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11/05/2019 06C 3rd Quarter Financial Report 't..an,gtntj ka d E$A aY BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 6.C. For Meeting of: November 5, 2019 ITEM TITLE: 2019 3rd Quarter Financial Report SUBMITTED BY: Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: The Third Quarter Financial Report for 2019 is attached and consists of the following: 1. Summary Narrative 2. Financial Reports • Cash Balance Trend • Material Revenue Performance Charts • Fund Balance Summary • Revenue and Expenditure Comparison to Budget and Actual Year-to-Date • General Government Revenue Historical Year-to-Date Detail • General Government Expenditure Historical Year-to-Date Detail • Other Funds - Revenue, Expenditure and Fund Balance Summary ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR t - '' Interim City Manager SUBMITTAL: STAFF RECOMMENDATION: Review only. Submitted for routine transparency and accountability. BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type ci 019 3rd C darter Financial Be rt 10/24/ 019 r Memo 2 f`R , ,` FINANCE DEPARTMENT £0 To: Mayor and City Council Cynthia Martinez,Interim City Manager From: Steve Groom,Finance Department Kathy Miles,Financial Services Date: November 5,2019 Subject: 2019 3rd Quarter Financial Update This financial update is an unaudited report for the 3rd quarter ended September 30,2019,9 months or 75%of the year,intended to inform and assist governance decisions for future planning. In total,city revenues are at 58.1%of budget and expenditures are at 55.0%of budget. The timing of Property Tax Revenue and the timing of Capital Fund Expenditures are always the biggest reason that revenues and expenditures are well below 75%. Cash position and revenue charts on the following pages provide insight into the monitoring of revenue and the management of expenses. Quarterly Treasury report provides further cash analysis separately. All invoices are not yet received and complete accrual analysis is done at year-end,not quarterly,so this report is intended as a progress report. General Fund's Performance to Budget General Fund Revenues in total are at 72.2%;the largest components are: • Sales Tax is at 73.6%,which is in line with prior year but lagging budget expectations • Property Tax is at 60.3% due primarily to timing since April and October have the largest receipts. This timing impacts the General Fund fund balance significantly but is expected to be on on target at year-end • Utility and Franchise Taxes are at 71.8% . Utility Tax (Revenue) is expected to fall short of budget by year-end by$700,000). General Fund Expenditures in total are at 70.7%;the largest components are: • Police expenditures are at 69.8% • Fire Expenditures are at 77.2% • Information Technology expenditures are at 63.8% 3 REVENUE FORECAST The City Council's current top strategic objective is improving the General Fund's fund balance. To accomplish that goal,the City is monitoring revenues and managing expenses. By managing to budget, the City will stay on track to meet its policy goal by 2023. Cash& Investments As a current over-all indicator,the 4-year historic city-wide cash and investments balance trends, inclusive of all funds,shows September at$89.1 million;May was an all-time high$92.9 million. Each month is best compared to the same month in previous years to account for seasonality and other annual events. CASH AND INVESTMENTS HISTORY $100,000,000 $so,o0o,000 — $6o,00n,onn — $40,000,000 — $20,000,000 — $o \5 vV\� � ti� .vA tie 1.vA �� ti�� \� �t �\� V .vA �� \tip \ oA vA ��� ��� vA ��� �� vA3 �\ ^, Sales Tax This is the largest single funding source for the city. Following a sluggish 1st and 2nd