enterprise Funds generated revenues of $60,584,109 - 95.7% of budget estimates; expenditures equaled $61,777,345 and were 93.8% of the authorized budget. The Total Other Operating Enterprise Funds carry forward fund balance is $13,616,636. (About $4.6 million or 34% of this balance consists of the Equipment Rental Replacement Reserve.) In total, without considering the Equipment Rental budget, the fund balances average about 14.1% of the budget, or slightly less than a 2 month operating reserve. PDFConvert.1091.1.2011_Year-End_Report.docx 20 of 30 CAPITAL FUNDS The following chart represents the status of our Capital Construction and Capital Reserve Fund balance. CHART VII OTHER OPERATING / ENTERPRISE FUNDS (Budget vs. Actual) Actual Revenue Appropriations Ending Beg Bal Amended Actual % Amended Actual % Balance Fund 1/1/2011 Budget Revenue Recd Budget Exp Exp'd 12/31/2011 Arterial Street $517,311 $4,451,590 $2,369,693 53.2% $4,811,547 $2,390,946 49.7% $496,058 Central Bus District Capital 391,994 37,000 73,749 199.3% 132,264 106,630 80.6% 359,113 Capitol Theatre Construction 124,227 0 5,000 130,045 127,406 98.0% 1,821 Yakima Redevelopment Area 0 800,000 951,251 800,000 196,375 24.5% 754,876 Parks and Recreation Capital 203,296 1,560,000 652,000 41.8% 1,492,770 778,021 52.1% 77,275 Fire Capital 253,164 791,588 816,639 1032% 841,500 660,142 78.4% 409,661 Law and Justice Capital 330,557 874,587 744,130 85.1% 1,154,231 820,348 71.1% 254,339 Public Works Trust Constr 865,818 578,000 542,344 93.8% 744,411 655,035 88.0% 753,127 REET 2 Capital 839,948 502,000 466,344 92.9% 1,236,822 933,317 75.5% 372,975 Transit Capital Reserve 1,276,134 50,000 300,506 601.0% 971,556 474,511 48.8% 1,102,129 Stormwater Capital Fund 716,390 864,794 575,482 66.5% 1,024,794 190,125 18.6% 1,101,747 Convention Center Cap Impr 377,465 429,558 419,191 97.6% 525,143 377,215 71.8% 419,441 Reserve for Capital Impr 3,402,817 13,635,658 12,069,817 88.5% 14,872,978 12,163,709 81.8% 3,308,925 Wastewater Facilities Cap Res 628,016 150,500 152,792 101.5% 50,000 42,261 84.5% 738,547 Sewer Construction 5,012,921 1,386,000 1,386,000 100.0% 4,768,500 1,011,268 21.2% 5,387,653 Domestic Water Improvement 3,713,738 800,000 1,367,747 171.0% 3,902,000 1,706,675 43.7% 3,374,810 Wastewater Facility Project 3,142,560 14,000,000 1,857,705 13.3% 13,800,879 1,533,538 11 1% 3,466,727 Irrigation System Impr 844,248 3,208,500 1,207,231 37.6% 2,501,017 2,453,799 98.1% (402,320) Total Capital Impr Funds $22,640,604 $44,119,775 $25,957,621 58.8% $53,760,457 $26,621,321 49.5% $21,976,904 The Arterial Street Fund reflects an actual expenditure level of 49.7 %, or $2,390,946 for 2011. The major projects substantially completed in 2011 were Coolidge Avenue improvements; and the reconstruction project at 16th and Washington Avenues. The major incomplete project to be carried forward into the 2012 budget is 64th Avenue from Nob Hill to Tieton. Revenue equals $2,369,693 or 53.2% of budget estimates and is derived from Federal and State shared funds. Gas Tax funds were slightly above budget, coming in at $603,000 compared to the budget of $565,000, while expenditures are based on the timing of work done on an approved project prospectus. The fund balance at year- end is $496,058. PDFConvert. 1091 .1.2011_Year - End_Report.docx 21 of 30 Capital Funds (Continued...) The Central Business District (CBD) Capital Fund is used to account for comprehensive downtown planning and redevelopment efforts. Expenditures in 2011 included the closeout of Phase IV of Downtown Redevelopment/Pedestrian project, supported by State grants; and $50,000 for the contract with the Committee for Downtown Yakima (CDY) for CBD maintenance. The expenditure total is $106,630 — 80.6% of budget authorizations and revenue totaled $73,749 — 199.3% of budget, representing grant reimbursement for Phase IV and monthly parking permits. The year -end balance is $359,113. Capitol Theatre Construction Fund is used to account for capital grants /improvements for the Theatre. Revenues were $5,000 consisting primarily of interest earnings, while final expenditures for the planned improvements to the production center were $127,406 or 98.0% of budget. The balance at December 31 is $1,821. The Yakima Redevelopment Area Fund was created in 2011 to account for the infrastructure improvements and tax credits associated with the redevelopment area located at the old sawmill site. Revenue of $951,251 