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♦ ♦' <br />SUMMARY <br />The City continues to experience slow, but steady financial growth. <br />GENERALFUND <br />At year end, total general fund revenues exceeded total expenditures by $437K, which helped boost the ending <br />fund balance to approximately $11.84 million. <br />Ongoing revenues came in at just under $59.0 million for the year, or about $639K more than budget, while total <br />revenues were $1.4M below budget. Budgeted property sales of $2.1M have been delayed until 2017. There <br />are multiple revenue categories that experienced higher than anticipated revenue receipts for the year, with the <br />largest variances in gambling taxes ($589K above budget), and sales & use taxes ($277K above budget). <br />Several revenue categories didn't perform as well as expected, including plan check & review fees ($334K below <br />budget) and property taxes ($264K below budget). Additional analysis of general fund financial performance is <br />included in the attached report. <br />Total expenditures in the General Fund ended the year under budget by $1.9 million. Over 40% of the savings <br />in 2016 were the result of vacant positions and a savings in overtime, primarily by the Fire Department. Additional <br />expenditure details are highlighted in the attached report. <br />Through the 2017 -2018 budget process, the City conservatively projected an ending fund balance of $11.6M. <br />Actual ending fund balance for the general fund is $11.8M, or $200K higher than projected. <br />OTHER GOVERNMENTAL FUNDS <br />The most newsworthy item in 2016 was the issuance of general obligation bonds for the new Justice Center and <br />reconstruction of three fire stations. These projects are being accounted for in the Public Safety Plan fund, and <br />additional reporting will be provided on a regular basis. <br />ENTERPRISE FUNDS <br />Charges for services are the primary revenue source in all utility funds. With rate increases enacted in January <br />2016 for all three utilities, charges for services were up, except for Water where consumption was down which <br />negatively impacted revenues. However, operating expenditures remained steady from 2015 to 2016 which <br />resulted in growth in fund balances. <br />2017 OUTLOOK <br />The local economy remains strong, with significant economic development efforts underway. The latest forecast <br />from the King County Office of Economic and Financial Analysis indicates a Countywide assessed valuation <br />growth rate of over 10% in 2017 and nearly 8% in 2018. In addition, growth rates of 5% in both 2017 and 2018 <br />are expected in local retail sales taxes. Seattle inflation rates (CPI -U) are estimated to hit nearly 3% in 2017, the <br />highest rate since 2008 when inflation was over 4 %. Economic forces affecting the City's finances will continue <br />to be monitored. Through adherence to a strong and sound reserve policy and prudent use of City resources — <br />all aligned with the City's strategic goals — the outlook for the City remains positive. <br />13 <br />