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Overview <br /> <br />Agenda Subject: 4th Quarter 2016 Financial Report Date: March 20, 2017 Department: Finance Attachments: Quarterly Financial Report Budget Impact: $0 Administrative Recommendation: For <br />discussion only. Background Summary: The quarterly financial report summarizes the general state of Citywide financial affairs and highlights significant items or trends that the City <br />Council should be aware of. The attachment provides the fourth quarter 2016 status report based on financial data available as of January 23, 2017 for the period ending December 31, <br />2016 and sales tax information representing business activity that occurred through October 2016. Staff: Coleman Meeting Date: March 27, 2017 Item Number: 1 <br />General Fund Summary 2 <br />December 2016 Financial ReportGeneral Fund2015Summary of Sources and UsesAnnualBudgetYE BudgetYE ActualYE ActualAmountOperating RevenuesProperty Tax617,733,500$ 17,733,500$ 17,932,830$ <br />17,199,418$ 199,3301.1 %Sales Tax7-814,572,000 14,572,000 14,717,540 14,573,164 145,5401.0 %Sales Tax -Annexation Credit1,912,000 1,912,000 2,006,028 1,988,523 94,0284.9 %Criminal Justice <br />Sales Tax1,747,000 1,747,000 1,968,679 1,815,833 221,67912.7 %Brokered Natural Gas Tax282,000 282,000 223,900 248,670 (58,100)(20.6)%City Utilities Tax9-103,521,200 3,521,200 3,959,131 <br />3,642,218 437,93112.4 %Admissions Tax333,600 333,600 378,760 355,170 45,16013.5 %Electric Tax103,297,700 3,297,700 3,525,357 3,232,503 227,6576.9 %Natural Gas Tax10852,000 852,000 946,959 <br />1,002,334 94,95911.1 %Cable TV Franchise Fee11906,700 906,700 977,736 925,835 71,0367.8 %Cable TV Franchise Fee -Capital64,000 64,000 66,315 69,680 2,3153.6 %Telephone Tax101,620,000 <br />1,620,000 1,494,354 1,661,505 (125,646)(7.8)%Garbage Tax (external)10106,000 106,000 124,007 114,870 18,00717.0 %Leasehold Excise Tax33,000 33,000 204,446 66,544 171,446519.5 %Gambling <br />Excise Tax334,400 334,400 494,472 212,939 160,07247.9 %Taxes subtotal47,315,100$ 47,315,100$ 49,020,516$ 47,109,207$ 1,705,416$ 3.6 %Business License Fees13-14221,000$ 221,000$ 224,876$ <br />281,654$ 3,8761.8 %Building Permits12-131,190,000 1,190,000 2,008,970 1,209,836 818,97068.8 %Other Licenses & Permits533,600 533,600 750,580 582,986 216,98040.7 %Intergovernmental (Grants, <br />etc.)14-155,647,293 5,647,293 5,737,079 5,317,259 89,7861.6 %Charges for Services:General Government Services1667,200 67,200 76,218 79,413 9,01813.4 %Public Safety16520,300 520,300 638,440 <br />479,061 118,14022.7 %Development Services Fees17680,600 680,600 1,046,249 1,400,292 365,64953.7 %Culture and Recreation182,105,080 2,105,080 2,316,824 2,317,351 211,74410.1 %Fines and <br />Penalties19-20796,180 796,180 905,921 938,775 109,74113.8 %Fees/Charges/Fines subtotal11,761,253$ 11,761,253$ 13,705,158$ 12,606,628$ 1,943,905$ 16.5 %Interest and Other Earnings2035,200$ <br />35,200$ 110,800$ 57,464$ 75,600214.8 %Rents, Leases and Concessions20630,600 630,600 783,930 729,969 153,33024.3 %Contributions and Donations2032,000 32,000 32,435 39,712 4351.4 %Other <br />Miscellaneous20-21157,800 157,800 286,520 218,832 128,72081.6 %Transfers In220,926 220,926 217,482 97,443 (3,444)(1.6)%Insurance Recoveries -Capital & Operating25,000 25,000 83,737 153,041 <br />58,737234.9 %Other Revenues subtotal1,101,526$ 1,101,526$ 1,514,904$ 1,296,461$ 413,378$ 37.5 %Total Operating Revenues60,177,879$ 60,177,879$ 64,240,577$ 61,012,296$ 4,062,698$ 6.8 <br />%Operating ExpendituresCouncil & Mayor1,135,833$ 1,135,833$ 1,065,395$ 912,825$ 70,4386.2 %Administration 1,350,722 1,350,722 1,197,355 1,171,634 153,36711.4 %Community & Human Services1,329,547 <br />1,329,547 872,023 1,222,557 457,52334.4 %Municipal Court & Probation2,280,889 2,280,889 2,242,473 2,239,983 38,4161.7 %Human Resources1,406,554 1,406,554 1,283,702 1,050,803 122,8528.7 <br />%Finance1,300,773 1,300,773 1,169,633 1,221,253 131,14010.1 %City Attorney2,194,830 2,194,830 1,883,009 1,901,141 311,82114.2 %Community Development4,731,841 4,731,841 4,109,092 3,882,709 <br />622,74813.2 %Jail -SCORE5,583,542 5,583,542 4,019,473 3,658,863 1,564,06928.0 %Police23,813,652 23,813,652 23,430,625 22,085,780 383,0271.6 %Public Works42,809,335 2,809,335 2,945,815 <br />2,620,478 (136,480)(4.9)%Parks, Arts & Recreation11,584,205 11,584,205 11,322,293 10,816,576 261,9122.3 %Streets3,466,563 3,466,563 3,209,370 3,016,275 257,1947.4 %Non-Departmental5,489,627 <br />5,489,627 3,934,038 5,302,250 1,555,58928.3 %Total Operating Expenditures68,477,914$ 68,477,914$ 62,684,298$ 61,103,128$ 5,793,616$ 8.5 %PageRef20162016 YE Budget vs. ActualFavorable <br />(Unfavorable)Percentage 3 <br />Executive Summary This Executive Summary provides an overview of the City’s overall financial position for the fiscal period ending December 31, 2016, reflecting financial data available <br />as of January 23, 2017. General Fund: Through December 2016, General Fund revenues totaled $64.2 million compared to a budget of $60.2 million, and were $3.2 million higher than the <br />revenues collected during the same period in 2015. Some notable variances to budget this year include: • Property tax collections in 2016 totaled $17.9 million, which is 1.1% or $199,000 <br />above budget expectations and exceed 2015 collections