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Q1 2024 Financial Report
CITY OF J * At -_ x C AGENDA BILL APPROVAL FORM * —00' WASHINGTON Agenda Subject: Date: 1st Quarter 2024 Financial Report (Thomas) (20 Minutes) June 12, 2024 Department: Attachments: Budget Impact: Finance Financial Renort through March 2024 Current Budget: $0 of 2024 Presentation Proposed Revision: $0 Revised Budget: $0 Administrative Recommendation: For discussion only. Background for Motion: Background Summary: The Financial Report summarizes the general state of the Citywide financial affairs and highlights significant items or trends that the City Council should be aware of. The attachment provides year-to-date financial activity through March 31, 2024, based on financial data available as of May 15, 2024. Reviewed by Council Committees: Councilmember: Kate Baldwin Staff: Jamie Thomas Meeting Date: June 24, 2024 Item Number: Page 15 of 88 CITY OF —J •y~.t4;" Quarterly Financial Report Through March 2024 WASHINGTON This report provides an overview of the City's overall cash-basis financial position for the fiscal period ending March 31, 2024, reflecting data available as of May 15, 2024. References to budget, actual and prior year amounts reflect year-to-date numbers, unless otherwise stated. Year-to-date budget expectations are generally based on the two prior years of data. General Fund Overview The City has entered 2024 on the heels of a solid financial performance in 2023, and is currently in the midst of developing the biennial budget for the fiscal years of 2025-2026. General Fund revenues have generally exceeded budget expectations and largely recovered from the impact of COVID-19. With the adoption of Ordinance #6918 in November 2023, the annual budget consists of$106.0 million in revenues and $104.0 million in expenditures - a planned increase in General Fund balance of$2.0 million. Through the first quarter of 2024, the General Fund outperformed revenue expectations. Comparing year-to-date 2024 revenues versus year-to-date 2023 revenues, the City collected $6.1 million or 30.0% more. A large contributor to this outcome was Business and Occupation (B&O) tax revenue; during the first quarter the City collected $3.1 million in B&O taxes, which includes back dated collections. However, the City anticipates that B&O revenues will decline from a high point of$10.6 million as payments related to prior periods decrease. The City also implemented a new photo enforcement program during the second half of 2023 which generated $755,500 of new revenue during the first quarter of 2024.Slightly mitigating the increases in General Fund revenues, the City also saw increased expenditures from the same period last year by $1.3 million or 6.1%. This is due to planned increases in overhead costs and professional services (citywide projects and improvements). To help attract visitors/tourists into the City, a wide range of recreational classes and access to the Auburn Golf Course. Greens fees at the Auburn Golf Course have remained a staple revenue source, comprising roughly 67% or$505,000 of the total culture and recreation revenues. Recreational classes have remained stable from 2023 collections and with the upcoming spring and summer months, an anticipated increase to golf course revenues is expected. Overall, General Fund revenues collected through Q1-2024 totaled $26.4 million as compared to the year-to-date budget of$20.7 million, and were $5.5 million, or 26.4% above budget expectations. General Fund expenditures through Q1-2024 totaled $22.6 million compared to the year-to-date budget of$24.3 million; resulting in a $800,000 or 3.4% underspend. GENERAL FUND REVENUES VS. EXPENDITURESTHROUGH MARCH 2024 YTD Actuals$22 6 M Expenditures YTD Budget$23 4 M VTD Actuals$26 4 M Revenues YTD Budget$20.9 M $0 $s $10 $15 $20 $25 $30 $35 $/-0 $MILLIONS Page 16 of 88 Quarterly Financial Report Through March 2024 2 Revenue: The following factors had the most significant impacts on the budget vs. actual revenue collected: • Business and Occupation Tax: Revenues collected throughout Q1-2024 totaled $3.1 million, exceeding the year-to-date budget by $1.3 million. Some of this favorable variance is due to the collection of tax obligation incurred in prior years and is not expected to continue at the same level in subsequent years. [page 7] • Fines and Penalties: Collections through the first quarter of 2024 were $1.07 million in total and $813,000,000 favorable to budget. Higher than expected revenues from a new photo enforcement program implemented by the City during the second quarter of the prior year contributed $683,500 toward the favorable variance. Other non-court fines and penalties are $134,000 favorable versus budget expectations, mainly due to interest and penalties on B&O tax collection. [pages 17-18] • Intergovernmental revenue: Q1-2024 revenues collected totaled $1.9 million, which was $623,500 favorable to the year-to-date budget. The variance is mainly due to the timing of collections from the Muckleshoot Indian Tribe (MIT). Furthermore, the City received an interlocal grant covering prior year projects as well, contributing to the favorable variance. [page 14] • Retail Sales Tax: The sales tax report for distributions through March 2024 (provided as an attachment to this report) reflects amounts remitted to the City of Auburn based on sales between November 2023 and January 2024. Collections totaled $5.7 million, a 0.9% increase from last year. Likewise, compared to the annual budget, sales tax has a favorable variance of $563,400 or 11.0%. The increase resulted from multiple categories, particularly services and transportation. [pages 5-7] • Utility Tax: Revenues collected through Q1-2024 totaled $3.8 million and were$653,400 higher than budget expectations. Collection of backdated utility taxes from solid waste haulers provided roughly 44% of the favorable variance. Likewise, city utility interfund taxes provide a favorable variance of $247,000, mainly due to higher solid waste collections resulting from a combination of increase levels of service provided and increased rates. [pages 8-9] Expenditures: Most departments operated within their year-to-date budgets through the first quarter of 2024, with some variances due to the timing of professional services payments, as well as expenses related to projects facilitated by ARPA funding. Overall favorable variance to the year-to-date expense budget is $799,000. Contributing to the favorable variance was a savings in salaries and benefits expenses; as of the compilation of this report, there were 29 vacant regular full-time positions in the City. Services and charges were also below budget expectations through the first quarter of 2024. This is partially due to the timing of spend on projects in-progress within the City. Page 17 of 88 Quarterly Financial Report Through March 2024 3 Enterprise Funds Overview The City's enterprise funds account for operations with revenues primarily provided from user fees, charges, or contracts for services. In the prior year, we noted that the City's cash and investment balances had increased significantly, due to increased interest rates and yields to maturity for the City's investment accounts. In 2024, the maturation of certain investments means the Enterprise funds which previously saw significant year-over-year increases in interest earnings are