HomeMy WebLinkAbout04.03.17 Work Session Packet City of Farmington Mission Statement
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AGENDA
CITY COUNCIL WORKSHOP
April 3, 2017
6:00 PM
Farmington City Hall
1. CALL TO ORDER
2. APPROVE AGENDA
3. DISCUSSION ITEMS
(a) 2016 Interfund Transfers Review and Expenditures Discussion
4. CITY ADMINISTRATOR UPDATE
5. ADJOURN
io�FARi►, City of Farmington
430 Third Street
• Farmington, Minnesota
`rs 651.280.6800 -Fax 651.280.6899
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www.ci.farmington.mn.us
TO: Mayor, Councilmembers and City Administrator
FROM: Robin Hanson, Finance Director
SUBJECT: 2016 Interfund Transfers Review and Expenditures Discussion
DATE: April 3, 2017
INTRODUCTION
Transfers of money between funds occur for various reasons. The following is not an exhaustive list,but
will provide you with some examples.
• Sometimes transfers are made as part of a long-term funding strategy often in conjunction with a
capital improvement plan(CIP). Some specific city examples would be transfers made to the
sealcoating,building maintenance, trail maintenance, and ice arena capital accounts.
• Money may be infused from one fund into another fund to cover day-to-day operations such as the
transfer made from the General Fund to the EDA.
• The city may want to save money over several years for a larger purchase(such as the fire engine
planned for 2019), or recurring replacement purchases (for example, items replaced on rotation
schedules, such as police and fire equipment), or items for which the delivery time is uncertain, such
as, ammunition and guns (may order one year,but delivery is not available until the following year—a
different budget year).
• Transfers are made when the city invests its liquor stores community improvement funds.
• Administrative transfers provide for the reimbursement of human resource and administrative costs
incurred in one fund for the benefit of another fund.Another type of administrative transfer would be
more house-keeping in nature, for example completing closing entries for accounts that are no longer
needed.
• Finally, no matter how comprehensive and well thought out the city's budget or current year plan may
be new, unanticipated opportunities often present themselves. Some recent examples would be the
Rambling River bank restoration project and potential downtown plaza.
During year-end staff reconciles the actual transfers which were made to the budgeted amounts. The
differences are identified and reviewed with you.
Reviewing this information annually also provides an excellent opportunity for you to see the positive
impacts you have had with these transfers.
DISCUSSION
The attached comprehensive schedule details the interfund transfers that occurred during 2016. It may be
difficult to review this report on your iPad. Larger copies of this information will be available for your review
during your April 3, 2017 workshop.
The transfers are grouped into five color-coded categories.
• Gray–Amounts highlighted in gray represent amounts that were included in the 2016 budget and
transferred accordingly.
• Brown—These represent amounts that were included in the 2016 budget,but not listed as transfers.
For accounting purposes these amounts are included as transfers. One example would be the
insurance deductible replenishment. One of these amounts was included in the General Fund. During
the year this money was transferred from the respective funds to the Property and Liability Insurance
Fund where the insurance claims are actually paid.
• Peach—Included in the peach cells are amounts which were listed as transfers for budget purposes.
These amounts were for interfund loans. For accounting purposes these amounts are not recorded as
transfers, rather they are recorded as interfund receivables and payables. The city's budgeting
process is for revenues and expenditures/expenses. So, we include these items as transfers in the
budgeting process so it is clear to council we envision these types of transactions and they are part of
the budgeted activities.
• Purple—These transfers occurred during the year but were not included in the 2016 budget. Many of
these items were discussed with the city council during the year. One example would be dedicated
funding for township road maintenance or transfers you approved as part of the bond refundings.
Another reason for these transfers may be more administrative. For example, the city paid off its
share of the 1995 Public Facilities Authority bonds. The remaining funds totaling$1,647 were
transferred into the General Fund so that the related bond fund could be closed.
• Blue—These are proposed transfers. They have not yet been made and will be reviewed and
discussed with you during your workshop.
