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HomeMy WebLinkAboutReg 2011-12-05 Item 2B - Presentation - 2011 Third Quarter Financial ReportSummary September 30, 2011 As of September 3(), 2011, three quarter, or 754 of the year had expired. The third quarter activity reduced the City -wide fund balance by $5.8 million creating a year to date deficit of $3.2 million. The year -to -date deficit was attributed to the Government funds $6.0 million deficit; although the e City -wide fund ending balance as of the third quarter is $46.2 million which is $14.10 million great- er than the annual budget ol' $32.()7 million The third quarter Government fund decrease is temporary and is due to the collection of property tax revenue which occurs in April and October. The decrease was offset by Enterprise fund revenue collections due to Summer wage and the collection of the Surface water semi- annual billing. Sales and use tax revenues Continue to eXCeed budget while charges for ServieeS Continues to suffer due to .r "�v economic Conditions. l (_.incertalnty Continues in the economy and deterioration of economic Conditions Could negatively impact City finances. As compared with budget, actual operating reSultS through the third quarter have been positive with expenses at 67.36% of budget or down $4.0 million offsetting the revenue shortage for the year compared to budget. The City appears on track to meet its budgetary goals for the year. FUND BALANCES CHANGE IN FUND CITY -WIDE BALANCES AU I UAL ACTUAL 12/31/2010 03/31/2011 06/30/2011 09/30/2011 Q3 I YTD Governmental funds 28,762,831 29,722,371 31,888,273 25,888,039 (6,000,234) (2,874,792) Enterprise funds 11,158,079 10,980,343 9,526,174 9,691,041 164,866 (1,467,039) Internal service funds 9,461,981 9,947,703 10,579,448 10,604,413 24,966 1,142,433 City -wide Total 49,382,891 50,650,417 51,993,895 46,183,493 1 (5,810,402)1 (3,199,398)1 O Fund Balances As of September 30, 2011 General Fund $5,24',746 4 Hotel /Motel Tax Fund $695,881 J Street Fund "N" 1 0 -A $794,510 Arterial StreetFund $8,470,882 3 Contingency Fund 5v $1,457,451 Fire Equip Cum Reserve $858,123 pit Drug Seizure Fund $160,784 Debt Service Funds $15,105 Parks AogFund yea.,„ vn., tiv .vYvh,v, .�q *Muuw $4,976,02 Facility Replacement Fund rFi $2,034,039 MM ;l 0 General Gov Improvements F,n"-- "=Al $871,002 Fire Impact Fee Fund a��311� /r 493 Water Fund $4,251,834 Sewer Fund 1,782,555 Foster Golf Fund $84,201 Su Fund q ui p ment Relacement Fund it ,451 E 3, Replacement 3,834,61 7 LEOFF Insurance Fund 0000 $4 000 $5,061,-,)7 $2 Self-insurance Fund 00 589 00 $6 000.000 $8.000.000 $10.000.000 O Unreserved/ unrestricted N Inside this issue: Governmental funds 2 Enterprise funds 4 Governmental funds continued 3 Internal Service funds 5 1 Governmental Fund Balances- By Fund Group $1] $16 $15 $14 $13 $12 $11 $10 $9 $8 $6 $s $4 $3 $2 $1 $15.7 $14.5 ---8 —,,y ,e® $14.1 e� ri m ews mxmsnmm $12.4 Fund —d $9.7 —2— Special $8.5 $8.4 Revenue Debt Service �a.......,,. w. w.w.w.w.w.�n.... $5.2 $5.8 $5.6 mmmm- Capital Project Dec 2010 Mar 2011 Jun 2011 Sep 2011 GOVERNMENTAL FUNDS General Fund Special Revenue Debt Ser\Ace Capital Project GOVERNMENTAL FUNDS Governmental Fund Balances Combined $35 $30 $25 $20 $15 $10 $5 Combined governmental fund activity for the third quarter resuulted in a $6.0 million decrease in fund balances. The General Fund was responsible for $4.5 million of this decrease and the special revenue funds were responsible for a decline of $1.7 million. The General Fund decrease is attributed to the timing in the collection ot'property taxes and lower revenue for fee based activities. Sumnmer' road con Struction for the SOUthcenter Access Project and Parkway Extension drove the balance of the 104 Arterial Street Fund down by $1.8 million. The financial resultS and positions of the governmental funds are discussed in more detail below. lffll �l� General fund third quarter activity decreased the fund balance by $4.5 million with a year -to -date decrease of $514,294. This is