HomeMy WebLinkAboutQ3 2023 Financial Report CITY OF
AUBURNI AGENDA BILL APPROVAL FORM
WASHINGTON
Agenda Subject: Date:
3rd Quarter 2023 Financial Update (Thomas) (20 Minutes) November 30, 2023
Department: Attachments: Budget Impact:
Finance Financial Report through September 2023 Current Budget: $0
2023 03 Financial Update 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 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 September 30, 2023, based on financial data available
as of November 15, 2023.
Reviewed by Council Committees:
Councilmember: Baldwin Staff: Thomas
Meeting Date: December 11, 2023 Item Number:
Page 5 of 78
C]TY OF —J +
1y ._-21l°-'
Quarterly Financial Report Through September 2023 WASHINGTON
This report provides an overview of the City's overall financial position for the fiscal period ending
September 30, 2023, reflecting financial data available as of November 15, 2023. References to
budget, actual and prior year amounts reflect year-to-date numbers, unless explicitly stated
otherwise. Year-to-date budget expectations are generally based on the two prior years of data.
General Fund Overview
Coming off a robust 2022 fiscal year, the City has embraced a new biennial budget cycle starting
in 2023. Consistent with prior years, General Fund revenues have generally exceeded budget
expectations and largely recovered from the impact of COVID-19. With the adoption of budget
amendment #2 in July 2023, the annual budget consists of$97.5 million in revenues and $107.1
million in expenditures, for a planned decrease in General Fund balance of$9.6 million.
Last year the City implemented a citywide Business and Occupation (B&O) tax, wherein
businesses are taxed based on the value of gross receipts or square footage of occupied
warehousing space, subject to certain exceptions. This new revenue stream achieved a total of
$3.0 million in 2022 and has already provided $8.2 million year-to-date in 2023. The City
anticipates that B&O revenues will remain consistent throughout the end of the year, significantly
surpassing budget expectations.
Due to a change in the renewal schedule for business licenses and increased discovery through
B&O tax collections, the City has seen an increase of roughly $253,000 or 158% in business
license revenue compared to last year.
The City offers a wide range of recreational classes and access to the Auburn Golf Course.
Green fees at the Auburn Golf Course have remained a staple revenue source for the City,
comprising roughly 52% of the total culture and recreation revenues. Recreational classes have
significantly increased by 28% from 2022 collections, a hopeful indication that the City is returning
to pre-pandemic activity levels.
Overall, General Fund revenues collected through Q3-2023 totaled $78.3 million as compared to
a year-to-date budget of$71.1 million, and were $7.2 million, or 10.2% above budget
expectations. General Fund expenditures through Q3-2023 totaled $68.3 million compared to a
year-to-date budget of$78.8 million; resulting in a $10.4 million or 13.2% underspend.
GENERAL FUND
REVENUES VS. EXPENDITURES THROUGH SEPTEMBER 2023
YTD Actu a l s$68 3 M
Expenditures
YTD Budget$78 8 M
YTD Actu a l s$78 3 M
Revenues
YTD Budget$71 1 M
$0 $20 $40 $60 $80 $100
$MILLIONS
Page 6 of 78
Quarterly Financial Report Through September 2023 2
Revenue: The following factors had the most significant impacts on the budget vs. actual revenue
collected:
• B&O Tax: Revenues collected through Q3-2023 totaled $8.5 million, exceeding the
annual budget by $3.0 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 4]
• Retail Sales Tax: The sales tax report through Q3-2023 (which is provided as an
attachment to this report) reflects amounts remitted to the City of Auburn based on
sales from November 2022 through July 2023. Collections through September 2023
totaled $17.1 million, a 1.8% increase from last year. Likewise, compared to the year-
to-date budget, sales tax has a favorable variance of$2.1 million or 13.8%. The
increase resulted from multiple categories, particularly services and automotive.
[pages 5-7]
• Solid Waste Tax - External: Q3-2023 revenues collected totaled $1.3 million which was
$1.2 million favorable to the year-to-date budget. This is largely due to the collection of
backdated utility tax revenues from City solid waste haulers. The City anticipates the
continued collection of these backdated taxes throughout the remainder of the year.
[pages 7-8]
• Fines and Penalties: Collections through Q3-2023 were $1.4 million in total and $1.1
million favorable to budget. A new photo enforcement program implemented by the City
during the second quarter of the year has contributed $310,000 toward the favorable
variance. Other non-court fines and penalties are $773,000 favorable versus budget
expectations, mainly due to interest and penalties on B&O tax collection. [page 16]
• City Interfund Utility Tax: As mentioned in previous reports, in 2022 there was a notable
change in how the interfund utility taxes are transferred between the General Fund and
the City's pass-through King County Metro Sewer sub-fund. Utility tax revenues through
Q3-2023 were $650,000 unfavorable to budget. Factoring in an accounting adjustment
in late 2022, collections are favorable by $1.8 million against prior year-to-date
revenues. [pages 7-8]
Expenditures: Almost all departments operated within budget expectations through the third
quarter of 2023, with some variances due to the timing of professional services payments, as well
as expenses related to operating supplies. Of the favorable variance to budget mentioned above,
roughly $458,000 is comprised of underspend professional services and charges, and an
additional $2.3 million of underspend is from lower personnel costs largely due to position
vacancies across the City. As of the compilation of this report, there were 29 vacant regular full-
time positions in the City.
Page 7 of 78
Quarterly Financial Report Through September 2023 3
Enterprise Funds Overview
The City's enterprise funds account for operations with revenues primarily provided from user
fees, charges, or contracts for services. Significant for 2023, the City's cash and investment
balance increased significantly compared to the same period last year. As a result, interest
earnings across all funds increased materially, totaling $1.3 million more in the enterprise
operating funds than through Q3-2022. Another key factor contributing to higher interest earnings
was increased interest rates and yields to maturity for the City's investment accounts compared
to last year.