consists of a sales tax credit from the state of $451,251; and a Supporting Investment in Economic Development (SIED) loan from Yakima County of $500,000. The current project is a study of potential access to Interstate 82 and other traffic planning. Expenditures were $196,375, leaving an ending fund balance of $754,876. The project balance will be carried forward into 2012. The Parks and Recreation Capital Funds actual revenue equaled $652,000 or 41.8% — (consisting primarily of Yakima School District and community donations) while actual expenditures through year -end 2011 were $778,021 — 52.1% of the amended budget. The major project included in the 2011 budget is the development of upper Kiwanis Park. The unspent balance along with the applicable financing is being rebudgeted for 2012. The year -end fund balance is $77,275. The Fire Capital Fund experienced actual expenditures of $660,142 — 78.4% of budget, including the purchase of two new pumper engines. Revenues were $816,639 — 103.2% of budget estimates. The major components of revenue include loan proceeds of $600,000 from a state purchasing program; a transfer of $50,000 of REET 1, which can be used for Fire capital needs relating to property/building improvements, but not rolling stock; and a transfer from the EMS Fund of $75,000 to support apparatus replacement. The year -end balance is $409,661. The encumbrance ordinance includes $151,000 of major repair projects to be carried forward into the 2012 budget. Law and Justice Capital Fund revenue, which included an allocation of Local Criminal Justice Sales Tax receipts, was $744,130 or 85.1% of budget, primarily because of the rebudgeting of a capital grant. Project and equipment expenditures (i.e. replacement vehicles, the Integrated Public Safety System, etc.) were $820,348 — 71.1% of authorized levels. The encumbrance ordinance includes $230,000 of grant - funded projects to be carried forward into the 2012 budget. The fund balance at year -end was $254,339. PDFConvert. 1091.12011_Year - End_Report.docx 22 of 30 Capital Funds (Continued...) The Public Works Trust Construction Fund accounts for the revenue generated by the first 1 /4% Real Estate Excise Tax (REET 1) and expenditures (including debt service) for General Government projects associated with the State Public Works Trust Fund Loan Program. Receipts for 2011 totaled $542,344. Of this amount, about $464,000 represents REET 1 proceeds; and $75,000 are transfers from other funds.for.debt service. Expenditures were $655,035 or 88.0% of budget during 2011. These include Debt Service — $527,000; Parks and Fire Capital Contributions — $100,000; and City Hall improvements — $28,000. Savings resulted from the deferment of debt service on the Upper Kiwanis Park, as the delay in that project pushed back the borrowing and subsequent debt service into 2012. The balance at year -end is $753,127. The Real Estate Excise Tax — 2nd 1 /4% (REET 2) Capital Fund accounts for the 2 1 /4% Real Estate Excise Tax, and related interest earnings. Revenue was $466,344 — 92.9% of the budget. Expenditures were $933,317 — 75.5% of budget, because the contribution to the 16th and Washington Avenue reconstruction project was not required. REET 2 is being used to purchase street maintenance supplies (originally scheduled to be $400,000, but reduced to $250,000 when this tax experienced a sharp decline); and debt service ($257,000). A one -time grind and overlay on 16th Avenue between Nob Hill and Washington of $426,000 completed the expenditure total. The balance at year -end is $372,975. Note: Both REET revenues are particularly sensitive to the current economic condition, as housing sales were curtailed by the national banking crisis. This revenue has been stressed since 2009. The 2012 budget is $450,000, but the first quarter receipts are 20% ahead of 2011, so the revenue budget will likely be met. The 2012 expenditure budget includes only debt service and the lowered level of street supplies. These reserves are being depleted; therefore, future capital improvements may be postponed. The LID Construction Control Fund is used to account for the resources and costs associated with LID projects. Expenses for these projects are incurred and paid for through up -front interest bearing warrants which are redeemable when the projects are completed from individual payoffs in full or from the proceeds of bond sales for that portion of the project or