Discussion:
March 2019 Review (See Attachment)
Revenue Variances (+/- 10% of 25% Target)
- Special Assessments continue to be a negative amount due to the payment to Republic Services for delinquent garbage assessments. Similar to last year, this account will be negative until we receive our first and second half tax payments.
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Licenses and Permits continues its strong start to the year with over $1 million in permit and license revenue which equates to 59 percent of the year's budget.
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Fines & Forfeitures recorded $900 of revenue in March due to the collection of a tobacco violation and fees for four participants in the driving diversion program.
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Miscellaneous revenue is tracking at a similar pace to 2018. Now that the 2018 financials are close to being finalized and cash balances of all funds are solidified, interest for the first quarter of 2019 has been allocated and posted proportionally.
Expenditure Variances (+/- 10% of 25% Target)
- Overall General Fund expenditures are sitting at 24% of budget which is right in line for the first quarter of 2019.
- Similar to the last couple months, the Mayor and Council budget line appears to be over budget. This division incurs a number of one-time costs at the front of the budget cycle and is anticipated to fall back within the variance parameters as the year progresses.
- The Street Maintenance division is within the target range but has about $170,000 more in expenditures compared to this time last year. This year's never-ending winter and the costs associated with plowing and de-icing account for this variance.
- Natural Resources is over budget at this point. However, contracted tree trimming work was being completed during the late winter months, which was planned in the budget. This budget variance should be eliminated as the year progresses.
- All other departments/divisions are within +/-10% of the March 31, 2019 target date.
SandVenture/Ice Arena/Community Center Year-over-Year Comparison (See Attachment)
March 2019
There will continue to be minimal SandVenture activity until the pool opens in June.
Ice arena revenues are approximately $245,000 through March 31 which is about $49,000 more than this same time last year. This variance is mainly due to receiving payment from the Shakopee Youth Association for March ice use in March this year compared to April last year. Overall, ice arena revenues for the first quarter are in line with budget expectations and similar to the prior year.
Ice arena expenditures within the wages & benefits category are about $16,700 higher than this time last year. This is mainly due to an additional pay period in the first quarter of 2019 versus 2018. Last year the seventh pay period of the year ended on April 1. This year the seventh pay period ended on March 31. Operating expenditures are about $12,200 higher than this same time last year due in part to higher gas and electric bills for January and February, which accounts for about half of this variance. Overall, ice arena expenditures are in line with the 2019 budget.
Community Center revenues are just over $319,000 thru the first quarter, which is about 33 percent of the year's budget and $38,000 higher than this time last year. The wages & benefits category is about $85,000 more this same time last year. About half of this variance is due to the additional pay period in the first quarter this year, similar to the ice arena. The other half is due to having a full part-time staff at the community center compared to a year ago. The increase in operating expenses is mostly related to an increase in internal rent charges from 2018 to 2019.
Deferred revenue related to annual membership sales for March 2018 and 2019 are very similar.
Quarterly Investment Portfolio Report - Q1, 2019 (See Attachment)
Attached is the 4th quarter portfolio report. It contains a host of information including the requirements of our recently revised investment policy:
- A listing of individual securities held at the end of the reporting period listed by maturity date (see pages 30-34, 41).
- The carrying basis, the current calculated accredited basis and the current market value (see the top of pages 22 & 39).
- Weighted average yield (see page 5).
- Total return performance measured against the selected benchmarks for longer-term funds (see page 7).
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.