The Water Fund ended Q3-2023 with operating income of about $5.3 million, which was
approximately $1.0 million above the same period last year. About $408,000 of the increase in
operating revenue was due to higher interest earnings. [page 21]
The Sewer Fund ended Q3-2023 with operating income of about $3.2 million versus $1.2 million
in the same period last year. Service charge and interest revenues increased, while operating
expenses decreased $1.1 million, largely due to the cessation of charging interfund utility tax
against the pass-through King County Metro Sewerage revenue. [page 22]
The Stormwater Fund ended Q3-2023 with operating income of about $2.3 million compared to
$2.0 million in the same period last year. The increase in revenues (primarily from charges for
storm service and interest earnings) were higher than the increase in expenditures, resulting in a
16.9% higher operating income this quarter than the same quarter last year. [page 22]
The Solid Waste Fund ended Q3-2023 with operating income of about $724,000. An increase of
$2.9 million in operating revenues over the same period last year was offset by an increase in
operating expenditures of$4.0 million due to higher tax expenditures and payments to the City's
solid waste vendor [page 22]
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 Q3-2023. [page 23]
Page 8 of 78
Quarterly Financial Report Through September 2023 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 2023 2022 2023 YTD Budget vs.Actual
Summary of Sources and Uses Annual YTD YTD YTD Favorable(Unfavorable)
Budget Budget Actual Actual Amount Percentage
Operating Revenues
Property Tax $ 24,016,247 $ 13,161,000 $ 13,312,970 $ 13,190,280 $ 151,970 1.2 %
Retail Sales Tax 20,344,500 15,027,100 17,105,897 16,808,519 2,078,797 13.8 %
Affordable Housing Sales Tax Credit 174,963 118,800 100,399 102,190 (18,402) (15 5) %
Sales Tax-Rerce County Parks 125,000 92,500 99,283 99,961 6,783 7.3 %
Criminal Justice Sales Tax 2,441,300 1,776,400 2,327,079 2,214,989 550,679 31.0 %
Brokered Natural Gas Tax 150,000 116,200 267,471 167,949 151,271 130.2 %
City Utilities Tax 6,776,697 5,361,000 4,709,841 5,151,760 (651,159) (12.1) %
Business&Occupation Tax 5,480,960 4,795,840 8,521,897 1,979,741 3,726,057 77.7
Admssions Tax 308,740 254,600 284,076 176,087 29,476 11.6
Electric Tax 4,357,031 3,350,300 3,380,170 3,111,165 29,870 0.9 %
Natural Gas Tax 1,638,857 1,292,200 1,297,025 1,107,927 4,825 0.4 %
Cable Franchise Fee 897,035 672,776 650,579 456,739 (22,197) (3.3) %
Cable Utility Tax 949,064 711,798 692,837 767,607 (18,961) (2 7) %
Cable Franchise Fee-Capital 52,484 39,363 38,693 39,396 (670) (1.7) %
Telephone Tax 500,974 380,354 336,654 422,710 (43,700) (11.5) %
Solid Waste Tax(external) 60,462 29,923 1,253,280 55,129 1,223,357 4088.4
Leasehold Excise Tax 246,514 232,314 251,394 228,661 19,080 8.2 %
Gambling Excise Tax 293.300 207.420 243.746 177.773 36.326 17.5 %
Taxes sub-total $ 68,814,128 $ 47,619,888 $ 54,873,290 $ 46,258,583 $ 7,253,402 15.2 %
Business License Fees $ 450,000 $ 160,500 $ 413,537 $ 128,986 $ 253,037 157 7 %
Building Permits 933,364 773,800 590,532 772,389 (183,268) (23.7) %
Other Licenses&Permits 1,128,000 926,400 1,052,048 757,819 125,648 13.6 %
Intergovernmental(Grants,etc.) 6,582,031 4,718,546 4,497,687 4,803,571 (220,858) (4.7) %
Charges for Services
General Government Services 4,863,272 3,608,026 3,346,174 2,581,227 (261,852) (7.3) %
Public Safety 1,057,000 792,750 773,804 579,924 (18,946) (2.4) %
Development Services Fees 1,130,517 921,000 832,887 1,137,072 (88,113) (9.6)
Culture and Recreation 2,481,335 2,135,309 2,740,415 2,312,157 605,106 28.3 %
Fines and Penalties 422.975 305.694 1.379.994 269.254 1.074.300 351.4 %
Fees/Charges/Fines sub-total $ 19,048,494 $ 14,342,024 $ 15,627,078 $ 13,342,399 $ 1,285,054 9.0 %
Interest and Investment Earnings $ 366,700 $ 275,025 $ 891,832 $ 393,440 $ 616,807 224.3 %
Rents and Leases 1,109,234 811,800 1,029,401 921,189 217,601 26.8 %
Contributions and Donations 21,000 11,261 25,421 17,230 14,160 125.7 %
Other Miscellaneous 299,110 248,587 371,846 425,026 123,259 49.6 %
Transfers In 7,703,978 7,667,913 5,232,897 821,014 (2,435,016) (31 8) %
Insurance Recoveries-Capital&Operating 118.400 88.800 246.312 95.473 157.512 177.4 %
Other Revenues sub-total $ 9,618,422 $ 9,103,386 $ 7,797,709 $ 2,673,371 $ (1,305,677) (14.3) %
Total Operating Revenues $ 97,481,044 $ 71,065,299 $ 78,298,077 $ 62,274,354 $ 7,232,778 10.2
Operating Expenditures
Council&Mayor $ 1,415,188 $ 1,039,400 $ 1,081,025 $ 1,108,009 $ (41,625) (4.0) %
Administration 1,280,462 930,314 800,072
Human Resources 2,374,011 1,761,300 1,732,277 1,508,386 29,023 1.6 %
Municipal Court&Robation 3,038,838 2,799,579 2,224,184 1,955,758 575,395 20.6 %
Finance 5,088,323 3,825,600 3,461,109 2,759,963 364,491 9.5 %
City Attorney 7,366,952 5,420,200 4,433,389 3,275,084 986,811 18.2 %
Community Development 9,931,959 6,649,600 5,631,503 4,548,731 1,018,097 15.3 %
DEl 705,913 529,200 344,016 - 185,184 35.0
Jail-SCORE 5,600,000 4,200,300 3,865,469 I 3,642,867 334,831 8.0 %
Police 35,936,986 26,484,100 24,902,106 23,247,236 _ 1,581,994 6.0 %
Public Works 4,785,592 3,534,600 3,302,992 2,667,532 231,608 6.6 %
Parks,Arts&Recreation 15,927,192 11,648,900 11,699,114 10,335,833 (50,214) (0.4)
Streets _ 4,769,219 3,479,100 3,015,496 2,702,800 463,604 13.3 %
Non-Departmental 8,876,888 6,443,539 1,721,162 1,922,206 4,722,378 73.3 %
Total Operating Expenditures $ 107,097,523 $ 78,782,618 $ 68,344,155 $ 60,474,475 $ 10,438,463 13.2 %
Page 9 of 78
Quarterly Financial Report Through September 2023 5
Revenue
The combined total of property, sales and 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 20% of total revenue to the General Fund. The remaining 10% 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 through the third quarter of 2023 totaled roughly $13.3 million as
compared to a year-to-date budget of$13.2 million. Coinciding with the due dates for County
property tax billings, the City collected 87.2% of the year-to-date 2023 revenues during the
months of April and May. As depicted in the chart below, the next influx of property tax revenues
is expected to occur during the fourth quarter. Since 2016, we have seen annual increases
versus the prior year totals and project the same will hold in 2023.
