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HomeMy WebLinkAboutQ4 2024 Financial Report* C1TY OF * _..y � * ; y^�� ~� � �-- � %� WASHINGTON AGENDA BILL APPROVAL FORM � Agenda Subject: 4th Quarter 2024 Financial Report (Thomas) (20 Minutes) Financial Report�through December 2024 Department: Attachments: Meeting Date: April 28, 2025 Budget Impact: Finance Financial Report through Dec None 2024 (FINAL), 2024 Q4 Financial Update Administrative Recommendation: For discussion only. Background for Motion: Background Summary: The Financial report summarizes the general state of Citywide financial affairs and highlights si.gnificant items or trends that the City Council should be aware of. l"he attachment provides year-to- date financial activity through December 31, 2024, based on financial data available as of April 1, 2025. Councilmember: Kate Baldwin Staff: Jamie Thomas f- CITY or + A r C, Quarterly Financial Report Through December 2024 - WASHINGTON This report provides an overview of the City's overall cash-basis financial position for the fiscal year ending December 31, 2024, reflecting data available as of March 15, 2025. The City's fiscal year is the same as the calendar year. References to budget, actual and prior year amounts reflect year-to-date numbers, unless stated otherwise. Year-to-date performance expectations are generally based on the two prior years of data. General Fund Overview As 2024 comes to a close, the City continues to surpass what was a solid financial performance in 2023. General Fund revenues have generally exceeded budget expectations and largely recovered from the impact of COVID-19. With the adoption of Ordinance#6961 in November 2024, the annual budget consists of $109.1 million in revenues and $115.4 million in expenditures - a planned decrease in General Fund balance of $6.3 million. The City Council also approved the biennial budget for the fiscal years of 2025-2026, which had been in development throughout 2024. Amid nationwide discussions of an economic soft landing, the General Fund continues to outperform revenue expectations. By year-end, the City collected $4.8 million or 4.4% more revenues in 2024 than in 2023. A large contributor to this outcome was Business and Occupation (B&O) tax revenue; throughout 2024 the City collected $11.6 million in B&O taxes (including backdated collections), an increase of $1.0 million from 2023. However, the City anticipates that B&O revenues will decline slightly in the upcoming year as payments related to prior periods decrease. The City also implemented a new photo enforcement program during the second half of 2023, which generated $2.6 million of revenue through 2024. Mitigating the increases in General Fund revenues, the City also saw expenditures increase from the same period last year by $6.9 million or 7.5%. This is due to planned increases in overhead costs, professional services and insurance premiums. Overall, General Fund revenues collected through 2024 totaled $114.9 million as compared to an annual budget of$109.1 million, and were $5.8 million, or 5.3% above budget expectations. General Fund expenditures through 2024 totaled $99.7 million compared to an annual budget of $115.4 million; resulting in a $15.8 million or 13.7% underspend. GENERAL FUND REVENUES VS. EXPENDITURES THROUGH DECEMBER 2024 YTO Actuals$99.7 M Expenditures -w--- YTDBudget$115.4M YTD Actuals$114.9 M Revenues ------- rib Budget$109.1 M $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $MILLIONS Quarterly Financial Report Through December 2024 2 Revenue: The following factors had the most significant impact on the budget vs. actual revenue collected: • B&O Tax: Revenues collected through 2024 totaled $11.6 million, greatly exceeding the annual budget by $4.6 million or 65.1%. Some of the favorable variance is due to the collection of tax obligations incurred in prior years, which is not expected to continue at the same level in the future. [page 11] • Fines and Penalties: Collections through 2024 were $3.8 million in total and $2.7 million favorable to budget. Higher than expected revenues from a photo enforcement program implemented by the City in 2023 contributed $2.0 million toward the favorable variance. Other non-court fines and penalties are $660,500 favorable versus budget expectations, mainly due to interest and penalties on B&O tax collection. Civil penalties and criminal costs had an unfavorable variance, slightly reducing the overall favorable variance. [pages 20-21] • Retail Sales Tax: The sales tax report for distributions through 2024 (provided as an attachment to this report)reflects amounts remitted to the City of Auburn based on sales between November 2023 and October 2024. Collections totaled $22.9 million, approximately $95,000 lower than last year, driven by lower collections particularly in the construction and retail trade sectors. This is the first time the City has recorded lower year-over-year retail sales tax revenue since 2013. However, compared to the annual budget, sales tax has a favorable variance of$2.3 million or 10.9%. [pages 9-11] • Interest and Investment Earnings: Throughout 2024, interest and investment earnings have totaled $2.2 million and hold a $1.9 million favorable variance to budget. This is largely due to current investments outperforming expectations throughout the year. Multiple investments matured during the remainder of the year, which may reduce the rate of collections in the upcoming year. An in-depth analysis of investments is included as an attachment to this report. [pages 3-4] • General Government Services: Revenues collected during 2024 totaled $4.5 million, marginally below the expected budget amount of $5.8 million. This was mainly due to the timing of reimbursements related to SKHHP projects that were scheduled but not completed during the year. However, even with this unfavorable variance to budget in 2024, these revenues surpassed 2023 totals by $78,000. This is due to a large percentage of these revenues resulting from interfund support services which were fully collected throughout the year. [page 18] • Transfers-in: Transfers into the General Fund were $9.4 million unfavorable to budget throughout the year. This is mainly due to a budgeted transfer-in amount of$9.3 million for cash-flow purposes. As the year progressed, the City determined that this transfer was unnecessary in 2024. Expenditures: Overall, the favorable variance to the annual expense budget is $15.8 million. At the close of the year all departments operated within their annual budgets, with some variances due to the timing of professional services payments, as well as expenses related to projects facilitated by ARPA funding. Also contributing to the favorable variance was a savings in salaries and benefits expenses of roughly $3.5 million; as of the compilation of this report, there were 38 vacant regular full-time positions in the City. Likewise, services and charges were favorable to budget expectations throughout the year by roughly $7.0 million. This is partially due to the timing of spend on projects in-progress within the City. Quarterly Financial Report Through December 2024 3 Citywide Cash and Investments As of December 31, 2024, the City of Auburn's Investment Portfolio is comprised of liquid investments in the State's Local Government Investment Pool (LGIP) and cash (60.6%), investments in agencies (26.2%), and treasuries (13.1%). Liauid balances are comprised of the City's cash balances, plus the amount invested in the LGIP. The LGIP is operated by the State Treasurer, and provides a "safe, liquid, and competitive" investment option for Washington local governments. The City can access and withdraw the entire amount of LGIP and cash balances at any time. As of December 31, the City maintained a balance of$132.1 million with the LGIP and $29.6 million in cash. The City's investment portfolio also includes 21 current investments in agencies and treasuries, each with a par value of$5 million for a total of$105 million. As of December 31, the market value of these investments was $103.9 million. As depicted in the graphic below, all investments mature within a 5-year period, with the highest amount of cash-flow coming in 2-3 years ($25 million). Maturity Distribution ».wM $254IM $ilLM- 519 M- $1441M $So. s',3un won. $0MM 50.0 472 500 $9 O-3mo 3 fimo 6•12663 L-2'yr I•3yi 3-S:r 4-3yr 5-7yr 7-106T O2er10yr The table below details the current position of the City's investments through the end of the year. As illustrated in the unrealized gain/loss column, the City currently holds an overall loss of roughly $357,000. This is calculated by subtracting the book value (value of investment after liabilities are backed out) against the market value (current price of investment on the market). As the investments move closer to maturity, the unrealized gain/loss will fluctuate based on current market conditions. Amortization/Accretion(look Calculations u nrealued CIISIP/5e1-ID Set 09511 Can Mat Ot Par Value Cost Purrh Po Book Val book P8 Book'/IM Mkt Val Mkt 13.8 Mkt ttM sa!N.ass 3130483M5 FEDERAL HOME LOAN 0414K81-1 0.55 3/28/2025 5,000,000 5,013,879 100.26 5,000,958 100.02 0.46 4655,150 9910 425 145,805] 315590505 FEDL NAR MTG ASSN SOD BENI 0.63 4/22/2025 5,000,100 4,699,320 93.99 4,933,484 98.67 4.96 4,945,350 98.91 4.17 11,855 3133EP948 FF00 4.75 7/2112025 5,000,100 4,990,590 99.81 4,997,147 99.94 495 5,011,750 100.24 431 14,663 31304W KM FOL6 4.75 12/12/2025 5,000,000 5,011,120 100.22 5,004,551 100.09 4.65 5,023,650 10047 423 19,099 3133E88110 FF00 4.63 4/10/2026 5,000,000 5,012680 10024 5,005,756 10612 4.53 5,0245350 16230 422 19,094 5133E159E9 FFCB 4.38 7/6/2026 5,000,000 4,989,635 9979 6,996533 99.89 445 5,006,000 10012 429 11,257 31304)00P1 FEDERAL HOME LOAN 04 NN EH 4.88 9/11/2026 5,000,000 5,029,315 100.59 5617682 100.36 4.65 5,049,050 100.98 426 31,168 912828YX2 T 1.75 12/31/2026 5,600,000 4,612,470 92.25 4,767,341 95.35 4.20 4,763,850 95.28 424 i3,491) 31424WAF9 FAMCA 4.88 4/1/2027 5,600,000 5,026,850 100.54 5,018,127 100.36 4.70 5,061,5500 101.23 429 43,373 3130405822 FOLD 4.13 6/11/2027 5,900,000 4,977,590 99.55 4,985,465 99.71 4.25 4,978,700 9957 4.31 16,766] 912829E99 TREAS SER AC-202 3.13 8/31/2027 5,000,000 4,862,025 97.24 4695,290 9791 3.96 4655,450 9711 428 139,840) 31422670 FAMCA 3.79 10/4/2027 5,000,000 4,855,555 97.07 4,893,399 97.87 4.52 4,950,560 96.61 433 37,101 912829699 TREAS 5ER AH-202 3.88 12/31/2027 5,000,000 5,045,630 10091 5,041,601 109.83 3.58 4,942,000 98.84 429 109,601) 912829659 TREAS 5ER}2028 125 3/31/2028 5,000,000 4,365,915 9732 4,518260 9037 447 4,540,450 90.91 431 22,190 912822120 T 4.03 6/30/2028 5,000,100 5,013,895 10028 5,011,338 100.23 3.93 4,947,650 98.95 433 {63,688) 91282CHX2 TREAS5ER AC-202 4.38 8/31/2028 5,000600 5,096,385 101.93 5,078,398 101.57 3.91 5,003,300 100.07 435 175,0913) 3133EPA47 FF66 4.88 11/1/2928 5,000600 5,082,540 10165 5,065,044 101.30 4.50 5,083,400 101.67 4.40 18,356 3133E45440 FF66 4.25 2/28/2029 5,000600 5,051,305 101.03 5,043,425 100.87 4.02 4,979,650 9959 436 163,775) 31424WHP0 FAMCA 4.65 4/26/2029 5,000,900 5,007,390 100.15 5,006674 100.17 4.62 5,043650 100.88 4.42 37,076 31424156111 FAMCA FEDERAL 3.63 9/4/2029 5,060,000 5,003,400 100.07 5,003,012 109.06 3.01 4,50,100 96.60 4.44 (172,912] 912829631 TREAS 015 3.88 12/31/2029 5,000,000 4,935,795 98.72 4,936,2. 