projects to be financed over several years. The year -end fund balance is $0 as there are no LID construction projects in process as of December 31, 2011. The Transit Capital Reserve Fund has a year -end balance of $1,102,129 which represents the reserves that the City Council has directed be set aside to provide funds for equipment replacement. For 2011, the actual expenditures were $474,511 — 48.8% of budget. The fix of the Public Works parking lot came in under budget, and other equipment purchases were re- evaluated and re- budgeted into 2012 as appropriate. Revenues were $300,506 — exceeding budget estimates by $250,506 as more sales tax was available for capital purposes than originally budgeted. The Stormwater Capital Fund ended its fourth year with a balance of $1,101,747. Revenues of $575,482 consisted of a transfer from the Operating fund of $350,000 and an Ecology grant. Expenditures of '190,125 or 18.6% of budget included drainage improvement projects. Projects to be carried forward .nto 2012 include Nob Hill /Fair Ave drainage improvements and a grant funded underground injection control retrofit project. PDFConvert. 1091 .1.2011_Year - End_Report.docx 23 of 30 Capital Funds (Continued...) The Convention Center Capital Improvement Funds actual revenues were $419,191 consisting primarily of an allocation of City Hotel/Motel tax and a grant of Yakima County Hotel/Motel tax from the Public Facilities District. Expenditures were $377,215 — 71.8% of budget, and the encumbrance ordinance included a carry forward of $67,000 for the planned purchase of equipment. The year -end balance is $419,441. The Cumulative Reserve for Capital Improvement Funds actual expenditures were $12,163,709 — 81.8% of the amended budget primarily for Railroad /Grade Separation costs, which is being funded by State and Federal grants, and the Utility Management System, funded by transfers from the utilities. Revenues were $12,069,817, and the balance at year -end is $3,308,925. (Most of the railroad project is already rebudgeted in 2012). The purpose of the Wastewater Facilities Capital Reserve Fund is to provide resources for major repairs /maintenance at the plant annually. Revenues equaled $152,792 — 101.5% of the amended budget, and are derived from Sewer Operating contributions, Sewer Service Agreements with Union Gap and Terrace Heights, and investment income. There were expenditures for capital improvements and repairs of $42,261 — 84.5% of the $50,000 budget authorization for emergency repairs. The fund balance at year -end is $738,547. The Wastewater Collection System Project Fund provides principally for off -site system improvements such as new interceptor and trunk line extensions. For 2011, $1,386,000 in revenue came from a Wastewater Operating Fund transfer. Expenditures of $1,011,268 were primarily for a neighborhood wastewater improvements and miscellaneous system repairs. Projects to be carried - forward into 2012 include improvements to the collection system in conjunction with a new industrial waste line in the redevelopment area and unsewered neighborhoods; the Yakima Speedway/Race Street interceptor; and start -up costs related to the implementation of Automated Meter Reading. The year -end balance is $5,387,653. In 2011 the Domestic Water Improvement Fund expenditures totaled $1,706,675 — 43.7% of budget, and included a new well at Gardner Park, and other watermain replacement projects. Revenue to this fund totaled $1,367,747 and included $800,000 from the Water Operating fund, $564,000 from a Public Works Trust Fund loan for the Gardner Park well, and interest earnings. The balance of the 2011 budget was mostly rebudgeted when the 2012 budget was adopted. The 2011 year -end balance is $3,374,810. Wastewater Facility Project Fund actual expenditures for 2011were $1,533,538 — 11.1% of budget, for treatment plant projects. Actual revenues were $1,857,705 consisting primarily of $1.7 million from the Wastewater Operating fund, with balance consisting of interest earnings and other miscellaneous contributions. The wastewater facility had several major projects included in the 2011 budget in various stages of completion. The balance of the 2011 budget was partially rebudgeted when the 2012 budget was adopted. Any projects that were under spent and not already rebudgeted will be carried forward by means of a non - lapsing appropriation. The year -end balance is $3,466,727 to be used for the continuation of the capital program at the wastewater facility. PDFConvert. 