Property Taxes
=2023Budget —0—2023 YTD Actu al —2022.-ctL..
S25.0
$20.0
0
$13.3 M
$15.0
$10.0
$5.0
SO
Jar Feb Mar Apr May Sep Oct C :
Retail Sales Tax collections through Q3-2023 totaled $17.1 million, representing taxes remitted
to the City of Auburn based on sales from November 2022 through July 2023. Overall, collections
were roughly $297,000 higher through the first three quarters of 2023 than the same period in
2022, with strong performances in the automotive (+$201,500), services (+$170,500), and
wholesale (+$93,375) industries more than offsetting slight decreases in most of the remaining
industries. Within the retail trade sector, sales tax revenues generated from sporting goods,
hobby, and music retailers have seen a significant increases versus the same period last year,
and correlate with the increase in culture and recreation charges for service revenues. The
notable exception to the trend of stable or increased collections is the manufacturing industry:
due to a large one-time contribution in Q1-2022, manufacturing collections are down $220,500
(35.1%). With a year-to-date 2023 budget expectation of$15.0 million, sales tax revenues have a
$2.1 million favorable variance to the budget. The City projects sales tax revenues will continue
this upward trend as we have seen in years prior.
Page 10 of 78
Quarterly Financial Report Through September 2023 6
Retail Sales & Use Tax
$25.0 ®2023 Budget 2023 YID Actual -2022 Actual
$20.0
$17.1 M
$15.0 •'
O
2
$10.0
$5.0 .�
$0.0 -
Ian Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Retail Sales & Use Tax
$25.0 $22.7
$21.6
$20.0 S188 $189
vo $17.1
$15.9
3 $15.0
$10.0
$5.0
$0.0
2018 2019 2020 2021 2022 2023
YTS
Note: The increase in sales tax revenue from 2018 to 2019 was primarily due to a policy change
whereby sales tax on construction revenue is retained in the General Fund;previously, a portion
was transferred to street funds. Of the year-over-year increase in sales tax revenue depicted in
the graphic above from 2018 to 2019, $2.2 million of the $2.9 million increase was due to this
policy change.
Page 11 of 78
Quarterly Financial Report Through September 2023 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 September 2023
2022 2023 I Change from 2022
Component Group YTD Actual YTD Actual 1 I Amount Percentage
Construction $ 2,094,449 $ 2,164,791 $ 70,341 3.4 %
Manufacturing 627,904 407,396 (220,509) (35.1) %
Transportation&Warehousing 196,911 169,788 (27,123) (13.8) °A,
Wholesale Trade 1,148,352 1,241,726 93,374 8.1 %
Automotive 3,501,328 3,703,016 201,689 5.8
Retail Trade 4,938,763 4,946,384 7,621 0.2 %
Services 4,023,179 4,193,701 170,521 4.2 %
Miscellaneous 277,632 279,096 1,464 0.5 %
YTD Total $ 16,808,519 $ 17,105,897 $ 297,379 1.8 °A,
1
Utility Taxes consist of interfund taxes on City utilities (Water, Sewer, Storm and Solid Waste)
and taxes on external utilities (Electric, Natural Gas, Telephone and Solid Waste). Effective
January 1st, 2023, Council approved an increase of the City utility tax rate from 10.0% to 11.5%.
However, the additional revenue generated from this increase was dedicated to funding City
street projects, while the General Fund portion remained at its previous 9.0%.
Overall, utility taxes increased by $1.2 million or 10.7% through Q3-2022, resulting in utility taxes
being currently favorable to budget by roughly $695,500. This is due to the City collecting
backdated utility taxes from City haulers which represents a favorable variance of$1.2 million
versus budget within the Solid Waste (external) category. As mentioned in previous reports, the
City is no longer applying interfund utility tax to the pass-through revenue from King County Metro
sewerage charges causing an unfavorable variance within this category. The City will reassess
the annual budget during the budget amendment process and make any adjustments as
necessary.
Additionally, as of January 2023 external utility taxes are collected on either a quarterly or annual
basis, rather than monthly. Although there have been collections throughout the year, the City
anticipates a change to the timing of these revenues in 2023, which will affect year-over-year
performance comparisons for the remainder of the year and into 2024.
The table and below demonstrates the various utility tax revenues and shows actual revenues
compared to budget.
Utility Tax by Type
Through September 2023
2022 2023 2023 I 2023 vs.2022 Actual 2023 vs. Budget
Utility Tax Type YTD Actual YTD Budget YTD Actual Amount Percentage Amount Percentage
City Interfund Utility Taxes $ 5,151,760 $ 5,361,000 $ 4,709,841 $ (441,919) (8.6)% $ (651,159) (12.1) %
'Electric 3,111,165 3,350,300 3,380,170 269,004 8.6 % 29,870 0.9 %
Natural Gas 1,107,927 1,292,200 1,297,025 189,099 17.1 % 4,825 0.4 %
(Telephone 422,710 380,354 336,654 (86,056) (20.4)% (43,700) (11.5) %
(Solid Waste(external) 55,129 29,923 1,253,280 1,198,151 2,173.4 % 1,223,357 0.0 %
(Brokered Natural Gas 167,949 116,200 267,471 99,522 59.3 % 151,271 130.2 %
(Cable 767,607 711,798 692,837 (74,769) (9.7)% (18,961) (2.7) %
YTD Total $ 10,784,247 $ 11,241,775 $ 11,937,278 $ 1,153,031 10.7 % $ 695,503 6.2 %
Page 12 of 78
Quarterly Financial Report Through September 2023 8
Utility Tax
=2023 Budget —0—2023 YTD Actual —2022 Actual
$160
$14,0
$11.9 M
$12,0 •
•$100
z •
0 $8.0
•
$6.0 •
$4.0
•$20 •�
$0.0 . -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Utility Tax Revenues
$13.2 $12.8
$13.0 $12.7„.„-- $11.9
$11,1 $109 / n
$11.0
° $9.0
$7.0
$5.0
$3.0
2018 2019 2020 2021 2022 2023
YTD
Note: Of the total utility tax levied, 2.5% of Water/Sewer/Storm/Solid Waste tax and 1.0% of other
utility tax is allocated to City streets funds and is not reflected in the General Fund's portion
discussed here. 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% effective in 2021.
Page 13of78
Quarterly Financial Report Through September 2023 9
An Admission Tax of 5.0% is placed on charges for general admission, season tickets, cover
charges, etc. Revenues from admission taxes are generally collected on a quarterly basis as
depicted on the chart below. Admission tax revenues of$284,100 collected through September
2023 were significantly higher (61.3%) than through Q3-2022. This is partially due to lingering
effects of the COVID-19 pandemic in the early part of last year, resulting in generally lower
admissions in early 2022. The City projects admission taxes will return to pre-pandemic levels
over the biennium. As of Q3-2023, admission tax revenues are favorable to budget by roughly
$29,500.