98.73 4.16 4,84,200 97 68 4.40 152,066) TOTAL and AVERAGES 105,030,000 103,600,735 104,217,754 4.15 103,860500 4.31 (357,254] The current cash-flow projections for 2025 can be seen below. Projected collections from investments in the upcoming year total $23.8 million and average $6.0 million of collections per quarter. The current structure of maturing investments creates a consistent inflow of cash throughout the year, making it easier for the City to manage its cash flow accordingly. Quarterly Financial Report Through December 2024 4 Extended Cash-lows n cv>;P Par Value Jan-25 Feb-25 mar-25 Apr-25 mar-2s lun-25 lul-25 A3H-25 S . Oct 25 Nov-25 Dec-25 rear 1 Total 15150893615 8018030 0 0 8013 750 0 0 0 0 0 0 0 0 0 5015750 2 515.0.5 8018030 0 0 O 8018625 0 0 0 0 0 0 0 0 5015.625 3 5133120728 5.000.000 118,750 0 0 0 0 ❑ 5,113,75❑ 0 0 0 ❑ 3 5.237.300 4 3130G6,8611 5,006000 0 0 0 0 0 118,750 0 0 0 0 0 5,118,75G 5237 MO 5 3133E22110 5.060.000 0 0 0 115,625 0 ❑ 0 0 0 115,625 0 0 231.2. 6 3133EPPE9 5.060.000 109,375 0 0 ❑ 0 ❑ 109,375 0 0 ❑ ❑ ❑ 216750 313088091 5.060.000 ❑ 0 121.875 0 0 ❑ ❑ 0 121.875 0 ❑ ❑ 243750 8 912823,. 5.060.000 ❑ 0 0 0 0 43,75❑ ❑ 0 0 ❑ ❑ 43,750 S7,500 9 31424W9F9 5,060,000 ❑ 0 0 121,675 0 0 ❑ 0 0 121,875 ❑ 0 243750 30 313080622 5,060,060 0 0 0 0 0 1❑3,125 0 0 0 ❑ 0 .3,125 206.250 11 612821269 5,060,060 0 75,125 0 0 0 0 0 73,125 0 ❑ 0 0 156,250 12 3142.070 5,006000 0 0 0 94,730 0 0 0 0 0 94,350 0 0 169500 13 9128200 C9 5,060,000 0 0 0 0 0 96,875 0 0 0 0 0 96,675 193 760 14 91282C659 5.060.000 0 0 31,250 0 0 0 0 0 31,2. 0 0 0 62,503 15 91282CH K❑ 5.060.000 ❑ 0 0 0 0 103,001 ❑ 0 0 ❑ ❑ loO,000 200,000 16 9126209162 5.060.000 0 109,375 0 0 0 0 0 109,375 0 ❑ ❑ ❑ 216.750 17 3133E,47 5.060.000 0 0 0 0 121,275 0 0 0 0 0 121,875 0 243750 16 3133E2480 5,068000 0 106,250 0 0 0 0 0 106,250 0 0 0 0 212,500 19 514240,1190 5,000A0 0 0 0 116,250 0 0 0 0 0 116,250 0 0 232.600 20 31424W0911 5060,060 0 0 90,623 0 0 0 0 0 .922 0 ❑ 0 161.250 21 91232.61 5006000 0 0 O ❑ 0 96875 0 0 0 0 0 96,675 .37. 'TOTAL 1❑5,00,000 228,125 203,750 5,257,500 5,664,125 121,E75 559,375 5,220,175 293,753 243,750 418,300 121,875 5,559,375 23,820,125 Street Funds Overview The City's three street funds are special revenue funds wherein the revenue sources and expenditures are legally restricted. These funds are used for street capital construction projects, as well as local and arterial street repair and preservation projects. Historically, most expenditures in all three street funds occur during the second half of the year when weather conditions are optimal for pavement construction. Variances in budget and actuals between years are generally due to the schedule and level of activity on projects in the funds, and the timing of grant reimbursements and other funding. In 2024, many projects in the street funds moved out of the design phase and into the construction phase, triggering increases in expenditure activity as well as revenue collections from grant reimbursements and sales tax. Arterial Street Fund revenues in 2024 totaled $6.8 million compared to $3.0 million in 2023, while expenditures increased $3.1 million from $3.4 million in 2023 to $6.5 million in 2024. There were 26 active projects in this fund in 2024 and, as noted above, the increased activity is due to increase construction activity for these projects throughout the year. [pages 26-27] Local Street Fund revenues through 2024 totaled $4.6 million compared to $3.2 million in 2023. This increase is due primarily to increased collections of interfund utilities taxes (+$963,000), as well as increase interest earnings compared to the prior year (+$301,000). Expenditures in 2024 totaled $2.1 million compared to $210,000 in 2023, which is consistent with the City's expectation given increased construction activity for the eight active projects in the fund. [pages 28-29] Arterial Street Preservation Fund revenues totaled $4.0 million in 2024 compared to $3.6 million in 2023. Most of this increase was driven by increased revenues from the Public Transportation Sales & Use Tax, which totaled $2.7 million in 2024, up $455,000 from $2.2 million in 2023. Increased construction activity for 18 active projects in this fund contributed to an increase in expenditures, which totaled $4.3 million in 2024 compared to $1.6 million in 2023. [pages 29-30] 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 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 investments means the 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. As such, interest earnings across all enterprise funds through 2024 increased $292,000 to $3.5 million compared to $3.2 million in the prior year. Quarterly Financial Report Through December 2024 5 The Water Utility Fund ended 2024 with an operating income of$7.7 million, which was approximately $337,000 higher than last year. Revenues for this fund were $20.2 million through 2024, compared to $19.5 million through 2023. These revenues were offset by$12.6 million in expenditures, compared to $12.2 million in 2023. In total, operating income had a $2.5 million favorable variance compared to the 2024 budget, due to favorable variances in both revenues (+$1.2 million) and expenditures (-$1.3 million lower than budget). However, after factoring in non-operating revenues and expenses such as capital construction and payment of debt service, the Water Utility experienced an overall decrease to working capital of$1.5 million. [pages 32- 33] The Sewer Utility Fund ended 2024 with an operating income of$5.2 million compared to $4.7 million in the same period last year. Operating revenues increased $857,000 from $11.3 million in 2023 to $12.1 million in 2024. This increase in revenue was partially offset by a $335,000 increase in operating expenses. Operating income was $5.2 million, driven by favorable variances in revenues (+$2.4 million) and expenditures (-$3.0 million) compared to budget. Net changes in non-operating income and capital project related activity reduced the overall change in working capital for the Sewer Utility to $4.2 million. [pages 33] The Stormwater Utility Fund ended 2024 with an operating income of$3.4 million compared to $3.3 million last year. Operating revenues in 2024 totaled $13.4 million compared to $12.7 million in 2023. Operating expenses increased $514,000 million from $9.4 million last year to $10.0 million in 2024. Compared to the 2024 budget, operating income held a $2.3 million favorable variance due to favorable variances in both revenues (+$2.0 million) and expenditures (- $253000). Increased expenditures related to capital construction led to an overall reduction in working capital of$1.6 million. [pages 33-34] The Solid Waste Utility Fund ended 2024 with an operating income of$620,000, compared to an operating loss of$549,000 through the same period last year. While operating revenues increased from $28.9 million through 2023 to $31.0 million through 2024, operating expenditures also increased. Operating expenditures through 2024 were $30.3 million, compared to $29.5 million through the same period last year. Like the other enterprise funds, operating income was favorable to the 2024 budget, due to a $374,000 favorable variance in revenues and a $907,000 favorable variance in expenditures. [page 34] The Airport Fund ended 2024 with operating income of$354,000, slightly lower (-$22,000) than operating income for the same period last year. Operating revenues decreased $31,000 from 2023, while operating expenditures also decreased slightly (-$9,000). Overall, the Airport Fund had a favorable operating income budget variance of$15,000 in 2024. Factoring in additional expenditures related to capital projects this fund experienced a reduction of$230,000 in total working capital. [page 34-35] The Cemetery Fund ended 2024 with operating income of$86,000, a reduction of$232,000 compared to $318,000 through the same period last year. This decrease was driven by decreased charges for service (-$161,000), as well as an overall increase of$60,000 in operating expenditures. Compared to 2024 budget expectations, the Cemetery Fund had favorable budget variances in both operating revenues (+$393,000) and expenditures (-$71,000). Additional expenditures related to capital projects occurring in 2024 contributed to an overall decrease in working capital of$178,000. [pages 35-36] Quarterly Financial Report Through December 2024 6 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. The Innovation & Technology Fund had budgeted for an operating loss of$2.4 million in 2024; however, due to timing differences between budgeted expenditures for software replacements and actual spend, the fund recorded operating income of$111,000. We expect these planned replacements and related expenditures to occur in 2025. Compared to the prior year, operating revenues increased $244,000 to $9.0 million in 2024. This increase was partially offset due to increases in personnel costs (+$469,000) and supplies (+$53,000), resulting in a decrease in operating income of$201,000 compared to 2023. The Equipment Rental Fund also had a $610,000 favorable budget variance in operating income for the same period, due to higher than anticipated interest earnings (+$340,000), gains on the sales of fixed assets (+$187,000), and lower than anticipated operating expenditures (- $194,000). Operating income in 2024 was $590,000, which is a $832,000 decrease compared to the prior year. This fluctuation is driven almost entirely by a decrease in insurance recoveries from 2023 to 2024. No other significant variances were reported in the Internal Service funds during 2024. [page 36] Quarterly Financial Report Through December 2024 7 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 YE Budget vs.Actual 11 2024 YTD Actual vs.2023 Actual ces and Uses Annual ' YE Favorable(Unfavorable) YE Favorable(Unfavorable) Budget ge Actual Amount Percentage Actual Amount Percentage Operating Revenues Property Tax $ 24,486,386 $ 24,486,386 $ 24,780,732 $ 294,346 . 