Town of Ocean View

Financial Update for the Town Council As of May 31, 2015

Report on finance department primary activities and projects:

1. Real Estate Tax

FY16 tax bills totaling $1,305,700 were mailed during the first week of May. Approximately 15% of FY16 property taxes have been paid and taxpayers have until August 31 to pay these current year taxes without penalty. YTD month-end property taxes receivable during the past four fiscal years are as follows:

2. Water System

The 29th

quarterly payment of $59,746 was made to the USDA on March 21 against the $4,600,000 in bonds issued for the water system – the remaining principal balance on these bonds is $4,224,900. The next payment is due on June 21.

The first quarter 2015 water bills were dated April 6. The May 31 report from Tidewater shows accounts receivable due of $48,300.

3. FY15 Audit

The Town’s independent auditor, Jefferson, Urian, Doane & Sterner, P.A., has mailed audit confirmations and has completed its planning for the FY15 audit. The audit team expects to begin its audit fieldwork on June 15. The auditor’s May 22, 2015, “required communication” letter to Town Council is attached to this report.

4. Transfer Tax collections

Transfer taxes collected during the current month were $51,800. Transfer taxes budgeted for FY16 were $700,000 and in order to meet this budgeted amount, monthly collections need to average $58,300. The YTD target is $58,300 and current collections are $6,500 behind this target.

YTD monthly transfer tax collections during the past four fiscal years are as follows:

Current Year 1st Prior Yr. 2nd Prior Yr. 3rd Prior Yr.

Period owed FY16 FY15 FY14 FY13

2013 & prior 3,789$ 9,945$ 23,522$ 16,967$

2014 1,360 3,992 - -

2015 1,388 1,031,200 - -

2016 1,116,636 - - -

Total 1,123,172$ 1,045,137$ 23,522$ 16,967$

Monthly Current Yr. 1st Prior Yr. 2nd Prior Yr. 3rd Prior Yr.

Collections FY16 FY15 FY14 FY13

May 51,800$ 85,900$ 53,500$ 70,000$

Total 51,800$ 85,900$ 53,500$ 70,000$

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Financial Update for the Town Council As of May 31, 2015 2

5. Status of Special Funds and Accounts

(a) The three Trust Funds:

Emergency Reserve Trust Fund (ERTF) $281,800

Capital Replacement Trust Fund (CRTF) $731,400

Street Repair and Replacement Trust Fund (SRRTF) $848,600 (includes $116,900 held in the MSA account)

(b) Impact fees collected

At the end of FY15, a total of $113,688 in impact fees was available and carried over to FY16. Through the current month, a total of $2,872 was collected during the issuance of building permits (at the rate of $1,436 per building project) representing a total of two building permits.

(c) Emergency Services Enhancement Funding (ESEF) program

At the end of FY15, a total of $8,300 in ESEF collections was carried over to FY16. Through the current month, a total $4,000 was collected during the issuance of building permits. The current total available for grants at the end of FY16 is $12,300 compared to $10.000 for the same period in the prior fiscal year.

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Collected Used Available

FY12 & prior 166,576 (25,000) 141,576 Applied to payoff DNB note for 201 Central

FY13 24,412 - 165,988

FY14 41,644 (160,000) 47,632 Applied to new DPW bldg per FY14 Budget

FY15 66,056 - 113,688

FY16 2,872 - 116,560

Total 301,560 (185,000) 116,560

Accumulation and Use

Collected Used Available

FY08 -FY12 251,404 (251,115) 289 $249,115 to MVFC & $2,000 to Beebe Med. Fdn.

FY13 58,552 (58,700) 142 MVFC

FY14 84,252 (80,000) 4,394 MVFC

FY15 113,891 (110,000) 8,285 MVFC

FY16 4,057 - 12,341

Total 512,156 (499,815) 12,341

Accumulation and Use

Town of Ocean View

Comparison of Budget to Actual

For the Fiscal Year Ending April 30, 2016

May FY16 Over (Under) FY Gone = 8%

Revenues YTD Actual Budget Budget

Taxes:

Real Estate Tax and Penalties 1,305,812$ 1,307,000$ (1,188)$ 100% A.