Admission Tax
II 2023 Budget —0—2023 YT❑Actual 2022 Actual
$400
$300 $284.1 K
Q $200
N _
$100 0�
$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Note: The decrease in admission tax revenues in November 2022 was due to a change in
accounting wherein admissions tax ceased to be charged to the City's Golf Course operations.
Page 14 of 78
Quarterly Financial Report Through September 2023 10
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 the gambling tax revenues are
collected from amusement games (31.8%) and card games (59.4%). As with admission tax, the
City projects increased collections from 2022 totals. Through the third quarter, collections are
$66,000 higher than 2022 year-to-date totals and report a $36,000 or 17.5% favorable variance to
budget. This revenue source historically has significant variance from year to year: excluding
2020, third-quarter revenue has been as high as $162,600 (2018) and as low as $45,500 (2021).
Gambling Tax
)0 =2023 Budget —e-2023 YTD Actual 2022 Actual
$300
$243.7 K
$200
O
$100
$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 make up approximately 70%
of the annual budgeted revenue in this category.
The annual Business License renewal fee for each business that is located within the City is
$103. Previously, all businesses were on calendar year renewal cycle, meaning that the majority
of business license revenue was collected in November and December for existing businesses
renewing their licenses, which is reflected in the large peak in the chart below in 2022.
As mentioned in last quarter's report, starting in September of 2022, businesses are now on an
annual renewal cycle that begins on the date the business was originally granted a license. This
is expected to smooth out revenue collection throughout the year, which can be seen in the chart
below as a more linear progression of year-to-date collections totaling $413,500, compared to
$129,000 through Q3-2022. Changes in the timing of collections will affect year-over-year
performance comparisons for the remainder of 2023 and into 2024. Moreover, collections in 2023
are projected to be higher in total than 2022, due to increased discovery through B&O tax
collections and use of the State's Business Licensing System (BLS).
Page 15 of 78
Quarterly Financial Report Through September 2023 11
Business Licenses
=2023 Budget —0-2023 YTD Actual 2022 Actua I
$500
$413.5 K
$400
$300
0 $200
$100
$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Business License Revenues
$500
$424 $414
•
$400 :;3'34
$336 $326
N
co
$300 $353
N
7
L
~ $200
$100
$0
2018 2019 2020 2021 2022 2023
YTD
Page 16 of 78
Quarterly Financial Report Through September 2023 12
Building Permit revenues collected through September 2023 totaled $590,500. Building permits
are approximately $182,000 lower than 2022 collections year-to-date and hold an unfavorable
variance against the budget of$183,250. A large contributing factor for this unfavorable variance
is the decreased valuation of construction permits on mixed-use and subdivision builds
throughout 2023, despite a higher volume of permits being issued this year than in the same
period last year. However, there are aged 2022 revenues that the City is still awaiting to collect
throughout the remainder of the year. It is anticipated that with the collection of the aged
accounts, the year-to-date unfavorable variance will be mitigated in the fourth quarter.
Building Permits
$1.6 02023 Budget —0-2023 YTD Actual —2022 Actual
$1.4
$1.2
$1.0
:n
z
$0.8
$06M
$0.6 •
•
:::
•
•
•
•
•
• •
$0.0
1 2 3 4 5 6 7 8 9 10 11 12
Building Permits
$2.5
$2.0
$1.5
$1.0
$0.9
$1.0 t, $0.8 $1.3
$0.5 0 $0.6
$0.0
2018 2019 2020 2021 2022 2023
YT❑
Page 17of78
Quarterly Financial Report Through September 2023 13
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 Q3-2023 totaled $4.5 million and were $221,000
unfavorable to budget expectations. The City has collected roughly $1.1 million from MIT through
the third quarter and is roughly $173,000 below budget expectations. Nearly 50% of the collected
total, however, is comprised of the final payment of the 2022 compact request. The City
anticipates more collections throughout the remainder of the year to mitigate the unfavorable
variance. Likewise, federal grants are also below projections, although these revenues are
generally received on a reimbursement basis, and subject to the timing of reimbursable activities.
Streamlined sales tax has an unfavorable variance due to the state Department of Revenue's
recalculation of the payment rate; effective July 2022, payments are calculated as 80% of the
payment made in the same quarter of the previous year. Mitigating some of the unfavorable
variance is due to higher collections of liquor excise tax.
Intergovernmental Revenues iGrants,Entitlements 8 Services}
Through September 2023
I 2022 2023 2023 2023 vs.2022 Actual 2023 vs.Budget
Revenue YTD Actual YTD Budget YTD Actual Amount 1 Change Amount 1 Variance
Federal Grants $ 12.161 $ 56.100 $ 478 5 (11.683) (96.1)% $ (55.622) (99.1)%
State Grants 22.589 234.600 236.620 214.032 947.5% 2.020 0.9%
Interlocal Grants 139,790 120.400 115.853 (23.937) (17.1)% (4.547) (3.8)%
Muckleshoot Casino Services 1,465,012 1.288.844 1-115.913 (349.099) (23.8)% (172.930) (13.4)%
One-Time Allocation(SE!5092) - - - - -
State Shared Revenues:
Streamlined Sales Tax 700.111 732,867 560.089 (140.022) (20.0)% (172,778) (23.6)%
Motor Vehicle Fuel Tax 877.056 884,000 852.054 (25.002) (2.9)% (31,946) (3.6)%
Criminal Justice-High Crime 207.922 213,617 213,279 5.357 2.6% (338) (0.2)%
Criminal Justice-Population 22.465 15,000 23,806 1.341 6.0% 8,806 58.7%
Criminal Justice-Special Proq. 97.286 66,600 102,007 4.721 4.9% 35,407 53.2%
Marijuana Excise Tax 179.192 129,696 175.439 (3.753) (2.1)% 45,743 35.3%
State DUI 7,179 9,155 3.179 (4.000) (55.7)% (5,976) (65.3)%
Fire Insurance Tax 104,661 89.700 114.235 9.574 9.1 % 24,535 27.4%
Liquor Excise 455,769 351.553 475.812 20.042 4.4% 124,259 35.3%
Liquor Profit 512.377 526.414 508.924 (3.453) (0.7)% (17,489) (3.3)%
Total State Shared: 3.164.018 3.018.602 3-028.823 (135.195) (4.3)% 10,221 0.3%
YTD Total $ 4.803.571 $ 4.718.546 $ 4-497.687 $ (305,883) (6.4)% $ (220,858) (4.7)%
Intergovernmental Revenues
(Grants, Entitlements&Services)
$12
$10.2
$10 J`
o $s \\ 56.9
$6.3 $6„/
56 r `r
$4.5
$4
$2
So
2018 2019 2020 2021 2022 2023
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 18 of 78
Quarterly Financial Report Through September 2023 14
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 September 2023 totaled $7.7 million and were roughly $236,000 (or 3.2%) more than
expected to date, mainly due to exceptional performance at the Auburn Golf Course.
