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Home My WebLink AboutCOW 2021-03-08 Item 5B - COVID-19 - Financial Impact ReportCOUNCIL AGENDA SYNOPSIS "s+a�' 41 Initials ITEM No. 1Meeting Date Prepared by Mayor's review Council review 0 3/8/21 VICKY 4.5.B. 01\\,___ _}.0 19Q8 ITEM INFORMATION STAFF SPONSOR: VICKY CARLSEN ORIGINAL AGENDA DATE: 3/8/21 AGENDA ITEM TITLE December Financial Update including COVID-19 related data CATEGORY eI Mtg Discussion Date 3/8/21 ❑ Motion Mtg Date ❑ Resolution Mtg Date ❑ Ordinance Mtg Date ❑ Bid Award Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ Admin Svcs ❑ DCD 11 Finance ❑ Fire ❑ P&R ❑ Police ❑ PW SPONSOR'S General fund financial update including report out on COVID specific financial impacts as SUMMARY required in Resolution No. 1987 REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ❑ Planning & Community Dev. ❑ LTAC ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: N/A COMMITTEE CHAIR: RECOMMENDATIONS: SPONSOR/ADMIN. Finance COMMITTEE N/A COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 3/8/21 MTG. DATE ATTACHMENTS 3/8/21 Informational Memorandum 3/2/21 31 32 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: March 2, 2021 SUBJECT: Preliminary year-end results for the general fund and select capital project funds Summary Resolution 1987 directed financial reporting on COVID-19 impacts twice a month. This report reflects the general fund and select capital project funds through December 31, 2020 The purpose of the general fund budgets to actuals report is to summarize for the City Council the general state of revenues and expenditures and to highlight significant items. The following provides a high-level summary of the general fund financial performance and includes select capital project funds. Since this is now a new year, the focus of this report will shift to preliminary year-end results. The General Fund Report is based on financial data available as of February 23, 2021 and includes December sales tax information. The amended budget noted throughout the report includes the original adopted budget and mid -biennium budget amendments approved in 2019 and 2020. In the report on the next page, General Fund revenues and expenditures are reflected through December 31, 2020. 33 INFORMATIONAL MEMO Page 2 Revenues, Expenditures, and Fund Balance CITY OF TUKWILA GENERAL FUND As of December 31, 2020 34 2019 2020 Variance Year -to -Date Actuals Amended Annual Budget Year -to -Date Actuals Budget vs. Actual Percent of Budgeted Year -End Revenue General Revenue Property Taxes $ 15,550,555 $16,416,911 $ 16,211,809 $ (205,102) 98.8% Retail Sales Tax 19,916,461 19,910,676 16,310,144 (3,600,532) 81.9% Use Tax 722,985 690,000 822,512 132,512 119.2% Admissions Tax 926,523 870,000 346,134 (523,866) 39.8% Utility Taxes 3,642,021 4,924,610 4,240,904 (683,706) 86.1% Interfund Utility Tax 2,358,608 2,412,000 2,153,573 (258,427) 89.3% Gambling/Excise Taxes 4,067,959 4,426,000 2,758,279 (1,667,721) 62.3% Total General Revenue 47,185,112 49,650,197 42,843,355 (6,806,842) 86.3% Licenses and Permits Business Licenses & Permits 3,961,299 4,612,400 4,928,473 316,073 106.9% Rental Housing License 39,523 45,000 50,483 5,483 112.2% Building Permits and Fees 2,115,648 2,127,494 1,957,878 (169,616) 92.0% Total Licenses and Permits 6,116,469 6,784,894 6,936,834 151,940 102.2% Intergovernmental Revenue Sales Tax Mitigation 655,127 - - - Seattle City Light Agreement 2,318,080 2,470,000 2,311,379 (158,621) 93.6% State Entitlements 493,631 