Discussion:
December 2018 Review (See Attachment)
Even though the new year has begun, that doesn't mean 2018 is complete. Financial reports are snapshot in time. We will be paying bills, collecting receipts and preparing journal entries all related to 2018 well into February.
The YTD 2018 Budget column has been updated to reflect the revised/final budget for 2018, which as approved by the Council this past December.
Revenue Variances (+/- 10% of 100% Target)
- Taxes - Second half property taxes were receipted in December. We will still receive a short settlement in January for property taxes collected from October 15 thru December 31, which will be accounted for in 2018.
- Special Assessment revenues have exceed the anticipated budget. Most of these special assessments are for delinquent garbage collections.
- Licenses & Permits - December revenues of $238,924 put the year-to-date revenues over $2.6 million. This is approximately $650,000 more than the revised budget, which was revised upward by $536,700. 2018 actual revenue is over $200,000 greater than the 2017 actual revenue.
- Intergovernmental - YTD revenues have exceeded the budget by over $100,000. The variance is most due to a $87,000 grant received from the Scott County CDA related to the West End Study.
- Charges for Services - Recorded monthly revenue of $549,070, including $58,500 in contractual police services, $187,500 in SPUC franchise fees, and $275,700 in Recreation Services, respectively.
- Fines & Forfeits - Revenue has exceeded the 2018 budget allotment of $800. A majority of the revenues in this category come from late fees associated with the monthly lodging tax submittals and payments related to the driving diversion program.
- Miscellaneous - Rising interest rates resulted in increased interest earnings. The city also received $50,000 from BHS for the issuance of conduit bonds for the construction of their senior living facility.
Expenditure Variances (+/- 10% of 100% Target)
- Overall General Fund expenditures are sitting at 96% of budget which is 4% below budget. 2018 expenditures will continue to accrue as the closing of the fiscal year will take several more weeks. Total expenditures are expected to come in under budget.
- Planning & Development is about $200,000 under budget. Costs related to the 2040 comp plan were anticipated to occur in 2018 but have now been pushed to 2019. The city is receiving grants from various sources to offset a portion of the comp plan cost.
- Natural Resources is about $46,000 under budget. This is due to not awarding a contract for tree services in 2018. The contract bids were deemed too high. Staff will be looking to rebid this service in 2019.
- Unallocated accounts for items that cannot be specifically assigned to specific departments or divisions. Included in this division is the city's contingency allotment of $110,000, which was not utilized in 2018.
- All other departments/divisions are within +/-10% of the December 31, 2018 target date.
Community Center & Ice Arena Year-over-Year Comparison (See Attachment)
Ice arena revenues are at $719,440 through December 31, which is about $51,000 less than budget. However, $65,000 of December ice billings were sent out in early January which will eliminate the budget variance.
Ice arena expenditures are remaining steady from month-to-month. Total expenditures are about $39,400 less than budget at this point. As with all the other city departments, additional expenditures are anticipated before the year is officially closed.
Community Center/Sand Venture revenues are $1,315,759 which surpasses the revised 2018 budget of $1.1 million and also surpasses the 2017 revenues by over $500,000.
Community Center/Sand Venture expenditures are about $52,000 under budget at this point and should meet budget expectations for 2018.
Deferred revenue for December 2018 decreased by about $63,000. In December 2017 there was a big promotional push for membership sales before rate increases took effect in January 2018. We recorded $121,000 of annual membership sales in December 2017 compared to about $55,000 in December 2018. Total memberships (annual and monthly) are virtually the same as of December 31, 2017 and December 31, 2018, but there has been shift from annual membership purchases to monthly memberships, which accounts for the decrease in deferred revenue.
Quarterly Investment Portfolio Report - Q4, 2018 (See Attachment)
Back in July of last year we began reviewing the quarterly portfolio reports. Attached to the memo is the 4th 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 preparation of monthly and quarterly investment reports.