Charges for Services by Type
Through September 2023
2022 2023 2023 2023 vs. 2022 Actual 2023 vs. Budget
Revenue YTD Actual YTD Budget YTD Actual Amount Percentage Amount Percentage
General Government $ 2,581,227 $ 3,608,026 $ 3,346,174 $ 764,947 29.6 % $ (261,852) (7.3)
(Public Safety 579,924 792,750 773,804 193,880 33.4 % (18,946) (2.4) %
(Development Services 1,137,072 921,000 832,887 (304,185) (26.8) % (88,113) (9.6) %
(Culture& Recreation 2,312,157 2,135,309 2,740,415 428,258 18.5 % 605,106 28.3 %
YTD Total $ 6,610,380 $ 7,457,085 $ 7,693,280 $ 1,082,900 16.4 % $ 236,195 3.2 %
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
revenues related to certain transportation projects. The unfavorable variance of$262,000 is
largely due to the timing of a SKHHP project budgeted to reimburse the General Fund for
expenses. Furthermore, the City expects to collect revenues for the salt/sand storage (carried
forward from 2022) per an interlocal agreement during the second half of the year, which will
mitigate the unfavorable variance through the third quarter.
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 third quarter of 2023 totaled approximately $774,000 and saw a $194,000 increase from
2022 third quarter totals. Revenues generated from DUI emergency response fees represent
$117,500 or 15.2% of the total amount collected and report a $114,000 favorable variance.
However, this favorable variance was offset by an unfavorable variance of$140,500 in revenues
for extra duty police officers. This results in an overall unfavorable variance of roughly $19,000,
although extra duty revenues are received on reimbursement basis, indicating that the related
expenses are also lower.
Development services fee collections consist primarily of plan check fees, facility extension
charges, and zoning and subdivision fees. Through Q3-2023, development service fees collected
totaled $833,000 and were $88,000 unfavorable to budget expectations. Major contributors to this
variance were FAC linear charges (fees assessed on projects that require extension of public
facilities). Although FAC linear charges are down year-over-year by $127,300, 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, 2023's collections, while lower than 2022, are still well above
the previous average collection for the third quarter. However, plan check fee collections
remained consistent with projections and helped mitigate the unfavorable variance of the FAC
linear charges by $20,000.
Page 19 of 78
Quarterly Financial Report Through September 2023 15
Development Service Fees
$2.0
$1.6
$1.5
$1.3
o 51.1
$0 9 $1
3 $1.0 $0.8
•
$0.5
$0.0
2018 2019 2020 2021 2022 2023
YTD
Most of the culture and recreation revenues are derived from greens 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, culture and recreation revenues exceeded budget by
$605,000, or 28.3%, with nearly 75% of revenues coming from greens fees and recreation
classes. Revenue from greens fees have increased $105,400 or 8.0% over last year, and are
favorable to budget by $350,500 due to a 3-4% increase in greens fee prices and good weather
during the spring and summer months. Consistent with previous years, these revenues are
projected to continue rising through the summer and taper down in fall as the golfing season
slows. Recreation class revenues have increased by $135,000 or 28.1% from the prior year, and
ticket sales for performances held at local school venues (previously held at the Auburn Avenue
Theater) have increased by $61,000 or 176.5%.A portion of the increase is attributable to lower
revenues due to COVID-19 restrictions in place during 2022, which have since been removed.
Culture & Recreation
$35 =2023Budget —0-2023YTDActual —2022Actual
$3.0
$2.7M
$2.5
$2.0
/7
a
O
$1.5
$1.0 - •
$0.5
$0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Page 20 of 78
Quarterly Financial Report Through September 2023 16
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 September 2023
I 2022 2023 2023 2023 vs.2022 Actual 2023 vs.Budget
Month YTD Actual YTD Budget YTD Actual Amount Percentage Amount Percentage
Civil Penalties $ 4,109 $ 9,394 $ 1,543 $ (2,566) (62.4)% $ (7,851) (83 6)%
(Civil Infraction Penalties 99,958 98,100 110,098 10,140 10.1 % 11,998 12.2%
IRedflex Program 562 2,100 1,067 505 89.8% (1,033) N/A
'Parking Infractions 62,118 62,400 372,412 310,294 499.5% 310,012 496.8%
(Criminal Traffic Misdemeanor 21,830 29,800 20,950 (880) (4.0)% (8,850) (29.7)%
'Criminal Non-Traffic Fines 27,771 30,700 41,770 14,000 50.4% 11,070 36 1 %
'Criminal Costs 21,597 24,000 9,667 (11,930) (55.2)% (14,333) (59.7)%
INon-Court Fines&Penalties 31,310 49,200 822,487 791,177 2,526.9% 773,287 1,571 7%
YTD Total $ 269,254 $ 305,694 $ 1,379,994 $ 1,110,740 412.5% $1,074,300 351 4%
Total revenues collected through September 2023 totaled $1.4 million as compared to a budget
of$306,000 and were 351.4% above budget expectations. This was primarily due to higher-than-
expected collections of fines related to a new photo enforcement program, which are classified as
parking infractions. With the implementation of this new program, the City expects significant
increases to revenue in this category. Furthermore, the City received an influx of non-court fines
& penalties in July and August.
Municipal Court fines and penalties account for 83% of the budgeted revenue in this category, but
only account for 40% of revenue actually collected. The City contracts with the King County Court
to operate its municipal court services; the number of hearings, judgements, and collections
activity began decreasing in 2019 and has continued to dramatically decrease since that time.
This decrease, as shown in the graph below, is now being offset by collection B&O & other tax
interest within non-court fines & penalties; there is a spike in current year collections and the City
will likely see future collections along this same trend.
Fines& Penalties
53.0
52.5
Sz.0
51.5 $1.4
$1,0 $0.9 S0.9
$0.6
$0,5 $0.4 $0,4
$0.0
2018 2019 2020 2021 2022 2023
YTD
Page 21 of 78
Quarterly Financial Report Through September 2023 17
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 September 2023
2022 2023 2023 I 2023 vs. 2022 Actual 2023 vs. Budget
Month YTD Actual YTD Budget YTD Actual 1 I Amount Percentage Amount Percentage
Interest& Investments $ 393,440 $ 275,025 $ 891,832 $ 498,392 126.7 % $ 616,807 224.3 %
'Rents&Leases 921,189 811,800 1,029,401 108,212 11.7 % 217,601 26.8
'Contributions&Donations 17,230 11,261 25,421 8,192 47.5 % 14,160 125.7 %
'Other Miscellaneous Revenue 425,026 248,587 371,846 (53,180) (12.5) % 123,259 49.6
YTD Total $ 1,756,885 $ 1,346,673 $ 2,318,500 $ 561,616 32.0 % $ 971,827 72.2 %
Revenues collected YTD 2023 in this category totaled $2.3 million and were $972,000 favorable
to budget. The majority of the favorable variance to budget was in the interest and investments
category, with the City already surpassing the annual budgeted total through the third quarter.