There are explanations for all of the amounts highlighted in purple and blue in your packet. The row
(numbers) and column(letters)references have been included in the spreadsheet. This will enable you to
cross-reference the cell on the worksheet with the corresponding comment on the following pages.
Similar to the update staff shared last October, the 2016 General Fund budget continued to fare well. There
were several revenue line items (ex. new construction permit revenue)that exceeded budget and several
expenditure areas (ex. snow removal)that were under budget. A more in depth review of the 2016 financial
statements will be provided to you during your April 17, 2017 city council meeting.
The draft 2016 revenues over expenditures presently total approximately$900,000. After ensuring the
General Fund fund balance meets the city's minimum 40% of the following year's expenditures and setting
aside funds to provide for a possible increase in 2018 expenditures, staff would like to propose the following
additional transfers. These transfers take into consideration city council's desire to provide tax levy relief,
fund commitments the city council has made for items that were not included in the 2017 budget and address
items which are underfunded.
The proposed transfers are highlighted in blue on the attached worksheet. Moving from left to right for
items listed on row eight of the worksheet the proposed transfers are as follows:
• To provide tax levy relief in 2018 staff is recommending the use of$150,000 as a one-time reduction
to the 2018 debt levy.
• Funding would be provided in the amount of$25,000 for a consultant to complete the transportation
analysis for the city's comprehensive plan.
• A transfer of$30,000 into the Maintenance Fund-Trail Maintenance would pay for the city's share of
the Rambling River restoration project which was discussed during your March workshop.
• An allocation of$27,500 to the Maintenance Fund for building maintenance, an additional$27,500 for
the city's Emerald Ash Borer response, and $7,500 for the downtown plaza concept development.
• Finally,the city has a compensated absences liability as of December 31, 2016 of$950,000. This
represents the amount due to city staff for unused vacation, sick leave and personal time off(PTO).
When a staff person leaves city employment the city pays the unused balance as severance pay. To-
date the city has set-aside$50,000 for compensated absences leaving an unfunded balance of
$900,000. Staff is recommending$300,000 be added to the initial$50,000 which was set-aside for
compensated absences. This would leave a remaining unfunded liability of$600,000.
BUDGET IMPACT
Budget variances have been explained above.
ACTION REQUESTED
• Review the material presented, ask questions and provide direction to staff.
• You will be asked to approve the comprehensive list of transfers during your regular April 3, 2017 city
council meeting.
• If you desire to make any changes to the transfers recommended due to the positive year end 2016
budget results these can be discussed and incorporated into recommendations you will consider at the
city council meeting.
ATTACHMENTS:
Type Description
D Backup Material 2016 Operating Transfers for Council 3-29-2017
Al B I C I 0 I E I F I G I H I I I J 1 K I L I M 1 N 1 0 .1 P 1 0 1 R I s I T I U I V I W I X I Y 1 2 I AA 1 AB I AC
1 2016 OPERATING TRANSFERS Transfers In u AcVI 5205 end Transfers ON u Acct 7310
2 IN
Main.Fund-
Arena General Main. Township Main.Fund- Employee