quarter largely defined by poor weather,3rd quarter receipts improved,exceeding prior year by$562,992,now only slightly under the 2019 budgeted amount by$21,682. Year-end budget is$31.2 million. SALES TAX REVENUE S35,000,000 $30,000,000 — S25,000,000 — $2n,000,ono — S15,000,000 — $10,000,000 — 55,000,000 — $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current Year Cumulative Prior Year Cumulative Budget Cumulative Finance Quarterly Report-Page 2 4 Property Tax The 2Dl9 budget increased by$3 million due to assessed valuations; were below expectation for the 1st quarter,but improved iutbe2odaod3rdguarter,aodare expectedtobeon-track by year-end. 78LQP2QIY TAX REVENUE �zs'ouo'uoo — $20'000'000 �o'ouo'uoo $|u'ouu'ouo Ss'wo'uoo $» 1^n Feb muz Apr May }'m Jul Aug Sep Oct Nov Dec — Current Year Cumulative Prior Year Cumulative oudA.t[umuuuv" Water Water revenue iyu slightly,both overfzioryearaodbudget. At the end oftb 3rd quarter, cumulative exceeds budget by$193,166. WATER REVENUE �o'ouo'uoo Sm'uon'uoo s*'wu'000 s6'mo.ono S+'mo.uoo sz.00Kuw $» Jan Feb w/a, Apr may Jun Jul Aug 5,p Oct Nov Dec Current Year Cumulative Prior Year cxmu|^a,, Budget Cumulative Finance Quarterly Report'Page 3 5 Refuse Refuse revenue is up after three quarters-$91,610 over budget,overcoming a negative 1st quarter that had been trailing budget by$90,000. REFUSE REVENUE $7,000,000 $6,000,000 55,000,000 $4,000,000 $3,000,000 S2,000,000 $1,000,000 SO Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current Year Cumulative Prior Year Cumulative Budget Cumulative Lodging Tax Lodging tax was typically slow in the 1st quarter,and was running under both budget and prior year but picked up with June receipts. It is now trailing budget by$46,314. There were no known events or lack of events that exerted a material influence on lodging activity. Two new local hotels have opened in 2020,adding 171 rooms to the existing supply of 1,855 hotel rooms. LODGING TAX REVENUE $2,000,000 ::::: $500,000 SO Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current Year Cumulative Prior Year Cumulative Budget Cumulative Finance Quarterly Report-Page 4 6 Airport Airport Revenue is up,exceeding budget by$125,168 after three quarters. This measure includes all airport revenues which include airline landing fees,commercial rents,parking lot revenue,car rental and general aviation. AIRPORT REVENUE S1,600,000 $1,400,000 S1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current Year Cumulative Prior Year Cumulative Budget Cumulative Building Permits Building permit revenues,budgeted to reach$610,000 by year-end,are currently up to$678,278,ahead of budget by$195,588. BUILDING PERMIT REVENUE s800,000 — S600,000 — $500,000 S400,000 — S300,000 S200,000 $100,000 — $o Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current Year Cumulative Prior Year Cumulative Budget Cumulative Finance Quarterly Report-Page 5 7 CITY-WIDE FUND BALANCE SUMMARY CHANGE IN FUND BALANCE 2019 As of September 30th Beginning 2019 2019 Ending Balance Actual Rev. Actual Exp. Balance General Fund $ 9,061,873 $ 48,692,695 $ 47,594,151 $ 10,160,417 Parks and Recreation 283,427 3,492,108 3,750,823 24,712 Street&Traffic Operations 470,252 3,373,510 4,086,228 (242,466) General Government Subtotal 9,815,552 55,558,313 55,431,202 9,942,663 Other Governmental Operating Funds 5,541,290 9,085,733 9,106,617 5,520,406 Government Capital Funds 15,485,084 7,653,483 13,796,114 9,342,453 Enterprise Operating Funds 15,778,548 44,120,160 41,067,579 18,831,129 Enterprise Capital Funds 36,213,777 7,591,430 7,567,690 36,237,517 Internal Service Funds 4,777,031 4,237,830 3,991,892 5,022,969 Employee Benefit Reserve 432,616 10,929,257 10,274,246 1,087,627 Risk Management Reserves 