The "other" miscellaneous revenue category, while $53,000 less than the same timeframe last
year, was nonetheless favorable to the 2023 year-to-date budget by $123,300. This category
includes $52,100 in revenue related to a national opioid settlement distribution program in the first
quarter. Furthermore, through the third quarter, purchase card rebates have totaled $131,200 or
65% of the total "other" miscellaneous revenue.
The rents and leases category includes prepayments for facility rentals. During the second
quarter, the City saw an influx of facility rentals, which coincides with prior years as the weather
generally becomes more favorable for gatherings. This remained consistent throughout the third
quarter. The increase in revenue brings the year-to-date 2023 total to $1.0 million resulting in a
$217,500 or 26.8% favorable variance to budget expectations.
Miscellaneous Revenues
53.5
$3.0
$2.5 $2.4 $2.3
_ :::
�l.L
$1.0
$0.5
$0.0
2018 2019 2020 2021 2022 2023
YTD
Page 22 of 78
Quarterly Financial Report Through September 2023 18
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 2023 total $2.7 million, which is roughly $950,000 or
35.1% favorable to budget expectations. However, as reflected in the table below, REET
revenues collected were significantly lower (40.7%) than in 2022. Continued borrowing rate
increases and slower housing markets contribute to the decreased revenues during this period.
However, the City anticipates continued growth in REET revenues as property values on new and
existing homes increase.
Real Estate Excise Tax
$7.0 02023 Budget VTn Artual 7m7 Artual
$6.0
$5.0
$4.0
35 6 7.7 M
$2.0
$1.0
$0.0
1 2 3 4 5 6 7 8 9 10 11 12
Page 23 of 78
Quarterly Financial Report Through September 2023 19
Shown in the table below, REET collections have generally been lower in most months of 2023
than their counterparts in 2022. In context, 2022 saw the highest collection of REET revenue
through the second quarter since 2015, largely due to high-value purchases made by Pepsi
Beverages Company, Holiday Inn Express, and a large land purchase made by an investment
group. Lower REET collections in 2023 represent a cooling market as interest rates increased
dramatically after a period of low interest rates and historic inflation.
Real Estate Excise Tax Revenues
Through September 2023
2022 2023 2023 2023 vs. 2022 Actual 2023 vs. Budget
Month YTD Actual YTD Budget YTD Actual Amount Percentage Amount Percentage
1 $ 235,988 $ 112,068 $ 231,316 $ (4,672) (2.0) % $ 119,248 51.6 %
2 320,851 112,249 229,810 (91,041) (28.4) % 117,561 51.2
3 855,713 254,131 335,109 (520,604) (60.8) % 80,978 24.2 %
4 530,857 182,134 470,605 (60,253) (11.4) % 288,471 61.3
5 710,134 208,433 100,896 (609,238) (85.8) % (107,537) (106.6) %
6 479,225 184,014 288,285 (190,941) (39.8) % 104,271 36.2 %
7 331,971 177,876 396,981 65,009 19.6 % 219,104 55.2
8 497,294 215,051 319,792 (177,502) (35.7) % 104,741 32.8 %
9 587,492 304,681 326,357 (261,135) (44.4) % 21,676 6.6 %
10 316,404 141,042
11 202,461 134,581
12 191,104 202,039
YTD Total $ 4,549,526 $ 1,750,638 $ 2,699,151 $ (1,850,375) -40.7% $ 948,512 35.1%
I I I 1
Real Estate Excise Tax Revenues
$7.0
$6.0
$6.0
$5.2 $5.3
$5.0
L, $4.2
o $3.9
$4.0
$3.0 $2.7
0
$2.0
$1.0
$0.0
2018 2019 2020 2021 2022 2023
YTD
Page 24 of 78
Quarterly Financial Report Through September 2023 20
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 $11.6 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 14,751,232
ARPA Funding Used to Mitigate Public Safety Costs 11,617,484
ARPA Funding Remaining 3,133,748
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
September 30, 2023, the City has been able to spend $1.4 million year-to-date and $3.9 million
since 2021 on the following projects:
2023 Lifetime Spend
Title Budget Q3Spend (includes this quarter) Remaining
Completed Projects 1,450,000 - 1,668,601 -
Body Cameras 586,400 - 550,325 36,075
Vaccination Incentive Program 47,500 - 34,980 12,520
Neighborhood Street Light Program 500,000 12,090 61,077 438,923
Human Services Grants includes admin 1,000,000 103,323 257,736 742,264
Dykstra Foot Bridge 400,000 - 10,357 389,643
Minor Improvements to Qualifying Neighborhood Parks 100,000 9,022 28,626 71,374
Limited Term Employee(LTE):Grants Coordinator 420,000 - 118,729 301,271
Paving Gravel Roads 636,866 16,281 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 56 563 149,437
Emergency Housing Voucher Program 2,000,000 88,881 166,922 1,833,078
Encampment Cleanup 500,000 122,944 422,403 77,597
Downtown sidewalk replacement on Main Street and B Street Plaza surface
replacement 1,643,266 13,905 20,128 1,623,138
Broadband grants to hardest hit communities 180,000 3,281 180,251 (251)
Community violence intervention programs(drone,SPIDR Tech) 313,600 - 214,666 98,934
Arts Culture Center Renovations 100,000 - - 100,000
Signing bonuses for lateral hires 200,000 33,045 131,576 68,424
Other Projects(not started) 4,180,000 - - 4,180,000
Total: 14,751,232 402,828 3,932,350 10,818,882
The Neighborhood Parks Improvement project will be able to make minor improvements in
qualifying neighborhood parks. 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 $28,626 which provided new fencing around
Forest Villa Tot Lot. The playground order was placed in mid-November and is scheduled for
installation in early Spring.
Page 25 of 78
Quarterly Financial Report Through September 2023 21
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$422,403 and
cleaned up 160 tons of liter and debris.
Beginning in 2023, the Clean and Sober Housing Program is budgeted at$2 million over the life
of the program. This program is to assist residents of Auburn who are experiencing
homelessness and drug addiction and 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, provided the participant follows the clean and sober housing agreement. Total
project spend through Q3-2023 is $166,922.