446,250 538,633 92,383 120.7% Grants 727,925 1,570,516 1,011,900 (558,616) 64.4% Total lntergov't Revenue 4,194,763 4,486,766 3,861,911 (624,855) 86.1% Charges for Services General Government 58,138 58,532 28,624 (29,908) 48.9% Security 1,248,463 1,622,000 1,599,623 (22,377) 98.6% Transportation (10,363) 79,000 (51,640) (130,640) -65.4% Plan Check and Review Fees 1,519,455 1,168,675 772,480 (396,195) 66.1% Culture and Rec Fees 525,919 621,000 71,024 (549,976) 11.4% Total Charges for Services 3,341,613 3,549,207 2,420,112 (1,129,095) 68.2% Fines and Penalties 186,717 291,718 139,438 (152,280) 47.8% Miscellaneous Revenue 1,345,098 1,214,156 946,197 (267,959) 77.9% Indirect cost allocation 2,545,644 2,637,288 2,637,289 1 100.0% Ongoing Revenue 64,915,416 68,614,226 59,785,136 (8,829,090) 87.1% Transfer from Contingency - 700,000 - (700,000) 0.0% Transfer from Urban Renewal - 600,000 400,000 (200,000) 66.7% Total Revenue 64,915,416 69,914,226 60,185,136 (9,729,090) 86.1% 34 INFORMATIONAL MEMO Page 3 CITY OF TUKWILA GENERAL FUND As of December 31, 2020 Percent of year completed: 100.0% The City's financial reserve policy states that unreserved general fund ending fund balance shall equal or exceed 18% of the previous year general fund revenue. Projected ending fund balance exceeds the balance of $11,598,531 required by the City's reserve policy by over $2 million. However, it should be noted that these are still preliminary figures and this amount will change before 2020 is officially closed. Total General Fund revenue through December 31st was $60.2 million and expenditures totaled $59.7. A budgeted transfer from the general fund to the PW Shops fund for $2.8 million did not occur. 35 2019 2020 Variance Year -to -Date Actuals Amended Annual Budget Year -to -Date Actuals Budget vs. Actual Percent of Budgeted Year -End Expenditures City Council 381,903 445,312 351,427 (93,885) 78.9% Mayor's Office 2,493,651 2,742,111 2,382,631 (359,480) 86.9% Administrative Services 1,987,279 2,220,662 2,073,500 (147,162) 93.4% Finance 2,392,462 2,802,249 2,357,270 (444,979) 84.1% Legal 654,866 710,730 654,286 (56,444) 92.1% Recreation 3,352,811 3,464,074 2,574,885 (889,189) 74.3% Parks Maintenance 1,678,360 1,682,579 1,603,883 (78,696) 95.3% Community Development 3,556,063 3,859,081 3,163,700 (695,381) 82.0% Court 1,297,382 1,345,060 1,274,472 (70,588) 94.8% Police 18,907,947 19,390,720 17,526,845 (1,863,875) 90.4% Fire 12,562,278 13,261,272 12,740,006 (521,266) 96.1% Information Technology 1,977,992 2,144,159 1,899,498 (244,661) 88.6% Public Works 3,780,318 3,995,760 3,508,068 (487,692) 87.8% PW Street Maintenance 3,834,767 3,269,041 2,749,795 (519,246) 84.1% Total Department Expenditures 58,858,079 61,332,810 54,860,267 (6,472,543) 89.4% Transfers - Debt Service 3,661,986 3,637,190 3,490,499 (146,691) 96.0% Transfers - Capital, Other 2,369,600 4,421,950 1,350,000 (3,071,950) 30.5% Transfers - Contingency 162,311 210,000 - (210,000) 0.0% Total Transfers 6,193,897 8,269,140 4,840,499 (3,428,641) 58.5% Total Expenditures 65,051,976 69,601,950 59,700,766 (9,901,184) 85.8% Change in Fund Balance 312,276 172,094 Beginning Fund Balance 13,828,530 13,828,530 Ending Fund Balance $ 14,140,806 $ 14,000,624 Percent of year completed: 100.0% The City's financial reserve policy states that unreserved general fund ending fund balance shall equal or exceed 18% of the previous year general fund revenue. Projected ending fund balance exceeds the balance of $11,598,531 required by the City's reserve policy by over $2 million. However, it should be noted that these are still preliminary figures and this amount will change before 2020 is officially closed. Total General Fund revenue through December 31st was $60.2 million and expenditures totaled $59.7. A budgeted transfer from the general fund to the PW Shops fund for $2.8 million did not occur. 