1091 .1.2011_Year - End_Report.docx 24 of 30 Capital Funds (Continued...) The Irrigation System Improvement Fund is used to account for capital improvement projects. For 2011, revenue totaled $1,207,231 consisting of the capital component of the irrigation rate, and interest earnings. Expenditures were $2,453,799 or 98.1% of the budget, which were spent primarily on the General, Capitol Hill, and Fruitvale Canal Diversion systems. The irrigation capital improvements have been funded by capital rates over the last several years. However, the 2011/2012 budgets required additional financing, and an interfund loan was approved with the understanding that it would be drawn only when the cash was needed to minimize interest expense. The first draw was made in January, 2012 to fund December's construction invoices paid in January. Accounting rules required the December business to be recorded as an expense which resulted in a temporary negative balance of ($402,320) in the budget system until the first installment of the interfund loan was made. Summary Capital Improvement Funds received revenues of $25,957,621 — 58.8% of budget estimates; expenditures equaled $26,621,321 and were 49.5% of the authorized budget. The carry forward fund balance is $21,976,904. Incomplete project balances were either already carried forward in the 2012 budget, or will be recorded as non - lapsing appropriations. Even though the total balance is just slightly less than 2011, many of the General Government capital funds are being depleted. The adequacy of funding to maintain the nearly $300 million investment in facilities and equipment will 'ontinue to be a topic of discussion in future budget deliberations. PDFConvert. 1091 .1.2011_Year - End_Report.docx 25 of 30 RESERVE FUNDS The following chart illustrates the position of the City's Employee Benefit and Pension Reserve Funds. CHART VIII RESERVE AND OTHER FUNDS (Budget vs. Actual) Actual Revenue Appropriations Ending Beg Bal Amended Actual % Amended Actual % Balance Fund 1/1/2011 Budget Revenue Recd Budget Exp Exp'd 12/31/2011 Employee Benefit Reserves Unemployment Comp Res $355,464 $173,000 $179,549 103.8% $312,477 $207,224 66.3% $327,789 Employees Health Ben Res 2,537,960 10,489,085 10,418,112 99.3% 11,056,761 11,047,904 99.9% 1,908,168 Worker's Compensation Res 1,177,333 1,109,008 1,195,989 107.8% 1,352,030 1,319,074 97.6% 1,054,248 Wellness/EAP 147,368 60,000 30,000 50.0% 79,885 54,722 68.5% 122,646 Firemens' Relief and Pension 774,349 1,572,265 1,480,800 94.2% 1,609,960 1,461,967 90.8% 793,182 Total Employee Ben Reserve $4,992,474 $13,403,358 $13,304,450 99.3% $14,411,113 $14,090,891 97.8% $4,206,033 Operating Reserves Contingency $235,364 $50,000 $50,000 100.0% $200,000• $42,613 21.3% $242,751 Capitol Theatre Reserve 381,765 500 4,011 8022% 71,927 71,927 100.0% 313,849 Risk Management Reserve 901,099 9,540,000 2,729,329 28.6% 9,630,681 2,781,536 28.9% 848,892 Total Operating Reserve $1,518,228 $9,590,500 $2,783,340 29.0% $9,902,608 $2,896,076 29.2% $1,405,492 Other Funds Cemetery Trust $592,099 $13,500 $22,132 163.9% $10,000 $9,811 98.1% $604,420 Agency Fund- YAKCORPS 0 163,629 163,627 100.0% 163,629 121,514 74.3% 42,113 Total Other Funds $592,099 $177,129 $185,759 104.9% $173,629 $131,325 75.6% $646,533 Note: The Employees Health Benefit, Worker's Compensation and Risk Management Reserve fund balances exclude an accrual for incurred but not reported claims. EMPLOYEE BENEFIT RESERVE The Unemployment Compensation Reserve provides for unemployment claims filed by former employees. Through year -end 2011, the City had actual expenditures of $207,224 - 66.3% of the amended budget. Revenues were $179,549 -3.8% above budget. The reserve balance at year -end is $327,789. Because actual reductions in force in response to the economic downturn were fewer than originally anticipated, rates were unchanged for 2012. PDFConvert. 