Discussion:
General Fund - September 2018 Review (See Attachment)
The September financial report continues with the same steady and positive trend as all the other months this year.
Revenue Variances (+/- 10% of 75% Target)
- General Fund revenues continue trending in the right direction, led by strong building permits and charges for services revenue which includes recreational activities, SPUC revenue sharing, private duty overtime reimbursement, etc.
- Taxes and Intergovernmental revenues are below the target at this point in the year. Taxes will be shored up with the second half tax collection payment in December. Intergovernmental revenues will be shored up in October as $667,000 of the 2018 Police and Fire State Aid was received on October 1.
Expenditure Variances (+/- 10% of 75% Target)
- Expenditures across all the departments are marginally higher in comparison to the target compared to last month. This is due in part to September having three pay periods versus a typical two pay period month. In addition, the city paid it's property and casualty insurance premium for the year in the amount of $360,000 which is allocated to all departments.
- Mayor and Council division is above the target as a result of paying for LMC dues in September. This budget is expected to fall back within range by yearend.
- The Finance Department is below the target budget due to the creation of the Lodging Tax Special Revenue Fund at the beginning of the year. This was created after the 2018 budget was adopted. The lodging tax receipts and subsequent payments to the Visitors Bureau are now made out of this fund rather than the General Fund. This variance will be adjusted later this year when the 2018 final budget is amended.
- All other departments are within the target variance at this time.
Community Center/Sand Venture& Ice Arena Year-over-Year Comparison - September 2018 (See Attachment)
2018 Ice Arena revenues are $40,800 higher than this same time last year and are tracking about 59% of budget. Revenues are expected to ramp up as the hockey association and high school hockey seasons begin. Ice Arena total expenditures are about $20,700 more than this same time last year and are tracking at about 68% of the 2018 budget.
Community Center/Sand Venture revenues surpassed the entire 2018 budget in September. Revenues are anticipated to increase as recreational programming opportunities and membership sales and renewals continue.
Community Center/Sand Venture expenditures are higher than this time last year due to the facility not being fully functional until mid-summer. Through September 2018, the community center/sand venture expenditures account for approximately 72 percent of the budget. Individual line item expenditures will continue to be monitored as the year progresses.
Deferred membership revenue as of September 30, 2018 is $167,180 compared to $164,121 a year ago. This is direct result of strong annual membership sales throughout 2017 and into 2018.
Quarterly Investment Portfolio Report - Q3, 2018 (See Attachment)
Back in July, we began reviewing the quarterly portfolio reports. Attached to the memo is the 3rd quarter portfolio report.
As a reminder, the city's investment policy is guided by the investment acronym SLY, which stands for Safety, Liquidity and Yield, and in that priority order. Safety of principal is the foremost objective of the investment program. Second, the investment portfolio needs to remain sufficiently liquid to meet day-to-day operational requirements. Lastly, attaining a market yield is the third goal of the investment policy. The first two priorities of safety and liquidity limit the ability of the portfolio to realize comparable private sector earnings in those robust years. However, the policy also minimizes the chances of experiencing losses in the down years.
The city utilizes Securian Asset Management as its investment manager. They handle a majority of the city's investment portfolio. Part of their services include the preperation of monthly and quarterly investment reports.