by $733,000, or 4.3%. [page 6] • General Fund retail sales tax revenues totaled $14.7 million, exceeding budget by 1.0% or $146,000, <br />and exceeding 2015 collections by $144,000. The primary area of significant increase in sales activity compared to 2015 was the services category. [pages 7-8] Collections in criminal <br />justice sales tax revenues exceeded budget by $222,000, or 12.7%. • The Other Taxes category performed better than budget in 2016. City utility tax revenues exceeded budget by $438,000 <br />or 12.4%, predominately due to higher than budgeted capital system development revenues collected in the Water, Sewer and Storm funds. Electric and natural gas tax revenues collected <br />in 2016 exceeded budget by $228,000 and $95,000, respectively. These revenues were somewhat offset by an unfavorable variance in telephone tax collections of $126,000. [pages 9-10] Year <br />end collections of leasehold excise taxes were $171,000 above budget due to an unanticipated payment for the Emerald Downs property which is tribally owned. Gambling excise tax revenues <br />exceeded budget by $160,000 primarily due to the timing of payments: the City’s main remitter of card game taxes paid 6 months’ worth of taxes from 2015 in the current year. • Building <br />permit revenue collected in 2016 totaled $2.0 million, compared to 2015 collections of $1.2 million and a 2016 budget of $1.2 million. The higher than budgeted revenues were predominately <br />due to a higher than anticipated volume of building permits as well as multiple large commercial building permits issued. [pages 12-13] • Other licenses and permit revenues exceeded <br />budget expectations by $217,000 primarily due to higher than anticipated revenue collected for plumbing permits. This increase in revenues was a result of increased construction activity <br />within the City. One project in particular that contributed to this influx of revenue was the permitting for the Promenade Apartment Project on 312th street. • Development services fees <br />revenues collected in 2016 exceeded budget expectations by $366,000, or 53.7%. This is predominately due to higher than anticipated revenues collected for plan check services related <br />to multiple single family and commercial construction projects within the City. [page 17] 4 <br />• Culture and recreation revenues collected in 2016 exceeded budget by $212,000, or 10.1%, but were flat compared to collections in 2015. Revenue sources that were significantly above <br />budget include special events revenue and Auburn Theatre ticket sales. [page 18] • Rents, leases and concession revenues were $153,000 or 24.3% above budget, and was $54,000 more than <br />was collected in 2015. This favorable variance is attributed to higher than anticipated revenues collected for City owned facility rentals and parking lot fees. [page 20] Ending 2016 <br />fund balances will not be finalized until approximately June 2017 pending final year-end adjustments and certification by the State Auditor’s Office. Once the final ending 2016 fund <br />balances are available, budgeted beginning 2017 fund balances will be reconciled and adjusted accordingly. General Fund expenditures in 2016 totaled $62.7 million compared to a budget <br />of $68.5 million, representing an 8.5% favorable variance to budget. All departments operated within their allocated budget in 2016 with the exception of the Public Works department. <br />This department ended the year $136,000, or 4.9% over budget. The variance to budget is seen in salary and benefit expenditures, as project engineers charged more of their time to general <br />fund projects versus transportation and utility projects during the year. General Fund expenditures in 2016 were $1.6 million, or 2.6%, higher than in 2015. Salary and benefit costs <br />increased by $1.6 million, or 5.0%, compared to 2015. This year-over-year increase is due primarily to an increase in Council approved FTEs (Full Time Equivalents) and increased costs <br />associated with healthcare and pension benefits. In addition, charges for services paid to Valley Communications for 911 services increased year-over-year by $490,000, or 20.4%. These <br />increased expenditures were somewhat offset by a reduction in intergovernmental expenditures by $713,000 compared to 2015. $60.2 M $68.5 M $64.2 M $62.7 M $0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0RevenuesExpenditures$ <br />MillionsGeneral Fund 2016 Revenues vs. Expenditures2016 YE Actual2016 YE Budget 5 <br />Street Funds: The City’s three street funds are special revenue funds where the revenue sources and expenditures are legally restricted. These funds are used for street capital construction <br />projects, local street repair and arterial street repair and preservation projects. In 2016, Arterial Street Fund revenues totaled $4.2 million as compared to collections of $4.7 million <br />for 2015; expenditures totaled $6.3 million as compared to $6.9 million spent last year. Local Street Fund revenues exceeded budget expectations the year by $692,000, or 39.2%, due to <br />higher than anticipated sales tax revenues from local construction projects; expenditures were $2.1 million as compared with a budget of $2.9 million. Lastly, the Arterial Street Preservation <br />