continuing to see higher interest income, albeit at a lower growth rate. Through Q1- 2024, total interest earnings for the City's enterprise funds increased $55,000 from Q1-2023 to Q 1-2024. The Water Fund ended Q1-2024 with operating income of about $1.1 million, an increase of $157,000 compared to the same period last year. This increase is due primarily to increased water sales (+$373,000) and was partially offset by increased operating expenses (+$170,000). Given the seasonality of Water revenues, we generally expect Water revenues to be lower in Q1, while gradually increasing through Q2 and reaching their peak in Q3 when the weather is the warmest. Operating revenues through Q1-2024 were higher than expected compared to our budget projections (+$288,000), while operating expenses also came in under budget (-$300,000), resulting in a $588,000 favorable variance to budget. [pages 22-23] The Sewer Fund ended Q1-2024 with operating income of about $1.2 million versus $989,000 in the same period last year. The main drivers of this $236,000 increase are increased service charges and interest earnings, compared to the prior year. In total, operating income for this fund was $1.3 million favorable compared to our budget projections, due to favorable variances in both operating revenues (+$548,000) and operating expenses (-$724,000). [page 23] The Stormwater Fund ended Q1-2024 with operating income of about $832,000, which is $88,000 lower than Q1-2023. While charges for storm service did increase $151,000 compared to the prior year, the fund also saw a year-over-year decrease in interest earnings. Additional drivers included increased personnel costs (+$109,000) and miscellaneous service costs (+$69,000), including utility taxes. This fund outperformed budget projections by$636,000 through Q1-2024, with favorable variances to budget in operating revenues (+$428,000) and operating expenses (-$208,000). [page 23] The Solid Waste Fund ended Q1-2024 with operating income of about $5.0 million, which is significantly higher than the operating loss of$71,000 that the fund saw in Q1-2023. This is due to a difference in the timing of payments made to the solid waste vendor, which lowered the amount paid in Q1-2024 compared to the prior year. This fund also saw an increase of$532,000 in charges for service due to higher rates in 2024, which contributed to the overall year-over-year increase. This timing difference also impacted variances to budget, given that the City recorded less expenses than originally anticipated through Q1-2024. [page 24] Internal Service Funds Overview Internal service funds provide services to other City departments and include functions such as Insurance, Worker's Compensation, Facilities, Innovation & Technology, and Equipment Rental. No significant variances were reported in these funds during Q1-2024. [page 24] Page 18 of 88 Quarterly Financial Report Through March 2024 4 General Fund Details The following chart is a detailed breakdown of the General Fund's different sources of revenue and expenditures, broken down by department: General Fund 2024 2024 YTD Budget vs.Actual 202361 2024 YTD Actual vs.2023 Actual Summary of Sources and Uses Annual YTD YTD Favorable(Unfavorable) YTD Favorable(Unfavorable) Budget Budget Actual Amount Percentage Actual Amount Percentage Operating Revenues Property Tax $ 24,486,386 $ 1,140,900 $ 1,050,494 $ (90,406) (7 9) % $ 1,103,605 $ (53,111) (4.8) % Retail Sales Tax 20,649,700 5,106,000 5,669,407 563,407 11.0 % 5,616,703 52,704 0 9% Affordable Housing Sales Tax Credit 177,587 56,000 47,917 (8,083) (14.4) % 48,202 (285) (0.6) % Sales Tax-Fierce County Parks 130,000 31,400 32,978 1,578 5.0 % 32,886 92 0 3% Criminal Justice Sales Tax 2,478,000 594,000 750,485 156,485 26.3 % 775,552 (25,067) (3.2) % Brokered Natural Gas Tax 150,000 54,600 95,328 40,728 74.6 % 144,350 (49,022) (34.0) % City Utilities Tax 5,989,667 1,313,400 1,560,380 246,980 18.8 % 1,445,233 115,147 8 0% Business&Occupation Tax 7,029,750 1,757,438 3,101,343 1,343,906 76.5 % 1,688,685 1,412,658 83.7% Admissions Tax 312,445 93,300 258,571 165,271 177.1 % 114,096 144,475 126 6% Electric Tax 4,426,743 1,064,300 1,097,323 33,023 3.1 % 1,041,482 55,841 5.4% Natural Gas Tax 1,658,523 394,100 323,043 (71,057) (18 0) % 348,245 (25,201) (7.2) % Cable Franchise Fee 880,889 220,222 195,621 (24,601) (11.2) % - 195,621 N/A % Cable Utility Tax 931,981 232,995 208,503 (24,492) (10.5) % 280,942 (72,438) (25.8) % Cable Franchise Fee-Capital 51,539 12,885 10,197 (2,688) (20.9) % 16,289 (6,092) (37.4) % Telephone Tax 435,847 91,669 230,267 138,598 151.2 % 81,478 148,790 182.6% Solid Waste Tax(external) 621,973 24,651 314,269 289,617 1174.9 % 21,420 292,848 1367 1 % Leasehold Excise Tax 255,335 15,200 17,868 2,668 17.6 % 17,790 78 0 4% Gambling Excise Tax 295 300 76 313 29,320 /46.9931 (61.6) % 103,877 (74.557).. (71.8) % Taxes sub-total $ 70,961,665 $ 12,279,373 $14,993,317 $ 2,713,944 22.1 % $12,880,835 $2,112,481 16.4% Business License Fees $ 461,250 $ 144,100 $ 158,848 $ 14,748 10.2 % $ 204,050 $ (45,201) (22.2) % Building Permits 956,698 220,700 234,452 13,752 6.2 % 142,518 91,934 64 5% Other Licenses&Permits 1,150,950 300,800 253,287 (47,513) (15.8) % 320,956 (67,669) (21.1) % Intergovernmental(Grants,etc) 5,558,102 1,303,854 1,927,291 623,437 47.8 % 1,486,422 440,869 29 7% Charges for Services. - WA General Government Services 4,698,004 1,161,662 1,131,944 (29,718) (26) % 1,091,757 40,187 37% Public Safety 1,057,000 264,250 269,302 5,052 1.9 % 237,189 32,113 13 5% Development Services Fees 1,158,080 275,700 398,853 123,153 44.7 % 214,228 184,624 86.2% Culture and Recreation 2,915,485 674,557 748,250 73,693 10.9 % 796,244 (47,993) (6.0) % Fines and Penalties 1 071 819 257 105 1,069,818 812.713 316.1 % 103,818 966,000 930.5% Fees/Charges/Fines sub-total $ 19,027,388 $ 4,602,729 $ 6,192,045 $ 1,589,316 34.5 % $ 4,597,182 $1,594,863 34.7% Interest and Investment Earnings $ 315,000 $ 78,750 $ 427,829 $ 349,079 443.3 % $ 248,841 $ 178,988 71.9% Rents and Leases 1,142,948 291,200 289,213 (1,987) (0 7) % 300,463 (11,251) (3.7) % Contributions and Donations 42,000 3,312 2,352 (960) (29.0) % 434 1,918 441.9% Other Miscellaneous 208,000 73,403 196,211 122,808 167.3 % 192,895 3,316 1 7% Transfers In 14,203,054 3,550,764 4,270,722 719,959 20.3 % 2,015,000 2,255,722 111 9% Insurance Recoveries-Capital&Operating 25 000 6 250 29,294 23.044 368.7 % 90,449 (61.155).. (67.6) % Other Revenues sub-total $ 15,936,002 $ 4,003,678 $ 5,215,621 $ 1,211,942 30.3 % $ 2,848,082 $2,367,539 83.1 % Total Operating Revenues $105,925,055 $ 20,885,780 $26,400,982 $ 5,515,202 26.4 % $20,326,099 $6,074,883 29.9% Operating Expenditures Council&Mayor $ 1,459,725 $ 382,800 $ 376,608 $ 6,192 1.6 % $ 371,523 $ 5,084 1.4% Administration 1,325,280 310,100 326,024 (15,924) (51) % 297,383 28,640 96% Human Resources 2,527,139 631,100 596,959 34,141 5.4 % 595,939 1,019 0.2% Municipal Court&Probation 3,040,544 239,686 265,572 (25,886) (10.8) % 252,957 12,614 5 0% Finance 5,455,040 1,292,300 1,216,178 76,122 5.9 % 1,150,000 66,179 58% Qty Attorney 4,613,393 1,019,900 951,573 68,327 6.7 % 1,384,348 (432,775) (31.3) % Community Development 7,457,716 1,501,600 1,597,614 (96,014) (64) % 1,589,461 8,153 05% Anti-Homelessness 3,099,432 774,900 567,118 207,782 26.8 % - 567,118 N/A % DEl 752,808 188,100 175,123 12,977 6.9 % 82,631 92,493 111 9% Jail-SCORE 5,700,000 