35 INFORMATIONAL MEMO Page 4 Sales Tax Sales tax revenue through December is $16.31 million and exceeded year-end projections by $100 thousand. Sales tax revenues continues to be impacted by COVID-19 but has been recovering faster than originally expected. The chart below graphically compares sales tax revenue in 2020 to 2019 revenue. 2,500,000 2,000, DDD 1,500,000 1,000,000 500,000 0 Sales Tax Revenue 2019 vs. 2020 Jan F Mar Apr May Jun Jul Aug Sep Oct NOV LLE_ — 2019 - 2020 The table below compares 2019 to 2020 monthly sales tax revenues. While sales tax revenues are exceeding the pandemic budget forecasts, actual sales tax revenues continue to trail prior year Sales Tax Revenues 2019 2020 $ Change % Change Jan 1,376,700 1,346,392 (30,308) -2.2% Feb 1,321,327 1,147,961 (173,367) -13.1% Mar 1,700,887 1,325,708 (375,179) -22.1% Apr 1,543,385 991,702 (551,684) -35.7% May 1,541,774 1,156,386 (385,388) -25.0% Jun 1,870,205 1,230,374 (639,831) -34.2% Jul 1,686,655 1,524,692 (161,963) -9.6% Aug 1,659,599 1,408,596 (251,003) -15.1% Sep 1,796,805 1,481,525 (315,280) -17.5% Oct 1,732,017 1,407,342 (324,675) -18.7% Nov 1,687,457 1,461,993 (225,465) -13.4% Dec 2,132,567 1,827,474 (305,093) -14.3% YTD Total 20,049,378 16,310,144 (3,739,234) -18.7% 36 INFORMATIONAL MEMO Page 5 Overtime Police and Fire accounted for $1.33 million of the $1.37 million of overtime expenditures through October. The public safety departments began the year with overtime at pre -pandemic levels and reduced their overtime when budget constraints were introduced in March 2020. Increased overtime in May, June and July were the results of maintaining minimum staffing levels in the fire department as well as some overtime incurred related to the lootings and protests occurring in the City. It should also be noted that some contractual overtime incurred by both Police and Fire is reimbursable and the City is monitoring and billing as needed. Lootings Twenty-six businesses were broken into at the end of May and beginning of June. The mass lootings required a strong police presence that resulted in overtime costs. Fire staff were also on standby while Public Works incurred some costs related to closing streets. BUDGETED I UNBUDGETED BUDGETED I UNBUDGETED MAY JUNE Transfers The transfers line includes budgeted transfers for debt service and certain capital projects. Transfers through December account for only 58.5% of the amended budget. It should be noted, because of existing funds in the PW Shops fund, no transfers from the general fund for this project have been required to date. The proposed 2021-2022 biennial budget includes a plan to finance the general fund portion of this project rather than utilizing a pays -as -you go approach. COVID Expenditures General Fund expenditures related to the COVID-19 pandemic began to be incurred in March. These expenditures totaled $984,547 through December 31st and are reported by department in the schedule below. COVID related expenditures in salaries and benefits include time dedicated to the emergency operations center (EOC) as well as time spent analyzing the financial impacts of the pandemic. Overtime and supplies are for time outside of