HomeMy WebLinkAbout2nd Qtr cover letter
MEMO
TO: Honorable Mayor and City Council Members
FROM: Charlene A. Stark, Finance Director
nd
RE: 2009 2 Qtr Financial update
DATE: August 27, 2009
Included in tonights packet is an update on the City’s funds and in particular an update
on the status of the General Fund’s fund balance at the end of July 31, 2009.
Recommended Council Action:
No action is requested, report only.
This report is a summary of the governmental and enterprise funds for the city. This
report is intended to give council an overall view of the funds as of July 31, 2009. A
summary of revenue, expenditures is below and a preliminary projection of the general
fund’s fund balance for the year ended December, 31, 2009.
Summary of Governmental Funds-Revenues
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The following charts compare the governmental funds revenues for July 31 2008 and
2009 and in comparison to the 2009 budget.
The general fund, Park operations, Arena, Pool and Debt all show revenues above the
same time period in 2008 and all of these but the general fund are at the 50% mark. The
general fund is lagging behind the 50% mark and this would be due to the lagging interest
market, lack of State Aid, Recycling, and permit revenue has fallen even farther then in
2008 at this time. The Fire & Ambulance fund is at a lower amount then in 2008. This is
most likely contributed to the lower interest market we are in and a timing of ambulance
billing.
Summary of Governmental Funds-Expenditures:
The following chart compares the expenditures and budget for the period ending July 31,
2009.
The graph above and the report below shows that the overall spending of both tax levy
supported fund by category and in all categories with the exception of debt the percentage
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of spent budget is at the 58% or less which for July 31 is equal to the 7 out of 12 months
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spending. Debt is at a 100% because the payment for debt is Feb 1 and August 1 and
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the payment was made on July 31 this year.
Summary of Enterprise Funds-Revenues:
The next couple of graphs depict the revenues and expenses of the enterprise fund which
include the utility funds, TRAC and the hydro fund.
Revenues for 2008 are lower in the two utility funds when compared to 2008. In the two
utility funds the lower revenues are due to the lack of new construction in the city. This
again was anticipated and thus the revenues are on target for the 2009 projected revenue
budgets. The hydro fund is higher then 2008 at about approximately $40,000.
Summary of Enterprise Funds-Expenses:
Expenses are on target for 2009 and all the funds should see an increase in net assets even
with the loss of revenue from new construction for WAC and SAC fees for the year.
Expenditures are down overall for the Enterprise funds in comparison to 2008. See
spreadsheet below:
Investments
The next following three graphs show the City’s Investment portfolio diversification in
length of maturity, types of investments, and brokers. The portfolio value is at
$19,624,808. In December a larger pay out for the Hydro bond is expected thus a larger
balance in short term investments is being reported.
It is the practice of this city to diversify the portfolio by not keeping more then 40% with
any one broker. As you can see by the above graph the portfolio is kept with 7 different
brokerage firms and no brokerage firm has more then 19% of the total portfolio.
At this time the city has no money invested in commercial paper. Most of the short term
money for meeting payroll and accounts payable cash flow needs is in money market
accounts.
Projection of the General Fund’s Year End Fund Balance:
The general fund fell below the working capital requirement of 40% per city policy at the
end of the year of 2008. This was due to loss of State Aid allocation at the end of the
year and loss of revenues in permits, interest and taxes collected during 2008 caused the
reserve of fund balance in the general fund to be depleted to 26%. The City in early
spring made cuts to all funds in order to reduce the deficit in the general fund as well as
offset the un-allocation of 2009 LGA. Below is a worksheet showing a projection of
where the general fund’s fund balance is projected to be at the end of 2009. The goal to
get to 30-35% of working capital is still attainable, as long as the departments remain
diligent in the spending for the rest of the year and revenues continue to remain at the
levels the city is currently receiving them.
A third quarter review will be completed in October and presented early in November. If
there are any questions about this report please call or email me at any time.