1,425,000 1,216,494 208,506 _ 14.6 % 1,173,547 42,947 3 7% Police 37,253,306 9,603,700 8,679,621 924,079 9.6 % 8,495,621 184,000 2.2% Public Works 4,744,995 1,078,500 1,244,139 (165,639) (15,4) % 1,035,836 208,303 20 1 % Parks,Arts&Recreation 15,941,772 3,490,000 3,660,307 (170,307) (4.9) % 3,427,650 232,656 6.8% Streets 4,839,339 1,065,300 1,053,765 11,535 1.1 % ilia8,310 - 115,454 12 3% Non-Departmental 5,810,301 429,854 706,518 (276,664) (64.4) % 540,193 166,326 30 8% Total Operating Expenditures $104,020,790 $ 23,432,840 $22,633,612 $ 799,228 3.4 % $21,335,400 $1,298,212 6.1 % Page 19 of 88 Quarterly Financial Report Through March 2024 5 Revenue The combined total of property, sales/use, utility, gambling, and admissions taxes provides over 70% of all resources supporting general governmental activities. Licenses, charges for services, intergovernmental revenue (grants, state shared revenue, etc.) and fines contribute a further 25% of total revenue to the General Fund. The remaining 5% is comprised of a combination of different sources that are considered to be one-time resources. The following section provides additional information on the most significant tax resource streams. Property Tax collections in the first quarter totaled roughly $1.1 million, approximately $90,000 or 7.9% below budget projections.. However, as depicted in the graphic below, the majority of property taxes are collected during the months of April and October, coinciding with the due dates for the County property tax billings. Property Taxes 02024Budget f2024YTDActual —2023Actual $30.0 $25.0 $20.0 0 $15.0 — $10.0 $5,0 $1.1 M $0,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Retail Sales Tax collections through Q1-2024 totaled $5.7 million, representing taxes remitted to the City of Auburn based on sales from November 2023 through January 2024. Overall, these revenues are on par with collections through Q1-2023, with steady performances in the transportation (+$18,425), wholesale (+$9,300), and services (+$24,400) industries more than offsetting slight decreases in most of the remaining industries. Of the main contributors to sales tax revenues, construction (-$33,500) and automotive (-$9,000) generated less revenue than in Q1-2023. In addition to the small overall increase from Q1-2023, these revenues are favorable to budget by nearly $563,000 or 11.0% through the first quarter. The City set an overall budget of$20.6 million for the fiscal year of 2024; based on year-to-date performance, actual collections may exceed this by year-end. King County estimates' that sales tax revenues will have an annual growth of 3.9% from 2023 actuals. Dating back to 2014, the City has seen consistent growth within the sales tax revenue stream by an average of 7.6% year-over- year. 1 King County, WA. 2024. The Office of Economic and Financial Analysis. httos://kinacountv.aov/en/leaacv/independent/forecasting. Page 20 of 88 Quarterly Financial Report Through March 2024 6 Retail Sales & Use Tax =2024Budget -2023Actual f2024YT➢Actual $25.0 $20.0 z $15.0 411 0 CJ $10.0 $5.7 M $5-0 sac) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Retail Sales & Use Tax $25.0 $22.7 $21.6 a $20.0 51R_R 51R.9 41 $15.0 0 $10.0 $5.7 $5.0 S $0.0 2019 2020 2021 2022 2023 2024 YT❑ Page 21 of 88 Quarterly Financial Report Through March 2024 7 The following table breaks out the City's retail sales taxes by major business sector. Comparison of Retail Sales Tax Collections by Group Through March 2024 2023 2024 Change from 2023 Component Group YTD Actual YTD Actual Amount Percenta•e Construction $ 677,484 $ 643,986 $ (33,497) (4.9) % Manufacturing 138,050 137,690 (361) (0.3) % Transportation & Warehousing 56,265 74,690 18,425 32.7 % Wholesale Trade 396,540 405,833 9,293 2.3 % Automotive 1,178,351 1,169,340 (9,011) (0.8) % Retail Trade 1,735,724 1,751,600 15,877 0.9 % Services 1,373,134 1,397,566 24,432 1.8 % Miscellaneous 61,156 88,702 27,546 45.0 % YTD Total $ 5,616,703 $ 5,669,407 $ 52,704 0.9 % Business & Occupation (B&O) Taxes were implemented by the City at the beginning of 2022. These taxes are collected from businesses based on either the value of gross receipts or square footage of occupied warehousing space, subject to certain constraints. While the City receives collections throughout the year, B&O taxes are generally collected on a quarterly basis. By reconciling against the State's Business Licensing System the City was able to identify taxes collectable from prior periods, significantly contributing to the performance of this revenue. Overall collection throughout the first quarter of the year totaled $3.1 million versus a budgeted amount of$1.8 million. Current 2024 collections outpace 2023 collections through the same period by$1.4 million (83.7%), although recovery of back taxes is anticipated to decrease over time. Business & Occupation Tax ©2024 Budget -2023 Actual f 2024 YTD Actual $12 $10 z $g0 - J J $6 $4 $3.I M $2 S Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • Page 22 of 88 Quarterly Financial Report Through March 2024 8 Utility Taxes consist of an 11.5% tax on the gross revenues of water, sewer, storm drainage and solid waste utilities and a 6.0% tax on electric, natural gas, and telephone utilities operating within the City. Of those utilities taxed at 11.5%, the General Fund receives 9.0% while the remaining 2.5% is dedicated to funding City streets projects. The utilities taxed at 6.0% contribute 5.0% to the General Fund and 1.0% to City streets projects. Overall, utility taxes increased by$466,000 or 13.9% from Q1-2023 and are $653,400 favorable to budget. Roughly 70% of the utility taxes collected by the City are represented by the city interfund utility and electric utility taxes. These two revenue sources accounted for$2.7 million of the collected $3.8 million throughout the first quarter of 2024. Furthermore, telephone taxes have increased from Q1-2023 by $149,000 and was mainly due to the timing of collections from prior year activity. A portion of the overall favorable variance comes within the Solid Waste (external) category due to the City collecting backdated utility taxes from solid waste haulers. The City anticipates this level of collection to slow as more utility taxes become current. The table and graphics below demonstrate the various utility tax revenues and show actual revenues compared to budget. Note that these amounts correspond to only the General Fund portion of revenues, and do not contain those revenues allocated for funding City streets projects. Utility Tax by Type Through March 2024 2423 2424 2424 2024 vs.2023 Actual 2424 vs. Budget Utili Tax T se YTD Actual YTD Bud•1 et YTD Actual Amount Percenta+a Amount Percenta+e I I I City Interkund Utility Taxes $ 1.445.233 $ 1.313.400 $ 1.560.380 $ 115.147 8.0 % $ 246.980 18.8 % Electric 1.041.482 1.064.300 1.097.323 55.841 5.4 % 33.023 3.1 % Natural Gas 348.245 394.100 323.043 (25.201) (7.2) % (71.057) (18.0) % Telephone 81.478 91.669 230.267 148.790 182.6 % 138.598 151.2 % External Utility Taxes 21.420 24.651 314.269 292.848 1.367.1 % 289.617 0.0 % Brokered Natural Gas 144.360 54.600 95.328 (49,022) (34.0) % 40.728 74.6 % Cable 280.942 232.995 208.503 (72,438) (25.8) % (24.492) (10.5) % YTD Total $ 3.363.160 $ 3.176,716 $ 3.829.116 $ 466,966 13.9 % $ 663.399 20.6 % Page 23 of 88 Quarterly Financial Report Through March 2024 9 Utility Tax ©2024 Budget f2024 YTD