1 2 % $ 24,149,996 $ 630,736 2 6% Retail Sales Tax 20,649,700 20,649,700 22,905,129 2,255,429 10 9 % 22,999,943 (94,814) (0.4)% Affordable Housing Sales Tax Credit 177,587 177,587 149,352 . (28,235) . (15.9) % 150,476 (1,123) (0 7)% Sales Tax-Rerce County Parks 130,000 130,000 135,512 5,512 4 2 % 133,326 2,186 1 6% Criminal Justice Sales Tax 2,478,000 2,478,000 3,056,862 . 578,862 . 23 4 % 3,119,532 (62,669) (2 0)% Brokered Natural Gas Tax 150,000 150,000 240,833 90,833 60.6 % 319,286 (78,453) (24.6)% City Utilities Tax 5,989,667 5,989,667 6,733,102 . 743,435 . 124 % 6,238,094 495,009 79% Business&Occupation Tax 7,029,750 7,029,750 11,605,183 4,575,433 65 1 % 10,625,063 980,120 9 2% Admissions Tax 312,445 312,445 702,930 • 390,485 = 125 0 % 403,607 299,323 74 2% Hectic Tax 4,426,743 4,426,743 4,696,372 269,629 6 1 % 4,443,631 252,740 5 7% Natural Gas Tax 1,658,523 1,658,523 1,289,448 . (369,075) . (22.3) % 1,469,777 (180,329) (12 3)% Cable Franchise Fee 880,889 880,889 753,919 (126,970) (14.4) % 853,521 (99,603) (11.7)% Cable Utility Tax 931,981 931,981 798,527 • (133,454)_ (14.3) % 909,293 (110,765) (12.2)% Cable Franchise Fee-Capital 51,539 51,539 39,176 (12,363) (24.0) % 49,201 (10,025) (20 4)% Telephone Tax 435,847 435,847 687,102 . 251,255 . 57 6 % 497,600 189,502 38 1 % Solid Waste Tax(external) 621,973 621,973 1,342,295 720,322 115.8 % 1,919,923 (577,627) (30.1)% Leasehold Excise Tax 255,335 255,335 303,727 - 48,392 19 0 % 268,560 35,168 13 1 % Gambling Excise Tax 295,300 295,300 212,097 (83.203) (28.2) % 278,202 (66,105) (23.81% Taxes sub-total $ 70,961,665 $ 70,961,665 $ 80,432,299 $ 9,470,634 • 13.3 % $ 78,829,030 $ 1,603,269 2.0% Business License Fees $ 461,250 $ 461,250 $ 640,082 $ 178,832 IF 38 8 % $ 583,469 $ 56,613 9 7% Building Perrrrts 956,698 956,698 767,031 (189,667) (19.8) % 904,387 (137,357) (15.2)% Other Licenses&Permits 1,150,950 1,150,950 1,199,438 48,488 4.2 % 1,362,462 (163,024) (12.0)% Intergovernmental(Grants,etc) 7,410,275 7,410,275 7,967,969 557,694 7 5 % 5,890,408 2,077,561 35 3% Charges for Services - WA General Government Services 5,824,577 5,824,577 4,532,458 (1,292,119) (22.2) % 4,454,072 78,386 1.8% Riblic Safety 1,094,160 1,094,160 1,644,675 . 550,515 503 % 1,218,117 426,558 350% Development Services Fees 1,158,080 1,158,080 1,138,214 (19,866) (1.7) % 1,141,917 (3,702) (0.3)% Culture and Recreation 2,975,485 2,975,485 3,399,314 423,829 14 2 % 3,265,931 133,383 4 1 % Fines and Penalties 1,071,819 1,071,819 3,762,521 2 690.702 251 0 % 2,458,443 1,304,078 53 0% Fees/Charges/Fines sub-total $ 22,103,294 $ 22,103,294 $ 25,051,700 $ 2,948,406 (. 13.3 % $ 21,279,205 $3,772,495 17.7% Interest and Investment Earnings $ 315,000 $ 315,000 $ 2,218,003 $ 1,903,003 = 604.1 % $ 1,600,133 $ 617,871 38.6% Rents and Leases 1,152,948 1,152,948 1,394,828 241,880 I 21 0 % 1,229,495 165,333 134% Contributions and Donations 42,000 42,000 24,030 (17,970) . (42.8) % 29,420 (5,391) (18 3)% Other Miscellaneous 258,000 258,000 850,739 592,739 229 7 % 457,129 393,610 86 1 % Transfers In 14,203,054 14,203,054 4,790,709 (9,412,345) . (66.3) % 6,356,542 (1,565,833) (24 6)% Insurance Recoveries-Capital&Operating 82,210 82,210 113,283 31.073 _ 37 8 % 249,217 (135,934) (54.5)% Other Revenues sub-total $ 16,053,212 $ 16,053,212 $ 9,391,592 $ (6,661,620) (41.5) % $ 9,921,936 $ (530,344) (5.3)% Total Operating Revenues $109,118,171 $109,118,171 $114,875,590 $ 5,757,419 5.3 4,845,420 4.4% itures Council&Mayor $ 1,459,725 $ 1,459,725 $ 1,444,985 $ 14,740 10 % $ 1,374,567 $ 70,418 51 % Administration 1,331,394 1,331,394 1,309,653 21,741 1 6 % 1,265,848 43,805 35% Human Resources 2,527,139 2,527,139 2,521,116 6,023 0.2 % 2,382,597 138,519 5.8% Municipal Court&Probation - 3,673,544 3,673,544 3,324,616 348,928 9 5 % 2,556,274 768,342 30 1 % Finance 5,763,940 5,763,940 4,861,292 902,648 15 7 % 4,689,061 172,230 3 7% City Attorney 5,063,393 5,063,393 4,692,554 370,839 7 3 % 6,069,324 (1,376,770) (22.7)% Community Development 9,070,576 9,070,576 6,649,256 2,421,320 26 7 % 8,128,085 (1,478,829) (18.2)% Human Services 4,954,978 4,954,978 3,090,240 1,864,738 37 6 % - 3,090,240 WA% Office of Equity 1,047,360 1,047,360 868,952 178,408 17 0 % 514,218 354,734 69 0% Jail-SCORE 5,700,000 5,700,000 4,865,975 834,025 14.6 % 5,169,317 (303,342) (5.9)% Police 38,019,143 38,019,143 34,780,325 3,238,818 85 % 33,618,197 1,162,128 35% Public Works 5,242,635 5,242,635 5,044,662 197,973 38 % 4,592,820 451,842 98% Parks,Arts&Recreation 17,010,764 17,010,764 16,689,872 320,892 1.9 % 15,532,210 1,157,662 7.5% Streets 5,014,872 5,014,872 4,773,367 241,505 4 8 % 4,366,872 406,495 9 3% Non-Departmental 9,535,810 9,535,810 4,734,268 4,801,542 504 % 2,469,549 2,264,719 91 7% IYgiiiSL513ii1iE"'"'-1° Iiihilii.21li <<Giili,:iii U1.11'1.11 ,� IiufliiI,LIS I I iU Y{�in i ii2Miiiiii N iiiGGdGii Quarterly Financial Report Through December 2024 8 General Fund Revenues Budget Vs Actual Property Tax 24.BM Retail Sales Tax 22.9M Transfers-ir 4.BM External Utilities Tax 19.6M Intergovernmental 8.6M B&O Tax 11.6M City Utilities Tax 6.7M General Gov't Services 4.5M Other Taxes 4.BM Culture&Recreatior 3.4M Licenses and Permits 2.6M Development Services Fees 1. M MI Rents&Leases 1.4M M. Public Safety 1.6▪ M M. Fines&Penalties 3.B▪ M ✓ Other Miscellaneous 988k g Interest&Investments 2.21. ll 0 5M 10M 1SM 20M 25M ■Annual Budget ■YTD Budget ■YTDActual Quarterly Financial Report Through December 2024 9 Revenue Tax revenues, including property, sales/use, utility, business & occupation, gambling, and admissions taxes provide over 65% of all resources supporting general governmental activities. Licenses, charges for services, intergovernmental revenue (grants, state shared revenue, etc.)and fines contribute a further 20% of total revenue to the General Fund. The remaining 15% is comprised of a combination of different sources that are considered one-time resources. The following section provides additional information on the most significant tax resource streams. Property Tax collections throughout 2024 totaled $24.8 million, approximately $294,000 or 1.2% above budget expectations. Coinciding with the due dates for County property tax billings, the City collects these revenues during the months of April, May, October, and November. Property tax accounts for roughly 21.6% of all revenues collected within the General Fund and is the fund's largest single source of revenue. The City is legally restricted to a 1% increase on property tax levied annually, plus the tax levied on new construction. This has resulted in an average growth of 2.5% annually since 2017. Property Taxes ©2024 Budget —0—2024 YE Actual —2023 Actual $30 $24.8 M $25 $20 U, 0 $15 $10 $5 SO Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Retail Sales Tax collections through 2024 totaled $22.9 million, representing taxes remitted to the City of Auburn based on sales from November 2023 through October 2024. The City set a retail sales tax budget of$20.6 million for 2024 and has exceeded expectations by $2.3 million or 10.9%. Overall, collections were roughly $95,000 or 0.4% lower throughout the 2024 fiscal year compared to the prior year, which represents the first instance of lower year-over-year sales tax collections since 2013. Two of the three top industries for City sales tax collections experienced a decrease from prior year totals: retail trade (-$55,277) and automotive (-$21,513). Likewise, construction sales tax revenues were also lower than 2023 collections (-$239,981), though the construction industry is highly volatile based on project timelines and the state of the economy. The services industry helped mitigate a large portion of the unfavorable variance with collections of$202,349 more than last year. Quarterly Financial Report Through December 2024 10 The City has seen consistent growth in recent years, but the rate of growth has generally been in decline since 2019. Retail Sales & Use Tax 0 2024 Budget —2023 Actual f 2024 YE Actual $25 $229F:; $20 $15 O $10 $3 SD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Retail Sales& Use Tax $25 $23.0 $22.9 $22.7 $216 L • • $20 518 R 518.9 $15 0 3 $10 $5 $0 2019 2020 2021 2022 2023 2024 YID Quarterly Financial Report Through December 2024 11 The following table breaks out the City's retail sales tax collections by major business sector. Comparison of Retail Sales Tax Collections by Group Through December 2024 2023 2024 Change from 2023 Corn•onent Grou• YE Actual YE Actual Amount Percenta•e Construction $ 2,950,423 $ 2,710,442 $ (239,981) (8.1) Manufacturing 531,277 477,151 (54,126) (10.2) % Transportation & Warehousing 224,807 321,173 96,366 42.9 % Wholesale Trade 1,668,471 1,611,967 (56,504) (3.4) % Automotive 4,937,407 4,915,894 (21,513) (0.4) % Retail Trade 6,573,018 6,517,742 (55,277) (0.8) % Services 5,724,661 5,927,009 202,349 3.5 0/0 Miscellaneous 389,925 423,751 33,826 8.7 % YE Total $ 22,999,989 $ 22,905,129 $ 94,860 0.4 Business & Occupation (B&O) Taxes were implemented by the City at the beginning of 2022. B&O taxes are collected from businesses based on 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. Overall collection throughout 2024 totaled $11.6 million versus a budgeted amount of$7.0 million, a $4.6 million or 65.1% favorable variance. By reconciling against the State's Business Licensing System (BLS), the City was able to identify taxes collectable from prior periods, significantly contributing to the performance of this revenue. Looking forward, the 2025 budget for B&O taxes is $10.0 million, with base collections remaining strong while collection of back taxes tapers off as businesses become current on tax obligations. Business & Occupation Tax 2024 Budget —2023Actual —111—2024 YE Actual $14 $12 $11.6 M $10 $S $6 $4 $2 $- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec \ Quarterly Financial Report Through December 2024 12 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 decreased by $9,900 or -0.1% from 2023, but ended the year $1.6 million favorable to budget. Roughly 72% of the utility taxes collected by the City are comprised of the city interfund utility taxes and electric utility taxes. These two revenue sources accounted for $11.4 million of the collected $15.8 million throughout 2024. One of the largest contributors to the overall favorable variance to budget is the collection of backdated utility taxes from solid waste haulers. The City anticipates this level of collection to slow as taxes become current, as evidenced by the decrease in overall revenue in this category from last year. Despite this, collections were still well in excess of projections. Also contributing to the favorable budget variance,telephone taxes have increased from 2023 totals by $189,500, mainly due to the timing of collections from prior year activity. Telephone taxes are collected in arrears on a quarterly basis, which causes the timing variance from prior year and quarters. Mitigating the favorable variance to budget and prior year totals, cable utility taxes have been declining year-over-year since 2022. With more households moving to streaming services rather than basic cable, the City anticipates cable utility taxes to continue to decline over time. Natural gas tax revenues also decreased following a three-year period of increases that peaked in 2023, which were the highest collections in more than a decade. Although 2024 revenues declined from the 2023 peak, they still represent the second-highest collections since 2009. The table and graphics below demonstrate the various utility tax revenues and show actual revenues compared to budget. Note that these amounts represent only the General Fund portion of revenues, and do not contain those revenues allocated for funding City streets projects. Utility Tax by Type(General Fund Portion) Throu.h Dece 2024 Favorable(Unfavorable I 2023 2024 Actual vs.2023 Actual Revenue Annual Budget YE Budget YE Actual Amount Percentage YE Actual Amount Percentage City Interfund Utility Taxes $ 5,989,667 $ 5,989,667 $ 6,733,102 $ 743,435 12.4% $ 6,238,094 $ 495,009 7.9% Electric 4,426,743 4,426,743 4,696,372 269,629 6 1% 4,443,631 252,740 5.7% Natural Gas 1,658,523 1,658,523 1,289,448 (369,075) -22.3% 1,469,777 (180,329) -12.3% Telephone 435,847 435,847 687,102 251,255 57.6% 497,600 189,502 38.1% External Utility Taxes 621,973 621,973 1,342,295 720,322 115.8% 1,919,923 (577,627) -30.1% Brokered Natural Gas 150,000 150,000 240,833 90,833 60.6% 319,286 (78,453) -24.6% Cable 931,981 931,981 798,527 (133,454) -14.3% 909,293 (110,765) -12.2% Total $ 14,214,734 $ 14,214,734 $ 15,787,679 $ 1,572,945 11.1% $ 15,797,603 $ 9,924 -0.1% Quarterly Financial Report Through December 2024 13 Utility Tax =2024 Budget —0-2024YE Actual —2023Actual $15.8 M $15 z r 510 AmMar $5 ,,+It/ $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Noy Dec Utility Tax Revenues $20 $15.8 $15.8 • 515 $12.7 $134 $12.� 0 $10 $10 $5 $0 2019 2020 2021 2022 2023 2024 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($15.8 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. Quarterly Financial Report Through December 2024 14 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 $702,900 were collected throughout 2024, resulting in a favorable variance of$390,500 to budget and a significant 74.2% increase from 2023 collections. 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 $283,800. These revenues are dependent on community engagement and highly correlated with general economic conditions. Admission Tax 0 2024 3udget f 2024 YE Actual -2023 Actua' $800 $700 - v $600 5500 0 z 0 $300 O $300 $200 / $100 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec A 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 (48.7%) and card games (36.6%). At $212,100 through the year, collections are $66,100 lower than 2023 totals and report a $83,200 or -28.2%, unfavorable variance to budget. The primary driver for the unfavorable variance was minimal collections for card games. As anticipated in previous reports, this was not mitigated by the end of the year due to the timing of collecting backdated taxes (although these have begun to be collected in 2025). Gambling tax revenues historically have high volatility both month-over-month and year-over-year: excluding 2021 (due to COVID-19 restrictions), recent annual revenues average about $292,500 but have been as high as $413,000 (2018) and as low as $110,000 (2020). Lower performance in gambling taxes combined with lower retail sales tax collections potentially indicates a decrease in disposable cash in the area. Quarterly Financial Report Through December 2024 15 Gambling Tax 02024 Budget f2024 YE Actual —2023 Actual $400 $350 $300 $250 $200 0 $150 $100 $50 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Licenses and Permits include business licenses, building permits, plumbing, electric and other licenses and permit fees. Building permit fees and business licenses typically comprise most of the budgeted revenue in this category, at approximately 60% and 15%, respectively. The annual Business License renewal fee for each business located within the City is $103, with the renewal cycle for each business beginning on the date the business was originally granted a license. Annual collections totaled $640,100 in 2024 compared to $583,500 in 2023, a 9.7% increase. Historically, business license collections have been a highly volatile revenue source, and as such were budgeted conservatively. Through discovery and B&O tax use of the State's Business Licensing System, these revenues have become more consistent. In 2025, the renewal fee will increase from $103 to $107. Business Licenses 02024 Budget —0-2024 YE Actual —2023 Actua! $700 $600 $500 z $400 Q 0 O $300 $200 $100 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Quarterly Financial Report Through December 2024 16 Business License Revenues $700 $640 $583 • $600 $500 5424 N /J a N $400 054 5326 0 t - I— $300 $336 $200 $100 $0 2019 2020 2021 2022 2023 2024 Building Permit revenues collected in 2024 totaled $767,000, approximately $137,350 lower than 2023, with an unfavorable variance to budget of$189,500 (-19.8%). The number of permits submitted throughout the year increased by 41.2% over 2023, representing an increased workload of construction throughout the City. This increase is mainly from one large project within City limits. However, a large contributing factor for this unfavorable collection variance versus 2023 totals is the decreased valuation of new tenant improvement permits and repairs. Building Permits 02024 Budget f2024YE Actual —2023 Actual $1.0 50.5K $0.8 O $0.6 $0.4 $0.2 $0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Quarterly Financial Report Through December 2024 17 Building Permits $2,5 $2,0 a $L5 $1.2 $1.3 2 $0,9 $L0 $0.8 $1 0 • $0,8 $0.5 $0.0 2019 2020 2021 2022 2023 202L 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 2024 totaled $8.0 million and were $558,000 favorable to budget expectations. Much of the favorable variance is due to collecting the approved 2024 Muckleshoot Casino compact request in full along with the final payment of 2023 at the beginning of the year, a total of$2.7 million. Generally, the City would experience a timing lag of collecting the annual request in the following year. Also contributing to the favorable variance is federal and interlocal grant reimbursements for projects such as the police body-worn camera program. State grants, however, ended 2024 with an unfavorable variance of$548,000. The incomplete projects related to these grants will be carried-forward into 2025 along with the corresponding grants. Generally speaking, intergovernmental revenues have increased year-over-year by 2% (after backing out the one-time Coronavirus Aid, Relief, and Economic Security Act revenues in late 2020), and the City expects the same to occur in 2025. Intergovernmental Revenues(Grants,Entitlements&Service• Through December 2024 2024 Favorable Unfavorable 2023 2024 YTD Actual vs.2023 Actual Revenue Annual Bud geti YE Budget I YE Actual Amount Percentage I YE Actual Amount I Percentage Federal Grants $ 141,246 $ 141,246 $ 143,807 $ 2,561 1.8% $ 41,589 $ 102,219 245.8% State Grants 1,476,384 1,476,384 928,292 (548,092) -37 1% 252,504 675,788 267.6% Interlocal Grants 434,543 434,543 611,104 176,561 40 6% 258,273 352,831 136.6% Muckleshoot Casino Seances 1,712,643 1,712,643 2,652,318 939,675 54 9% 1,404,116 1,248,202 88.9% State Shared Revenues: Streamlined Sales Tax 575,982 575,982 576,091 109 0 0% 720,114 (144,023) -20.0% Motor Vehicle Fuel Tax 1,179,887 1,179,887 1,097,029 (82,858) -7 0% 1,106,315 (9,286) -0.8% Criminal Justice-High Crime 289,096 289,096 291,589 2,493 0 9% 284,886 6,703 2.4% Criminal Justice-Population 20,650 20,650 33,948 13,298 64.4% 32,098 1,849 5.8% Criminal Justice-Special Proq 92,924 92,924 119,271 26,347 28 4% 133,769 (14,497) -10.8% Manluana Excise Tax 175,522 175,522 224,867 49,345 28 1% 235,532 (10,665) -4.5% State DUI 12,390 12,390 8,647 (3,743) -30 2% 6,141 2,505 40.8% Fire Insurance Tax 91,000 91,000 - (91,000) -100 0% 114,235 (114,235) -100.0% Liquor Excise 495,593 495,593 610,509 114,916 23 2% 622,267 (11,758) -1.9% Liquor Profit 712,415 712,415 670,497 (41,918) -5.9% 678,570 (8,072) -1.2% Total State Shared 3,645,459 3,645,459 3,632,447 (13,012) -0 4% 3,933,926 (301,479) -7.7% YE Total $ 7,410,275 $ 7,410,275 $ 7,967,969 $ 557,694 7 5% $ 5,890,408 $ 2,077,561 35.3% Quarterly Financial Report Through December 2024 18 Intergovernmental Revenues (Grants, Entitlements&Services) $12 S10 2 $10 $8.0 $8 $6.9 • $6. 6.3 $5.9 $6 $4 $2 - $0 2019 2020 2021 2022 2023 2024 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. 