1,802,216 3,169,713 3,093,113 1,878,816 Debt Service&Agency Funds 2,456,990 4,316,644 3,824,882 2,948,752 Total $ 92,303,104 $ 146,662,563 $ 148,153,335 $ 90,812,332 This table shows fund balances by fund at this point in time,however due to seasonal fluctuations such as Property Tax revenues that come in twice a year, and dept payments made periodically,as well as other seasonal factors, this is intended to provide transparency and accountability but it not a reliable measure of predicted year-end. Finance Quarterly Report-Page 6 8 CITY WIDE REVENUES & EXPENDITURES BY FUND GROUPING REVENUE COMPARISON (Budget vs.Actual) 2018 2019 Annual Actual % Amended Actual % as of 9/30 Rec'd Budget as of 9/30 Rec'd General $ 47,592,725 70.7% $ 67,465,430 $ 48,692,695 72.2% Parks and Recreation 3,438,746 62.9% 5,259,740 3,492,108 66.4% Street&Traffic Operations 3,218,188 57.9% 5,782,582 3,373,510 58.3% General Government Subtotal 54,249,659 69.3% 78,507,752 55,558,313 70.8% Other Government Operating Funds 8,308,169 56.0% 16,900,561 9,085,733 53.8% Government Capital Funds 21,498,380 46.2% 42,223,961 7,653,483 18.1% Enterprise Operating Funds 41,666,961 72.1% 60,490,047 44,120,160 72.9% Enterprise Capital Funds 6,122,639 31.3% 19,892,710 7,591,430 38.2% Internal Service Funds 4,380,727 71.6% 6,167,579 4,237,830 68.7% Employee Benefit Reserves 10,054,682 69.8% 16,388,226 10,929,257 66.7% Risk Management Reserve 3,210,018 76.9% 4,345,936 3,169,713 72.9% Debt Service&Agency Funds 13,057,118 120.2% 7,529,200 4,316,644 57.3% Total $ 162,548,353 64.4% $ 252,445,972 $ 146,662,563 58.1% EXPENDITURE COMPARISON (Budget vs.Actual) 2018 2019 Annual Actual % Amended Actual % as of 9/30 Exp'd Budget as of 9/30 Exp'd General $ 47,526,461 71.0% $ 67,358,718 $ 47,594,151 70.7% Parks and Recreation 4,152,207 73.8% 5,169,394 3,750,823 72.6% Street&Traffic Operations 3,824,743 69.8% 7,662,384 4,086,228 53.3% General Government Subtotal 55,503,411 71.1% 80,190,496 55,431,202 69.1% Other Government Operating Funds 8,391,134 56.8% 16,992,455 9,106,617 53.6% Government Capital Funds 12,716,671 30.1% 45,504,256 13,796,114 30.3% Enterprise Operating Funds 41,245,028 68.9% 62,221,384 41,067,579 66.0% Enterprise Capital Funds 3,546,043 12.9% 27,327,123 7,567,690 27.7% Internal Service Funds 3,101,422 48.3% 9,238,850 3,991,892 43.2% Employee Benefit Reserves 9,861,088 65.6% 16,128,416 10,274,246 63.7% Risk Management Reserve 2,986,635 74.3% 4,301,306 3,093,113 71.9% Debt Service&Agency Funds 11,337,508 104.5% 7,516,225 3,824,882 50.9% Total $ 148,688,940 57.5% $ 269,420,511 $ 148,153,335 55.0% Finance Quarterly Report-Page 7 9 GENERAL GOVERNMENT REVENUE DETAIL GENERAL GOVERNMENT REVENUES 2019 Revenues as of 9/30 Amended Percent General Fund 2017 2018 2019 Budget Rec'd General Sales Tax $ 12,225,764 $ 12,978,931 $ 13,370,058 $ 18,173,950 73.6% Criminal Justice Sales Tax 2,453,260 2,701,011 2,662,007 3,584,560 74.3% Property Tax 7,268,450 7,477,446 6,366,319 10,557,065 60.3% Utility&Franchise Taxes 11,145,509 11,542,802 13,633,317 18,976,079 71.8% Charges for Services 6,428,857 6,837,479 6,015,268 7,993,893 75.2% State Shared Revenue 1,694,631 1,728,389 1,542,819 2,242,469 68.8% Other Intergovernmental 563,928 504,375 517,467 740,490 69.9% Fines and Forfeitures 1,376,901 1,304,023 1,249,413 1,939,817 64.4% Other Taxes&Fees 1,207,149 1,235,395 1,196,454 1,655,074 72.3% Licenses and Permits 612,113 826,477 989,802 939,850 105.3% Other Revenue 349,124 456,395 1,149,772 662,183 173.6% Total General Fund 45,325,686 47,592,723 48,692,696 67,465,430 72.2% Parks&Recreation Property Tax 1,522,092 1,601,982 1,464,645 2,560,000 57.2% Charges for Services 712,391 732,051 687,898 884,050 77.8% State Shared Revenue 17,325 17,873 17,873 