Discussion:
General Fund - December 2022 (see attachment) (Preliminary results)
These are preliminary results for the year ended 12/31/2022. The city will be paying bills, collecting receipts and preparing journal entries related to 2022 over the next few weeks. The monthly report shows currently a positive budget variance for the year of $1.5 million, in addition to the adjustments for payables/receivables, there will be a significant General Fund balance adjustments in accordance with adopted city polices.
Revenues Variances (100% target)
- Revenues, in total, exceeded amended budget expectations by $1.65 million.
- Taxes are currently under budget, current collections for the year were at 98.6%, The difference represents both valuation adjustments and unpaid property taxes. Revenues will increase when the final tax settlement ($82k) is posted and when the 4th quarter cable franchise fee is received.
- Special Assessments are currently negative as a result of recent assessments of refuse bills. These amounts will be recovered through the assessment process.
- Licenses and permits are exceeding the budget amount and ahead of last year, primarily as a result of building permit revenue. In 2022, the City received permits for three apartment buildings, 57 townhomes and 203 single family homes. Total permit value was $356 million in 2022, compared to $250 million in 2021.
- Intergovernmental is currently ahead of budget targets as a result of an increase in Municipal State Aid for street maintenance (allocation of gasoline tax).
- Charges for services are currently under budget, but will be adjusted when the true up for the Shakopee Public Utilities PILOT ($700k) is posted. The primary variance was in engineering fees, as the city had vacancies throughout the year in the engineering department.
- Miscellaneous includes investment earnings, with rising rates in 2022 the City currently has a large unrealized loss which is reflected in the year-end amount shown, and explains the negative amount.
Expenditure variances (100% target)
- Overall expenditures are within the amended budget. The City Council approved budget amendments were entered after their approval at the December 20, 2022 council meeting. Preliminary amounts show in total expenses were $434k under.
- The City Clerk department exceeding the budget primarily as a result of the Modus Election Management software subscription, which was not included in the budget.
- Facilities is currently exceeding the budget amount primarily as a result of building maintenance costs for the year.
- Fire is currently exceeding the budget amount primarily as a result of the payment of state aid to the fire relief. This is a pass through transaction and the city recorded an equivalent amount of revenue.
- The Building Inspection department exceeding the budget primarily as a result of health insurance inadvertantly missed in the budget for one of the building inspectors.
- Engineering expenditures are currently under budget targets as a result of vacancies and allocated wages to projects.
- Park Maintenance expenditures are currently over budget as a result of public works staff time allocated to park maintenance. However, public works in total remained under budget for staffing.
- Recreation expenditures are currently over budget as a result of building maintenance costs and operating supplies.
Community Center/Ice Arena/SandVenture - December 2022 (see attachment) (Preliminary results)
SandVenture
- SandVenture completed the year with $240k in total revenues, exceeding the budget of $189k.
Community Center
- Revenues are ahead of the previous year and are currently at 90% percent of budgeted annual revenues. Expenditures are tracking ahead of last year as a result of a conversion of a part-time position to full time, implementation of the part-time wage study, operating supplies related to room rentals and increased utilities (electric/gas).
Ice Arena
- Revenues are currently at 84 percent of budgeted annual revenues. Expenditures have seen an from the previous year in utility costs (electric/gas).
Quarterly Investment Portfolio Report - Q4, 2022 (See attachment)
Attached is the 4th quarter investment portfolio report including a cover page that provides a comparison of investment results over the past five years. The report provided by Wells Fargo Securities encompasses all city investments.
As required by the investment policy the report provides:
- Total return performance measured against the the three year treasury (Page 6)
- Weighted average yield (Page 3/Page 6)
- A listing of individual securities held at the end of the reporting period listed by maturity date (Pages 15-17)
- The carrying basis, the current calculated accredited basis and the current market value (Page 3)
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 earning in those robust years. However, the policy also minimizes the changes of experiencing losses in the down years.