The Broadband Network to Hardest Hit Communities project allows the City to expand the City's
broadband network capabilities for all residents, visitors, and city employees to utilize. The IT
department has acquired all necessary hardware and software related to the broadband/Wi-Fi
replacement and expansion. Total spent in Q3-2023 was $3,281 bringing the accumulated project
total to $180,251. All replacement of existing hardware has been completed. The expansion is
estimated to be completed during Q4-2023.
Utility 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 project managers will know exactly how much working capital is available for
current and planned projects.
Through September 2023, the Water Utility had operating income of$5.3 million (operating
revenues less operating expenditures), approximately $1.0 million above the same period last
year. Water Fund operating revenues were $2.5 million or 20.6% higher than Q3-2022; the
majority of this variance was due to higher revenues from water sales ($2.1 million) and interest
earnings ($408,000). As previously mentioned, this increase in interest earnings is due to an
increase in the City's cash and investments balances.
Operating expenditures also increased by $1.5 million, mainly due to increases in personnel
costs, interfund allocations and utility taxes.
Billable water consumption through June 2023 totaled 2.4 million hundred cubic feet (ccf),
approximately 236,000 ccf or 8.0% higher than consumption volume through Q3-2022.
Consumption increased across every customer class except manufacturing when compared to
Q3-2022, with the largest increases by both volume and revenue amount occurring in irrigation
and single-family accounts.
Page 26 of 78
Quarterly Financial Report Through September 2023 22
Water Revenues and Water Sold
2022 vs 2023
$2.5M 1,000
0
0
$2.0M 800
$1.5 M 600
900110111111401
$1.0M 400
$0.5M •
200 =o
t
$0.0M -
,ac <<aP `Sac PQc SaJ >Jc ��� Jpo SaQ o8 +61 Oeo
• • • 2022 Water Sales ($) —0—2023 Water Sa les ($)
• • • • 2022 Water Sold(ccf) —0—2023 Water Sold(ccf)
Through the third quarter of 2023, the Sewer Utility finished with operating income of$3.2 million
as compared to $1.2 million through the same period last year. Operating revenues were up
$935,000 or 13.0% from the same period last year due to stronger performance in charges for
City sewer service and higher interest earnings. Interest earnings increased from $44,000
through Q3-2022 to $396,000 through Q3-2023 due to higher cash and investment balance and
higher interest rates.
Operating expenses were down $1.1 million due to decreased in expense related to interfund
utility taxes. As discussed on pages 7-8, the City is no longer applying this tax to the pass-
through King County Metro revenue. This, combined with lower interfund charges, more than
offset increases in personnel costs and supplies, resulting in overall lower expenses compared to
last year.
Through September 2023, the Stormwater Utility had operating income of$2.3 million
compared with $2.0 million in the same period last year. Operating revenues were up $1.1 million
compared to last year due to charges for City storm service and interest earnings. Interest
earnings increased from $60,800 through Q3-2022 to $462,600 through Q3-2023. As most
Stormwater service charges are based on a flat rate, there are not typically seasonal fluctuations
in this revenue.
Operating expenditures in the Stormwater Utility were up $723,000 through the third quarter of
the year compared to the same period last year. The majority of this increase is due in roughly
equal measure to higher personnel and interfund allocation costs.
The Solid Waste Utility finished the second quarter with operating income of$724,000. While
operating revenues were up by $2.8 million compared to Q3-2023 due to stronger performance in
charges for solid waste service, operating expenses were up by $4.0 million. This increase was
due to increased interfund utility tax payments, payments to the City's solid waste vendor Waste
Management, and a payment of$530,000 of B&O tax to the Department of Revenue.
Page 27 of 78
Quarterly Financial Report Through September 2023 23
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: htto://www.auburnwa.aov/. For any questions about this report please
contact Jamie Thomas at idthomasauburnwa.qov.
Page 28 of 78
City of Au B urn
3rc Quarter 2023
Financia Report
CITY COUNCIL STUDY SESSION
DECEMBER 11 , 2023
General Fund Revenue Overview
Summary
Variance to Variance
•Collected 8% more Budget to2022
2022 2023 2023 Favorable Favorable
revenue YTD Revenue YTD Actual YTD Budget YTD Actual (Unfavorable) % (Unfavorable)
compared to budget Property Tax $ 13,190,280 $ 13,161,000 $ 13,312,970 $ 151,970 $ 122,690
and 23% more than Sales Tax 17,010,670 15,238,400 17,305,579 2,067,179 294,909
Utility Tax 10,784,247 11,241,775 11,937,278 695,503 1,153,031
YTD last year B&O Tax* 1,979,741 4,795,840 6,833,212 2,037,372 4,853,471
Other Tax 3,293,645 3,182,873 3,795,566 612,693 501,921
•Underspent the YTD Licenses and Permits 1,659,194 1,860,700 2,056,117 195,417 396,923
budgeted Intergovernmental 4,803,571 4,718,546 4,497,687 (220,859) (305,884)
Charges for Services 6,610,380 7,457,085 7,693,280 236,195 1,082,900
expenditures by 13%
Other 2,121,611 1,741,167 3,944,806 2,203,639 1,823,195
and have spent 13% Transfers In 821,014 7,667,913 5,232,897 (2,435,016) 4,411,883
more compared to Total Revenue $ 62,274,353 $ 71,065,299 $ 76,609,392 $ 5,544,093 8% $ 14,335,039 23%
Total Expenditures $ 60,474,475 $ 78,782,618 $ 68,344,155 $ 10,438,463 13% $ (7,869,680) -13%
YTD last year
Page 30 of 78
Tax Revenue
2023 budgeted taxes account for $68.8 million, or 75% of the General Fund budget
Property Tax (35% of taxes)
• $24 million 2023 budget
• Expected to collect 100% of the budget by year-end
Retail Sales and Use Tax (30% of taxes)
• $20.3 million 2023 budget
• $295,000 (2%) over prior YTD actual
• $2.1 million (14%) over YTD budget
Page 31 of 78
Tax Revenue
Manufacturing: a DOR correction January
Comparison of Retail Sales Tax Collections by Group
Through September 2023 2022 accounted for an inflated Q1 2022
2022 2023 Change from 2022 and 100% of the $220k decrease.
Component Group YTD Actual YTD Actual Amount Percentage
Construction S 2.094.449 S 2.164,791 S 70.341 3.4 % Transportation & Warehousing: The $27k
Manufacturing 627.904 407.396 (220.509) (35.1)
Transportation & Warehousing 196.911 169.788 (27.123) (13.8) % decrease is entirely attributed to couriers
Wholesale Trade 1.148.352 1.241.726 93.374 8.1 % and messengers.
