Accuracy of Budgeted Expenses
- Analysis of Performance
- Metric Definition
- Why Is This Important?
- City Organization Impact on Performance
- Benchmark Information
Analysis of Performance
The result is red due to under spending, not due to overspending. At the end of Q4, the actual spending was $16.7M under budget. The $9.4M of underspending in the Governmental Funds was driven by: $2.7M in personnel (vacancy) savings, $4.4M in Natural Areas monies for budged land purchases that has not yet occurred, the Economic Health Office rebate expenditures are below budget $794K because the projects subject to rebate progressed faster than projected, and $2.3M for a debt service contingency related to the Woodward project that was not needed in 2013.
The $7.2M of under spending in the Enterprise Fund shows up in several utility funds. The Water Production Division is under budget $1.7M, primarily due to less water being treated and lower than projected fire-related operating costs. Fire restoration costs were $1.4M under projection. The Light and Power fund is under budget in energy services $2.5M. Total personnel (vacancy) savings are under budget in all utility funds $2.3.
This metric covers the accuracy and precision of planned (budgeted) and actual expenditures. Expenditures include operating costs, such as personnel, insurance, consulting and supplies, as well as debt payments and capital equipment purchases. Not included are the costs of large capital projects that occur over several years and have a beginning and end. Expenditures are separated into Governmental and Enterprise. Governmental expenditures are for those activities that are primarily supported by taxes and grants and to a much lesser degree from fees. Examples are Police, Streets Maintenance, Parks, Museum, Fire, etc. Alternatively, Enterprise expenditures related to activities that are accounted for like a business and are entirely supported by fees charged to users. These include Light and Power, Water, Wastewater, Storm Drainage and Golf.
Why Is This Important?
Accuracy and precision in expennse budgeting is very important to ensure the City can provide the full amount of programs and services citizens expect. Over estimating budgeting expenses takes money away from additional programs and services that could be provided to the community. The City strives to do a better job being accurate with our expense forecasts without going over the Council approved budget. The City is not allowed to go over budget according to statutory law.
City Organization Impact on Performance
High - The City has direct control over the amounts it forecasts and how much it actually spends. Historical analysis of actual spending to budgeted spending should allow the City to improve the accuracy of its budgeting.
This metric contains no benchmark data because the target for this metric is not influenced by the performance of other cities. External reference points would add no value to the data because the City's goal is always to be as accurate as possible with its own budgeted expenses.