General Park Imp 2013A 20164 2008AB 2010C 2010A Road and Cap Proj Equipment Fund- Main.Fund-Main.Fund-Main.Fund- Road Emerald Ash Main.Fund- Expense Prop Ins
3 Fund ERA Fund Bonds Bonds Bonds Bonds Bonds 2010B Bonds 2006C Bonds 2007A Bonds Bridge Fund Fire Cap Fd Cap Fund Sealcoat Streets Trail Main Bldg Main Maintenance Borer DT Plaza Fund ISF
4 I II 1,118,171 40,000 40.000 118,000 - - 160,000 - 114,662 1,786,000 - 117,000 286,000 20.000 766,807 760,000 - 30,000 16,000 - - 4,050,630
5 Fund 1000 2000 2300 3091 3094 3095 3096 3097 3098 3130 3135 4100 4300 4503 5600 5700 5700 5721 5731 5741 7100 Totals Difference
6 630,000 1000 40000 - 90,000 20,000 85.000 350,000 30,000 156100 13,022 10600 653,022 (23.022)
- 1000 43,709 - 69.000 40,000 45.000 36,969 50,000 280,676 (280,678)
8 . 1000 150,000 25,000, 30,000 27,500 27,500 7,000 300,000 587,000 (587600)
9 278,807 1000LGA
205,000 71,807 276,607
10 . 2300 50.600_ 50,000 (50,000)
11 - 2500
10000- 10.000 (10.000)
12 _ 3094 2,290,000 1,220,000 3,510,000 (3.510,000)
13 . 3110 1647
_ 1,847 0.847)
14 - 3130 165 165 (185)
15 Q 117,000 3091 117,000 - 117,000 -
16 u . 3136 - _ 4,850001
4,850,000 (4.850,000)
17 T . 3137 1,830000 1,630,000 (1.630.000)
18 369,000 4100 219000 377000- 745,000_ 150,000_ 1,491,000 (1,122,000)
19 1,386,000 4400 1,385,000 1,385,000
20 . 5711 10,000 10,000 (10,000)
21 83,040 6100 53,040 40000 2000 95,040 (2,000)
22 . 6100 15,013 _ 14,513_15,121 25,125 36,301 109,073 (109.073)
23 312,597 6202 281,859 31,138 3,750 316,747 (3,750)
24 120,236 6302 81,528 48,707
- _ 300 128,595 (380)
25 342,611 6402 320942 15,589 342,511 -
26 436,140 6502 405,002 31 135 436,140 -
27 4,090,630 1,150,183 40,000 55,013 219,000 377,000 3,035,000 1370,000 193,709 124,552 1.385,000 6,480.000 117,000 309,513 98,121 246.732 350,000 25,000 96,301 82,500 10,000 72,500 43,969 363,022 16,110
2B
16,260,225
3J 1,812 - 76,077 - 377,000 7,076,000 1.228.900 797,709 - - BM0,000 - 14,613 78,121 90,125 - 26,000 66.701 57,500 10,000 72,500 43,968 303,022 18,110 16,260,225
30
31 Transfers per original 2016 budget
32 Amounts included in 2018 budget line items.but not as transfers.For accounting purposes they are transfers.
33 Amounts included in 2016 budget line items as transfers.For accounting purposes they are not transfers,but rather interfund loans.
34 Additional transfers that occurred during the year.Explanations noted as comments within worksheet.Printed on separate page for your referemce.
35 Proposed additional transfers.retro to 12-31-16.Explanations noted as comments within worksheet.Printed on separate page for your reference.
36
K:IOperatIng Transfers by yearsAerating Transfers 3/292017 8:37 AM
Cell:Z6
Comment:Robin Hanson:
Employee insurance premium transfer
Cell:AA6
Comment:Robin Hanson:
Insurance deductible transfer
Cell:K7
Comment:Robin Hanson:
The 2017 budget anticipated the residual fire truck levy be transferred to the 2010A bond funds in 2016 so the debt levy for 2017 could be lowered.This was a one-time reduction.
Cell:R7
Comment:Robin Hanson:
In the fall of 2016 council approved set-aside for police equipment
Cell:N
Comment:Robin Hanson:
In the fall 012016 council approved set-aside for building maintenance
Cell:X7
Comment:Robin Hanson:
In the fat of 2016 council approved setaside for Emerald Ash Borer efforts
Cell:Y7
Comment:Robin Hanson:
In the/all of 2016 council approved set-aside for downtown redevelopment efforts
Cell:27
Comment:Robin Hanson:
In the fall of 2016 council approved set-aside for compensated absences
Cell:KB
Comment:Robin Hanson'.
Proposed one time use of 2016 fund balance for 2010A debt levy.