Real Estate Transfer Tax 51,782 700,000 (648,218) 7% B.

Rental Gross Receipts Tax 3,099 200,000 (196,901) 2% C.

Intergovernmental Revenues:

State Grant - Municipal Street Aid - 99,000 (99,000) 0% D.

Public Safety Grant - Sussex County - 25,000 (25,000) 0% E.

Public Safety Grant - Police Pensions - 30,000 (30,000) 0%

Charges for Services:

Building and Sign Permits 9,380 205,000 (195,620) 5%

Impact Fees 2,872 45,000 (42,128) 6%

Business and Rental Licenses 3,490 118,000 (114,510) 3% F.

Cable TV Franchise Fee - 60,000 (60,000) 0% G.

Zoning and Other Fees 1,100 12,500 (11,400) 9%

Expense Reimbursements 11,758 12,000 (242) 98% H.

Miscellaneous 7,574 12,000 (4,426) 63% I.

Other Revenue Sources:

Public Safety Fines 2,193 40,000 (37,807) 5%

Interest 70 2,500 (2,430) 3%

Donations - 100 (100) 0%

Total 1,399,131$ 2,868,100$ (1,468,969)$ 49%

Revenues (above) 1,399,131$ 2,868,100$ (1,468,969)$

Expenditures (Page 2 of 4) 255,034 2,347,300 (2,092,266)

Revenues Over (Under) Expenditures 1,144,097$ 520,800$ 623,297$

Portion of

% of Budget

Recap Actual BudgetOver (Under)

Budget

Page 1 of 4

Town of Ocean View

Comparison of Budget to Actual

For the Fiscal Year Ending April 30, 2016

May FY16 Over (Under) FY Gone = 8%

Expenditures YTD Actual Budget Budget

Payroll - Gross Wages 72,041$ 1,067,200$ (995,159)$ 7%

Payroll - Overtime & Bonus 6,008 53,600 (47,592) 11% L.

Payroll Taxes 6,444 95,500 (89,056) 7%

Payroll - Council & Commissions 480 8,900 (8,420) 5%

Subtotal - Compensation 84,972 1,225,200 (1,140,228) 7%

Employee Retirement 7,187 101,800 (94,613) 7%

Insurance - Medical, Dental, & Life 37,763 316,800 (279,037) 12%

Insurance - Workers' Comp 2,070 39,200 (37,130) 5%

Subtotal - Personnel related costs 131,993 1,683,000 (1,551,007) 8%

Advertising 347 4,200 (3,854) 8%

Communications - Telephone & Internet 2,547 31,300 (28,753) 8%

Comprehensive Land Use Plan - 30,000 (30,000) 0%

Computer Software Updates & Website 2,559 24,800 (22,241) 10%

Contracted Labor 388 20,000 (19,612) 2%

Donations - - - 0%

Drainage Maintenance 3,832 25,000 (21,168) 15%

Dues & Subscriptions 410 5,100 (4,690) 8%

Education & Training 1,669 17,600 (15,931) 9%

Insurance - Business 69,199 64,100 5,099 108% J.

K-9 Supplies - 2,000 (2,000) 0%

Maintenance & Repairs - Building & Facilities 509 28,200 (27,691) 2%

Maintenance & Repairs - Contracted 1,494 14,200 (12,706) 11%

Mileage 70 2,200 (2,130) 3%

Non-capital Equipment 2,606 19,500 (16,894) 13%

Park Expense 1,461 20,000 (18,539) 7%

Postage, Printing, & Office Supplies 4,623 15,400 (10,777) 30%

Professional Services 9,279 62,600 (53,321) 15% K.

