Matt Wolff, finance director, gave a budget presentation to the Gardner City Council last week, explaining the city uses priority based budgeting. Gardner is in the middle of their first two-year budget cycle, and are beginning the next two-year cycle for 2021-22.
As part of that, results are monitored and adjusted as necessary. The year-end results are reviewed before the budget process.
According to the meeting minutes, the general fund revenues were favorable by estimate by 3.5 percent, or $455,000. Expenditures were unfavorable to the estimate by 1.3 percent or $176,000.
Overall, the fund balance increased from an estimated 26 percent to 28 percent, and every one percent is about $137,000.
The main revenues that went up were licensing and permits. The development department has been busy, and interest earnings were up and have been for several years. The finance department will continue to invest idle funds to maintain and increase investment earnings, and the other/misc was 20 percent higher than estimated (or $180,000) and $135,000 of that was due to lease proceeds for the dump truck.
General fund expenditures were unfavorable by about 1.3 percent or $176,000, again due primarily to the dump truck purchase that wasn’t planned but was needed, and the SWJCEDC contract expense had to be moved to the general fund because the city didn’t have enough transient guest tax.
There are other miscellaneous budget changes throughout the entire budget that were $42,000 favorable, but overall with unplanned expenditures, they are within 1.3 percent of expenditures.
This illustrates a very tight budget control, Wolff said. The electric fund had unfavorable revenue by 4.9 percent or $865,000, and expenses were favorable by 9.4 percent or $1.6 million. Fund balance increased from 68 percent to 80 percent. There is an additional $3.1 million in electric capital reserve fund. The revenue difference is primarily in retail sales, but there was a small offset with higher than anticipated revenues from Dogwood.
There was a favorable variance to expenses, mostly due to a delay in capital projects like smart meters. There was an offset by negative variance at wholesale electric purchases, about $1.3 million, and the transfer made to the airport fund. Overall it’s a $15.5 million fund balance.
The water fund revenues were unfavorable by 17.2 percent, and expenses were unfavorable by 1.5 percent. The fund balance decreased from an estimated -62 percent to -67 percent. The reason the fund balance is negative is because the city encumbered the entire contract for the water plant expansion. If that is removed, they’d have a fund balance of 81 percent or $4.6 million. Bonds will be issued in May, according to meeting minutes.
The wastewater fund revenue was unfavorable by 26 percent, and expenses were favorable by 36.7 percent. Fund balance increased from an estimated 18 percent to 33 percent. Revenue variance is due to a variance in the amount of bond proceeds that were issued, $5.2 million versus $2 million, and retail sales were down $190,000.
Expense savings is due to delayed capital projects. Overall the fund balance went up $2.9 million, and the end of year fund balance is $1.9 million. The general fund balance is above the 25 percent target rate at 28 percent.
The electric fund is robust, according to Wolff’s report. Water and Wastewater funds are adequate.
If the water plant is taken out of account, there’s an 81 percent fund balance from water. It’s listed as adequate because there are $50 million in water projects coming up in the next 10 years, and with the rate study, that gets spent down over time.