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 the 2024 were $10.7 million and were roughly $338,000 or-3.1% less than expected for the year. This variance was found primarily in the General Government category. Charges for Services by Type Through December 2024 2024 Favorable(Unfavorable 2023 2024 Actual vs.2023 Actual Revenue Annual Bud•et YE Bud•et YE Actual Amount Percenta•e YE Actual Amount Percenta•e General Goeemment $ 5,824,577 $ 5,824,577 $ 4,532,458 $ (1,292,119) -22.2% $ 4,454,072 $ 78,386 1.8% (Public Safety 1,094,160 1,094,160 1,644,675 550,515 50.3% 1,218,117 426,558 35.0% (Development Services 1,158,080 1,158,080 1,138,214 (19,866) -1.7% 1,141,917 (3,702) -0.3% (Culture&Recreation 2,975,485 2,975,485 3,399,314 423,829 14.2% 3,265,931 133,383 4.1% Total $ 11,052,302 $ 11,052,302 $ 10,714,660 $ 337,642 -3.1% $ 10,080,036 $ 634,624 6.3% 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 revenues related to certain transportation projects. Approximately $1.2 million of the $1.3 million variance is due to the deferral of SKHHP projects from 2024 to 2025. In 2024, these projects were planned to be paid from the General Fund and reimbursed by the SKHHP fiduciary fund; beginning in 2025, all SKHHP operating activity will occur in the fiduciary fund. Looking forward into 2025, the main source of revenues within this category will remain the interfund support department charges. Quarterly Financial Report Through December 2024 19 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 funds collected from the Auburn School District for services rendered. Compared to the annual budget, revenues were $550,500 or 50.3% favorable. Public safety revenues collected throughout 2024 totaled approximately $1.6 million and saw a $427,000 increase from 2023 totals. This is largely attributable to higher than expected law enforcement services revenue collected throughout the year, accounting for$1.5 million or 94.8% of the total revenue collected in this category, an increase of$477,600 or 44.2% from last year. DUI emergency response fees decreased from 2023 collections by $46,800 or-37.5%, which slightly mitigated some of the favorable variance to prior year totals. The City expects continued growth in this revenue category next year. Development Services fee collections consist primarily of plan check fees, facility extension charges, and zoning and subdivision fees. Through 2024, development service fees collected totaled $1.1 million but were $19,900 unfavorable to budget expectations. Within this category, unfavorable variances to annual budget existed in plan check fees (-$27,000), environmental services (-$27,000), and fees assessed on projects that require extension of public facilities (- $13,700). Mitigating a portion of the unfavorable variance, zoning and subdivision fees ended 2024 with a favorable variance (+$48,000). The overall unfavorable variance is an effect of the revenue regressing to the mean after an exceptional two-year period of high collections from 2021 through 2022. The City is estimating a 7% increase from 2024 budget for these revenues in 2025 due to an anticipated increase of plan check fees throughout next year. Development Service Fees 52.0 $1,6 ::: . $13 $1.1 $1.1 $1,1 o_ • $1, 3 $0.5 $0.0 2019 2020 2021 2022 2023 202L Most of the 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 (currently being held at local high schools), senior programs, and special events. Overall, this category of revenues outperformed budget expectations by $424,000 or 14.2%. Quarterly Financial Report Through December 2024 20 Over 50% of annual Culture and Recreation revenues have come from the Auburn Golf Course. Green fee revenues have increased by$113,400 or 7.0%from last year and are favorable to budget by $145,400 in 2024. The golf course collects roughly 65% of its total revenues during the peak months of May through September. Since 2018, green fee revenues have increased annually, seeing a large spike in 2020 through 2021, followed by modest increases in 2022 and 2023. Continuing this trend, the City anticipates continued modest growth in 2025 based on updated green fee rates. Recreation classes represent a further 20.0% of annual culture and recreation collections and have generally remained consistent from prior year totals with $687,500 in collections. Ticket sales for performances held at local school venues (previously held at the Auburn Avenue Theater) have decreased by $20,000 or 18.0% from prior year totals but carry a favorable variance to budget by $51,000. This is mainly due to the Performing Arts Center decreasing to two shows annually in 2024 compared to three shows in 2023. With continued community participation in recreational classes the City is expecting a slight increase in these revenues in 2025. Culture & Recreation ©2024 Budget -0-2024YE Actual -2023Actual $4 $3.4 M $3 - 0 $z $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 December 2024 2024 Favorable Unfavorable 2023 2024 Actual vs 2023 Actual Revenue Annual Bud.et YE Bud.et YE Actual Amount Percenta•e YE Actual Amount Percenta•e CM Penalties $ 10,000 $ 10,000 $ 9,102 $ (898) -9.0% $ 1,786 $ 7,316 409.7% CAI Infraction Penalties 138,313 138,313 183,777 45,464 32.9% 138,221 45,556 33.0% Photo Enforcement 3,000 3,000 407 (2,593) -86.4% 1,817 (1,410) -77.6% Parking Infractions 733,506 733,506 2,701,857 1,968,351 268.3°/ 1,134,673 1,567,184 138.1% Criminal Traffic Misdemeanor 40,000 40,000 46,862 6,862 17.2% 33,449 13,413 40.1% Criminal Non-Traffic Fines 41,000 41,000 75,213 34,213 83.4% 49,967 25,246 50.5% Criminal Costs 30,000 30,000 8,790 (21,210) -70.7% 11,350 (2,559) -22.5% Non-Court Fines&Penalties 76,000 76,000 736,511 660,511 869.1% 1,087,180 (350,669) -32.3% Total $ 1,071,819 $ 1,071,819 $ 3,762,521 $ 2,690,702 251.0% $ 2,458,443 $ 1,304,078 53.0% Quarterly Financial Report Through December 2024 21 Total revenues collected throughout 2024 were$3.8 million as compared to a budget of$1.1 million and were 251.0% above budget expectations. This is primarily due to collections from the photo enforcement program (implemented in 2023), which are classified as parking infractions. These revenues were budgeted conservatively during the first full year of the program. Furthermore, the City received an influx of non-court fines & penalties through the first half of the year 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 even stronger 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 $324,000, approximately one-third of their annual average for the period of 2015-2019, prior to contracting with King County. The City is currently conducting a feasibility study of alternatives to contracting with King County. Moving into 2025 the City is anticipating a slight decrease in photo enforcement revenues as the program progresses in its desired effect of encouraging safe driving. Furthermore, while the revenues will be receipted into the General Fund, the City will be transferring those funds into the General Transportation Fund that will fund pedestrian and street safety programs. Fines& Penalties S r S3.8 • S3 52.6 o $2 $0.9 $1 $0.6 $0,4 $0 4 $0 2019 2020 2021 2022 2023 202L 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 is listed in the table below. Quarterly Financial Report Through December 2024 22 Miscellaneous Revenues by Type Through September 2024 2024 Favorable(Unfavorable _ 2023 2024 Actual vs.2023 Actual Revenue Annual Bud•et YE Bud•et YE Actual Amount Percentage YE Actual Amount Percentage Interest&Investments $ 315,000 $ 315,000 $ 2,218,003 $ 1,903,003 604.1% $ 1,600,133 $ 617,871 38 6% (Rents&Leases 1,152,948 1,152,948 1,394,828 241,880 21.0% 1,229,495 165,333 13 4% (Contributions&Donations 42,000 42,000 24,030 (17,970) -42.8% 29,420 (5,391) -18.3% 'Other Miscellaneous Revenue 258,000 258,000 850,739 592,739 229.7% 457,129 393,610 86.1% Total $ 1,767,948 $ 1,767,948 $ 4,487,600 $ 2,719,652 153.8% $ 3,316,177 $ 1,171,423 353% Revenues collected throughout 2024 in this category totaled $4.5 million and were $2.7 million or 153.8% favorable to budget. Of the overall favorable variance to budget, 70.0% was comprised of interest and investment collections, far exceeding budget expectations due to higher than expected interest rates and the maturation of multiple investments during the third quarter of the year. Referring to the investment portfolio table in this report, four investments are set to mature throughout 2025. The rents and leases category includes payments for facility rentals, golf cart rentals, and the restaurant lease at the golf course. Rents and leases were favorable by $242,000 against 2024 budget expectations, with a temporary easement of City property contributing significantly to the variance. Golf carts and other rentals were also favorable to expectations by $96,000, resulting in a favorable balance of budget to actual for the category. The rents and leases category generally exhibits seasonality, with the peak being in the spring and summer months. Throughout the year, rents and leases were $165,300 above 2023 collections, as the City has seen increased numbers of events that request the use of City facilities. The "Other Miscellaneous Revenue" sub-category reported $394,000 more than last year and was favorable to the annual budget by $592,700. This category includes $406,500 in revenue related to a national opioid settlement distribution program. Miscellaneous Revenues SS $4.5 $4 $3.3 o $3 $2,4 $2 $1,8 $1.5 $1.2 S1 SO 2019 2020 2021 2022 2023 202L Quarterly Financial Report Through December 2024 23 OTHER FUNDS Real Estate Excise Tax (REET) revenues are taxes on the sale of both commercial properties and single-family residences. These collections are received into the Capital Improvement Projects Fund and used for governmental capital projects. REET revenues collected during the 2024-year total $5.5 million, which is roughly $3.3 million or 59.8%favorable to budget expectations. According to King County assessed valuations of property taxes, the City has increased in property value by 2.3% from 2023 assessments. Accompanied with lower interest rates currently, the current climate for real estate sales is favorable. Real Estate Excise Tax O 2024 Budget f 2024 YE Actual —2023 Actual $5.5 M— $4 z 0 $3 $2 $1 — $0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec l Annual REET collections in 2024 significantly outpaced those of last year, and have only been exceeded in the last ten years by 2021 annual collections. This is a sign of recovery after two years of declining annual REET revenues. Collections peaked in 2021 following two years of historic low interest rates maintained by the Federal Reserve in response to COVID-19. However, interest rates were increased throughout 2022 and 2023 to address severe inflation, cooling the market and lowering REET collections in those years. In 2024, the federal funds rate began decreasing September, and the second