Accuracy of Cumulative Budgeted Expenses ($ millions)

Desired Result:  Below Target

 
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Analysis of Performance

Governmental expenditures, on the whole, remain below budget through the first quarter and continue to demonstrate favorable fiscal performance relative to adopted spending targets. Personnel and operating expenditures are generally tracking within expectations, supported in part by the City’s hiring freeze and formalized exception review process. These measures have proven effective in moderating expenditure growth and assisting departments in maintaining alignment with their approved budgets while prioritizing critical operational needs.

First quarter expenditure trends were also impacted by the implementation of a revised accounting treatment for prepaid expenditures, which shifted the allocation of certain costs from Year 1 into Year 2. As a result, several departments experienced elevated first quarter non-personnel expenditures and temporary budget variances associated with the recognition of these prepaid expenses. While this accounting change created some early year distortion in expenditure reporting, the variance is expected to normalize over the course of the fiscal year as spending patterns stabilize and the timing impacts associated with the prepaid allocations are absorbed. Based on current year to date trends, governmental expenditures are generally tracking favorably and are projected to finish at or below overall budgeted levels by year end, assuming current spending controls and operational conditions remain in place.

Utility fund expenditures, in aggregate, continue to trend favorably relative to budget and reflect stable operational performance through the first quarter of the fiscal year. Overall spending levels remain within adopted budget parameters, supported by ongoing expenditure monitoring, operational controls, and disciplined management of personnel and non-personnel costs across the utility enterprise funds.

These impacts are anticipated to normalize as the fiscal year progresses and expenditure activity aligns more closely with historical seasonal trends and operational spending patterns. Based on current year-to-date performance and existing expenditure controls, utility fund expenditures are generally projected to conclude the fiscal year at or below budgeted levels while continuing to support core service delivery and infrastructure operations.



Metric Definition
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 expense 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.
Benchmark Information
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. The evaluation criteria for this metric was revised so that Green performance is between 96-100% of the target, Yellow performance is between 93-96% of the target and Red performance is below 93% of the target.