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Home My WebLink AboutReg 2011-12-05 Item 2B - Color 2011 Third Quarter Financial ReportSeptember 30, 2011 • 0 1- V ;I* C1J ;1-1 ;1-10 r:4 Pt P-1 .1* Tji 1-1 z ow Summary As of September 30, 2011, three quarters, or 75% 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 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 of $32.07 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 usage and the collection of the surface water semi - annual billing. Sales and use tax revenues continue to exceed budget while charges for services continues to suffer due to economic conditions. Uncertainty 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. CITY -WIDE -U $5,242,746 FUND BALANCES CHANGE IN FUND BALANCES ACTUAL ACTUAL 12/31/2010 03/31/2011 06/30/2011 09/30/2011 Q3 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 $ (5,810,402) $ (3,199,398) General Fund Hotel /Motel Tax Fund Street Fund Arterial Street Fund Contingency Fund Fire Equip Cum Reserve Drug Seizure Fund Debt Service Funds Parks Acq Fund Facility Replacement Fund General Gov Improvements Fire Impact Fee Fund Water Fund Sewer Fund Foster Golf Fund Surface Water Fund Equipment Replacement Fund Self- Insurance Fund LEOFF Insurance Fund Fund Balances ** As of September 30, 2011 - -U $5,242,746 MI $695,881 NM $794,510 M e $8,470,882 llllllll�l $1,4157,451 - $858,123 1 $160,784 $15,105 $4,976,022 $2,034,039 - $871,002 III $311,493 $4,251,834 11,782,555 1 $84,201 $3, 572,451 3,834,617 $5,061,207 0/ $ ,708,589 L NEMEK $- * *Unreserved /unrestricted $2,000 000 $4,000 000 $6,000 000 $8,000 000 $10,000,000 Inside this issue: Governmental funds 2 Enterprise funds Governmental funds — continued 3 4 Internal Service funds 5 Governmental Funds Overview 517 516 515 514 513 512 511 510 2 59 58 2 57 56 55 54 53 52 51 Governmental Fund Balances- By Fund Group $14.5 $15.7 --- _... —•. - ..�� FUND BALANCES CHANGE IN FUND BALANCES 12/31/2010 ACTUAL 03/31/2011 06/30/2011 09/30/2011 M.. ..... ACTUAL Q3 YTD $14.1 '_' _� Variance YTD General Fund $ 5,757,040 y ......... $12.4 $ 5,242,746 $ 4,856,239 $ (4,488,778) $ (514,294) $ (1,243,761) $ 729,467 Special Revenue 14,461,545 15,679,070 $8.4 $9 7 8,004,059 $8.5 x x (1,975,974) Debt Service 3,050 (8,947) 14,132 x $8.2 2,250 $ 974 12,055 2,250 4 Capital Project 8,541,195 5. 8,053,470 $5.6 6,592,852 $ 139,086 $5.8 (447,149) 98,510 GOVERNMENTAL FUNDS $28,762,831 $29,722,371 $31,888,273 $25,888,039 $ 19,455,400 $(6,000,234) $(2,874,792) $(1,736,600) ♦ B • • Dec 2010 Mar 2011 Jun 2011 Sep 2011 General Fund —•— Special Revenue Debt Service —%— Capital Project Governmental Fund Balances - Combined GOVERNMENTAL FUNDS FUND BALANCES CHANGE IN FUND BALANCES 12/31/2010 ACTUAL 03/31/2011 06/30/2011 09/30/2011 -- BUDGET -- YTD ACTUAL Q3 YTD - -- BUDGET -- YTD Variance YTD General Fund $ 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 Special Revenue 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) Debt Service 3,050 (8,947) 14,132 15,105 2,250 $ 974 12,055 2,250 9,805 Capital Project 8,541,195 8,405,568 8,053,470 8,192,557 6,592,852 $ 139,086 (348,639) (447,149) 98,510 GOVERNMENTAL FUNDS $28,762,831 $29,722,371 $31,888,273 $25,888,039 $ 19,455,400 $(6,000,234) $(2,874,792) $(1,736,600) $ (1,138,192) Combined governmental fund activity for the third quarter resulted 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 of property taxes and lower revenue for fee based activities. Summer 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. General Fund 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 large 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 budget 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 Page 2 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 Technology 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% 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 2011 THIRD QUARTER FINANCIAL REPORT • Information