General Fund 2011 Year End Auditor’s Report
January 15, 2012
Dear Members of Norwood City Council,
This is the preliminary Auditor's Report for the year ending 12/31/2011. It offers graphical representations of the financial activity in 2011. The report includes breakdowns of revenue sources, expenditures by departments, year to year comparisons, and a break-down of health care and overtime costs. In 2011 the City's General Fund expenditures of $19,428,302 significantly outpaced its revenues of $18,868,568 with expenses exceeding revenues by $559,734. The initial amount carried forward to 2012 is $162,500 before year end encumbrances [pg 4]. Comparisons of yearly revenue and expenses are included in this report [pg 5-6].
While initial 2012 projection show the greatest revenue source for General Fund, earnings tax receipts, remaining steady we do anticipate a decrease in our Intergovernmental revenue of ($821,012). This is comprised of a decrease of ($183,473) with the elimination of the Tangible Personal Property Tax in 2012, a scheduled decrease of ($97,750) in House Bill 66 reimbursement, General Property Tax decrease of ($258,789) and a decrease in Local Government Funds of ($281,000) [pg 9].
Overall the City’s greatest expense was personnel related expenditures at $16,132,209 with the greatest revenue source being local earnings and admission taxes at $13,678,510 [pg 7-8]. The City did well in cutting General Fund expenses in 2011 reducing total expenses by ($2,059,748) over 2010 expenses and by ($2,638,956) over 2009 expenses. We saw a decrease in personnel expenses ($486,441), in contractual expenses ($53,237) and materials & supplies ($249,273) while Debt payments increased $579,922 [pg10-12].
Overtime made up for 3.6% of all personnel costs totaling $582,877 which is an increase of $116,233 from 2010. The City’s largest two departments, Police and Fire, were the largest recipients of overtime. A detailed overtime analysis by department is included in this report [pg13].
Health care costs for the City of Norwood have stabilized for the next year. In 2012 the projected total Health Care costs for the General Fund is $3,184.017. The City is projected to spend $2,355,447 on health care and dental/optical benefits for its current employees and $501,777 on retirees health care with an additional $326,793 paid to the C9 trust fund [pg14]. This represents 17.7% of the total amount available for appropriations.
The City was able to make significant savings in 2011 by paying for $734,000 of its fixed expenses with the Developmental Impact Fund-28. At the end of 2011 the unencumbered balance of the fund is $15,361. These expenses, which were not included in the 2011 appropriations, will have to be appropriated in the General Fund in 2012.
With the projected decrease in revenue the beginning 2012 Certificate of Estimated Resources has $18,028,928 available for the General Fund appropriations. In 2012 the City has $1,941,603 less than the 2011 final appropriations. This represents an additional 9.7% reduction needed for 2012.
This report also contains reference material including detailed revenue reports for 2005 through 2011 [pg15], the 2011 statement of cash position [pg17], and a detailed report with itemized expenses by department [pg18]. The Year End Auditor's report contains the initial totals at the year-end closeout for 2011 and are presented in unaudited form. Fully audited detailed information will be available in the 2011 CAFR which should be completed in the Spring of 2012. I hope you find this information useful.