Actual -2023Actual $20.0 $15.0 z $10.0 $3.8 M $5.0 Sao Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Utility Tax Revenues $18.0 $15.8 $12.7 $13.2 $12.8 $13.0 • $10.9 � I • • / $8.0 $3.8 • $3.0 2019 2020 2021 2022 2023 2024 YTD Note: The large increase from 2019 ($10.9 million) to 2020 ($12.7 million) is attributed to the City's decision mid-2020 to reallocate 1.0%previously dedicated to the Arterial Street Preservation Fund to support General Fund operations, due to the uncertainty of the economic impacts of COVID-19. The Arterial Street Preservation Fund's 1.0% was reinstated in 2021, but 2021 collections continued to increase due to an increase in the City's internal utility tax rate from 7.0% to 10.0%. The significant jump from 2022 ($12.8 million) to 2023 ($15.4 million) is largely due to higher service revenue following a rate increase effective in 2023, combined with higher service usage and the collection of B&O taxes on businesses that provide utility services. Page 24 of 88 Quarterly Financial Report Through March 2024 10 An Admission Tax of 5.0% is placed on charges for general admission, season tickets, cover charges, etc. which are generally collected on a quarterly basis. Admission tax revenues of approximately $260,000 collected through March 2024 were significantly higher (177.1%) than Q1-2023, and favorable variance to budget by $145,000. The large increase in collections in March was due to a one-time payment as part of an agreement. Controlling for this non-recurring payment, admission taxes are still reporting a favorable variance to budget by roughly$59,000. Admission Tax I2024 Budget f 2024 YTD Actual —2023 Actual $500.0 $400.0 o $300.0 $258.6 K 0 $200.0 $100.0 —_ $0.0 Jan Feb Mar Apr N.lay Jur Aug Sep Oct Nov Dec Gambling Tax applies to all card games, punch board games, pull tabs, bingo games, raffles and amusement games played within City limits. The majority of gambling tax revenues are collected from amusement games (87.0%) and punch boards and pull tabs (12.9%). Through the first quarter, collections are $75,000 lower than 2023 year-to-date totals and report a $47,000, or 61.6%, unfavorable variance to budget. The primary driver for the unfavorable variance is due to the City receiving no collections for card games. Gambling tax revenues historically have high volatility from year to year: excluding 2021, recent first-quarter revenues average about $72,000 but have been as high as $103,000 (2023) and as low as $35,000 (2018). Page 25 of 88 Quarterly Financial Report Through March 2024 11 Gambling Tax 02024Budget f2024YTDActual -2023Actual $400.0 $350.0 $300.0 $250.0 $200 0 $150.0 $100.0 $50.0 SO Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D : Licenses and Permits include business licenses, building permits, plumbing, electric and other licenses and permit fees. Building permit fees (approximately 60%) and business licenses (approximately 15%) typically make up about 75% of the annual budgeted revenue in this category. The annual Business License renewal fee for each business located within the City is $103. Previously, all businesses were on calendar year renewal cycle, resulting in the majority of business license revenue being collected in November and December for existing businesses renewing their licenses. As of September of 2022, businesses are now on an annual renewal cycle that begins on the date the business had originally been granted a license. This methodology has smoothed revenue collection throughout the year, which can also be seen in the chart below as a fairly linear progression of year-to-date collections totaling $159,000, compared to $204,000 in Q1- 2023, a -22.2% decrease. Historically business license collections have been a highly volatile revenue source, though collections in 2024 are projected to be comparable to 2023 totals due to increased discovery through B&O tax collections and use of the State's Business Licensing System. Page 26 of 88 Quarterly Financial Report Through March 2024 12 Business Licenses 02024Budget f2024YTDActual 2023 Actual S650.0 $550.0 $450.0 z $350.3 H $250.0 $150.0 $.158.8 K $50.0 411. $50 0 Jan Feb Mar Apr May Jun Jul Aug Se❑ Oct Nov Dec J I ' Business License Revenues $700 $583 $600 $500 5424 co $400 -- - $32 L $300 $336 $200 ti c4 i $100 $0 2019 2020 2021 2022 2023 2024 YTD Page 27 of 88 Quarterly Financial Report Through March 2024 13 Building Permit revenues collected through March 2024 totaled $234,500. Building permits are approximately$92,000 higher than 2023 collections year-to-date and holds a favorable variance against the budget of$13,750 (6.2%). A large contributing factor for this favorable variance is due to the increased valuation of construction permits on mixed use and subdivision builds, which coincides with the marginal gains noted in plan check fees mentioned later in this report. The number of permits submitted have also increased from 2023 by 29.0% through the first quarter representing an increased workload of construction throughout the City. Building Permits 2024 Budget f2024YTDActual -2023 Actual $1.6 $1.4 $1.2 $1.0 z 0 $0.8 $0.6 $0.4 $0.2 K $0.2 $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Building Permits $2.5 $2.0 o $1.5 31.2 � a $0.9 $1.0 $1.0 $0.8 $0.5 aV.L • $0.0 2019 2020 2021 2022 2023 2024 YT❑ Page 28 of 88 Quarterly Financial Report Through March 2024 14 Intergovernmental revenues include grants and stimulus monies (direct and indirect federal, state, and local), revenue from the Muckleshoot Indian Tribe (MIT) compact as well as state shared revenues. Collections through Q1-2024 totaled $1.9 million and were $623,000 favorable to budget expectations. Much of this favorable variance is due to the final payment of the 2023 compact request made by Muckleshoot Casino in February 2024. However, the 2024 compact request is still pending MIT approval, and no 2024 revenues have been collected to date. Likewise, the City received reimbursements from an interlocal grant paying prior year expenses of $120k contributing to the favorable variance. Intergovernmental Revenues(Grants, Entitlements&Services) Through March 2024 2023 2024 2024 2024 vs.2023 Actual 2024 vs.Budget Revenue YTD Actual YTD Budget YTD Actual Amount %Change Amount %Change Federal Grants S - $ - $ 1,330 $ 1,330 $ 1,330 State Grants 2,417 2,600 28,846 26,428 1093.4% 26,246 1009.4% Interlocal Grants - 900 196,851 196,851 195,951 21772.3 Muckleshoot Casino Services 539,508 428,161 791,885 252,377 46.8% 363,724 85.0% One-Time Allocation(SB 5092) - - - - - State Shared Revenues: Streamlined Sales Tax 200,032 143,996 160,025 (40,006) (20.0)% 16,030 11.1 % Motor Vehicle Fuel Tax 263,010 286,300 256,148 (6,861) (2.6)% (30,152) (10.5)% Criminal Justice-High Crime 70,856 72,274 70,778 (78) (0.1)% (1,496) (2.1)% Criminal Justice-Population 7,760 5,000 8,195 436 5.6% 3,195 63.9 Criminal Justice-Special Prog. 27,452 20,600 28,858 1,407 5.1 % 8,258 40.1 Marijuana Excise Tax 58,580 43,881 64,249 5,670 9.7% 20,369 46.4% State DUI 108 3,098 2,927 2,819 2599 9% (171) (5.5)% Fire Insurance Tax - - - - - Liquor Excise 147,070 118,942 149,568 2,498 1.7% 30,626 25.7% Liquor Profit 169,631 178,104 167,631 (2,000) (1.2)% (10,473) (5.9)% Total State Shared: 944,497 872,194 908,381 (36,117) (3.8)% 36,187 4.1 % YTD Total $ 1,486,422 $ 1,303,854 $ 1,927,291 $ 440,869 29.7% $ 623,437 47.8 % Intergovernmental Revenues (Grants, Entitlements& Services) $12 $10.2 $10 $8 $6.9 C $6. 