INTER – CITY MEMORANDUM
To: Havre de Grace City Council and Citizens
From: Mayor Wayne H. Dougherty
Date: September 18, 2013
RE: Fiscal 2013 Fourth Quarter Financial Results
The financial results for the fourth quarter of fiscal 2013 indicate that the City is,
overall, in sound financial shape and will achieve most of its budget efforts by
The General Fund completed the quarter $2.7 million ahead of budget
The Water & Sewer Fund operated at a $400,000 loss.
The Marina Fund operated at a $5,000 profit.
A more detailed discussion of financial activity within each of these funds is
City revenues were almost $14.2 million for the year, which exceeded prior year
revenues $555,000 and fiscal 2013 budget targets by $1 million. The major
contributors to the excess revenues:
● Real property tax revenues totaled almost $8.3 million. These revenues
exceeded the prior year by $190,000 and fiscal 2013 budget expectations
by $185,000. Personal property tax revenues, meanwhile, were $445,000
for the year, which were $35,000 less than 2012 and $10,000 more than
fiscal 2013 budget expectations.
● Income tax revenues totaled over $1.65 million. This exceeded prior year
revenues by $130,000 and current year budget expectations by $885,000.
● Grant revenues were $1.65 million for 2013. This exceeded prior year
grants by $170,000 but were less than budget estimates by $170,000.
Expenditures were $14.7 million for the year, which was $700,000 below 2013
budget levels and $1.8 million more than 2012 levels. Major areas where
spending varied include the following:
Salaries and benefit expenses were over $250,000 less than anticipated
by the budget due to position vacancies and turnover.
● Juniata Street paving was delayed to allow for completion of County
construction, resulting in spending only $30,000 of the $550,000 budget.
This paving should be completed in fiscal 2014 and my current
expectation is that the project will finish at or below the authorized budget.
The City started the year with a Fund Balance of over $3.7 million. The $510,000
loss has resulted in the fund being $3.2 million at the end of the year. As required
by the Charter, the City incorporated its projected fund balance as a source of
funds for the fiscal 2014 budget
Water and Sewer Fund
The Water & Sewer operations broke even for the year, generating a profit of
only $8,000. This was $90,000 better than the results for last year but $675,000
less than the operating profit anticipated by the budget.
Revenues were $5.9 million for the year, $225,000 more than those earned last
year but $815,000 below expected levels anticipated by the budget. The primary
causes for the results include the following:
While overall demand for Water & Sewer services has remained
essentially flat compared to the prior year, it is over 50 million gallons
below projected budget levels resulting in revenues being short of
expectations by $560,000.
The City imposed a 5% rate increase for fiscal 2013 in an effort to ensure
adequate funds were available for operations and debt service
requirements. As a result the revenues increased by $140,000 over the
The less than expected demand for water also resulted in operational spending
being below budgeted levels, but by only $140,000.
Water & Sewer capital project activity required $405,000; or almost $400,000
more than the operating profits for the year. This is over $335,000 more than was
anticipated by the budget. The major components to capital activity include:
The City received $1.18 million in capital cost recovery fees for the year.
This is over $510,000 less than anticipated by the budget,
The City paid $1.1 million in debt service payments, and
The City contracted over $485,000 in infrastructure repairs and capital
The City started the year with a $1.2 million fund deficit. This deficit has
increased by $400,000 to $1.6 million by year end. The budget, however,
anticipated the fund deficit would increase by only $55,000. If new construction
continues at current levels, the fund deficit could increase for the upcoming year
as well. For this reason, I am continuing to set aside General Funds to ensure
operations are fully funded through the end of the year.
The Marina operated at a $5,000 profit through the end of the quarter, $80,000
ahead of budget expectations.
Revenues were over $85,000 above estimates while spending was $5,000
greater than budgeted. The primary cause for the revenue overage was
increased fuel sales and ramp usage. The Marina started the year with a balance
of $205,000 and remains financially sound through fiscal 2013 with a fund
balance of $210,000.
The City did not have to use any Emergency Reserve funds during the year and
the fund is still at its $1.2 million legislative target.
The RAD loan program made no new loans this year and has $220,000 available
for additional lending.
The Promenade Fund has $125,000 available to repair and maintain the
Critical Area Tax receipts were $52,000 for fiscal 2013 while almost $67,000 was
transferred to fund qualified Bay Restoration projects. As a result, $270,000 is
available for future qualified Bay restoration projects.
Slip User Fees were $60,000 for the year and almost $43,000 was spent on
qualified projects. As a result, $230,000 is available at year-end.
The Community Center Fund has earned $16,000 for the year, reducing its fund
deficit to just over $1,000.
The Abandoned Property Restricted Fund remains unchanged through the end of
the quarter and has a balance of almost $42,000.
The Forest Conservation Fund has had no activity during the quarter and $700
resides in the Fund at year-end.