normal operations spent in the EOC as well as time responding directly to COVID-19 related activities. Supplies are for additional PPE and disinfectant supplies. Unbudgeted costs can be applied against CARES Act funding or FEMA funding and will not affect ending fund balance. Budgeted salaries and benefits for time that has been redirected to responding to the pandemic could qualify for reimbursement from CARES Act funding. Any reimbursement for budgeted salaries and benefits would reduce the need for contingency funds because the City had not received confirmation that CARES Act funding would be available. 37 Salaries and Salaries and Department Benefits Overtime Benefits Overtime Total Police $ - $ 24,994 $ - $ 36,573 $ 61,567 Fire - 435 - 1,003 1,438 Street Maintenance -- 2,064 - 2,064 Total $ - $ 25,429 $ 2,064 $ 37,576 $ 65,069 Transfers The transfers line includes budgeted transfers for debt service and certain capital projects. Transfers through December account for only 58.5% of the amended budget. It should be noted, because of existing funds in the PW Shops fund, no transfers from the general fund for this project have been required to date. The proposed 2021-2022 biennial budget includes a plan to finance the general fund portion of this project rather than utilizing a pays -as -you go approach. COVID Expenditures General Fund expenditures related to the COVID-19 pandemic began to be incurred in March. These expenditures totaled $984,547 through December 31st and are reported by department in the schedule below. COVID related expenditures in salaries and benefits include time dedicated to the emergency operations center (EOC) as well as time spent analyzing the financial impacts of the pandemic. Overtime and supplies are for time outside of normal operations spent in the EOC as well as time responding directly to COVID-19 related activities. Supplies are for additional PPE and disinfectant supplies. Unbudgeted costs can be applied against CARES Act funding or FEMA funding and will not affect ending fund balance. Budgeted salaries and benefits for time that has been redirected to responding to the pandemic could qualify for reimbursement from CARES Act funding. Any reimbursement for budgeted salaries and benefits would reduce the need for contingency funds because the City had not received confirmation that CARES Act funding would be available. 37 INFORMATIONAL MEMO Page 6 COVID-19 Related Expenditures BUDGETED I UNBUDGETED Department Salaries and Benefits Overtime Supplies Department Total General Fund Council $ 1,784 $ - $ - $ 1,784 Mayor 87,818 - 34,042 121,860 Admin Services 43,120 - 512 43,632 Finance 39,433 386 1,157 40,976 Recreation 425,541 - 40,214 465,755 DCD 3,712 - 2,301 6,013 Court 114 137 5,307 5,558 Police 74,676 19,809 12,738 107,223 Fire 46,945 12,995 19,607 79,547 TIS 390 - 42,392 42,782 Public Works 6,673 318 18,334 25,325 Park Maintenance 38,691 - 2,421 41,112 Street Maintenance -- 2,980 2,980 Total General Fund $ 768,897 $ 33,645 $ 182,005 $ 984,547 In addition to COVID spending in the general fund, the Public Safety Plan has incurred approximately $650 thousand to date in costs directly related to the pandemic. Because these costs are associated with COVID-19, the City is able to request reimbursement from CARES Act funding to cover these costs. It should be noted that the change orders specific to COVID-19 were funded with contingency that is built into the project budgets. The change orders are not increasing the total budget allocated to each project. 