63 $5.9 3 $6 $4 $1.9 $2 • $0 2019 2020 2021 2022 2023 2024 YTD Note: 2020 revenue was higher than normal due to the receipt of$3.8 million in federal CARES grant money from the Department of Treasury. Page 29 of 88 Quarterly Financial Report Through March 2024 15 Charges for Services consist of general governmental service charges, public safety charges, development service fees, and culture and recreation fees. Total charges for services collected through March 2024 totaled $2.5 million and were $172,000, or 7.2%, more than expected to date, mainly due to development services (specifically plan check fees) being higher than anticipated. Charges for Services by Type Through March 2024 2023 2024 2024 2024 vs. 2023 Actual 2024 vs. Budget Revenue YTD Actual YTD Bud•et YTD Actual Amount Percenta.e Amount Percenta•e General Government $ 1,091,757 $ 1,161,662 $ 1,131,944 $ 40,187 3.7 % $ (29,718) (2.6) % (Public Safety 237,189 264,250 269,302 32,113 13.5 % 5,052 1.9 % (Development Services 214,228 275,700 398,853 184,624 86.2 % 123,153 44.7 % (Culture& Recreation 796,244 674,557 748,250 (47,993) (6.0) % 73,693 10.9 % YTD Total $ 2,339,418 $ 2,376,169 $ 2,548,349 $ 208,930 8.9 % $ 172,179 7.2 % The General Government revenue category primarily includes the interfund assessment for support departments (Finance, Human Resources and Legal). Operating costs for these departments are charged to the respective General Fund home department and the portion of those costs that provide citywide benefit are recouped from other funds via interfund charges. General Government revenues also include fees for passport services, reimbursement from cities participating in the South King Housing and Homelessness Partners (SKHHP), as well as transportation projects. The unfavorable variance of$25,000 to budget is due to the timing of SKHHP revenues, which are received on a reimbursement basis. Based on current schedules, most of the budgeted expenses are for projects expected to occur during the second half of the year and will be reimbursed at that time. Public safety revenues mainly consist of revenues for law enforcement services, which are extra duty security services whereby police officers are contracted for, and reimbursement is made by the hiring agency. This category also includes reimbursements from the Muckleshoot Indian Tribe (MIT) for a full-time dedicated police officer and associated expenditures as well as monies collected from the Auburn School District for services rendered. Public safety revenues collected in the first quarter of 2024 totaled $270,000 and saw a $32,000 increase from 2023 first quarter totals This is largely attributable to higher-than-expected DUI emergency response fees collected. The sub-category of law enforcement services is higher than 2023 totals year-to-date by $31,000 due to timing of collections on private security services. However, this sub-category holds an unfavorable variance to budget by $9,000. Development services fee collections consist primarily of plan check fees, facility extension charges, and zoning and subdivision fees. Through Q1-2024, development service fees collected totaled $400,000 and were $123,000 favorable to budget expectations. Major contributors to this variance were plan check fees, where construction documents require review per Section 106.3 of the Construction Administrative Code (+$109,000) and zoning and subdivision (+$29,000). Although FAC linear charges (fees assessed on projects that require extension of public facilities) are higher year-over-year by $60,000 to date, this revenue source holds an unfavorable variance to budget by$8,000. This is an effect of the revenue regressing to the mean after an exceptional three-year period of high collections from 2020 through 2022. By comparison, while first quarter collections in 2024 are lower than the same period in 2022, they are still higher than any other first quarter collections dating back to 2009. Page 30 of 88 Quarterly Financial Report Through March 2024 16 Development Service Fees $2.0 $1.6 $1.5 $1.3 $1.1 $1.1 0 3 $1.0 $1. $0.5 $0.4 • $0.0 2019 2020 2021 2022 2023 2024 YTD Most culture and recreation revenues are derived from green fees and pro shop sales at the Auburn Golf Course, recreational classes, ticket sales at the Auburn Avenue Theater, senior programs, and special events. Overall, this category of revenues outperformed budget expectations by $74,000, or 10.9%. Nearly 80% of the year-to-date revenues have come from the Auburn Golf Course and recreation classes. Even with the favorable variances, greens fee revenues have decreased $22,350 or-10.3% from the same period last year and are unfavorable to budget by$175,500 year-to-date. The City projects that green fees collections will steadily rise with the upcoming spring and summer seasons. Recreation class revenues have generally remained consistent from prior year-to-date totals and reported $313,000 in collections. Ticket sales for performances held at local school venues (previously held at the Auburn Avenue Theater) have decreased by $13,750 or 23.0%. Since 2021, culture and recreation revenues have increased by roughly 18% each year, and the City anticipates the same in 2024 with upcoming favorable weather for the golf course and recreational classes. Page 31 of 88 Quarterly Financial Report Through March 2024 17 1 l Culture & Recreation p2024Budget f2024YTDActual -2023Actual $4.0 $3.5 $3.0 $2.5 O $2.0 $1.5 $1.0 $0.7K $0.5 agi $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Fines & Penalties include civil penalties (such as code compliance fines), parking and traffic infraction penalties, criminal fines (including criminal traffic, criminal non-traffic, and other criminal offenses) as well as non-court fines such as false alarm fines. The table below shows a detailed breakdown of the different types of fines and penalties collected by the City. Fines&Penalties by Type Through March 2024 2023 2024 2024 2024 vs.2023 Actual 2024 vs. Budget Month YTD Actual YTD Bud•et YTD Actual Amount Percenta•e Amount Percenta•e Civil Penalties $ 210 $ 529 $ 370 $ 160 76.2 % $ (159) (30.0) % 'Civil Infraction Penalties 37,218 32,300 41,298 4,080 11.0 % 8,998 27.9 % (Photo Enforcement 1,067 1,500 157 (910) (85.3) % (1,343) N/A % (Parking Infractions 20,004 183,377 866,789 846,786 4,233.1 % 683,413 372.7 % 'Criminal Traffic Misdemeanor 9,232 14,800 7,641 (1,591) (17.2) % (7,159) (48.4) % (Criminal Non-Traffic Fines 15,226 12,600 14,332 (894) (5.9) % 1,732 13.7 % (Criminal Costs 4,226 10,300 3,377 (849) (20.1) % (6,923) (67.2) % 'Non-Court Fines& Penalties 16,635 1,700 135,853 119,218 716.7 % 134,153 7,891.4 % YTD Total $ 103,818 $ 257,105 $ 1,069,818 $ 966,000 930.5 % $ 812,713 316.1 % Total revenues collected through March 2024 totaled $1.1 million as compared to a budget of $102,000 and were 949.6% above budget expectations. This is primarily due to collections of the photo enforcement program implemented in 2023, which are classified as parking infractions. Furthermore, the City received an influx of non-court fines & penalties in January and February due to back-pay of B&O taxes. The City contracts with the King County Court to operate its municipal court services. The number of hearings, judgments, and collections activity began decreasing in 2019 and has continued to decline since that time. Although the graph