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Overview <br /> <br />AGENDA BILL APPROVAL FORM Agenda Subject: 4th Quarter 2016 Financial Report Date: March 20, 2017 Department: Finance Attachments: Quarterly Financial Report Budget Impact: $0 Administrative <br />Recommendation: For discussion only. Background Summary: The quarterly financial report summarizes the general state of Citywide financial affairs and highlights significant items or <br />trends that the City Council should be aware of. The attachment provides the fourth quarter 2016 status report based on financial data available as of January 23, 2017 for the period <br />ending December 31, 2016 and sales tax information representing business activity that occurred through October 2016. Staff: Coleman Meeting Date: March 27, 2017 Item Number: <br />Quarterly Financial Report Through Q4-2016 General Fund Summary 1 <br />Quarterly Financial Report Through Q4-2016 December 2016 Financial ReportGeneral Fund2015Summary of Sources and UsesAnnualBudgetYE BudgetYE ActualYE ActualAmountOperating RevenuesProperty <br />Tax617,733,500$ 17,733,500$ 17,932,830$ 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 <br />1,988,523 94,0284.9 %Criminal Justice 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 <br />Tax9-103,521,200 3,521,200 3,959,131 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 <br />%Natural Gas Tax10852,000 852,000 946,959 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 <br />69,680 2,3153.6 %Telephone Tax101,620,000 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 <br />33,000 204,446 66,544 171,446519.5 %Gambling 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 <br />License Fees13-14221,000$ 221,000$ 224,876$ 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 <br />582,986 216,98040.7 %Intergovernmental (Grants, 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 <br />9,01813.4 %Public Safety16520,300 520,300 638,440 479,061 118,14022.7 %Development Services Fees17680,600 680,600 1,046,249 1,400,292 365,64953.7 %Culture and Recreation182,105,080 2,105,080 <br />2,316,824 2,317,351 211,74410.1 %Fines and 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$ <br />16.5 %Interest and Other Earnings2035,200$ 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 <br />32,000 32,435 39,712 4351.4 %Other 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 <br />& Operating25,000 25,000 83,737 153,041 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$ <br />64,240,577$ 61,012,296$ 4,062,698$ 6.8 %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 <br />153,36711.4 %Community & Human Services1,329,547 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 <br />1,406,554 1,283,702 1,050,803 122,8528.7 %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 <br />4,731,841 4,109,092 3,882,709 622,74813.2 %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 <br />2,809,335 2,945,815 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 <br />%Non-Departmental5,489,627 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 <br />Budget vs. ActualFavorable (Unfavorable)Percentage 2 <br />Quarterly Financial Report Through Q4-2016 Executive Summary This Executive Summary provides an overview of the City’s overall financial position for the fiscal period ending December <br />31, 2016, reflecting financial data available 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, <br />and were $3.2 million higher than the revenues collected during the same period in 2015. Some notable variances to budget this year include: • Property tax collections in 2016 totaled <br />$17.9 million, which is 1.1% or $199,000 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, <br />exceeding budget by 1.0% or $146,000, and exceeding 2015 collections by $144,000. The primary area of significant increase in sales activity compared to 2015 was the services category. <br />[pages 7-8] Collections in criminal 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 <br />revenues exceeded budget by $438,000 or 12.4%, predominately due to higher than budgeted capital system development revenues collected in the Water, Sewer and Storm funds. Electric and <br />natural gas tax revenues collected in 2016 exceeded budget by $228,000 and $95,000, respectively. These revenues were somewhat offset by an unfavorable variance in telephone tax collections <br />of $126,000. [pages 9-10] Year 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. <br />Gambling excise tax revenues 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 <br />in the current year. • Building 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 <br />budgeted revenues were predominately due to a higher than anticipated volume of building permits as well as multiple large commercial building permits issued. [pages 12-13] • Other licenses <br />and permit revenues exceeded budget expectations by $217,000 primarily due to higher than anticipated revenue collected for plumbing permits. This increase in revenues was a result of <br />increased construction activity within the City. One project in particular that contributed to this influx of revenue was the permitting for the Promenade Apartment Project on 312th <br />street. • Development services fees revenues collected in 2016 exceeded budget expectations by $366,000, or 53.7%. This is predominately due to higher than anticipated revenues collected <br />for plan check services related to multiple single family and commercial construction projects within the City. [page 17] 3 <br />Quarterly Financial Report Through Q4-2016 • Culture and recreation revenues collected in 2016 exceeded budget by $212,000, or 10.1%, but were flat compared to collections in 2015. Revenue <br />sources that were significantly above budget include special events revenue and Auburn Theatre ticket sales. [page 18] • Rents, leases and concession revenues were $153,000 or 24.3% <br />above budget, and was $54,000 more than was collected in 2015. This favorable variance is attributed to higher than anticipated revenues collected for City owned facility rentals and <br />parking lot fees. [page 20] Ending 2016 fund balances will not be finalized until approximately June 2017 pending final year-end adjustments and certification by the State Auditor’s <br />Office. Once the final ending 2016 fund balances are available, budgeted beginning 2017 fund balances will be reconciled and adjusted accordingly. General Fund expenditures in 2016 totaled <br />$62.7 million compared to a budget of $68.5 million, representing an 8.5% favorable variance to budget. All departments operated within their allocated budget in 2016 with the exception <br />of the Public Works department. 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 <br />charged more of their time to general fund projects versus transportation and utility projects during the year. General Fund expenditures in 2016 were $1.6 million, or 2.6%, higher than <br />in 2015. Salary and benefit costs 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 <br />Equivalents) and increased costs associated with healthcare and pension benefits. In addition, charges for services paid to Valley Communications for 911 services increased year-over-year <br />by $490,000, or 20.4%. These 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 <br />M $0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.0RevenuesExpenditures$ MillionsGeneral Fund 2016 Revenues vs. Expenditures2016 YE Actual2016 YE Budget 4 <br />Quarterly Financial Report Through Q4-2016 Street Funds: The City’s three street funds are special revenue funds where the revenue sources and expenditures are legally restricted. These <br />funds are used for street capital construction projects, local street repair and arterial street repair and preservation projects. In 2016, Arterial Street Fund revenues totaled $4.2 <br />million as compared to collections of $4.7 million for 2015; expenditures totaled $6.3 million as compared to $6.9 million spent last year. Local Street Fund revenues exceeded budget <br />expectations the year by $692,000, or 39.2%, due to higher than anticipated sales tax revenues from local construction projects; expenditures were $2.1 million as compared with a budget <br />