38 INFORMATIONAL MEMO Page 7 Selected Capital Projects Funds Residential Streets The most impactful issue in the 103 fund relates to the 42nd Ave S and 53rd Ave S roadway projects. Both projects are completed and are awaiting final closeout and payments to contractors. The 2020 budget amendment included two transfers; a transfer of $400 thousand from the urban renewal fund and reallocated solid waste utility tax revenue (funds dedicated to road projects). Costs are now expected to be incurred in 2021. Arterial Streets 42nd Ave S Bridge: Council approved the TranTech Engineering 30% design contract on November 2, 2020 for $1,078,487.00 and a Notice to Proceed was issued November 17, 2020. S 119th St Ped Bridge painting: This project is included in the 2021 Capital Improvement Program and is now scheduled for 2024. Overlay: The 2020 Overlay and Repair Program included only the two highest priority overlay projects. Overlay has been completed for 2020 for $277,220.01 and accepted and closed by Council on December 14, 2020. General Government Improvement Siding repair at TCC: Project has been completed and waiting on final prevailing wage documentation in order to close out the project. Facilities Study.' This project has been put on hold for now due to the continuing COVID-19 health emergency. 39 INFORMATIONAL MEMO Page 8 City of Tukwila Residential Street Fund 103 - Revenue and Expenditures Year -to -Date as of December 31, 2020 40 2019 2020 Year -to -Date Actuals Amended Annual Budget Projected Year- End Year -to -Date Projected vs. Actuals YTD Actual" Percent of Pro ected 1 Year -End REVENUE: General Revenue Solid Waste/Recycling Utility Tax 36,953 - 550,000 550,000 0 100.0% Total Intergovernmental Revenue 36,953 - 550,000 550,000 - 1 Intergovernmental Revenue Indirect Federal - SRTS - 3,454,000 -- - 0% State Grant - Macadam 1,099,038 947,000 -- - 0% State Entitlements - MVFT Cities 294,958 290,000 170,000 100,816 69,184 59.3% Total Intergovernmental Revenue 1,393,996 4,691,000 170,000 100,816 69,184 59.3% Miscellaneous Revenue ** Charges for services 1,226,221 - - - - 0.0% Investment earnings 1,860 20,000 - - - 0.0% Total Miscellaneous Revenue 1,228,081 20,000 - - - 0.0% Transfers In 1,850,000 1,050,000 400,000 400,000 - 100.0% Total Revenues 4,509,030 5,761,000 1,120,000 1,050,816 69,184 93.8% EXPENDITURES: 46thAve Safe Routes to School - 1,832,000 - -- 0.0% Macadam Rd S Complete Street - 747,000 - -- 0.0% S 152nd St Safe Routes to School - 1,622,000 - -- 0.0% Traffic Calming/Residential Safety 165,616 400,000 50,000 80,667 (30,667) 161.3% 53rd Ave S 2,317,293 500,000 500,000 381,332 118,668 76.3% 42nd Ave S Ph III Wetland Monitoring 1,192 - 3,011 15,559 (12,548) 516.7% 42nd Ave S Phase III (SC Blvd -160) 1,142,651 600,000 593,763 350,053 243,710 59.0% Interfund Loan Repayment - - 0.0% Total Expenditures 3,626,752 5,701,000 1,146,774 827,611 319,163 72.2% Change in fund balances 60,000 (26,774) Beginning Fund Balance 51,544 141,586 Ending Fund Balance - 111,544 114,812 40 INFORMATIONAL MEMO Page 9 City of Tukwila Arterial Street Fund 104 - Revenue and Expenditures Year -to -Date as of December 31, 2020 41 2019 2020 Year -to -Date Actuals Amended Projected Year- Year -to -Date Projected vs. Percent of Annual End Actuals YTD Actual"" Projected Budget Year -End REVENUE: General Revenue Parking Tax #NAME? 470,000 200,026 192,655 7,371 96.3% MVFT Cities 149,889 137,000 92,483 127,356 (34,873) 137.7% Real Estate Excise Taxes 629,244 500,000 500,000 320,567 179,433 