below shows a large spike in revenue in 2023 and strong performance in 2024, this is almost entirely due to photo enforcement and B&O-related collections. Excluding these sources, the remaining court-related collections have declined to $67,000, approximately one-third of their first quarter average for the period of 2015-2019 prior to contracting with the King County Court. Page 32 of 88 Quarterly Financial Report Through March 2024 18 Fines& Penalties $3.0 $2.6 $2.5 $2.0 3 $1.5 $1.1 ::: $0.9 $0.6 $0.4 $0 50.0 2019 2020 2021 2022 2023 2024 YTD Miscellaneous Revenues consist of investment earnings, income from facility rentals, revenue collected for golf cart rentals at the Auburn Golf Course, contributions and donations, and other income including the quarterly purchasing card (P-card) rebate monies. A breakdown of the most significant miscellaneous revenue categories are listed in the table below. Miscellaneous Revenues by Type Through March 2024 2023 2024 2024 2024 vs. 2023 Actual 2024 vs. Budget Month YTD Actual YTD Bud•et YTD Actual Amount Percenta•e Amount Percenta•e Interest& Investments $ 248,841 $ 78,750 $ 427,829 $ 178,988 71.9 % $ 349,079 443.3 % (Rents & Leases 300,463 291,200 289,213 (11,251) (3.7) % (1,987) (0.7) % (Contributions& Donations 434 3,312 2,352 1,918 441.9 % (960) (29.0) % 'Other Miscellaneous Revenue 192,895 73,403 196,211 3,316 1.7 % 122,808 167.3 % YTD Total $ 742,633 $ 446,665 $ 915,604 $ 172,971 23.3 % $ 468,939 105.0 % Revenues collected year-to-date 2024 in this category totaled $915,600 and were $469,000 or 105.0% favorable to budget. Of the favorable variance to budget, 78.8% was comprised of interest and investment collections, far exceeding budget expectations due to higher-than- expected interest rates and the timing of investment maturities. The City has multiple investments maturing during the second half of the year which will impact revenue collections during that timeframe also. The "Other Miscellaneous Revenue" sub-category reported $3,300 more than the same timeframe last year and was favorable to the year-to-date budget by $123,000. This category includes $137,700 in revenue related to a national opioid settlement distribution program. The rents and leases category includes payments for facility rentals, golf cart rentals, and restaurant lease at the golf course. Rents and leases were to par with year-to-date budget expectations, with facility revenues exceeding expectations by about$70,000. Golf carts and other rentals were unfavorable to expectations, resulting in general alignment of budget to actual for the category. Page 33 of 88 Quarterly Financial Report Through March 2024 19 Miscellaneous Revenues $4.0 $3.5 S33 $3 0 o $2.5 $20 c, $1.5 $15 4114 >i.z S0.9 $1,0 • $0.5 $0.0 2019 2020 2021 2022 2023 2024 YTD OTHER FUNDS Real Estate Excise Tax (REET) revenues are taxes on the sale of both commercial properties and single-family residences. These collections are receipted into the Capital Improvement Projects Fund and used for governmental capital projects. REET revenues collected year-to-date in 2024 total $1.1 million which is $632,000 or 56.8% favorable to budget expectations. According to King County assessed valuations of property taxes, the City has increased in property value by 2.3%. Accompanied with lower interest rates currently, the current climate for real estate sales are favorable for citizens within the State of Washington. Real Estate Excise Tax 02024Budget —0-2024YFDActual —2023Actual $4.0 $3.5 $3.0 $2.5 z O $2.0 $1.5 $1.1 $1.0 $0.5 $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec l Page 34 of 88 Quarterly Financial Report Through March 2024 20 As shown in the table below, REET collections were higher in both January and February than their counterparts last year, while March experienced a decrease. In context, 2023 saw the lowest first-quarter collection of REET revenue since 2018. Lower REET collections in 2023 represent a cooling market after a period of increasing interest rates and historic inflation which saw revenue peak in 2021 and decline each year since. Real Estate Excise Tax Revenues Through March 2024 2023 2024 2024 2024 vs. 2023 Actual 2024 vs. Budget Month YTD Actual YTD Budget YTD Actual Amount Percentage Amount Percentage 1 $ 231,316 $ 118,562 $ 346,387 $ 115,071 49.7 % $ 227,826 65.8 % 2 229,810 146,777 549,438 319,628 139.1 % 402,660 73.3 % 3 335,109 214,549 215,927 (119,182) (35.6) % 1,378 0.6 % 4 470,605 194,952 5 100,896 163,802 6 288,285 176,375 7 396,981 197,738 8 319,792 207,764 9 326,357 258,962 10 355,405 177,189 11 264,919 162,145 12 213,893 209,484 YTD Total $ 796,235 $ 479,888 $ 1,111,752 $ 315,517 39.6% $ 631,864 56.8% Real Estate Excise Tax Revenues $7.0 $6.0 $6.0 $5.2 $5.3 $5.0 v. $4.2 0_ $4.0 $3.5 $3.0 $2.0 $1.1 $1.0 • $0.0 2019 2020 2021 2022 2023 2024 YTD Page 35 of 88 Quarterly Financial Report Through March 2024 21 American Rescue Plan Act (ARPA) Fund In March 2021, the American Rescue Plan Act (ARPA) was signed into law, with the intent of mitigating the economic impacts related to COVID-19. Through ARPA's State and Local Government Fiscal Recovery Fund program, the City was allocated $14.75 million in funding. Council approved the City's acceptance of ARPA funds in Resolution #5608, and the general spending categories of those funds (as determined by a Council ad hoc committee) in Ordinance #6832. The City's plan for using ARPA funding is to mitigate the cost of providing public safety services throughout the City. Since receiving the funding, the City has been able to offset all $14.8 million in public safety expenditures, as shown in the table below and reported to the Department of the Treasury. ARPA FUNDING STATUS Total ARPA Funding Received 14,751,231 ARPA Funding Used to Mitigate Public Safety Costs 14,751,231 ARPA Funding Remaining - As a result of the cost mitigation provided by the ARPA funding, the City has been able to allocate General Fund funding toward projects approved by the Council ad hoc committee. As of March 31, 2024, the City has been able to spend $166,661 year-to-date and $4.6 million since 2021 on the following projects: 2024 Lifetime Spend Title Budget Q1 Spend (includes this quarter) Remaining Completed Projects 1,630,000 - 1,853,949 - Body Cameras 586,400 - 550,325 36,075 Vaccination Incentive Program 47,500 - 34,980 12,520 Neighborhood Street Light Program 500,000 12,220 91,821 408,179 Human Services Grants IncludesAdmin 1,000,000 - 441,041 558,959 Dykstra Foot Bridge 400,000 - 10,357 389,643 Minor Improvements to Qualifying Neighborhood Parks 100,000 29,158 99,332 668 Limited Term Employee(LTE):Grants Coordinator 420,000 - 118,729 301,271 Paving Gravel Roads 636,866 - 23,539 613,327 Translation Services 75,000 - 1,685 73,315 Auburn Way South Median Landscape Replanting/Irrigation 50,000 - 40,187 9,814 Auburn Way South Roundabout 150,000 - 1,089 148,911 Emergency Housing Voucher Program 2,000,000 72,330 344,755 1,655,245 Encampment Cleanup 500,000 3,202 448,481 51,519 Downtown Sidewalk Replacement on Main Street and B Street Plaza Surface Replacement 1,343,266 13,593 59,360 1,283,906 Community Violence Intervention Programs(Drone,SPIDR Tech) 313,600 - 248,227 65,373 Arts Culture Center Renovations 100,000 - - 100,000 Auburn Ave Theater Demolition 300,000 15,745 15,784 284,216 Signing Bonuses for Police Lateral Hires 200,000 10,881 153,294 46,706 Other Projects(not started) 