1091 .1.2011_Year - End_Report.docx 26 of 30 Reserve Fu ads (Continued...) The Employees Health Benefit Reserve provides for group medical, vision and dental claims for present, retired and terminated City employees and eligible dependents. Actual expenditures through year -end were $11,047,904 — 99.9% of the amended budget. Revenue of $10,418,112 was 99.3% of the amended budget, so that 2011 used over $629,000 of reserves. The year -end balance is $1,908,168, before the estimate for incurred but unpaid claims. Financial Disclosure requirements prescribe that liabilities be recognized when incurred. The self - insurance auditor recommended that we record 15% of the annual paid claims as a liability. Therefore, about $1.5 million in medical and dental claims representing 15% of the prior 12 months will be recorded as a liability in the financial statements. The ending fund balance after considering this transaction will be about $0.4 million. The Health and Benefit Board recognized that the self - insurance plan may not survive if ;status quo was maintained —i.e. if the plan goes below the minimum reserve recommendation the State Office of Risk Management may require us to close the plan and transfer to fully insured- premium based program. Therefore, the Board approved a plan design change to increase deductibles and annual out -of pocket maximums. Additionally, to accommodate health -care industry inflation coupled with the City's experience, rates were increased by almost 16% for the 2012 budget. The plan design change is not expected to actually reduce plan costs, but to slow the growth of required premium contributions. Through the first quarter of 2012, the fund has just broken even —i.e. total revenues abou c equaled total expenditures. So the premium increases and plan design changes somewhat stopped the use of reserves, but it is still too early to tell if it will actually rebuild reserve levels. The Board meets monthly, and is kept apprised of operating results. This balance will continue to be monil:ored. The Worker's Compensation Reserve provides for payment by the City of industrial insurance claims and time loss for City employees who are injured in the performance of their assigned duties. Revenues were $1,195,989 — 107.8% of budget estimates and expenditures were $1,319,074 — 97.6% of the amended budget. The Reserve Fund balance of $1,054,248 is the cash balance. For the same reasons discussed above, a liability will be presented in the financial statements of about $705,000 which will leave the fund balance of about $349,000. Because cash reserves are adequate, the 2012 rates were unchanged. The Wellness/Employee Assistance Program fund expenditures ended the year at $54,722 or 68.5% of budget. Revenues were $30,000 or 50.0 %, leaving a balance of $122,646. Revenues are recorded at the end of the year as medical insurance savings from vacant positions; therefore the balance needs to carry this fund's activity to the end of the next year. Because of the greater need to stabilize the Health Benefit Fund, more of the savings from vacant positions were directed to that fund. Firemen's Relief and Pension expenditures were $1,461,967 — 90.8% of budget through year -end 2011. ctual revenues were $1,480,800 — 94.2% of budget. The fund balance at year -end is $793,182, and eflects the Pension Board's policy to build reserves for potential long -term medical care needs of the LEOFF I retirees. PDFConvert.1091.1.2011_Year-End_Report.docx 27 of 30 Reserve Funds (Continued...) OPERATING RESERVES General Contingency Fund -- The year -end balance is $242,751. Capitol Theatre General Contingency Reserve - In 2011, $71,927 was transferred to the Capitol Theatre Operating Fund to fund the Theatre's annual capital improvement program. The year -end balance is $313,849. The Risk Management Reserve Fund was established to provide for payment of insurance coverages and for claims incurred for liability losses. Annual allocations are made by City operating departments to this fund. Total revenues received were $2,729,329, and expenditures equaled $2,781,536. Major expenses included: $384,000 for payments of claims, $418,000 for outside legal services (revenues include $102,000 of insurance reimbursement for services relating to prior City ownership of the Yakima Resources site), $295,000 for property insurance coverage, and $971,000 for general liability insurance. The year -end Risk Management fund balance is $848,892, before outstanding claims are considered. The required claim reserve at December 31, 2011 is estimated to be about $690,000, which will result in an adjusted funded balance of about $159,000 to be reported in the 2011 financial statements. The 2011 budget included a 10% rate adjustment to pay the balance of outstanding claims, anticipated increases in insurance premiums, and continued professional support. This reserve balance will also be monitored for adequacy throughout 2012, and may require enhanced contributions from operating funds. PDFConvert. 