64.1% Total General Revenue #NAME? 1,107,000 792,509 640,578 151,931 80.8% Charges for Services Park irrpact Fees 1,359,533 300,000 -- - 0.0% Traffic Irrpact Fees 547,889 213,000 70,564 406,731 (336,167) 576.4% Total Charges for Services 1,907,422 513,000 70,564 406,731 (336,167) 576.4% Intergovernmental Revenue Federal Grants 1,366,552 6,724,000 2,811,834 1,113,575 1,698,259 39.6% State Grants 13,966 2,253,000 160,000 224,757 (64,757) 140.5% Total Charges for Services 1,380,517 8,977,000 2,971,834 1,338,332 1,633,502 45.0% Miscellaneous Revenue Investment earnings 54,890 20,000 20,000 13,462 6,538 67.3% Contributions/Donations 7,400 30,000 17,533 18,733 (1,200) 106.8% Total Miscellaneous Revenue 62,290 50,000 37,533 32,194 5,339 85.8% Total Revenues #NAME? 10,647,000 3,872,440 2,417,835 1,454,605 62.4% EXPENDITURES: Overhead (Salaries & Benefits) 225,087 485,382 - 273,297 (273,297) 0.0% Wetland Monitoring (various) 4,969 - 40,000 35,417 4,583 88.5% BAR over Airport Way Seismic Retrofit 324,405 2,614,000 1,441,000 680,526 760,474 47.2% TIB Channelization Study 20,832 - 19,920 19,920 0 100.0% Transportation Conp Bement Ran- 200,000 1,338 198,662 0.7% TUC Ped/Bicycle Bridge 288,097 - 1,505 1,505 (0) 100.0% Boeing Access Road Bridge Rehab 1,184,848 - 16 16 - 100.0% Strander Boulevard Extension 143,487 877,566 625,000 625,428 (428) 100.1% S 140th St Intersection Improvements 241,316 - - - - 0.0% S 144th ST Phase II 19,941 - 161 161 - 100.0% S 196th/200th St Bridge 123,386 - 1,304 1,304 - 100.0% West Valley Highway 28,813 3,195,000 509,000 455,825 53,175 89.6% 42nd Ave S Bridge Replacement 18,652 1,600,000 200,000 97,489 102,511 48.7% Annual Overlay 1,281,409 1,400,000 517,000 485,692 31,308 93.9% Annual Bridge Inspections 29,720 335,000 335,000 32,928 302,072 9.8% Annual Traffic Signals 14,655 125,000 62,000 44,829 17,171 72.3% Other Msc. Capital Projects 63,355 792,000 2,025 16,242 (14,217) 802.1% Transfer Park Impact Fees to 301 -- 675,106 - 675,106 0.0% Total Expenditures 4,012,973 11,423,948 4,629,037 2,771,918 1,857,119 59.9% Change in fund balances (776,948) (756,597) Beginning Fund Balance 1,187,826 2,083,854 Ending Fund Balance 410,878 1,327,257 41 INFORMATIONAL MEMO Page 10 City of Tukwila General Government Improvements Fund 303 - Revenue and Expenditures Year -to -Date as of December 31, 2020 ** This column reflects amounts needed to be collected/expended to meet year-end projections 42 2019 2020 Year -to -Date Actuals Amended Projected Year -to -Date Projected vs. Percent of Annual Year -End Actuals YTD Actual** Projected Budget Year -End REVENUE: Miscellaneous Revenue Investment earnings 10,586 500 4,000 4,269 269 106.7% Total Miscellaneous Revenue 10,586 500 4,000 4,269 269 106.7% Transfers In 200,000 200,000 -- - 0.0% Total Revenues 210,586 200,500 4,000 4,269 269 2.1% EXPENDITURES: City Hall Siding/Roof Repair - 50,000 -- - 0.0% TCC Siding/Roof Repair - 100,000 128,601 116,589 (12,012) 90.7% 2020 Facilities Study - 300,000 -- - 0.0% [Asc. Projects (including salaries & benefits) 17,772 208,015 31,684 31,684 (0) 100.0% Install No Parking Signs at 6200/6300 Bl 8.759 2.026 2,026 Fire Station 54 Flooring 7.629 6300 Bldg. Dry Fire Sprinkler System - 29,658 29,658 City Facilities Mitigation 1,384 - - Total Expenditures 17,772 658,015 160,285 148,273 (12,012) 92.5% Change in fund balances (457,515) (156,285) Beginning Fund Balance 525,166 656,306 Ending Fund Balance 67,651 500,021 ** This column reflects amounts needed to be collected/expended to meet year-end projections 42