HomeMy WebLinkAbout1974-1023 MEMO - FINANCEOctober 23, 1974
City Administrator Brian L. Almquist
Director of Finance Robert D. Nelson
uhierI: ioN'rm, Y FINANCIAL CO THIiN'I'ARY--7/1-9/30/74
The Council has expressed interest in receiving a mont],.ly review of the
City's financial trends. I am in complete accord with this request, and
I appreciate the Council's growing interest in this important phase of
the City government.
Initially at least, the commentaries will be very similar to those which
have been prepared for Staff use during the past five >-ears or so. Follow-
ing are some guidelines which have proved successful here and elsewhere:
1. Information will be provided, not merely figures.
The emphasis svill be the forward look, especially in the direction
of the fiscal year's ending balance, based upon the latest hard
information available.
3. Efforts will be made toward early identification of problems while
they are still of manageable proportions.
Proposed solutions will be provided wherever possible.
Attention will be primarily focused upon operating funds, not cus-
todial type funds such as Customer Deposits, Hospital Bonds and the
like. Ashland Parks & Recreation Commission is outside our sphere
of responsibility and therefore will be excluded.
6. As in the past, we will be especially watchful for (1) trends
tm~ard over-expending major categories of appropriations, (2)
tendencies toward future cash deficits, and (3) substantial unan-
ticipated resources which could be made available for expenditure.
As in any endeavor to foresee the future, there are hazards in this approach.
Many finance-oriented people feel more comfortable in looking backward into
the past and leaving the uncertainties of the future to someone else; but
in reality the forward look, frequently updated according to fresh infor-
mati .~, is the key to sound financial management.
As in the past, there may be some audit adjustments affecting beginning
fund l, alances, but we are unaware of any proposed adjustments which will
upset the City's fiscal baiauce in any way.
Monthly Financial Commentary-~7/]-9/30/74
October 23, 1974
UTII, ITIES t:UND
The beginnin:1 fund balance was $385,885, compared with $262,000 budgeted,
a favorable difference oT$123,885. llowe-ver, $68,156 of this was a result
of flood transfers which we were able to accomplish during 1973-74 instead
of 1974-75, because of a check received from the U.S. Government just before
the end of June. Therefore, practically all of the $69,S00 budgeted for
transfer during 1-974-75 is alreadX reflected in the beginning fund balance.
Most of the remainder of the increase is due to good revenue results 1.ate
Taking all 1974-75 Utilities resources into consideration, including the
beginning fund balance, we estimate $2,475,000, which would exceed the
Budget by $22,S00 or about 1%. (This does not take into consideration
the proposed electric rate increase, which would increase the ending bal-
ance by only $8,909, since the remainder of it would be offset by increased
appropriations.)
Expenditures are difficult to predict on the basis of past experience and
only three months' data, especially with respect to Utilities capital outlay.
Before the November 14 Budget Committee meeting, we will be able to refine
our estimates. But it appears that we should under-expend the Budget by
$35,000, most of which would be unspent Operating Contingency.
Ending fund balance should be about $316,000, of which $280,000 would be
warehouse inventory.
GENERAL FUND
The beginning fund balance was $105,366, compared with $80,000 budgeted.
Again, we were able to transfer most of the flood expenditures as 1973-1974
business. Revenues in June were also slightly better than anticipated.
Revenues might be about $35,000 less than budgeted, primarily due to the
cost of the Street Department's share of flood restoration being less than
anticipated.
Total General Fund resources are expected to fall short of my Budget
estimate by $7,000, or less than 1%.
Expenditures will be very close to the amounts budgeted, except that we
are unaware of any potential claims against the Operating Contingency.
However, we probably will have to request more transfers of appropriations
witbin funds this year, due to the extremcly tight budget and the uncer-
tainties of the times.
At this time, it is apparent that 'the General Fund ending fund balance wj. ll
be practically zero. Because of this condition, and for other reasons, it
is recommended that crew sizes should be reduced wherever possible, by means
of short-term layoffs, especially during inclement weather. This is in
harmony with tile plans outlined in the Budget.
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Monthly Financi~il Commentary~-7/1-9/30/74
October 23, 1974
REVENUE SIlARING
Beginnin~ fund balance was $54,076 more than budgeted. Nearly all this
is at. tri uted to the fact that paving scheduled for June did not begin
until July.
Revenues will total about $138,000, compared with $142,000 budgeted. There
has been some reduction in quarterly allocations from the U.S. Treasury,
probably due to Ashland falling further behind other local governments in
tax effort in relation to income.
Total resources will be about $302,000, or $50~000 more than anticipated
for this year.
Expenditures will
$50,000 mentioned
the electric rate
depend largely upon Council action concerning both the
above and the $15,200 which could be reappropriated if
increase is adopted.
CEMETERY FUND
Beginning fund balance was $6,198 more than budgeted, but revenues will be
down due to competition from one or possibly two new crematories in the
area. In the near future, Cemetery Snperintendent Jim Burr and I will
offer a proposed plan of action to meet this challenge.
HOSPITAL AND HOSPITAL CONSTRUCTION FUNDS
Due to increases in both revenues and expenditures in the Hospital Fund,
we anticipate' the nee~ for a supplemental Dudget later this )'ear.
AIRPORT FUND
Thanks to a donation, we were able to acquire a visual angle slope indi-
cator, at no cost to the City.
SU/,BIARY
We probably will have to ask for more transfers of appropriations within
funds, due to the extremely tight budget this )'ear. |towever, if the Electric
rate increase is adopted, we are optimistic that during 1974-75 the normal
level of City services can be provided within the limited resources available.
Respectfully submitted,
P, objrt D. Nel;on ......
Director of Finance
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