1091 .1.2011_Year- End_Report.docx 28 of 30 BOND REDEMPTION FUNDS The following chart illustrates the financial position of the City's General Obligation and Revenue Bond Funds. Reserve balances are in compliance with bond covenants. CHART IX BOND REDEMPTION FUNDS (Budget vs. Actual) Actual Revenue Appropriations Ending Beg Ba1 Amended Actual % Amended Actual % Balance Fund 1/1/2011 Budget Revenue Rec'd Budget Exp Exp'd 12/31/2011 G.O. Bond Redemption L.I.D. Guaranty $79,987 $100 $102 102.0% $0 $0 $80,089 1994 G.0 Ltd - Police & Streets 109,820 512,000 511,996 100.0% 514,275 514,275 100.0% 107,541 1995 G.O. Street, Parks & Fire 191,674 293,000 291,639 99.5% 292,800 292,800 100.0% 190,513 G.O Line of Credit 0 114,000 0 0.0% 114,000 0 0.0% 0 1996 G.O. Ltd -Conv Center 64,437 428,750 428,750 100.0% 426,753 426,753 100.0% 66,434 2002 G.O. Convention Center 165,804 1,018,896 1,018,896 100.0% 1,014,136 1,014,136 100.0% 170,564 2005 G.O Parks and Rec Bond 6,191 986,989 987,389 100.0% 988,113 988,112 100.0% , 5,468 L.I.D. Debt Service Control 25,243 274,000 178,040 65.0% 285,000 155,933 54.7% 47,350 Total G.O. Bond Redemption $643,156 $3,627,735 $3,416,812 94.2% $3,635,077 $3,392,009 93.3% $667,959 Water /Sewer Revenue Bond Redemption 1997 Water Rev Bond Res $270,407 $400 $400 100.0% $0 $0 n/a $270,807 1996 Revenue Bond Reserve 146,063 700 700 100.0% 0 0 n/a 146,763 Water /Sewer Revenue Bonds 114,128 545,107 545,107 100.0% 544,707 544,707 100.0% 114,528 1997 Water Revenue Bonds 4,841 237,818 237,818 100.0% 237,793 237,793 100.0% 4,866 2008 Water /Sewer Rev Bond 0 411,614 411,613 100.0% 411,613 411,612 100.0% 1 2003 Wastewater Bond Red 3 1,348,707 1,348,707 100.0% 1,348,707 1,348,706 100.0% 4 2003 Irrigation Bond Red 35,436 319,234 319,234 100.0% 319,234 319,234 100.0% 35,436 Water /Sewer Rev Bond Res 970,200 1,000 1,000 100.0% 0 0 n/a 971,200 2003 Sewer Rev Bond Res 828,650 0 0 n/a 0 0 n/a 828,650 Total W/S Rev Bond Red $2,369,728 $2,864,580 $2,864,579 100.0% $2,862,054 $2,862,052 100.0% $2,372,255 PDFConvert. 1091 .1.2011_Year - End_Report.docx 29 of 30 CONCLUSION Given the current state of the local and national economy, the state of worldwide affairs and the related potential impacts to all government entities, City management has taken a conservative approach to budgeting of revenues and continues to maintain tight controls on expenditures. Overall, the 2011 year -end fiscal position reflects that the City of Yakima was able to effectively manage its economic environment. PDFConvert.1091.1.2011_Year -End Report.docx 30 of 30 Memo To: Michael Morales, City Manager Chris Waarvick, Director of Public Works Cindy Epperson, Director of Finance From: Ken Wilkinson, Parks & Recreation Manager Date: February 15, 2012 Re: Parks and Recreation 2011 Budget Overage In my analysis of the 2011 Parks and Recreation Service Unit budgets, it has become apparent that in the face of continued reductions in full -time staff, the back filling with temporaries, increased utility costs, the Kiwanis Park ball field project, multiple Priorities of Government (POG) revenue and expense adjustments over the past three years and the Parks and Recreation Division's attempt to provide similar year to year services has greatly contributed to a 2011 budget overage. The Parks and Recreation Division can no longer provide the same level of services to our community within the current allocation of resources. As of March 5, 2012, the actual 2011 year end Parks and Recreation expenditures are $4,194,991 —over the 2011 budget of $4,042,937 by $152,054. Consideration of an appropriation ordinance in late 2011 was not considered necessary, but late occurring costs became evident after the new year. Over the past three years, Parks and Recreation has lost 6 full -time positions and a Department of Corrections crew of eight to ten inmates. Temporaries have been used as a backstop to complete some of the work of the eliminated positions; however, the level of savings is not 100 %. • Aquatic Specialist – position eliminated • Golf Course Starter – position eliminated • Parks Superintendent – retired and position eliminated • Park Maintenance Technician - position eliminated • Parks Maintenance Worker – position eliminated • Administrative Associate – retirement and position reduced [Joseph Calhoun, City