Cell:TB
Comment:Robin Hanson:
Proposed one time use of 2016 fund balance to pay for transportation consultant for the comp plan.
Cell:UB
Comment:Robin Hanson:
Proposed one time use of 2016 fund balance the Rambling River bank restoration project.
Cell:VO
Comment:Robin Hanson:
Proposed one time use of 2016 fund balance to provide additional building maintenance funds.
Cell:X8
Comment:Robin Hanson:
Proposed one time use 012016 fund balance to provide additional funds for the Emerald Ash Borer project.
Cell:Ye
Comment:Robin Hanson'.
Proposed one time use 012016 fund balance t0 pay for downtown plaza development consultant.
Cell:Z8
Comment:Robin Hanson:
Proposed one time transfer 012016 fund balance to the Employee Expense Fund to help address the citys unfunded compensated absences liability.
Cell:010
Comment:Robin Hanson:
Transfer from Park Improvement Fund to Arena Capital Projects Fund for the purchase of the new Zamboni
Cell:Q11
Comment:Robin Hanson:
Transfer from 2016 Ice Arena Fund operations to Ice Arena Capital Fund for future building needs.
Ce11:112
Comment:Robin Hanson:Amount of 2016A refunding bond proceeds transferred to 2008AB bonds for 2-1-17 early redemption.
Cell:J12
Comment:Robin Hanson:
Amount of 2016A refunding bond proceeds transferred to 2010C bonds for 2-1-17 early redemption.
Cell:013
Comment:Robin Hanson:
Transfer net cash balance remaining from the 1995 Public Facilities bonds to the General Fund.E's were in tum used to pay down on the Fire Truck loan.
K:lOperating Transfers by year lOperating Transfers 3129/2017 8:37 AM
Cell:214
Comment:Robin Hanson:
Transfer net cash balance remaining from the 2010C bond fund to the General Fund.
Cell:015
Comment:Robin Hanson:
Included in 2016 Budget to provide for interfund loan.For accounting purposes this results in an Interfund loan and not an actual operating transfer.
Cell:516
Comment:Robin Hanson:
Transfer of 20166 refunding bond proceeds to 20070 bond fund.
Cell:517
Comment:Robin Hanson:
Transfer of2016C refunding bond proceeds to 2007A bond fund.
Cell:AIR
Comment:Robin Hanson:
Transfer of city's net contribution to the 2016A bond refunding.$05,000 for general contribution,$42.000 for the interest on the interfund loan for SA prepayments and$240.000 to ensure the 2016A bonds meet the 105%debt service funding requirement.
Cell:118
Comment:Robin Hanson:
Transfer of city's net contribution to the 2016A band refunding.
Cell:M19
Comment:Robin Hanson:
Included in 2016 Budget to provide for interfund loan.For accounting purposes this results in an interfund loan and not an actual operating transfer.
Cell:w26
Comment:Robin Hanson:
Transfer within the Maintenance Fund to set-up funding for township road maintenance.
Cell:F22
Comment:Robin Hanson:
Transfer of Liquor Store Community Investment$'s to the Park Improvement Fund for the purchase of the roving camera(currently surveiling at Lake Julie park)and the new bike racks for downtown.
Cell:P22
Comment:Robin Hanson:
Transfer of Liquor Funds Community Investment$'s to the Fire Capital Fund for the purchase of thermal imaging camera.
Cell:Q22
Comment:Robin Hanson:
Transfer of Liquor Store Community Investment$'s to the Arena Capital Project Fund for advertising on the new Zamboni($10,000)and the new sound sylem($8,121)
Cell:R22
Comment Robin Hanson:
Transfer of Liquor Store Community Investment Fund$'s to the Gen'!Capital Equipment Fund for the purchase of a new building inspections vehicle.
Cell:U22
Comment:Robin Hanson:
Transfer of Liquor Store Community Investment Fund$'s to the Trail Maintenance Fund for the TH-3 trail extension
1610perating Transfers by year\Operating Transfers 3/29/20178:37 AM