a re- sult of property tax revenue collected Semi annually in April and October The negative fund balance will be offset in the fourth quarter upon collection of the October property tax revenue which as of the third quarter is 53.32 of budget. Although the reSUltS show a lar-e decrease in fund balance for the quarter, the balance is $729,467 greater than the budgeted fund bal- ance. Sales and Use tax continue to have positive resultS with reve- nueS exceeding budget throUgh the quarter at 82.54 of budget. The increase in sales and Use tax revenue has offset the lower revenueS collected for participation /USe fees which are at 59.34 of budget. Year -to -date revenueS of $35.1 million, or 68.54% of annual bud( are lower than expected, but exceed expenditureS. The General Fund had expenditureS of $13.3 million during the third quarter, bringing the year -to -date total to $35.6 million or 67.36% of annual budget. City departments have been diligent in managing their budgets all departments are within budget with the exception of the City Attorney and Park Maintenance. The City Attorney has experienced a high number of incidents and Park and Maintenance is due to City layoff reinstatements with back pay in July 2011. Departments experiencing positive budget resultS include Mayor at 64.24 Parks and Recreation at 67.90 Information Teehnolo( at 66.75 Public Works at 66.57% and Dept 20 at 45.56 Mayor's department has effectively managed their spend ing to reduce costs in addition to not renewing the ORCA card program for employees at a cost of $67,000 due to a 100"7 increase (2010 ORCA was $36,000). Parks and Recreation has experienced declines in program participation resulting in lower revenue and reduced ex- penseS Such as extra labor at 63 Continued on page 3 Page 2 2011 THIRD QUARTER FINANCIAL REPORT 2 De, 10 Mar -11 Jun -11 Sep -11 FUND BALANCES I CHANGE IN FUND BALANCES ACTUAL BUDGET ACTUAL BUDGET Variance 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD O3 YTD YTD YTD 5,757,040 5,646,681 9,731,524 5,242,746 4,856,239 (4,488,778) (514,294) (1,243,761) 729,467 14,461,545 15,679,070 14,089,147 12,437,630 8,004,059 $(1,651,517) (2,023,915) (47,941) (1,975,974) 3,050 (8,947) 14,132 15,105 2,250 974 12,055 2,250 9,805 8,541,195 8,405,568 8,053,470 8,192,557 6,592,852 139,086 (348,639) (447,149) 98,510 $28,762,831 $29,722,371 $31,888,273 $25,888,039 19,455,400 1 $(6,000,234) $(2,874,792)1 $(1,736,600)1 $(1,138,192) Combined governmental fund activity for the third quarter resuulted in a $6.0 million decrease in fund balances. The General Fund was responsible for $4.5 million of this decrease and the special revenue funds were responsible for a decline of $1.7 million. The General Fund decrease is attributed to the timing in the collection ot'property taxes and lower revenue for fee based activities. Sumnmer' road con Struction for the SOUthcenter Access Project and Parkway Extension drove the balance of the 104 Arterial Street Fund down by $1.8 million. The financial resultS and positions of the governmental funds are discussed in more detail below. lffll �l� General fund third quarter activity decreased the fund balance by $4.5 million with a year -to -date decrease of $514,294. This is a re- sult of property tax revenue collected Semi annually in April and October The negative fund balance will be offset in the fourth quarter upon collection of the October property tax revenue which as of the third quarter is 53.32 of budget. Although the reSUltS show a lar-e decrease in fund balance for the quarter, the balance is $729,467 greater than the budgeted fund bal- ance. Sales and Use tax continue to have positive resultS with reve- nueS exceeding budget throUgh the quarter at 82.54 of budget. The increase in sales and Use tax revenue has offset the lower revenueS collected for participation /USe fees which are at 59.34 of budget. Year -to -date revenueS of $35.1 million, or 68.54% of annual bud( are lower than expected, but exceed expenditureS. The General Fund had expenditureS