Technology spending is down due to the in- stallation of the new phone system paid through bond fund- ing 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 charged 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 budget will be moved to 2012 through the budget amendment process. Special Revenue Funds GOVERNMENTAL Special Revenue FUND BALANCES CHANGE IN FUND BALANCES 12/31/2010 ACTUAL 03/31/2011 06/30/2011 09/30/2011 -- BUDGET -- YTD ACTUAL 03 YTD - -- BUDGET -- YTD Variance 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 $ 8,004,059 $(1,651,517) $(2,023,915) $ (47,941) $ (1,975,974) Special revenue funds declined $1.7 million in the third quarter bringing the year -to -date decrease to $2.0 million The 104 - Arterial Street Fund was the largest contributors to this decline as discussed below. Fund 104 - Arterial Street. The third quarter fund balance decline is due to capital expenditures exceeding corresponding revenue. Third quarter revenue was slightly lower than second quarter revenue. Ex- penditure activity continued on the Southcenter Access Project and the Southcenter Parkway Extension Projects. A deficit was planned for the year - the actual year -to -date deficit of $2 6 million is higher than the prorated budget deficit of $157,000. However, beginning fund balance is $6 million higher than budget due partially to the $4.3 million in unspent 2010 debt proceeds remaining at the begin- ning 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 GOVERNMENTAL Capital Project FUND BALANCES CHANGE IN FUND BALANCES ACTUAL • -- BUDGET -- ACTUAL - -- BUDGET -- Variance 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD Q3 YTD YTD YTD 301 - Parks Acq Fund $ 4,773,512 $ 4,792,089 $ 4,850,322 $ 4,976,022 $ 4,186,142 $ 125,700 $ 202,510 $ (313,859) $ 516,368 302 - Facility Replacement Fu 2,058,647 2,051,032 2,043,779 2,034,039 1,910,145 $ (9,740) (24,608) (89,855) 65,248 303- General Gov lmprovemer 1,553,018 1,397,115 990,450 871,002 318,990 $ (119,448) (682,016) (81,010) (601,006) 304 - Fire Impact Fee Fund 156,018 165,331 168,919 311,493 177,575 $ 142,574 155,475 37,575 117,900 Total Capital Project $ 8,541,195 $ 8,405,568 $ 8,053,470 $ 8,192,557 $ 6,592,852 $ 139,086 $ (348,639) $ (447,149) $ 98,510 Capital project funds increased $139,086 for the quarter mainly due Improvement are mainly due to the additional expenses related to to impact fees collected for by the Parks Acquisition Fund and Fire the installation of the emergency generator for 6300 building. Impact Fee Fund. Third quarter expenses for the Fund 303 - General Page 3 2011 THIRD QUARTER FINANCIAL REPORT Enterprise Funds $7 $6 $5 2 $4 0 5 $3 $2 $1 $o Enterprise Fund Balances - By Fund $5.9 $5.0 $4.3 Dec 2010 Mar 2011 Jun 2011 Sep 2011 --401 -Water Fund 1402 -Sewer Fund —A-411 -Foster Golf Fund x-412 - Surface Water Fund Fund 401 - Water. The Water fund realized a fund balance decline of $425 thousand during the quarter, which is an increase of $95 thousand from the second quarter deficit of $320 thousand. Water revenue through the third quarter is at 78.71% of budget, but the cost to purchase water is greater than budget by $93 thousand or 79.52% of budget. Grant revenue of $1,244,271 for the water system as part of the Southcenter Parkway Extension project will not be received until the project is complete. 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- governmental budgeted grant revenue for the Southcenter Parkway Extension project not received as of the end of the quarter Fund 411 -Golf Course. The Golf Course realized a fund balance increase of $22 thousand, bringing the year -to date deficit to $195 thousand. Revenues and expenses through the third quarter are 70.37% and 67.48% of budget. Fund 412 - Surface Water. Due to the timing of the semi- annual billings the third quarter realized an increase in fund balance by $951 thousand. Revenues and expenses through the third quarter are 96.86% and 