CITY OF BEAUFORT FY2022
Budget In Brief
A Summary Look at the 4th Quarter of the FY21-22 Budget
The following report represents the activity through the fourth (4th) quarter of the fiscal year (unaudited) in comparison with prior years and budgets. One thing to note is that revenues are not realized on an equal basis amongst the quarters. In fact, most of the revenues are realized during the later half of the fiscal year. As we review the 4th quarter activity, I encourage readers to keep the above in mind and look more closely at the actual revenues and expenditures on a historical basis as a gauge on whether the City's financial position is on track in meeting its goals and objectives. The comparative charts are presented for the General Fund, the Parks & Tourism Fund and the Stormwater Fund, which are the three major operational funds of the City.
I encourage readers to drill down into any the following charts and graphs which will lead you to the City's transparency portal, where the reader will find budget comparisons and the ability to filter down into more detail of the City's operations.
FY 2022 4th Quarter Revenues
Overall revenues for the 4th quarter of $40.9M in comparison with June 2021 represents a slight decrease of $86K. The City received $3.3M in the first tranche of American Rescue Plan Act (ARPA) funds which was offset by a decrease in bond proceeds received through the 4th quarter of fiscal year 2021.
FY 2022 4th Quarter Expenditures
Overall expenditures for the 4th quarter of FY 2022 of $34.8M are $7.4M less than the 4th Quarter of FY 2021. This decrease is a result of capital expenditures and transfers between funds for the Mossy Oaks Stormwater Improvement Project that was in the construction phase last fiscal year but the project has been completed.
FY 2022 4th Quarter Revenues over (under) Expenditures
The chart summarizes the total revenues less total expenditures for the net change. Revenues exceed expenditures by $6.1M as of 4th quarter fiscal year 2022 and closely inline with revised budget.
Personnel Costs for 4th Quarter
Personnel costs consist of salary related transactions. Besides the budgeted salary increases of 2% from results of compensation study, the City also allowed employees to sell up to 40 hours of vacation back to the City to keep from losing vacation accrued hours above the cap. The City finished slightly under revised personnel budget at 99.8% at the end of fiscal year 2022.
Benefit Costs for 4th Quarter
Benefits represent approximately 25% of the total personnel costs and ended at 94% of the revised budget in fiscal year 2022.
General Fund Overall
The General Fund is the main operating fund of the City and consists of the activity of public works, fire, police, community & economic development, municipal court, city council. city manager, finance, and human resources departments.
Overall the General Fund's revenues exceeded expenditures by $1.4M due to higher than expected revenues and keeping expenditures in line with the budget. Please see below for further analysis.
General Fund Expenditures by Function
Total general fund expenditures represent 101.3% of the budgeted expenditures for fiscal year 2022, but there are budget amendments that will be brought forward for City Council approval for revised budget to exceed expenditures. General fund expenditures are $7.3M greater than 4th quarter 2021. Most of the increase is attributed to $5.5M in capital acquisition purchases for South Coast Cyber building located on Boundary Street and Fire Station #4 located on Robert Smalls Parkway. Law enforcement is $343K greater than the prior year due to changes in the allocation of personnel and benefit costs to other funds, but $338K under budget mostly due to personnel vacancies throughout the year; community and economic development is $235K more than prior year due to increased personnel & benefit costs and contractual services of outsourced staff support to review boards & commissions and public works are $212K more than the prior year as a result of a new service provider for residential garbage.
General Fund Expenditures by Expense Type
Most of the increases in General Fund Expenditures for 4th Quarter FY 2022 as compared to 4th Quarter FY 2021 are the result of $7.3M increase in capital expenditures in property acquisition costs as previously discussed. Personnel and corresponding employee benefits increased by $591K mostly due to results from compensation study. Transfers out increased by $693K as a result of Council approved use of committed fund balance for such projects as replacement of marina fuel tank.
General Fund Revenue Comparison
General Fund revenues are $7.3M greater in 4th quarter FY 2022 than 4th quarter 2021. The City issued $5.3M general obligation bond to fund purchase of South Coast Cyber Center and Fire Station #4. Licenses and permits increased by $942K compared to last year as development continues to expand in the City and the receipt of $450K state appropriation for cybersecurity. Charges for services increased by $352K mostly attributed to a new garbage collection rate in FY22.
Parks & Tourism Fund Overall
The Parks & Tourism Fund reports the activity of the public works division on parks, the proportionate share of police services dedicted to protecting tourists, tourism and tourism related activities and the operations of downtown services including parking, marina, waterfront park and other activities related to maintaining a vibrant downtown.
Overall, the parks and tourism fund revenues are greater than expenditures by $1.1M. This is mostly attributed to increased collections of hospitality and local accommodation taxes as the tourism industry continues to show signs of improvement.
During the onset of COVID in fiscal year 2020, expenditure activity was slowed to ensure the financial viablity of the fund. Salary and benefit costs allocated to the fund were more closely aligned in fiscal year 2022 to match the level of effort of those personnel whose duties cross functions.
Park & Tourism Revenue Comparison
The overall revenues of the fund are about $1.1M greater than what was reported in the 4th quarter of fiscal year 2021. Hospitality taxes increased $364K and accommodations taxes increased $450K more than what was reported through the 4th Quarter of the prior year. Both provide strong economic indicators to the vibrancy of tourism in the City as recovery from the pandemic continues to occur. In addition, through the 4th Quarter of FY 2022 the City has seen a return of downtown events, including the Shrimp Festival and Taste of Beaufort, which led to an increase of $254K in event revenues.
4th Quarter Expenditures by Function
Parks and Tourism Fund expenditures are $510K greater than the 4th quarter 2021. The increase is primarily attributed to the City hosting the Shrimp Festival and Taste of Beaufort along with other downtown events that did not take place in fiscal year 2021 due to the pandemic. These costs are offset by event revenues.
4th Quarter Expenditures by Expense Type
Parks and Tourism operating expenditures saw the most significant increase of $346K compared to June 2021 due to downtown events such as Shrimp Festival and Taste of Beaufort being held. These events were not held in the prior year due to COVID.
Stormwater Fund Overall
The Stormwater Fund accounts for the operations of the Stormwater division of the Public Works department, overseeing the maintenance of the stormwater system as well as repairs and major enhancements to the system. This fund is supported through stormwater user fees that are applied to property owners annual tax bill.
During fiscal year 2021, stormwater revenue bonds were issued to support the major enhancements to the stormwater system in many of our more prone areas to flooding in the City. The bond proceeds are maintained in the Stormwater Fund and released through transfers to the capital projects fund as project costs are incurred.
4th Quarter Expenditures
During fiscal year 2021, the City refunded the 2018 general obligation bonds and issued stormwater revenue bonds to continue the major improvements to the stormwater system. That accounts for the reason why the June 2021 quarter expenditures of the fund are significantly greater than the 4th quarter fiscal year 2022. Actual expenditures for the quarter are $516K more than budget primarily as a result of bond funds that were transferred to the capital projects fund to cover current period costs to the system improvements.
4th Quarter Revenues
The significant decrease in revenues is attributed to $8.0M stormwater bond proceeds received in fiscal year 2021. The City received $1.2M in stormwater tax revenue which was about $90K more than in prior year.