of $13.3 million during the third quarter, bringing the year -to -date total to $35.6 million or 67.36% of annual budget. City departments have been diligent in managing their budgets all departments are within budget with the exception of the City Attorney and Park Maintenance. The City Attorney has experienced a high number of incidents and Park and Maintenance is due to City layoff reinstatements with back pay in July 2011. Departments experiencing positive budget resultS include Mayor at 64.24 Parks and Recreation at 67.90 Information Teehnolo( at 66.75 Public Works at 66.57% and Dept 20 at 45.56 Mayor's department has effectively managed their spend ing to reduce costs in addition to not renewing the ORCA card program for employees at a cost of $67,000 due to a 100"7 increase (2010 ORCA was $36,000). Parks and Recreation has experienced declines in program participation resulting in lower revenue and reduced ex- penseS Such as extra labor at 63 Continued on page 3 Page 2 2011 THIRD QUARTER FINANCIAL REPORT 2 De, 10 Mar -11 Jun -11 Sep -11 Information Technolo spendim is down due to the in- stallation of the new phone system paid through bond fund inl in Fund 303 General Government Improvements. Public Works has managed their spending to reduce Costs through the third quarter. Salaries through the third quarter are at 68.75 due to project manager salary and benefits eharued to Fund 104 Arterial Street Fund. Additional General Fund savings have been achieved through the delay of transfers -out from Dept 20 and will be made on a as need- ed basis. The $2 million variance in transfer out constitute the budget for removal of the flood mitigation devices. This bud will be moved to 2012 through the budget amendment process. Special Revenue Funds Special revenue funds declined $1.7 million in the third quarter brinin, the year -to -dale decrease to $2.0 million. The 104 Arterial Street Fund was the lamest contributors to this decline as discussed below. Fund 104- Arterial Street. The third quarter fund balance decline is due to capital expenditures exceedin(I corresponding revemre. 'Third quarter revenue was slightly lower than second quarter revenue. Ex- penditure activity Continued on the SOUthcenter Access Project and the Southceuter Parkway Extension Projects. A deficit was planned for the vear- the actual year -to -date deficit of $2.6 million is hi( than the prorated budget deficit of $157,000. However, beuinninu fund balance is $6 million hi"her than budget due partially to the $4.3 million in unspent 2010 debt proceeds remaining at the begin- ninu of the year. 'These funds are available to cover costs of the SOUthcenter Parkway Extension project. Both revenue and expend- itures are below budget at 29.33 and 36.75 respectively due to the timing" of Construction activity and certain Construction delays. The fund had $7.1 million in cash and investments at quarter -end. ACTUAL FUND BALANCES Variance I CHANGE IN FUND BALANCES YTD FUND BALANCES GOVERNMENTAL 125,700 ACTUAL BUDGET ACTUAL BUDGET Variance 65,248 Special Revenue (682,016) (81,010) (601,006) 12/31 /2010 03/31/2011 06/30/2011 09/30/2011 YTD 301 Parks Acq Fund 4,773,512 4,792,089 4,850,322 4,976,022 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD Q3 YTD YTD YTD 101 Hotel /Motel Tax Fund 850,106 899,916 686,669 695,881 538,964 9,211 (154,226) (261,036) 106,810 103 Street Fund 607,646 670,123 732,390 794,510 553,378 62,119 186,864 53,378 133,486 104 Arterial Street Fund 11,053,410 11,623,721 10,264,965 8,470,882 4,842,102 (1,794,083) (2,582,528) (157,898) (2,424,629) 105 Contingency Fund 889,470 1,456,606 1,457,270 1,457,451 1,193,362 181 567,982 301,362 266,620 107 Fire Equip Cum Reserve 744,890 745,366 810,615 858,123 737,253 47,508 113,233 97,253 15,979 109 Drug Seizure Fund 316,024 283,337 137,237 160,784 139,000 23,547 (155,240) (81,000) (74,240) Total Special Revenue $14,461,545 $15,679,070 $14,089,147 $12,437,630 J$ 8,004,059 1 $(1,651,517) $(2,023,915)1 (47,941)1 $(1,975,974) Special revenue funds declined $1.7 million in the third quarter brinin, the year -to -dale decrease to $2.0 million. The 104 Arterial Street Fund was the lamest contributors to this decline as discussed below. Fund 104- Arterial Street. The third quarter fund balance decline is due to capital expenditures exceedin(I corresponding revemre. 