half of the year saw increased collections compared to the first half. Generally, REET revenues have reflected the overall market volatility in recent years, with a standard deviation of$960,400 or 29.0% of the average annual collections over the time period of 2017 to 2023. Quarterly Financial Report Through December 2024 24 Real Estate Excise Tax Revenues $7 $6.0 $5.5 $6 $5.2 $5.3 • $5 in $4.2 0 3 $4 `�7f $3 $2 $1 $0 2019 2020 2021 2022 2023 2024 Quarterly Financial Report Through December 2024 25 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 was to mitigate the cost of providing public safety services throughout the City. The City has expended all $14.75 million as of Q1-2024, 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. Throughout 2024, the City has been able to spend $2.5 million, for a total of$6.9 million since 2021 on the following projects: 2024 Lifetime Spend Title Budget Q4Spend (includes this quarter) Remaining Completed Projects 2,745,359 - 2,745,358 - Neighborhood Street Light Program 1,300,000 244,756 339,292 960,708 Neighborhood Traffic Calming 200,000 (9,032) 9,464 190,536 Recreation Access Grants 150,000 236 886 149,114 Human Services Grants Includes Admin 1,000,000 - 445,882 554,118 Theater 389,700 - - 389,700 Tyler Tech MUNIS Financial Implementation 301,500 - - 301,500 Paving Gravel Roads 135,000 114,297 135,000 - 2023 Local Street Preservation 501,886 48,167 48,167 453,719 Translation Services 25,000 - 1,685 23,315 Cyber Security Locks 50,000 - - 50,000 Auburn Way South Median Landscape Replanting/Irrigation 50,000 - 40,187 9,814 Auburn Way South Roundabout 150,000 33,380 52,840 97,160 Emergency Housing Voucher Program 2,000,000 83,102 575,882 1,424,118 DEI Dashboard(Inclusive Auburn) 130,000 - 92,805 37,195 Duct cleaning in applicable buildings 150,000 184,219 150,000 - Encampment Cleanup 500,000 4,536 456,403 43,597 Downtown Sidewalk Replacement on Main Street and B Street Plaza Surface Replacement 1,819,409 258,795 612,828 1,206,581 Cameras in qualified census tracts 150,000 137,875 150,000 - Community Violence Intervention Programs(Drone,SPIDR Tech) 236,248 33,561 204,436 31,812 Arts Culture Center Renovations 100,000 - - 100,000 Auburn Ave Theater Demolition 490,000 406,071 437,771 52,229 Signing Bonuses for Police Lateral Hires 200,000 22,245 200,000 - OtherProjects(notstarted) 1,977,130 - - 1,977,130 Total: 14,751,231 1,562,207 6,798,885 7,952,346 The project Downtown Sidewalk Replacement on Main Street and B Street Plaza Surface Replacement (cp2321) will construct infrastructure improvements in Downtown Auburn along Auburn Ave. from East Main St. N to 1st St. NE and on East Main St. from Auburn Ave to B St. NE, including B St. Plaza. The improvements will support existing and future re-development activities Quarterly Financial Report Through December 2024 26 and replace infrastructure that is at or near the end of its useful service life. The project team is finalizing the design of the proposed improvements and anticipates completing the design in the first quarter of 2025, with construction to begin in the second quarter of 2025. Total spend of this project so far is $612,828 with $258,795 spent in the fourth quarter. The DEI Dashboard project was initiated in the third quarter, with the Office of Equity entering into a contract with an outside consultant firm for development of the City's DEI data strategy. The purpose of this plan is to outline and roadmap of the City's data practices, aimed at tracking and monitoring key organizational DEI objectives. Overall spend of this project is $92,805 which was all spent in the third quarter of 2024. 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 $575,882, with $83,102 occurring in Q4-2024. Throughout 2024, this project helped house 35 individuals. The Auburn Avenue Theater Demolition project was budgeted at$490,000. The project demolished the existing Auburn Avenue Theater building, provided support to the shared wall with the adjacent building, and disconnected existing utilities. The Auburn Avenue Theater building demolition was completed on November 15, 2024. The lifetime project cost through 2024 is $437,771. Street Funds This section provides a financial overview of the City's three street funds for the period ending December 31, 2024. The City's street funds are the Arterial Street Fund (Fund 102), the Local Street Fund (Fund 103), and the Arterial Street Preservation Fund (Fund 105). As noted in the Street Funds Overview section above, variances between budget and actual amounts are generally driven by the schedule and level of activity on projects in the fund, as well as the timing of grant reimbursements and other funding. As many projects in these funds moved into the construction phase in 2024, it is expected that there would be increased activity in both expenditures and revenues to reflect these progressions. Fund 102 —Arterial Street Fund The Arterial Street Fund is a special revenue fund that is funded primarily by transportation grants, traffic impact fees, a portion of the City's gas tax receipts, Public Works Trust Fund loans, and developer contributions. As of December 31, 2024 there were 26 separate street projects budgeted in this fund. Revenues collected in 2024 totaled $6.8 million compared to 2023 collections of$3.0 million. Total expenditures in 2024 were $6.5 million compared to $3.4 million in the prior year. These increases year-over-year are consistent based on the status of capital projects at the end of 2023. Variances in revenues and expenditures are largely due to the timing of capital expenditures and any subsequent reimbursement via grants, intergovernmental loans and/or operating transfers. Expenditure timing is generally determined by the current phase of each individual capital project; expenditures tend to increase as projects move from the design phase into the construction phase. Quarterly Financial Report Through December 2024 27 Fund 102-Arterial Street Fund Summary of Sources and Uses Through December 2024 2024 Favorable (Unfavorable) 023 YE Budget YE Actual Amount Percentage Actual Revenues Federal Grants $ 5,296,661 $ 2,267,341 $ (3,029,320) (57.2) % $ 312,329 State And Local Grants 7,471,713 1,022,186 (6,449,527) (86.3) % 517,951 Motor Vehicle Fuel and Multimodal Taxes 620,000 582,810 (37,190) (6.0) % 645,238 Miscellaneous Revenue 3,020,000 1,394,435 (1,625,565) (53.8) % 256,353 Operating Transfer In 7,004,370 1,385,912 (5,618,458) (80.2) % 889,996 Contributions&Donations 125,000 - (125,000) (100.0) % 332,000 Investment Income 23,000 103,526 80,526 350.1 % 93,986 Total Revenues $ 23,560,744 $ 6,756,209 $(16,804,535) (71.3) % $3,047,854 Expenditures Salary and Benefits $ - $ 539,750 $ (539,750) $ 491,171 Capital Outlay 25,192,264 5,433,551 19,758,713 78.4 % 2,543,365 Subtotal-Capital Project Expenditures I 25,192,264 I 5,973,302 I____ 19,218,962 I 76.3 %I 3,034,536 Services and Charges 195,000 256,821 (61,821) (31.7) % 134,186 Interfund Payments for Services 29,000 29,004 (4) (0.0) % 28,404 I Debt Service Principal and Interest 204,800 204,650 150 0.1 % 205,345 'Operating Transfer Out - - - - Total Expenditures $ 25,621,064 $ 6,463,777 $ 19,157,287 74.8 % $3,402,470 Net Change in Fund Balance $ (2,060,320) $ 292,432 $ 2,352,752 114.2 % $ (354,617) Beg.Fund Balance,January 2024 $ 2,279,131 Net Change in Fund Balance,December 2024 292,432 Ending Fund Balance,December 2024 $ 2,571,563 2024 Budgeted Ending Fund Balance $ 218,811 The table below presents the status of the projects with the most significant budget impact on the fund. Many capital projects are budgeted over multiple years; what is displayed below is the 2024 portion of each project's budget and annual expenditures. Fund 102-Arterial greet Capital Projects Status rounded) Name 2024 Budget YE Actual Remaining %of Budget Regional Growth Center Access Imp $ 8,790,000 $ 1,890,000 $ 6,900,000 35% AWS Imp.-Hemlock St SE to Poplar St SE 4,740,000 820,000 3,920,000 19% A Street Loop 1,830,000 1,610,000 220,000 7% East Valley Highway Widening 1,570,000 60,000 1,510,000 6% 10th St NW&A St NW Intersection Improv 1,550,000 450,000 1,090,000 6% Al Other Projects (21 Remaining) 6,720,000 1,140,000 5,580,000 27% Total $ 25,200,000 $ 5,970,000 $ 19,220,000 The A Street Loop project was completed in 2024. The remaining projects noted above entered the construction phase in 2024 and are expected to continue into 2025 as planned. Quarterly Financial Report Through December 2024 28 Fund 103 - Local Street Fund The Local Street Fund is a special revenue fund used for local street repair and is funded by interfund transfers on a project-reimbursement basis, as well as the streets funds portion of utility tax revenue (2.5%). Revenues collected in 2024 totaled $4.6 million compared $3.2 million recorded in 2023. This $1.4 million increase was driven mainly by increased collections of interfund utility taxes compared to the prior year (+$963,000) as well as a $301,000 increase in interest earnings. Total expenditures in 2024 were $2.1 million compared to $210,000 in the prior year. Similar to the Arterial Street Fund, this increased activity is consistent with the City's expectation of the status of capital projects at the end of 2024. Most projects entered the construction phase during the year, which is the primary cause of the increase in expenditures and the collection of sales tax related to construction. Highlighted in the table below and shown in the following graph are the fund's total expenditures related to capital projects. Fund 103-Local Street Fund Summary of Sources and Uses Through December 2024 2024 Favorable(Unfavorable) 2023 YE Budget YE Actual Amount Percentage YE Actual Mr- --F Revenues Interfund Utility Taxes $ 889,500 $ 1,870,306 $ 980,806 110.3 % $ 907,435 Electric Utility Tax $ 885,300 $ 939,274 53,974 6.1 % $ 888,726 Natural Gas Utility Tax 331,700 257,890 (73,810) (22.3) % 293,955 Cable W Tax 176,200 118,005 (58,195) (33.0) % - Telephone Utility Tax 87,200 137,436 50,236 57.6 % 100,088 Garbage Utility Tax(External Haulers) 10,300 201,314 191,014 1854.5 % 412,856 Miscellaneous Revenue - 2,400 2,400 8,704 Operating Transfer In 1,300,329 699,392 (600,937) (46.2) % 345,780 Interest Earnings 15,900 300,843 284,943 1792.1 % 210,547 Total Revenues $ 3,696,429 $ 4,526,860 $ 830,431 22.5 % $3,168,092 Expenditures Capital Salary and Benefits - 166,710 (166,710) 49,499 Capital Outlay 5,886,738 1,916,554 3,970,184 67.4 % 159,424 Subtotal-Capital Project Expenditures 5,886,738 2,083,264 3,803,474 64.6 % 208,923 Interfund Payments for Services 1,300 1,296 4 0.3 % 1,296 'Operating Transfer Out - - - - Total Expenditures $ 5,888,038 $ 2,084,560 $ 3,803,478 64.6 % $ 210,219 Net Change in Fund Balance $ (2,191,609) $ 2,442,300 $ 4,633,909 211.4 % $2,957,873 Beg.Fund Balance,January 2024 $ 6,372,457 Net Change in Fund Balance,December 2024 2,442,300 Ending Fund Balance,December 2024 $ 8,814,757 2024 Budgeted Ending Fund Balance $ 4,180,848 Quarterly Financial Report Through December 2024 29 The table below presents the status of the five active projects in Fund 103. Many capital projects are budgeted over multiple years; what is displayed below is the 2024 portion of each project's budget and annual expenditures. Fund 103-Local Street Capital rojects Status(rounded) Name 2024 Budget YE Actual Remaining %of Budget 2023 Local Street Preservation $ 2,060,000 $ 1,080,000 $ 980,000 35% Local Street Improvement Prog 1,700,000 - 1,700,000 29% D St SE&23rd St SE Storm Improvements 710,000 900,000 (190,000) 12% 2026 Local Street Preservation 520,000 10,000 510,000 9% 2025 Local Street Preservation 350,000 90,000 260,000 6% Al Other Projects (3 Remaining) 460,000 - 460,000 8% Total $ 5,800,000 $ 2,080,000 $ 3,720,000 Both the 2023 Local Street Preservation and D St SE & 23'd St SE Storm Improvements projects were completed as of December 31, 2024. The remaining projects illustrated above are expected to continue or enter the construction phase in 2025. Fund 105—Arterial Street Preservation Fund The Arterial Street Preservation Fund is a special revenue fund that historically had been funded by a portion of the utility tax collected by the City. Beginning in 2023, this funding was replaced by a 0.1% sales and use tax enacted by the City's Transportation Benefit District (TBD) via Ordinance 6881. To ensure that restricted TBD revenues remain in the Arterial Street Preservation Fund, the streets funds' portion of utility tax revenues are now receipted entirely into the Local Street Fund and transferred to the Arterial Street Preservation Fund on an as-needed basis. As a result of the changes that occurred in 2023, revenues for the Arterial Streets Preservation Fund in 2024 were $411,000 higher than the previous year's total of$3.6 million. The Public Transportation Sales & Use Tax (TBD revenue)was $455,000 higher through December 2024 than through the same period last year, and brought in $555,000 more revenue than what was anticipated for the current year. Additional sources contributing to this increase included grant revenue, which was $673,000 higher through December 2024 compared to the prior year. Expenditures in 2024 totaled $4.3 million compared to $1.6 million in 2023. Historically, the majority of this fund's expenditures occur in the second half of each year due to the weather sensitivity of pavement construction, which needs to be done primarily in the summer and early fall. Similar to the other streets funds, many projects entered the construction phase in 2024, which had a direct impact on total expenditures and subsequent grant reimbursements. Highlighted in the table below and shown in the following graph are the fund's total expenditures related to capital projects. Quarterly Financial Report Through December 2024 30 Fund 105-Arterial Street Preservation Fund Summary of Sources and Uses Throu.h Decem,, 2024 Favorable (Unfavorable) 2023 YE Budget YE Actual Am ount Percentage YE Actual Revenues City Utility Tax $ 1,334,300 $ - $ (1,334,300) (100.0) % $ 825,368 Cable TV Tax - 41,701 41,701 181,859 Public Transportation Sales&Use Tax 2,100,000 2,655,210 555,210 26.4 % 2,199,743 Grants 3,992,122 766,752 (3,225,370) (80.8) % 94,050 Transportation 141,092 361,768 220,676 156.4 % 104,518 Developer Mitigation Fees 288,465 - (288,465) (100.0) % - Operating Transfer In - - - - Interest Earnings 18,800 210,947 192,147 1022.1 % 219,029 Total Revenues $ 7,874,779 $ 4,036,378 $ (3,838,401) (48.7) % $3,625,362 Expenditures Salary and Benefits $ - $ 412,545 $ (412,545) $ 338,138 Capital Outlay 10,202,176 3,751,436 6,450,740 63.2 % 1,248,874 Subtotal-Capital Project Expenditures 10,202,176 4,163,981 6,038,195 59.2 % 1,587,012 Supplies - - - - Services and Charges 400,000 125,473 274,527 68.6 % 53,552 Operating Transfer Out 185,000 - 185,000 100.0 % - Total Expenditures $ 10,787,176 $ 4,289,454 $ 6,497,722 60.2 % $1,640,564 Net Change in Fund Balance $ (2,912,397) $ (253,075) $ 2,659,322 (91.3) % $1,984,798 Beg. Fund Balance,January 2024 $ 5,773,021 Net Change in Fund Balance,December 2024 (253,075) Ending Fund Balance,December 2024 $ 5,519,946 2024 Budgeted Ending Fund Balance $ 2,860,624 The table below presents the status of the projects with the most significant budget impact on the fund. Many capital projects are budgeted over multiple years; what is displayed below is the 2024 portion of each project's budget and annual expenditures. As noted above, many projects saw increased expenditure activity in 2024 as they entered the construction phase. Fund 105-Arterial Street Preservation Capital Projects Status(rounded) Name 2024 Budget YE Actual Remaining %of Budget C St SW Presrv(W Main to GSASignal) $ 3,600,000 $ 80,000 $ 3,520,000 37% R Street SE Preservation 1,920,000 1,970,000 (50,000) 19% 2024 Arterial Street Preservation 1,410,000 1,130,000 290,000 14% Lake Tapps Pkwy/Sum ner-Tapps Hwy E Prsv 1,330,000 840,000 480,000 13% Al Other Projects (14 Budgeted) 1,590,000 150,000 1,440,000 16% Total $ 9,850,000 $ 4,170,000 $ 5,680,000 Quarterly Financial Report Through December 2024 31 Fund 124— Mitigation Fees The Mitigation Fees Fund is a special revenue fund for fees that are assessed at the time applications are received for development activity. These revenues are used to address costs associated with City growth. The fund houses two types of revenues: mitigation fees and impact fees. Mitigation fees are variable charges collected as a result of State Environmental Policy Act (SEPA) reviews and the City's determination that a project must pay additional fees to compensate for a unique effect that it has on the community. Impact fees are set charges collected automatically for a variety of projects. These fees are adopted annually by the City Council based on projects anticipated in the Capital Facilities Plan over the next six years. School and Fire Impact fees are collected and reimtted on behalf of the Valley Regional Fire Authority, Auburn School District, Kent School District, Federal Way School District, and Dieringer School District. Expenditures from these funds consist of transfers out to capital project funds to help support the cost of transporation and parks capital projects. The projects funded from impact and mitigation fee are new or enhanced services necessary to absorb the impact of development. In 2024, the City received $1.7 million in mitigation and impact revenues, largely driven by commercial transportation impact fees ($799,000), parks impact fees ($175,000) and interest and investment income ($678,000). Overall, the fund experienced a $9.0 million favorable variance to budget driven by lower-than- budgeted expenditures (-$8.9 million) and marginally higher than budgeted revenues (+$73,000). Similar to the various streets funds, expenditure budget-to-actual variances are largely driven by project timing. The underspend in this fund is the result of timing differences of multiple capital projects funded by mitigation and/or impact fee revenues. Fund 124-Mitigation Fees Summary of Sources and Uses Through December 2024 Budget YEActuals Favorable(Unfavorable)Variance Ending Fee Type Revenues Expenditures Revenues Expenditures Fund Balance/ Revenues Expen' Transportation Impact Fees $ 1,300,000 $ 6,470,159 $ 798,683 $ 1,166,604 $ 10,501,980 $ (501,317) $ 5,303,555 Traffic Migitation Fees - 150,000 - 150,000 (3,286) - - Fire Impact Fees 125,000 75,000 17,891 - 398,907 (107,109) 75,000 Fire Mitigation Fees - - - - 81 - - Parks Impact Fees 150,000 4,236,630 175,000 645,355 4,125,653 25,000 3,591,275 Parks Mitigation Fees - - - - 198,397 - - School ImpactAdnrn Fees 5,000 - 2,804 - 110,180 (2,196) - Wetland Mitigation Fees - - - - 2,190 - - Truck Impact Fees - - 152 - 41,053 152 Interest and Investment Income 20,100 - 678,241 - 678,241 658,141 - Fees in Lieu of Improvements - - - - 28,882 - - Permit Processing Fees - - - - - - - Total $ 1,600,100 $ 10,931,789 $ 1,672,771 $ 1,961,959 $ 16,082,278 $ 72,671 $ 8,969,830 Beginning Fund Balance,January 2024 $ 16,371,466 Net Change in Fund Balance,Decanter 2024 (289,188) Estimated Ending Fund Balance,Decanter 2024 $ 16,082,278 Quarterly Financial Report Through December 2024 32 Enterprise Funds Detailed income and expense statements for Enterprise and Internal Service funds can be found in an attachment at the end of this report. The attachment provides operating and —as applicable — capital fund reports for these funds showing budget, actuals, and variances. 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. When considering the utility as a whole, both the operating fund and capital sub-fund must be taken into account. Through December 2024, the Water Utility Fund outperformed budget expectations with a favorable variance of$1.2 million in revenues. Water sales increased $663,000 from $18.5 million in 2023 to $19.2 million in 2024. Interest earnings increased $55,000 compared to the prior year, which is consistent with overall continued increases in the City's cash and investments balances. The Water Utility Fund also experienced a $1.3 million favorable variance to budget for operating expenditures across all categories, except for supplies (-79,000). Compared to expenditures reported in 2023, operating expenditures increased by $337,000, mainly due to increases in personnel costs (+$75,000), public utilities charges (+$122,000), utilities interfund and excise taxes (+$120,000), and interfund allocations (+$53,000). In 2024, the Water Utility Fund had operating income (operating revenues less operating expenditures) of$7.7 million, approximately $337,000 above the same period last year. When combined with non-operating income and the activities of the capital sub-fund, the utility's total working capital decreased by $1.5 million. Despite the reduction, ending working capital for the Water Utility Fund was $13.3 million favorable to budget, due to the favorable variances noted above in operating revenues (+$1.3 million), operating expenditures (-$1.3 million), and lower than anticipated capital project spend due to scheduling delays (-$14.0 million). Given the lower project spend in 2024, actual grant revenues received were also lower than budgeted (-$2.5 million), which partially offset these favorable variances. Billable water consumption in 2024 totaled 3.0 million ccf(ccf= hundred cubic feet), approximately 112,000 ccf, or 4%, lower than consumption volume through 2023. Compared to the prior year, the largest volume decreases occurred in irrigation and single-family accounts. Note that increased water rates contributed to the increase in water sales revenue compared to the prior year, despite the slight decreases in consumption. Quarterly Financial Report Through December 2024 33 Water Revenues and Water Sold 2023 vs 2024 $3-OM 1,000 $25M 800 $2.0M • v 600 -a $1-SM .