23,830 75.0% Other Intergovernmental 28,272 44,321 25,830 50,500 51.1% Transfers from other Funds 1,063,655 908,781 1,168,922 1,513,060 77.3% Other Revenue 180,628 133,740 126,940 228,300 55.6% Total Parks&Recreation 3,524,363 3,438,748 3,492,108 5,259,740 66.4% Streets Property Tax 2,072,034 1,782,962 1,785,794 3,121,325 57.2% Charges for Services 255,550 255,550 379,796 720,000 52.7% State Shared Revenue 970,851 976,848 931,941 1,319,812 70.6% Other Intergovernmental 121,412 188,413 183,401 246,900 74.3% Other Taxes&Fees 150,000 Transfers from other Funds 176,545 Other Revenue 60,619 14,416 92,578 48,000 192.9% Total Streets 3,480,466 3,218,189 3,373,510 5,782,582 58.3% Total General Government $ 52,330,515 $ 54,249,660 $ 55,558,314 $ 78,507,752 70.8% Finance Quarterly Report-Page 8 10 GENERAL GOVERNMENT EXPENDITURE DETAIL GENERAL GOVERNMENT EXPENDITURES 2019 Expenditures as of 9/30 Amended Percent 2017 2018 2019 Budget Exp'd Police $ 20,683,411 $ 21,145,841 $ 21,129,877 $ 30,250,940 69.8% Fire 9,549,556 9,965,085 11,011,668 14,259,577 77.2% Information Technology 2,608,027 2,394,946 2,369,623 3,711,761 63.8% Interfund Distributions 3,875,470 2,688,292 1,765,911 2,143,060 82.4% Code Administration 1,311,050 1,411,455 1,428,749 1,974,496 72.4% Legal 1,162,889 1,192,884 1,302,109 1,938,043 67.2% Finance 1,109,192 1,141,621 1,132,916 1,787,366 63.4% Municipal Court 1,048,674 1,153,196 1,167,757 1,711,215 68.2% Firemen's Relief/Pension 853,670 857,177 910,660 1,216,963 74.8% Indigent Defense 768,840 672,882 785,431 1,050,000 74.8% Police Pension 635,843 616,607 601,808 929,497 64.7% Engineering 499,275 504,280 500,601 778,311 64.3% Human Resources 456,680 513,589 556,487 768,113 72.4% City Clerk/Records 326,630 343,642 337,002 717,207 47.0% Planning 420,964 453,222 514,986 707,117 72.8% Purchasing 406,072 439,183 453,764 647,613 70.1% City Management 294,320 320,006 435,078 629,681 69.1% City Hall Facility 455,320 371,424 400,712 602,352 66.5% Economic Development 372,447 319,769 264,567 313,243 84.5% City Council 201,845 208,826 188,808 275,686 68.5% Parking 119,619 128,216 120,961 186,854 64.7% Intergovernmental 117,542 124,560 122,825 162,689 75.5% State Auditor 75,299 59,761 91,687 130,000 70.5% Contingency 500,000 313,489 n/a Total General Fund 47,352,635 47,526,464 47,593,987 67,205,273 70.8% Parks&Recreation Fund 4,125,258 4,152,207 3,750,823 5,169,394 72.6% Street&Traffic Ops. 4,091,357 3,824,743 4,086,228 7,662,384 53.3% Total General Government $ 55,569,250 $ 55,503,414 $ 55,431,038 $ 80,037,051 69.3% Finance Quarterly Report-Page 9 11 OTHER FUNDS DETAIL OTHER GOVERNMENT OPERATING FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Economic Development $ 70,321 $ 84,032 $ 58,613 $ 95,740 Neighborhood Development 862,584 1,087,301 1,595,448 354,437 Community Relations 741,290 488,113 427,740 801,663 Cemetery 118,508 189,463 236,228 71,743 Emergency Services 9,414 837,520 812,119 34,815 Public Safety Communication 718,371 3,158,565 2,906,141 970,795 Police Grants 1,185,643 206,124 200,531 1,191,236 PBIA(Park/Bus Impr Area) 63,947 123,207 129,377 57,777 Trolley 19,856 11,275 30,951 180 Front Street Bus Impr Area 1,090 3,700 2,770 2,020 Cony Center(Tourist Promo) 377,237 915,043 1,260,672 31,608 Capitol Theatre 34,144 311,547 349,381 (3,690) PFD-Convention Center 1,028,440 706,417 481,315 1,253,542 Tourism Promotion Area 69,902 428,271 243,127 255,046 PFD-Capitol Theatre 240,544 535,154 372,206 403,492 Capitol Theatre Reserve Total Other Gov't Oper Funds $ 5,541,291 $ 9,085,732 $ 9,106,619 $ 5,520,404 GOVERNMENTAL CAPITAL FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Arterial Street $ 2,147,691 $ 2,043,816 $ 6,495,352 $ (2,303,845) Central Bus District Capital (532,523) 542,410 9,887 Capitol Theatre Construction 149,087 30,000 8,070 171,017 Yakima Redevelopment Area 2,230,389 537,767 406,544 2,361,612 Parks&Recreation Capital 4,021,729 91,726 3,709,529 403,926 Fire Capital 393,621 94,435 24,595 463,461 Law and Justice Capital 444,425 506,937 141,399 809,963 Public Works Trust Construction 2,980,111 1,065,441 1,016,850 3,028,702 REET 2 Capital 1,060,389 983,006 767,788 1,275,607 Street Capital 951,821 1,274,894 367,322 1,859,393 Convention Center Cap Impr 1,056,992 473,050 841,376 688,666 Reserve for Capital Impr 581,353 10,000 17,289 574,064 Total Gov't Capital Funds $ 15,485,085 $ 7,653,482 $ 13,796,114 $ 9,342,453 Finance Quarterly Report-Page 10 12 ENTERPRISE OPERATING FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Airport Operating $ 86,890 $ 1,081,743 $ 959,315 $ 209,318 Stormwater Operating 1,115,074 2,205,633 2,586,068 734,639 Transit Operating 3,856,311 5,651,000 6,088,756 3,418,555 Refuse 1,435,369 5,760,683 5,265,255 1,930,797 Wastewater Operating 6,299,131 18,623,723 16,175,080 8,747,774 Water Operating 1,983,267 8,224,363 7,458,505 2,749,125 Irrigation 1,002,506 1,458,070 1,419,697 1,040,879 Utility Services 1,114,944 1,114,903 41 Total Enterprise Oper Funds $ 15,778,548 $ 44,120,159 $ 41,067,579 $ 18,831,128 ENTERPRISE CAPITAL FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Airport Capital $ 458,802 $ 1,843,688 $ 1,833,745 $ 468,745 Stormwater Capital 5,394,934 900,000 1,291,860 5,003,074 Transit Capital 6,291,546 187,013 528,024 5,950,535 Wastewater Facilities Capital 3,133,277 739,917 73,475 3,799,719 Wastewater Const Capital 7,080,518 2,184,954 1,258,857 8,006,615 Wastewater Capital 5,354,196 332,600 705,205 4,981,591 Water Capital 4,276,005 376,125 1,292,410 3,359,720 Irrigation Capital 4,224,499 1,027,133 584,114 4,667,518 Total Enterprise Oper Funds $ 36,213,777 $ 7,591,430 $ 7,567,690 $ 36,237,517 INTERNAL SERVICE FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Equipment Rental $ 3,650,802 $ 3,203,179 $ 3,007,654 $ 3,846,327 Environmental 555,685 104,502 169,992 490,195 Public Works Admin 570,544 930,150 814,247 686,447 Total Enterprise Oper Funds $ 4,777,031 $ 4,237,831 $ 3,991,893 $ 5,022,969 Finance Quarterly Report-Page 11 13 EMPLOYEE BENEFIT RESERVES 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Unemployment Comp Rsv $ 193,601 $ 164,298 $ 122,746 $ 235,153 Employees Health Ben Rsv 223,546 9,084,253 9,043,750 264,049 Worker's Comp Rsv (13,652) 1,630,706 1,067,673 549,381 Wellness/EAP 29,121 50,000 40,077 39,044 Total Employee Ben Reserve $ 432,616 $ 10,929,257 $ 10,274,246 $ 1,087,627 RISK MANAGEMENT RESERVE 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance Risk Management Reserve $ 1,802,216 $ 3,169,713 $ 3,093,113 $ 1,878,816 DEBT SERVICE &AGENCY FUNDS 2019 As of September 30th Beginning 2019 2019 Ending Fund Balance Actual Rev. Actual Exp. Balance GO Bond Redemption 2002 GO Convention Center $ 166,440 $ 513,469 $ 558,863 $ 121,046 2005 GO Various Bonds 8,733 2,268,056 2,297,557 (20,768) 1996 GO LTD-Convention Center 73,292 258,390 7,035 324,647 LID Debt Service Control 109,355 109,355 Total GO Bond Redemption $ 248,465 $ 3,039,915 $ 2,863,455 $ 534,280 Water/Sewer Revenue Bond Redemption Water Rev Bonds&Debt Service $ 366,880 $ $ $ 366,880 WW Rev Bond&2008 Debt Service (20,419) 62,531 41,688 424 Irrigation Bond Debt Service (24,038) 320,154 265,103 31,013 WW Rev Bond Rsv&2012 Debt Svc 1,584,282 103,700 69,133 1,618,849 Total W/S Rev Bond Redemption $ 1,906,705 $ 486,385 $ 375,924 $ 2,017,166 Agency Funds Yakcorps (382,575) 669,982 585,504 (298,097) Cemetery Trust 684,396 11,006 695,402 Total Agency Funds $ 301,821 $ 680,988 $ 585,504 397,305 Finance Quarterly Report-Page 12