by Eric Hagen
Finance Director Sharon Kutzke updated the Ham Lake City Council on the final 2011 budget numbers at its Feb. 21 meeting.
According to Kutzke, expenditures exceeded revenues by $34,490 in 2011.
It was the council’s plan in 2011 for the city to spend more than it took in, according to Kutzke. All cities have some fund balance in order to get through the first half of the year before property tax revenue starts coming in from the county. The percentage of how much each city carries over from the end of each year varies.
Kutzke said the council adopted a resolution in 2011 that states the goal is to have a general fund balance in the range of 35 to 50 percent of the next year’s budgeted expenditures, including transfers. At the end of 2011, the city had a 57.2 percent general fund balance.
The city had budgeted to spend $282,500 of the city’s fund balance, but only spent down $34,490, according to Kutzke.
Councilmember Gary Kirkeide sees this as a situation where staff was very careful about not just spending money because it was budgeted. He said many factors go into budgeting and some things are hard to project. For example, this mild winter means less will be spent on overtime costs for plowing roads and salt than last winter.
Kirkeide said Ham Lake has the lowest tax capacity rate of any city in Anoka County and he feels it is thus the most efficient and well-run city in the county.
The biggest expenditure drop came from the public works and parks departments, which share staff, but are budgeted separately. These departments spent $153,147 less than budgeted. Although the retirement of Don Mickelson and Nate Ayshford taking the public works director job in East Bethel accounted for $14,087 of the decrease, the biggest decline was due to roads maintenance projects coming in $41,987 below the budget.
Building repair and maintenance $11,233 lower, operating supplies $7,895 lower and fuel costs $7,400 less were other factors that led to actual expenditures being less than the projected numbers.
Ham Lake collected 93.9 percent of the certified levy it budgeted for in 2011 compared with 94.4 percent in 2010 and 94.7 percent in 2009.
Delinquent taxes at the end of 2011 stood at $173,959, down from $185,273 at the end of 2010.
The city had $24,451 of unspent capital outlay transferred from four different general fund accounts to equipment funds. The amounts were $8,982 from general government capital outlay to the general government equipment fund, $1,000 from senior center capital outlay to the general government equipment fund, $7,968 from public works capital outlay to the public works equipment fund and $6,501 from parks capital outlay to the parks equipment fund.
Kutzke said the capital outlay funds are for small items such as new computers or a hoist for vehicle repairs. The equipment fund is meant for large expenditures such as new vehicles or software.
“The equipment fund is like a savings account,” Kutzke said. “We set aside a little each year so when we need a new plow truck we have the money so we don’t have to levy extra or borrow the money.”
The city is budgeting $77,000 in the general government equipment fund for new financial and payroll software, a new financial server and notepad computers for the council. With these expenses, the transfer of funds into the account and the current balance on the account, the general government equipment fund is expected to have a balance of less than $4,000 at the end of 2012.
Eric Hagen is at [email protected]