Planner, is working in Parks 215 time] • Department of Corrections 8 - 10 man crew elimination This continued trend in full -time staff reductions has resulted in using temporary employees to provide similar year to year services in parks and recreation services. In 2012 the temporary employee roster will be significantly reduced. The very popular Beyond the Bell free after school program and free Summer Playground Program at Kissel Park have also caused added stress on the Parks budget due to the number of staff needed to reduce legal liability and safely supervise the large number of children in these programs. A proposal to charge a fee for the Beyond the Bell program and other cost reducing measures is being drafted. Elimination of these programs from the Parks and Recreation budget is also an option, albeit a difficult one. There is currently a large need for these free programs and the number of children who attend is almost always at capacity. The Upper Kiwanis Park Improvement Project caused additional strain on the budget. All of the irrigation work for the three new ball fields and surrounding park is in the process of being completed in -house by Park Maintenance staff along with temporary Park Maintenance employees. The additional staffing costs and the irrigation equipment [estimated at over $40,000.00] were paid for out of the Parks operating fund in 2011 so that there would be enough funds in Parks Capital to pay for the completion of the project in 2012. Every dollar allocated to the project will be expended in order to complete the multi - million dollar complex and a savings in the Parks Capital Fund of labor and materials for the irrigation portion of the project was necessary to accomplish this community goal. The additional hours of operation and added grass area were greatly appreciated by many at Franklin Pool. The new expanded grass area and added lighting allowed for an increase in evening hours for families to swim together; although the additional hours of service and expansion resulted in some additional revenue, the revenue did not completely match the expense. The 6% utility tax on City utilities will generate an unbudgeted expense to Parks of nearly $10,000 in 2012. The Parks and Recreation Division also completed the 2012 — 2017 Parks and Recreation Comprehensive Plan in 2011. Additional costs of approximately $10,000 were incurred to complete this plan. These costs were unbudgeted and will not be incurred again until 2016. Plans for cost containment and revenue increases in 2012 include: 1. Restrooms will be open later in the spring and closed earlier in the fall. A reduction in temporary employee expense will be realized. ($16,500 savings — 2 months, 4 workers @ $10.44/hr, estimated utility savings $1000 /month) 2. All Utilities Costs are being closely monitored for errors, incorrect charges, inaccurate readings and bills that have been wrongly assigned. 3. Proposed fees for the Beyond the Bell — After School Program. ($62,837 is needed to break even) The program has been operating since January and costs have been incurred to date. At this point, I recommend continuing the program through the 2011 — 2012 school year, but with some additional revenue. 4. Elimination of the free Summer Playground program at Kissel Park. ($42,546 savings) 5. Reduce evening hours and decrease staffing levels at the seasonal Franklin Pool. ($15,000 savings) 6. Limited service hour reductions are being considered for Lions Pool with regard to no weekend availability and in conjunction with the yearly planned closure of Lions Pool in August for maintenance. 7. Requests have been made to local organizations, individuals and businesses for sponsorships of "Outdoor Movies in the Park" series. ($6,000 — 10 movies @ $600 each - savings). Another option is to reduce the number of movies offered. Limited response has been received regarding sponsorships and several businesses have voiced interest in sponsoring movies, but only one commitment have been made to date. 8. Amend the Park Ordinance to allow private rentals of Fisher Park Golf Course to serve alcohol to their guests. ($1,500 — estimated revenue, if 3 additional events are scheduled) Ordinance has been amended. The implementation of these or other similar cost containment measures will keep the Parks and Recreation within budget for 2012 while the discussion of community budget priorities for 2013 and beyond are deliberated.