• . ...... 400 $LOM •• ..... 200 $O.SM $0-OM - 1ac kee lac 0 40 S;o 5�\ �4' •,e9 Oc� +04 O� 2023 Water Sales($) —0-2024Water Sales($) 2023 Water Sold(ccf) 2024 Water Sold(ccf) Through the end of 2024, the Sewer Utility Fund finished with operating income of$5.2 million, a $522,000 increase compared to $4.7 million through the same period last year. Net of non- operating activity, to include increased capital project activity, the utility experienced an overall increase in working capital of$4.2 million. Operating revenues were up $857,000, or 7.6%, from the same period last year due to stronger performance in charges for City sewer service and interest earnings. Charges for service increased $541,000 from $10.3 million through 2023 to $10.8 million through 2024, and interest earnings increased $317,000 during that same period. This increase in activity is also reflected in a favorable to budget variance in revenues of$2.4 million. Operating expenditures were favorable to budget by $3.0 million in 2024, driven primarily by a favorable to budget variance in other service charges of$2.7 million due to the elimination of utility tax charges on pass-through revenues for King County Metro Sewer service. Although total operating expenditures were favorable to budget in 2024, actual expenditures did increase from $6.6 million in 2023 to $6.9 million in 2024. This was due in part to increased personnel costs (+$54,000), supplies (+$40,000), other miscellaneous expenditures such as utility taxes (+$116,000), while interfund support charges decreased slightly (-$29,000). Ending working capital for the Sewer Utility Fund was $14.8 million favorable to budget, due to the favorable variances noted above in operating revenues (+$2.4 million), operating expenditures (-$3.0 million), and lower than anticipated capital project spend due to scheduling delays (-$8.6 million). In 2024, the Stormwater Utility Fund had a favorable budget variance in operating revenues of $2.0 million, driven by charges for service (+$1.5 million) and interest revenue (+$667,000). Compared to 2023, operating revenues were up $688,000, driven by an increase in charges for storm service (+$815,000) and partially offset by decreases in miscellaneous revenues (-$20,000) and interest earnings (-$82,000). As most stormwater service charges are based on a flat rate, there are not typically seasonal fluctuations in this revenue. Accordingly, service charge Quarterly Financial Report Through December 2024 34 revenues reported throughout 2024 generated on average $3.1 million each quarter for a total of $12.6 million through December 2024. Operating expenditures saw a $253,000 favorable variance to budget, due to lower than budgeted expenditures in other service charges and personnel costs. In 2024, operating expenditures of$9.9 million were $513,000 higher compared to the same period last year. Most of this increase is due to higher personnel (+$414,000), and miscellaneous other service charges (+$78,000) such as utility and excise taxes compared to 2023. Overall, the Stormwater Utility recorded operating income of$3.4 million compared with $3.3 million in the same period last year. The fund finished the year with an overall reduction in net working capital of$1.6 million, due to increased capital project expenditures. Ending working capital for the Stormwater Utility Fund was $14.4 million favorable to budget, due to the favorable variances noted above in operating revenues (+$2.0 million), operating expenditures (-$253,000), and lower than anticipated capital project spend due to scheduling delays (-$12.0 million). The Solid Waste Utility Fund finished 2024 with a favorable operating income budget variance of$1.3 million, due to favorable variances in revenues (+$374,000) and expenditures (-$907,000). Service charges generated the majority of$31.0 million in operating revenues for 2024, which increased $2.0 million compared to 2023 mainly due to increased service rates. Operating income for the year was $620,000, a significant increase compared to the operating loss of $549,000 in 2023. Operating expenditures increased $875,000 from $29.5 million in 2023 to $30.3 million in 2024. This increase was driven by an increase in payments to the City's contracted solid waste provider (+$817,000) along with litter crew services (+$461,000). These increased costs were partially offset by decreases in personnel costs due to the dissolution of the City's internal litter crew (-$181,000). The current mix of solid waste customer account types is: • 92.4% Residential • 6.0% Commercial • 1.6% Multifamily In total, tonnage collected decreased from 68,344 in 2023 to 65,914 in 2024. The "diversion rate" is a measure of how much generated waste is not sent to the landfill, i.e., waste that is either recycled or collected yard waste. Through December 2024, the total diversion rate was 27.4%, which represents a total of 18,060 tons of waste that was diverted from landfills. In the Airport Fund, there is a direct correlation between supply costs for fuel for resale and revenues for fuel sales, and that is reflected in the fund's activity in the current year. In 2024, the Airport Fund experienced an unfavorable budget variance of$110,000 in operating revenues and a favorable variance of$124,000 in operating expenditures, resulting in an overall favorable variance of$15,000. The unfavorable revenue variance was driven by lower-than-anticipated charges for service revenue (-$171,000) and was partially offset by higher interest earnings (+$46,000). The favorable to budget operating expenditure variance was driven by cost savings in supplies, primary fuel for resale (-$137,000). Quarterly Financial Report Through December 2024 35 Operating income was $354,000, approximately$22,000 lower than operating income in the previous year. The primary driver of this decrease is lower interest earnings (-$39,000), which were offset by decreased operating expenses (-$9,000). Charges for service were $1.9 million in 2024, which is a minimal increase (+$3,000) from the prior year. While personnel costs increased $41,000 compared to the previous year, along with miscellaneous service charges (+$13,000), these increases were offset by cost savings in supplies (-$69,000). In all, the Airport Fund saw a reduction in working capital of$230,000 in 2024, due mainly to increased activity related to the fund's capital projects. Airport Expenditures 020248udie, t2(vA Y10 Arn:al -)qzi Y]]1A•: 2024 Budget: 53.4 M 2024 2 Aeteel: sazM $3M 20235711 Ba-tm $zM • SIM The Cemetery Fund saw favorable budget variances both operating revenues (+$393,000) and expenditures (-$71,000) in 2024, resulting in a favorable operating income budget variance of $464,000. In 2024, the Cemetery Fund saw a decrease of$178,000 in working capital, compared to an increase of$104,000 in the prior year. This decrease was driven in part by increased activity related to the fund's capital projects, which were substantially completed in 2024. Total operating income decreased $232,000 from $318,000 in 2023 to $86,000 in 2024, driven primarily by a decrease of$161,000 in charges for service, as well as a $12,000 decrease in interest earnings. Additionally, the fund saw increases in operating expenditures (+$60,000) compared to the prior year. The increase in operating expenditures from 2023 was driven by increases in personnel costs (+$91,000), other service charges (+$36,000) and interfund cost allocation for support services (+$9,000). These increased expenses were partially offset by savings in supplies expenditures (-$76,000). Quarterly Financial Report Through December 2024 36 Cemetery Expenditures J02024 Budget -2024 TT0 Actual —2023tt0 Actual 53M 2024 Budget: 52.2 M 2024 YTO Actual. 52.s M 53h5 _ • Are May Jun ful Internal Service Funds Compared to the prior year, operating revenues in the Innovation &Technology Fund increased $262,000 from $8.8 million in 2023 to $9.0 million in 2024. As an internal service fund, these revenues are generated through charges to other City departments to sufficiently cover anticipated expenditures. Overall, this fund had a budgeted operating loss of$2.4 million in 2024; however, due to timing differences between budgeted expenditures for software replacements and actual spend, the fund recorded operating income of$111,000 instead. We expect these planned replacements and related expenditures to occur in 2025. The Equipment Rental Fund saw an $832,000 reduction in operating income from 2023, due almost entirely to a decrease in insurance recoveries from 2023 to 2024. Given the unexpected nature of insurance recoveries, it is not unusual for there to be wide fluctuations year-over-year in these accounts. The fund also saw a $610,000 favorable budget variance in operating income for the same period, due to higher than anticipated interest earnings (+$340,000), gains on the sales of fixed assets (+$187,000), and lower than anticipated operating expenditures (-$194,000). No significant variances were reported in the Workers' Compensation, Insurance, or Facilities Funds through 2024. Contact Information This report is prepared by the Finance Department. Additional financial information can also be viewed on the City's website: http://www.auburnwa.gov/. For any questions about this report please contact Jamie Thomas at idthomas(a�auburnwa.gov.