3,980,000 - - 3,974,704 Total: 14,751,231 166,661 4,555,350 10,195,935 The Minor Improvements to Qualifying Neighborhood Parks project will be able to make improvements to numerous parks in our low-income census tracts are in need of modernization that will assist in getting these community members outdoors and experiencing a better quality of life. To date this project has spent $99,332 on Forest Villa Tot Lot replacing the perimeter fencing and installing a new playground. Page 36 of 88 Quarterly Financial Report Through March 2024 22 The Encampment Cleanup project provides two service contracts that began in 2023; one contract provides continued cleanup of garbage and debris related to encampments and other illegal dumping on City-owned properties and rights of way (ROW), while the secondary contract focuses specifically on encampment trash cleanup. To date, the project has spent$448,481 and cleaned up 320 tons of litter and debris. Beginning in 2023, the Emergency Housing Voucher Program is budgeted at $2 million over the life of the program. This program assists residents of Auburn who are experiencing homelessness and drug addiction who are willing to enroll in and complete inpatient treatment. The program will cover the costs of clean and sober housing of participants for up to three years if the participant follows the clean and sober housing agreement. Life-to-date project spend is $344,755, with $72,330 occurring in Q1-2024. Beginning in 2024, Auburn Avenue Theater Demolition project is budgeted at$300,000. The project will demolish the existing Auburn Avenue Theater building, provide support to the shared wall with the adjacent building, and disconnect existing utilities. The project design is complete, and the design team is finalizing the construction plans and other contract documents for the advertisement in June. Total project estimated costs are $251,000 and total project cost through Q1-2024 totals $15,784. Enterprise Funds Utility activities are divided between operating funds and capital sub-funds. Operating funds house all the operating costs along with debt service and financing obligations. Capital funds show costs associated with capital acquisition and construction. Both the operating and capital funds have a working capital balance, which is equivalent to current assets minus current liabilities. This approach isolates those funds available for capital and cash flow needs for daily operations and provides project managers information on the availability of working capital for current and planned projects. Through March 2024, the Water Utility had operating income of$1.1 million (operating revenues less operating expenditures), approximately $157,000 above the same period last year. A majority of this increase is due to higher revenues from water sales due to increased rates and consumption; charges for service revenues were $3.9 million in Q1-2024 compared to $3.5 million in Q1-2023. In addition to increased water sales, the fund also saw higher expenses in personnel costs (+$15,000), supplies (+$24,000) and other service charges, including utility taxes (+$117,000). Q1-2024 activity is consistent with the seasonality of this revenue stream, where revenues remain relatively low early in the year and then increase in Q2 and Q3 as the weather grows warmer. In total, operating income for this fund was $588,000 favorable to budget projections. Operating revenues were $288,000 higher than expected through Q1-2024, while operating expenditures had a $300,000 favorable variance to budget, driven by lower than expected utility expenses during the quarter (-$75,600), professional service charges (-$56,200) and timing differences in monthly excise tax payments (-$99,000). Billable water consumption through Q1-2024 totaled 618,000 ccf(hundred cubic feet), approximately 28,000 ccf or 5.0% higher than consumption volume through Q1-2023. Consumption increased across every customer class except schools when compared to Q1- 2023, with the largest increases by both volume and revenue amounts occurring in manufacturing, commercial, and single-family accounts. Page 37 of 88 Quarterly Financial Report Through March 2024 23 Water Revenues and Water Sold 2023 vs 2024 Sz sM Loco 3 • 520M 800 • • SLSM 600 • S L OM 400 C- • $0.5m 4" 0............... 200 0 50.OM - ♦T(s 4e a PQ` p46 yeQ +to Dec 2023 Water Sales IS) —0-2024 Water Sales IS) 2023 Water Sold(ccf) 2024 Water Sold(cc° Through Q1-2024, the Sewer Utility finished with operating income of$1.2 million as compared to $989,000 through the same period last year. Operating revenues were up $190,000 or 7.8% from the same period last year due to stronger performance in charges for City sewer service and higher interest earnings. Interest earnings increased from $127,000 through Q1-2023 to $240,000 through Q1-2024. Operating expenses increased slightly (+$68,000)from the prior year, due primarily to increased personnel costs (+$61,000), as well as other service charges, including utility tax expense (+$13,000). Through Q1-2024, this fund performed better than budget expectations with a $548,000 favorable variance in operating revenues, both in charges for service (+$318,000) and interest earnings (+$229,000). Additionally, operating expenditures had a $724,000 favorable variance compared to budget expectations, driven primarily by the elimination of utility tax charges on pass-through revenues for King County Metro Sewer service. The Stormwater Utility had operating income of$832,000 through Q1-2024 compared with $920,000 in the same period last year. This is consistent with the historical activity of this fund; as most Stormwater service charges are based on a flat rate, there are not typically seasonal fluctuations in Stormwater revenue. Operating expenses for this fund were higher through Q1- 2024 than through Q1-2023, driven by increased personnel costs (+$109,000) and other service charges (+$69,000). This fund also outperformed budget expectations, with a $636,000 favorable to budget variance in operating income, driven by higher than anticipated revenues (+$428,000) and lower operating expenditures (-$208,000) through Q1-2024. Page 38 of 88 Quarterly Financial Report Through March 2024 24 The Solid Waste Utility finished Q1-2024 with operating income of$5.0 million, which was the result of a timing difference between the City's monthly payments to its solid waste vendor and the collection of revenues for services performed during the first quarter. We expect a direct correlation between solid waste service charges and payments for service due to the contract with the City's solid waste provider; however, this timing difference in payments lowered operating expenses in Q1-2024 compared to the prior year. Internal Service Funds Operating expenditures within the Insurance Fund represent the premium cost pool that will be allocated monthly to other City funds over the course of the year. As a result, the expenditure balance gradually diminishes each month throughout the year. No significant variances are reported in the Workers' Compensation, Facilities, Innovation & Technology, or Equipment Rental Funds. Contact Information This report is prepared by the Finance Department. Additional financial information can also be viewed at our website: http://www.auburnwa.gov/. For any questions about this report please contact Jamie Thomas at idthomasauburnwa.qov. Page 