Discussion:
June 2019 Review (See Attachment)
Revenue Variances (+/- 10% of 50% 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 $2.5 million in permit and license revenue which equates to 145 percent of the year's budget.
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Fines & Forfeitures recorded additional fine revenue for alcohol violations.
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Miscellaneous revenue is tracking at a higher pace compared to 2018, which is attributed to an increase in investment income.
Expenditure Variances (+/- 10% of 50% Target)
- Overall General Fund expenditures are sitting at 47% of budget which is right in line for this point in the year.
- The Finance Department is over budget due to a $290,500 payment to Scott County in May for annual assessing services. This variance will dissipate as the year progresses.
- Natural Resources is over budget due to contracted tree trimming work that began late this winter and spring, which was planned in the budget. This budget variance should also be eliminated as the year progresses.
- Street Maintenance is within the target variance at this point, but is trending above the 50% mark. This department not only accounts for the increased costs of this year's never ending winter and related snow plowing events, but also accounts for the seal coating and crack sealing costs in the summer. In June, a payment for $277,952 was made for seal coating.
- All other departments/divisions are within +/-10% of the June 30, 2019 target date.
SandVenture/Ice Arena/Community Center Year-over-Year Comparison (See Attachment)
June 2019
SandVenture officially opened for the summer in June. Revenue to date is down compared to last year. This due in part to opening on June 10 versus June 4 last year. In addition, the weather in June was cool and wet with the pool closed completely for 5 days. Wages and benefits are higher than last year, but this isn't a true comparison at this point. We discovered in early July last year that part-time staff at SandVenture were not coding their time to the correct facility. A journal entry moving over $29,000 wages and benefits from the Community Center to SandVenture was posted in early September to correct the coding. Adding that $29,000 to the 2018 YTD wages and benefits minimizes the variance for this year. Operating expenditures are down in comparison to last year. Last year, SandVenture expended about $17,000 on filter media replacement before the season started.
Ice arena revenues are approximately $401,000 through June 30, an increase of $28,000 from this same time last year.
Ice arena operating expenditures are about $37,000 higher than this same time last year. In April this year an industrial floor scrubber was purchased for about $11,000. This is a one-time purchase and will be made up from savings in canceling the cleaning contract and bringing those duties in house. Overall, ice arena expenditures account for 45 percent of the year's budget.
Community Center revenues are over $628,000 thru June 30, which is about 66 percent of the year's budget and over $72,000 higher than this time last year. The wages & benefits category is about $53,000 more this same time last year, which is mainly attributed to being fully staffed this year. The increase in operating expenses is related to an increase in internal rent charges from 2018 to 2019 and general operating expenses such as pool chemicals, birthday party supplies, and other promotional supplies associated with room rentals and community center activities. Overall, the Community Center has utilized 51 percent of its expenditure budget through June 30, which is on target through this point of the year.
Deferred revenue related to annual membership sales for June 2019 and 2018 are very similar.
Quarterly Investment Portfolio Report - Q2, 2019 (See Attachment)
Attached is the 2nd 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 33-37, 45).
- The carrying basis, the current calculated accredited basis and the current market value (see the top of pages 24 & 43).
- 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.