'Third quarter revenue was slightly lower than second quarter revenue. Ex- penditure activity Continued on the SOUthcenter Access Project and the Southceuter Parkway Extension Projects. A deficit was planned for the vear- the actual year -to -date deficit of $2.6 million is hi( than the prorated budget deficit of $157,000. However, beuinninu fund balance is $6 million hi"her than budget due partially to the $4.3 million in unspent 2010 debt proceeds remaining at the begin- ninu of the year. 'These funds are available to cover costs of the SOUthcenter Parkway Extension project. Both revenue and expend- itures are below budget at 29.33 and 36.75 respectively due to the timing" of Construction activity and certain Construction delays. The fund had $7.1 million in cash and investments at quarter -end. Capital project funds increased $139,086 for the quarter mainly due to impact fees collected for by the Parks Acquisition Fund and Fire Impact Fee Fund. Third quarter expenses for the Fund 303 General CHANGE IN FUND BALANCES ACTUAL Capital Project Funds Variance 03 YTD FUND BALANCES YTD 125,700 GOVERNMENTAL (313,859) ACTUAL BUDGET (24,608) Capital Project 65,248 (119,448) (682,016) (81,010) (601,006) 12/31 /2010 03/31/2011 06/30/2011 09/30/2011 YTD 301 Parks Acq Fund 4,773,512 4,792,089 4,850,322 4,976,022 4,186,142 302 Facility Replacement Fu 2,058,647 2,051,032 2,043,779 2,034,039 1,910,145 303 General Govlmprovemei 1,553,018 1,397,115 990,450 871,002 318,990 304 Fire Impact Fee Fund 156,018 165,331 168,919 311,493 177,575 Total Capital Project 8,541,195 8,405,568 8,053,470 8,192,557 6,592,852 Capital project funds increased $139,086 for the quarter mainly due to impact fees collected for by the Parks Acquisition Fund and Fire Impact Fee Fund. Third quarter expenses for the Fund 303 General CHANGE IN FUND BALANCES ACTUAL BUDGET Variance 03 YTD YTD YTD 125,700 202,510 (313,859) 516,368 (9,740) (24,608) (89,855) 65,248 (119,448) (682,016) (81,010) (601,006) 142,574 155,475 37,575 117,900 139,086 (348,639)1 (447,149)1 98,510 Improvement are mainly due to the additional expenses related to the installation of the emergency generator for 6300 building. Page 2011 THIRD QUARTER FINANCIAL REPORT 3 $7 $6 $5 c $4 0 $3 $2 $1 Enterprise Fund Balances By Fund $5.9 401 -Water Fund $4.3 402 -Sewer Fund 3.4 $2.7 $2.3 $2.6 $3.6 $2.€ $1.8 $2.2 $0 Dec 2010 Mar 2011 Jun 2011 Sep 2011 411 Faster Golf Fund 412 Surface Water Fund ENTERPRISE FUNDS 401 Water Fund 402 Sewer Fund 411 Foster Golf Fund 412 Surface Water Fund ENTERPRISE FUNDS Jun 2011 Sep 2011 411 Faster Golf Fund 412 Surface Water Fund Fund 401- Water. The Water fund realized a fund balance decline Fund 411 -Golf Course. The Golf COUI Se realized a fund balance of $425 thousand durin." the quarter, which is an increase of $95 increase of $22 thousand, brinuinu the year -to date deficit to $195 thousand from the second quarter deficit of $320 thousand. Water thousand. Revenues and expenses throu the third quarter are revenue through the third quarter is at 78.71 of budget, but the cost 70.37% and 67.48% of budget. to purchase water is (Ireater than bud(let by $93 thousand or 79.52% of budget. Grant revenue of $1,244,271 for the water system as part Fund 412- Surface Water. Due to the timing of the semi annual of the Southcenter Parkway Extension project will not be received billin the third quarter realized an increase in fund balance by until the project is complete. $951 thousand. RevemleS and expenses throu( the third quarter are 96.86(/r and 49.63(7 of bud Fund 402- Sewer. The Sewer fund realized a fund balance decline of $383 thousand for a year -to date decline of $876 thousand. Reve- nues and expenses through the third quarter