Property Assessment 980 20,000 (19,020) 5%

Public Relations 5,426 16,200 (10,774) 33%

Real Estate Transfer Tax Fees 560 7,000 (6,440) 8%

Street Lighting 5,963 65,000 (59,037) 9%

Street Maintenance - 20,000 (20,000) 0%

Street Signs 1,418 6,000 (4,582) 24%

Supplies 1,256 28,000 (26,744) 4%

Uniforms - New & Maintenance 666 14,000 (13,334) 5%

Utilities 3,102 40,400 (37,298) 8%

Vehicles & Equipment - Fuel 2,338 42,000 (39,662) 6%

Vehicles & Equipment - Maintenance & Repairs 340 19,500 (19,160) 2%

Total Expenditures 255,034$ 2,347,300$ (2,092,266)$ 11%

Portion of

% of Budget

Page 2 of 4

Page 3 of 4

Town of Ocean View

Comparison of Operating Budget to Actual – Analytic Comments For the Fiscal Year Ending April 30, 2016

Comments on specific revenue and expense accounts are as follows:

Revenues

A. Real Estate Tax and Penalties – The FY16 tax bills were mailed during the first week of May and taxpayers have until the end of August to pay without penalty. Approximately 15% of current year taxes have been collected through the current month end.

B. Real Estate Transfer Tax – As of the current month end, transfer tax collections are

$51,800 or $6,500 behind the YTD target based on the $700,000 budgeted for the current fiscal year.

C. Rental Gross Receipts Tax – The collection of GRRT tax is based on the calendar year

and payments are due in two installments – no later than August 15 and February 15. As of the current month end, a total of $3,100 has been collected compared to $1,400 for the comparable period in FY15.

D. State Grant (Municipal Street Aid) – The Town’s FY16 budget includes $99,000 for the

MSA grant. Historically, the Town’s share has been approximately 2% of total MSA allocations. The total to be funded by the State will not be known until (i) the State’s FY16 Budget has been adopted and (ii) the allocation factors based on population and miles of streets have been calculated for the new fiscal year.

E. Public Safety Grant (Sussex County) – This local law enforcement grant is from the

Sussex County Council and is provided to each municipal police department that responds to calls within the County but outside that department’s normal jurisdiction. $25,000 has been included in the Town’s FY16 budget. The County accounts for these local law enforcement grants according to its June 30 fiscal year period and for its fiscal year ending June 30, 2015, increased the 2015 grant by $10,000. This additional funding was not received by the OVPD during FY15 and will be reported in the Town’s FY16 receipts.

F. Business and Rental Licenses – Licenses are issued on an annual basis, are billed in

advance, and are due at the beginning of each calendar year. Accordingly, during the first eight months of each fiscal year, the license collections are expected to be minimal and the “normal” collection date will occur near the end of the fiscal year in December 2015/January 2016.

G. Cable TV Franchise Fee – This revenue is provided for in the franchise agreement with

Mediacom and is based on 5% of the cable company’s revenue from its customers in Town. The Town’s FY16 budget includes $60,000 for this franchise fee and Mediacom is to make payments at the end of each calendar quarter. The first payment for the current fiscal year representing 2Q15 is expected ~ August 15, 2015.

Comparison of Operating Budget to Actual – Analytic Comments For the Fiscal Year Ending April 30, 2016

Page 4 of 4

H. Expense Reimbursements – The majority of these collections are a result of charges by

the Town to property developers for inspection work that is done by the Town’s engineer (Kercher Engineering) relating to roads, site development, sidewalks, etc. This revenue (totals $8,700 as of the end of the current month) offsets the related expenses that are recorded under Professional Services. These charges are invoiced to developers and builders based on the engineer’s charge for the professional services rendered plus an Administrative Fee of 10%.

Revenue that is also reported in this category includes (i) $2,800 in charges for OVPD Special Duty overtime related to the SR26 Project and (ii) charges for lot clean up and grass cutting violations.

I. Miscellaneous – The primary amount budgeted in this category is $7,200 due from the taxpayers in The Preserve at Ocean View which represents the last installment owed to the Town for the final street paving that was done in that community in 2011.

Expenditures

J. Insurance – Business – The Town’s general business insurance policies renew annually on May 7 and the premiums are paid at the beginning of the fiscal year.

K. Professional Services – Included in this category are charges from Kercher Engineering

for site reviews at various development projects in Town. These charges are billed out to developers along with a 10% Administrative Fee and the offsetting revenue is recorded in Expense Reimbursements as described in item H above.

L. Overtime and Bonuses – This amount includes $1,900 in overtime paid to OVPD officers for special duty time worked on the SR26 Project referred to in item H above.

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