49.63% of budget. Page4 2 o11 THIRD QUARTER FINANCIAL REPORT ENTERPRISE FUNDS FUND BALANCES CHANGE IN FUND BALANCES ACTUAL - -- BUDGET -- ACTUAL - -- BUDGET - -. Variance 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD Q3 YTD YTD YTD 401 - Water Fund $ 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) 402 - Sewer Fund 2,658,708 2,560,579 2,165, 382 1,782,555 1,494,081 $ (382, 827) (876,153) $ (1,005,920) 129,767 411 - Foster Golf Fund 280,013 (20,676) 61,924 84,201 145,873 $ 22,278 (195,812) $ (279,127) 83,315 412 - Surface Water Fund 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 ENTERPRISE FUNDS $11,158,079 $10,980,343 $ 9,526,174 $ 9,691,041 $ 5,162,425 $ 164,866 $(1,467,039) $(3,162,575) $ 1,695,537 Fund 401 - Water. The Water fund realized a fund balance decline of $425 thousand during the quarter, which is an increase of $95 thousand from the second quarter deficit of $320 thousand. Water revenue through the third quarter is at 78.71% of budget, but the cost to purchase water is greater than budget by $93 thousand or 79.52% of budget. Grant revenue of $1,244,271 for the water system as part of the Southcenter Parkway Extension project will not be received until the project is complete. 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- governmental budgeted grant revenue for the Southcenter Parkway Extension project not received as of the end of the quarter Fund 411 -Golf Course. The Golf Course realized a fund balance increase of $22 thousand, bringing the year -to date deficit to $195 thousand. Revenues and expenses through the third quarter are 70.37% and 67.48% of budget. Fund 412 - Surface Water. Due to the timing of the semi- annual billings the third quarter realized an increase in fund balance by $951 thousand. Revenues and expenses through the third quarter are 96.86% and 49.63% of budget. Page4 2 o11 THIRD QUARTER FINANCIAL REPORT Internal Service Funds $6 $5 $4 0 $3 $2 $1 Internal Service Fund Balances - By Fund Dec 2010 Mar 2011 Jun 2011 Sep 2011 +501- Equipment Replacement 1502 -Self- Insurance Fund .11.503 - LEOFF Insurance Fund Internal Service Fund Balance - Combined $11 $11 $10 $10 $10 $10 $10 $9 59 $9 - 59 / .5 $9.9 $10.6 $10.6 Dec -10 Mar -11 Jun -11 Sep -11 INTERNAL SERVICE 4. $5.1 $5.1 —5U - -- BUDGET -- $3.8 $3.8 1 $3.3 YTD 03 YTD YTD $1.6 $1.6 $1.7 $1.7 $ 34,268 $ 512,633 $ 82,597 . A. 4,553,247 4,721,605 5,097,891 5,061,207 . 1 $ (36,684) 507,960 $ (51,135) Dec 2010 Mar 2011 Jun 2011 Sep 2011 +501- Equipment Replacement 1502 -Self- Insurance Fund .11.503 - LEOFF Insurance Fund Internal Service Fund Balance - Combined $11 $11 $10 $10 $10 $10 $10 $9 59 $9 - 59 / .5 $9.9 $10.6 $10.6 Dec -10 Mar -11 Jun -11 Sep -11 INTERNAL SERVICE FUND BALANCES CHANGE IN FUND BALANCES FUNDS ACTUAL - -- BUDGET -- ACTUAL - -- BUDGET -- Variance 12/31/2010 03/31/2011 06/30/2011 09/30/2011 YTD 03 YTD YTD YTD 501 - Equipment Replacement $ 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 $ 9,461,981 $ 9,947,703 $10,579,448 $10,604,413 $ 9,104,066 $ 24,966 $ 1,142,433 $ (45,934) $ 1,188,367 Fund 501- Equipment Replacement. Expenditures increased in the third quarter by $162,285 as equipment purchases were made to outfit the new police vehicles. Revenues and expenses through the third quarter are 75.14% and 55.89% of budget, resulting in an in- crease to the year -to -date fund balance by $512,633. Fund 502 - Insurance. Employee healthcare costs have continued to remain consistent through 2011 and in line with budgeted revenues. The fund balance year -to -date increased by $512,633 with an end- ing cash and investment balance of $6.3 million Fund 503 -LEOFF Insurance. Third quarter activity added $27,381 to the fund balance. The year -to -date increase in fund bal- ance of $121,840 is $199,236 more than the year -to -date projected deficit of $77,396. The fund had cash and investments of $1.8 mil- lion at quarter -end. Pages 2011 THIRD QUARTER FINANCIAL REPORT