are 73.19% and 71.87% of budget. The reduction in fund balance is primarily related to inter "overnmental budgeted grant revenue for the SOLIthcenter parkway Extension project not received as of the end of the quarter Page 4 2011 THIRD QUARTER FINANCIAL REPORT El FUND BALANCES I CHANGE IN FUND BALANCES ACTUAL BUDGET ACTUAL BUDGET Variance 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD 03 YTD YTD YTD 5,928,552 4,997,667 4,677,391 4,251,834 2,394,524 (425,557) $(1,676,718) (1,305,476) (371,242) 2,658,708 2,560,579 2,165,382 1,782,555 1,494,081 (382,827) (876,153) (1,005,920) 129,767 280,013 (20,676) 61,924 84,201 145,873 22,278 (195,812) (279,127) 83,315 2,290,807 3,442,772 2,621,478 3,572,451 1,127,947 950,973 1,281,644 (572,053) 1,853,696 $11,158,079 $10,980,343 9,526,174 9,691,041 I 5,162,425 1 164,866 $(1,467,039) $(3,162,575) 1,695,537 Fund 401- Water. The Water fund realized a fund balance decline Fund 411 -Golf Course. The Golf COUI Se realized a fund balance of $425 thousand durin." the quarter, which is an increase of $95 increase of $22 thousand, brinuinu the year -to date deficit to $195 thousand from the second quarter deficit of $320 thousand. Water thousand. Revenues and expenses throu the third quarter are revenue through the third quarter is at 78.71 of budget, but the cost 70.37% and 67.48% of budget. to purchase water is (Ireater than bud(let by $93 thousand or 79.52% of budget. Grant revenue of $1,244,271 for the water system as part Fund 412- Surface Water. Due to the timing of the semi annual of the Southcenter Parkway Extension project will not be received billin the third quarter realized an increase in fund balance by until the project is complete. $951 thousand. RevemleS and expenses throu( the third quarter are 96.86(/r and 49.63(7 of bud Fund 402- Sewer. The Sewer fund realized a fund balance decline of $383 thousand for a year -to date decline of $876 thousand. Reve- nues and expenses through the third quarter are 73.19% and 71.87% of budget. The reduction in fund balance is primarily related to inter "overnmental budgeted grant revenue for the SOLIthcenter parkway Extension project not received as of the end of the quarter Page 4 2011 THIRD QUARTER FINANCIAL REPORT El $6 Internal Service Fund Balances By Fund $5.1 $5.1 S47 .m 501- Equlpment $4.o Re place me nt tx G $3.8 $3.8 $3.3 502- Self Insurance Fund 0 2 $3 503 LEOFF Insurance $2 ......$.1 h 6 S1.7 1 .Z Fund X, ,I A $1 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Jun -11 Sep -11 INTERNAL SERVICE FUND BALANCES I CHANGE IN FUND BALANCES FUNDS ACTUAL BUDGET ACTUAL BUDGET Variance 12/31/2010 03/31/2011 06/30/2011 0913012011 YTD Q3 YTD YTD 1 YTD 501 Equipment Replacemen 3,321,984 3,589,750 3,800,349 3,834,617 3,382,597 34,268 512,633 82,597 430,037 502 Self Insurance Fund 4,553,247 4,721,605 5,097,891 5,061,207 4,448,865 (36,684) 507,960 (51,135) 559,095 503 -LEOFF Insurance Fund 1,586,749 1,636,348 1,681,208 1,708,589 1,272,605 27,381 121,840 (77,396) 199,235 INTERNAL SERVICE FUNDS 1$ 9,461,981 9,947,703 $10,579,448 $10,604,413 1$ 9,104,066 1 24,966 1,142,433 1$ (45,934)1 1,188,367 Fund 501- Equipment Replacement. Expenditures increased in the Fund 503 -LEOFF Insurance. Third quarter activity added third quarter by $162,285 as equipment purchases were made to $27,381 to the fund balance. The year -to -dale increase in fund bal- outfit the new police vehicles. Revenues and expenses throu the ante of $121,840 is $199,236 more than the year -to -date projected third quarter are 75.14 and 55.89 of budget, resulting" in an in- deficit of $77,396. The fund had cash and investments of $1.8 mil crease to the year -to -dale fund balance by $512,633. lion at quarter -end. Fund 502 Insurance. Employee healthcare costs have Continued to remain consistent throu 2011 and in line with bud"eted revenues. The fund balance year -to -date increased by $512,633 with an end in cash and investment balance of $6.3 million. Page 5 Internal Service Fund Balance Combined 2011 THIRD QUARTER FINANCIAL REPORT 5