Discussion:
December 2017 Review (See Attachment)
Even though the new year has begun, that doesn't mean 2017 is complete. Financial reports are snapshot in
time. There are many revenues and expenditures along with various other year-end entries that need to be
made. We will be paying bills and collecting receipts all related to 2017 well into February.
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. This line includes all tax collections, including lodging tax. We will also receive the December lodging tax this month. Both of these collections will be accounted for in 2017.
- Special Assessments will end the year right on target. Most of these special assessments are for delinquent garbage collections.
- Licenses & Permits - December revenues of $128,467 put the year-to-date revenues over $2.7 million. This is approximately $750,000 more than the revised budget, which was revised upward by $266,000. 2017 actual revenue is over $150,000 greater than the 2016 actual revenue.
- Intergovernmental - This budget was revised upward by about $115,000 with the anticipation we will receive some additional public safety grant funding.
- Charges for Services - Recorded monthly revenue of $568,037. Contractual police services accounted for $54,300, along with SPUC franchise fees of $352,000, and Recreation Services of $124,600.
- Fines & Forfeits - Revenue has exceeded the 2017 budget allotment of $1,500. 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 - Interest earning receipts are slightly higher than anticipated.
Expenditure Variances (+/- 10% of 100% Target)
- Community Development/Planning - Although within the target range, planning expenditures are above budget due to the 2040 Comp Plan contract with MKSK. The city will be receiving grants from various sources to offset some of this cost. These grants will be recorded as a revenue and likely not be recognized until 2018 when the Comp Plan is complete.
- Facilities - With the opening of the new city hall there were some additional building maintenance costs associated getting the new city hall building online. In addition, this past December the police entrance gate needed repairs that totaled about $8,300.
- Engineering - Is below budget due to personnel vacancies earlier in the year.
- Natural Resources - This budget was reduced from an original budget of $198,000 to $163,840. This reduction was an error in understanding that public works staff charges their time to natural resources in the winter months when tree trimming occurs. This activity has been accounted for within the 2018 budget.
- Unallocated - This division 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.
- All other departments/divisions are within +/-10% of the December 31, 2017 target date.
Community Center & Ice Arena Year-over-Year Comparison (See Attachment)
Ice arena revenues are at $665,030 through December 31, which is approximately $280,800 greater than this same time last year. The ice arena is still expecting another $52,000 of ice rental revenues for 2017.
Ice arena expenditures are remaining steady from month-to-month. As previously mentioned we are monitoring the utility costs, as the gas and electric charges are more than originally anticipated.
Year-to-Date community center and Sand Venture revenues are $676,683. This revenues is split between the community center and Sand Venture in the amounts of $471,689 and $204,993, respectively. There is still about $48,000 in community center revenues that needs to be booked into 2017.
A new line has been included in the community center budget-to-actual report to indicate the deferred revenue balance as of the end of each reporting period. As of December 31, the community center has $255,786 of deferred revenue on the books. This amount relates to the sale of annual community center memberships. In the past this entire amount would have all been recognized as revenue at the time of sale. We have changed our accounting practice and are now recognizing this revenue as it is earned.
Even with this change in accounting principle, community center and Sand Venture revenues have exceeded the total 2017 budget of $645,400.
Community center and Sand Venture expenditures were expected to exceed the 2017 original budget due to additional staffing needs for the community center that were not anticipated with the original 2017 budget. The revised 2017 budget has accounted for these personnel changes which should bring the actual wages in line with the revised budget.