Automotive 3.501.328 3.703.016 201.689 5.8 %
Retail Trade 4.938.763 4.946.384 7.621 0.2
1Seruces 4,023.179 4,193,701 170.521 4.2 % Services: telecommunications,
Miscellaneous 277.632 279.096 1.464 0.5 % car/equipment rentals and leasing,
pTD Total S 16.808.519 S 17.105.897 S 297.379 1.8 % restaurants, and fitness centers
1
Page 32 of 78
Tax Revenue
Utility Tax (21% of taxes) Utility Tax
02O23Budget —0-2023YTDActual —2022 Actual
• $14.4 million 2023 budget $16.0
Water, Sewer, Storm, Solid Waste Utility Tax rate 9% $14.0
($6.8 million of total budget)
$119M
Electric, Natural Gas, Cable, and Telephone Utility Tax $12.0 •
rate 5% ($7.6 million of total budget)
$1D.D
• $695,000 (6%) over budget •
3 Sao
Higher than expected natural gas and solid waste tax •
collected $6.0 •
• $1.1 million (11%) over prior year
$4.0
Higher electric, natural gas, and solid waste tax •
collected compared to 2022 $2.0 •
$0.O
An Feb Mar Apr May fun Jul Aug Sep Oct Nov Dec
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Tax Revenue
Business and Occupation Tax (B&O) (8% of total taxes)
• $5.5 million 2023 budget
o $6.8 million collected YTD*
• $4.0 million in gross receipts tax (59%)
• $2.8 million in square foot tax (41%)
• Includes Q4 2022, Q1 2023, Q2 2023, and 2022 Annual Filings
• $2.0 million (43%) over YTD budget
Other Taxes (8% of total taxes)
• $4.4 million budgeted
• Criminal justice sales tax, admissions tax, gambling tax, leasehold excise tax, franchise fees
• $2.2 million (127%) over 2023 YTD budget
• $1.8 million (86%) over 2022 YTD collections
• Both variances are due to higher sales tax collection ($550,000), interest earnings ($617,000), and penalties and fees
($1,100,000)
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Licenses and Permits
Accounts for 3% of the total General Fund
Resources Building Permits
02023Budget —0-2023 YTD Actual —2022 Actual
$1.6
$2.5 million budgeted in 2023
S 1.4
• Most all of this ($2.0 million is related to
building permits) $1.2
$196,000 (11%) over budget
Z
o $0.8
$397,000 (24%) over prior year s0.6M
• $285,000 YTD increase in business license s°.6
revenue and a $182,000 decrease in YTD $0.4
building permit
• Total building permits issued YTD 2023 50.2
exceeded 2022 by 24% but total value of $0.0
permit has decreased by 38%
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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
$221,000 (5%) under 2023 YTD budget
• Timing of contribution payment from the MIT compact, and Streamlined Sales Tax
Mitigation reductions
$306,000 (6.4%) under 2022 YTD collections
• Timing of contribution payment from the MIT compact, and Streamlined Sales Tax
Mitigation reductions
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Charges for Services
General Government - $262,000 below budget (7%)
• Timing of SKHHP Payments — Reimbursement basis
Public Safety - $19,000 below budget (2%)
• Reimbursement for law enforcement services provided for private business
• Reimbursement for officers at the Auburn School District and Muckleshoot Contract
• Variance is due to fewer private business charges (down $140,000), but offset by more DUI emergency
response fees (up $114,000)
Development Services - $88,000 below budget (10%)
• Plan check fees, facility extension charges, zoning and subdivision fees
• Primary drivers for this is tied to the permitting activity, which are also down
Culture and Recreation - $605,000 above budget (28%)
• Green fees and pro shop sales are up $105,000 (8%) compared to previous
• Recreation Classes and Special Events account are up $135,000 (28%) compared to previous year
Page 37 of 78
General Fund Expenditures
byDepartment
2022 YTD 2023 YTD 2023 YTD Budget vs Actual
Department Actual Budget Actual $
Council, Mayor,Admin 1,908,081 2,006,600 2,011,339 (4,739) 0%
Diversity, Equity and Inclusion - 529,200 344,016 185,184 35%
Municipal Court 1,955,758 2,799,579 2,224,184 575,395 21%
Community Development 4,548,731 6,649,600 5,631,503 1,018,097 15%
Housing and Homelessness Outreach* 909,861 2,253,800 1,486,149 767,651 34%
Public Works 2,667,532 3,534,600 3,302,992 231,608 7%
Streets(M&O) 2,702,800 3,479,100 3,015,496 463,604 13%
Parks,Art,and Recreation 10,335,833 11,648,900 11,699,114 (50,214) 0%
Police 23,247,236 26,484,100 24,902,106 1,581,994 6%
SCORE 3,642,867 4,200,300 3,865,469 334,831 8%
Internal Services(HR, Finance, Legal, Nondepartment) 8,555,778 15,196,839 9,861,788 5,335,051 35%
Total $ 60,474,477 $ 78,782,618 $ 68,344,156 $ 10,438,462 13%
Page 38 of 78
ARPA Update
2023 Lifetime Spend
Title Budget Q3Spend (includes this quarter) Remaining
Completed Projects 1,450,000 - 1,668,601 -
Body Cameras 586,400 - 550,325 36,075
Vaccination Incentive Program 47,500 - 34,980 12,520
Neighborhood Street Light Program 500,000 12,090 61,077 438,923
Human Services Grants includes admin 1,000,000 103,323 257,736 742,264
Dykstra Foot Bridge 400,000 - 10,357 389,643
Minor Improvements to Qualifying Neighborhood Parks 100,000 9,022 28,626 71,374
Limited Term Employee(LTE):Grants Coordinator 420,000 - 118,729 301,271
Paving Gravel Roads 636,866 16,281 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 56 563 149,437
Emergency Housi ng Vou cher Program 2,000,000 88,881 166,922 1,833,078
Encampment Cleanup 500,000 122,944 422,403 77,597
Downtown sidewalk replacement on Main Street and B Street Plaza surface
replacement 1,643,266 13,905 20,128 1,623,138
Broadband grants to hardest hit communities 180,000 3,281 180,251 (251)
Community violence intervention programs(drone,SPI DR Tech) 313,600 - 214,666 98,934
Arts Culture Center Renovations 100,000 - - 100,000
Signing bonuses for lateral hires 200,000 33,045 131,576 68,424
Other Projects(not started) 4,180,000 - - 4,180,000
Total: 14,751,232 402,828 3,932,350 10,818,882
I
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Non -General Fund Highlights Ca ital
p
Real Estate Excise Tax (REET) Real Estate Excise Tax
YTD Collections: $2.7 million 02023Budget —0-7073rEDActual —2022Actual
$1.8 million less prior year
$6.0
$950,000 ove YTD budget
$5.0
$4.0
z
O
2 $3.0 S.2/.M
a
•52.0 •
•
• •
51.0
•
$0.0
1 2 4 5 6 7 8 9 10 11 12
Page 40 of 78
Questions
Page 41 of 78