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Memo
TO: Honorable Mayor and Members of City Council
VIA: David L. Greene, City Manager
FROM: John De Leo, Administrative/Financial Services Director
DATE: July 10, 2015
RE: Variance Explanations for the Proposed Budget Detail Fiscal Year 2015-2016
Based on the Consolidated Financial Overview in the Fiscal Year 2015-2016 Proposed
Budget Document, the Major Components for each of the six distinct expenditure
categories are highlighted in the following variance analysis:
Personal Services — Personal Services experienced a 9.1 % increase from the
previous year. Major components include salaries, benefits and insurance.
• Salaries increased 4.4% ($97,866) as a result of changes in organizational
structure, merit increases and staffing levels to accommodate additional growth
the City is experiencing.
• Life and Health Insurance decreased by a combined 6% ($29,773) as a result
of employee gains/losses throughout FY 2014-2015. However, with the
uncertainty of future healthcare expenses and the effect of those who qualify
for the $5,000 dependent coverage plan, the situation remains extremely
unpredictable. Additionally, with the changes in the Affordable Care Act
reconstituting the definition of a Full-time, Part -Time and Seasonal employee
this will also affect the overall cost of health care.
• Overall, the average of Retirement expenses increased by 7% ($13,340) due
to a change in the number of employees eligible for a full year or partial year of
benefits.
• General LiabilityMorkers' Compensation is expected to increase 21 %
($47,371) based on asset inventory reassessment conducted by Florida
Municipal Insurance Trust (FMIT).
Operating Expenses — Operating expenses experienced an overall 13.6% increase
from the previous year. The major components that contributed to the increase were:
July 10, 2015
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• 5% increase in both Protective Services and Fire/Rescue Services
• 18% in Legal Services
• 8% in materials
• Variable increases in equipment maintenance, contract services, and
professional services
Capital Outlay — Capital Outlay expenses increased over 350% compared to the
previous year as a result of project costs being shifted based on changes in original
start dates, projects delayed, rescheduled and/or rebid. The major projects that make
up this increase are:
• Reclaimed Water Tank/Sludge Belt Press Improvements
• Lift Station Rehabilitation
• Canaveral City Park Exfiltration
• North Atlantic Improvement Project
• Construction of the New City Hall
• Infrastructure Maintenance Building Replacement
Debt Service - Debt Service has been reduced by 39% due to the payoff of a State
Revolving Fund Loan #825020 which ended the City's obligation of semi-annual
payments of $252,000.
Transfers - Increase in transfers represent over $6.8M in SRF Loans to the Enterprise
Capital Fund for Major Projects.
Contingency - Contingency decreased from $530,841 to $231,307 which is directly
related to an increase in personal services, operating expenditures and conservative
revenue estimates.
The FY 2015-2016 Budget is based on a Roll -Back rate of 3.5513 mills and, as a result,
Ad Valorem revenue increased for General Government and the Library by a
combined total of $63,480 (Prior Year's Roll -Back was 3.7246 mills).
July 10, 2015
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Important Notes
- State Shared Revenues are not final at this point and may require additional
updates as new data becomes available.
- Revenue and Expenditures may require additional adjustments/updates based on
factors affecting upcoming projects.
If you have any questions or wish anything additional, please let me know.