Initial Reports Show a Surplus for FY2012

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Thursday September 13, 2012

In a time when the national economic climate has not been at its best, South Burlington has some good news.  Deputy City Manager Bob Rusten and Deputy Finance Officer Sue Dorey reported during the September 6 City Council meeting that after looking at the unaudited end of the year financials, the city ended 2011–12 fiscal year with a surplus.

However, the estimated surpluses for the General Fund , at $405,609.88, and the enterprise funds could change. According to an analysis report from Rusten to the City Council, the city is waiting for the “June and July Local Option Tax, the final collection of the City property taxes, and to determine whether our estimated additional expenditures were lower or higher.” The city is expected to receive the final audited numbers by December.

Rusten and Dorey shared a list of all the expenditures and revenues for the general fund as well as enterprise funds: Sewer budget (water pollution control; Fund 400), Stormwater budget (Fund 402), and Water budget (Fund 401). The list is thorough, showing more data than what used to be presented in the past. For example, the budget may show an over-expenditure of diesel fuel, but on the revenue side, it shows the revenue that came in to support that over-expenditure. In previous years, that had been “netted out” and nobody saw those figures, Rusten said.

The Sewer budget—part of a 10-year plan to fund the Bartlett Bay project—has an estimated surplus of $849,842.04, much higher than predicted. Reasons for this surplus originate from the “higher than budgeted revenues in the sewer (connection) hookup fees and a non-recurring payment from the Airport Parkway Project contractor,” according to Rusten’s report.

The Stormwater budget has an unaudited anticipated surplus of $460,555, higher than the originally anticipated surplus of $98,382. According to the report, “The unaudited surplus is right on target to the amount we had budgeted to carry forward to FY 2013.” This will help fund expected projects.

The Water budget’s estimated surplus $41,337.00, is largely attributed to the Connection Fee Revenue Line, according to the Champlain Water District, the city’s contractor.

Regardless if the surplus numbers go down after auditing, it is still a major improvement than the end of Fiscal Year 2011 when the city showed a deficit of over $200,000, Rusten said.

“Even though I think this is good news, we have some issues to continue to address,” explained Rusten.

Rusten reviewed some of the concerns that are currently being solved such as overtime in fire and ambulance, the sick bank, and the actuarial pension plan. Rusten said that there have been discussions with the union to find ways to alleviate fire and ambulance overtime expenses.

The city has overspent money for the sick bank line, but $100,000 has been put into a reserve fund so that if there is over-expenditure for Fiscal Year 2013 there will be additional funds to use.

For pension planning, there will be a Request for Proposal sent to the Pension Advisory Committee that will look to make sure managers are doing the right job at the best price, Rusten said.

There was also more hiring done this year, effectively adding more advertising costs to the budget than normal.

The City is also looking to finalize payment with the state for the Airport Parkway Project to get a better handle of the “due to’s and due from’s” going forward with future FY budgets. Additionally, the City set up a Rainy Day Reserve, or Undesignated Reserve, of $50,000 for FY13, Rusten said.

Plans for City Center cannot be ignored when budgeting for future fiscal years. Rusten explained that City Center will be “far from cheap,” but it will certainly be an important investment for South Burlington.

Until December’s audit reveals the true numbers, the city can anticipate a positive start to FY 13.

SOURCE: Miranda Jonswold, Correspondent