39 of 88 City of Au B urn 1st Quarter 2024 Financia Report CITY COUNCIL STUDY SESSION TUNE 24, 2024 General Fund Revenue Overview Summary Variance to Variance Budget to 2023 •Collected 26% more 2023 2024 2024 Favorable Favorable revenue YTD Revenue YTD Actual YTD Budget YTD Actual (Unfavorable) % (Unfavorable) % compared to budget Property Tax $ 1,103,605 $ 1,140,900 $ 1,050,494 $ (90,406) $ (53,111) Sales Tax 5,616,703 5,106,000 5,669,407 563,407 52,704 and 30% more than Utility Tax 3,218,798 3,121,115 3,733,785 612,670 514,987 YTD last year B&OTax* 1,688,685 1,757,436 3,101,343 1,343,907 1,412,658 Other Tax 1,253,044 1,153,922 1,438,288 284,366 185,244 •Underspent the YTD Licenses and Permits 667,524 665,600 646,587 (19,013) (20,937) budgeted Intergovernmental 1,486,422 1,303,854 1,927,291 623,437 440,869 e n d itu res by3% Charges for Services 2,339,418 2,376,169 2,548,349 172,180 208,931 expenditures Other 936,900 710,019 2,014,717 1,304,698 1,077,817 and have spent 6% Transfers In 2,015,000 3,550,764 4,270,722 719,958 2,255,722 more compared to Total Revenue $ 20,326,099 $ 20,885,779 $ 26,400,983 $ 5,515,204 26% $ 6,074,884 30% Total Expenditures $ 21,335,400 $ 23,432,840 $ 22,633,612 $ 799,228 3% $ (1,298,212) -6% YTD last year Page 41 of 88 Tax Revenue 2024 budgeted taxes account for $70.96 million, or 67% of the General Fund budget Property Tax (34% of taxes) • $24.4 million 2024 budget • Collected 100% at year-end Retail Sales and Use Tax (29% of taxes) • $20.6 million 2024 budget • $53,000 (1%) under prior YTD actual • $563,000 (11%) over YTD budget Page 42 of 88 Tax Revenue Comparison of Retail Sales Tax Collections by Group Through March 2024 2023 2024 Change from 2023 Component Group YTD Actual YTD Actual Amount Percentage Construction $ 677,484 $ 643,986 $ (33,497) (4.9) % Manufacturing 138,050 137,690 (361) (0.3) Transportation & Warehousing 56,265 74,690 18,425 32.7 Wholesale Trade 396,540 405,833 9,293 2.3 % Automotive 1,178,351 1,169,340 (9,011) (0.8) Retail Trade 1,735,724 1,751,600 15,877 0.9 % Services 1,373,134 1,397,566 24,432 1.8 % Miscellaneous 61,156 88,702 27,546 45.0 % YTD Total $ 5,616,703 $ 5,669,407 $ 52,704 0.9 ok Ell Page 43 of 88 Tax Revenue Utility Tax (20% of taxes) Utility Tax • $14.1 million 2024 budget p2024Budget —0-2024YTDActual —2023Actual • Water, Sewer, Storm,Solid Waste Utility Tax rate 9% szo.o ($6.8 million of total budget) • Electric, Natural Gas, Cable, and Telephone Utility Tax rate 5% ($7.6 million of total budget) sis.0 • $613,000 (20%) over budget 0 • Higher than expected water, sewer, storm collections 5t0.0 • $515,000 (16%) over prior year • Higher than expected water, sewer, storm collections 53.8M 55.0 So.o I Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Page 44 of 88 Tax Revenue Business and Occupation Tax (B&O) (10% of total taxes) • $7.0 million 2024 budget • $3.1 million collected YTD • $2.04 million in gross receipts tax (66%) • $1.01 million in square foot tax (33%) • Includes Q4 2023 and some 2023 Annual Filings • $1.3 million (76%) over YTD budget Other Taxes (7% of total taxes) • $4.7 million 2024 budget • Criminal justice sales tax, admissions tax, gambling tax, leasehold excise tax, franchise fees • $172k (7%) over 2024 YTD budget • $209k (9%) over 2023 YTD collections • Both variances are mostly due to higher sales tax collection and admission tax collection (delinquent taxes received) Page 45 of 88 Licenses and Permits Accounts for 2% of the total General Fund Resources Building Permits =12024Budget —40--i324YF0Actual —2023Actual $2.6 million budgeted in 2024 Half of this ($1.0 million building permit revenue) $19,000 (3%) under budget $21,000 (3%) under prior year Both variances are attributed to lower collections for various permit fees Building permit revenue is right on track with budget expectations Jan Feb Mar Apr May lun Jul Aug Sep Oct Nov Der Page 46 of 88 Intergovernmental Revenues include: Federal/State/Interlocal Grants, Muckleshoot Indian Tribe (MIT) Compact, State Shared Revenue • State Shared Revenue: Streamlined Sales Tax, Motor Vehicle Excise Tax (MVET), Marijuana/Liquor excise taxes, Criminal Justice Sales Tax $623,000 (48%) over 2024 YTD budget • Timing of contribution payment from the MIT compact $441,000 (30%) over 2023 YTD collections • Timing of contribution payment from the MIT compact Page 47 of 88 Charges for Services General Government - $30,000 below budget (2.6%) • Timing of SKHHP Payments — Reimbursement basis Public Safety - $5,000 above budget (2%) Development Services - $123,000 above budget (44%) • Greater than anticipated plan check fees, facility extension charges and zoning and subdivision fees Culture and Recreation - $74,000 above budget (11%) • Green fees and pro shop sales are slightly higher than budget, but below prior year collections by 10% Page 48 of 88 General Fund Expenditures byDepartment 2023 YTD 2024 YTD 2024 YTD Budget vs Actual Department Actual Budget Actual $ Council, Mayor,Admin 668,906 692,900 702,632 (9,732) -1% Diversity, Equity and Inclusion 82,631 188,100 175,123 12,977 7% Municipal Court 252,957 239,686 265,572 (25,886) -11% Community Development 1,589,461 1,501,600 1,597,614 (96,014) -6% Human Services 437,099 774,900 567,118 207,782 27% Public Works 1,035,836 1,078,500 1,244,139 (165,639) -15% Streets (M&O) 938,310 1,065,300 1,053,765 11,535 1% Parks,Art, and Recreation 3,427,650 3,490,000 3,660,307 (170,307) -5% Police 8,495,621 9,303,700 8,679,621 624,079 7% SCORE 1,173,547 1,425,000 1,216,494 208,506 15% Internal Services (HR, Finance, Legal, Nondepartment) 3,197,381 3,373,154 3,471,228 (98,074) -3% Total $ 21,299,399 $ 23,132,840 $ 22,633,613 $ 499,227 2% Page 49 of 88 ARPA Update 2024 Lifetime Spend Title Budget Q1 Spend (includes this quarter) Remaining Completed Projects 1,630,000 - 1,853,949 - Body Cameras 586,400 - 550,325 36,075 Vaccination Incentive Program 47,500 - 34,980 12,520 Neighborhood Street Light Program 500,000 12,220 91,821 408,179 Human Services Grants Includes Admin 1,000,000 - 441,041 558,959 Dykstra Foot Bridge 400,000 - 10,357 389,643 Minor Improvements to Qualifying Neighborhood Parks 100,000 29,158 99,332 668 Limited Term Employee(LTE):Grants Coordinator 420,000 - 118,729 301,271 Paving Gravel Roads 636,866 - 23,539 613,327 Translation Services 75,000 - 1,685 73,315 Auburn Way South Median Landscape Replanting/Irrigation 50,000 - 40,187 9,814 Auburn Way South Roundabout 150,000 - 1,089 148,911 Emergency Housing Voucher Program 2,000,000 72,330 344,755 1,655,245 Encampment Cleanup 500,000 3,202 448,481 51,519 Downtown Sidewalk Replacement on Main Street and B Street Plaza Surface Replacement 1,343,266 13,593 59,360 1,283,906 Community Violence Intervention Programs(Drone,SPIDR Tech) 313,600 - 248,227 65,373 Arts Culture Center Renovations 100,000 - - 100,000 Auburn Ave Theater Demolition 300,000 15,745 15,784 284,216 Signing Bonuses for Police Lateral Hires 200,000 10,881 153,294 46,706 Other Projects(not started) 3,980,000 - - 3,974,704 Total: 14,751,231 166,661 4,555,350 10,195,935 • IMMII Page 50 of 88 Non -General Fund Highlights Real Estate Excise Tax (REET) Real Estate Excise Tax YTD Collections: $1.1 million 02024Budget — —2024YTDActual —2023Actual $4.0 $632,000 over prior year $315,000 over YTD budget 53.5 $3.0 $2.5 0 $2.0 $1.5 $1.0 50.5 $0.0 Ian Feb Mar Apr May Jun Jui Aug ep Oct Nov Ut Page 51 of 88 Questions Page 52 of 88