N/A - Informational Purposes Only

December 2017 Review (See Attachment)

As I mentioned last month, even though the new year has begun, that doesn't mean 2017 is complete. Financial reports are a 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 through at least February.

Revenue Variances (+/- 10% of 100% Target)

• Taxes - The December short settlement was receipted in January bringing our tax collections to 98.5 percent of our levy. The difference between the levy and the year to date collections is due to multi-year tax petition refunds that were settled by the County in 2017. 

• Special Assessments will end the year slightly below target. Most of these special assessments are for delinquent garbage collections or nuisance abatements.
• Licenses & Permits - December revenues of $240,501 put the year-to-date revenues over $2.8 million. This is approximately $880,000 more than the revised budget, which was revised upward by $266,000. 2017 actual revenue is over $265,000 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. We are still anticipating 2017 payments that will be received in the next few weeks.
• Charges for Services - Recorded monthly revenue of $715,543. Contractual police services accounted for $111,665, along with SPUC franchise fees of $352,000 and Recreation Services of $234,800.
• 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. Facilities also accounted for the utility costs for both the old and new city halls.  Lastly, 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.  

January 2018 Review (See Attachment)

Revenue Variances (+/- 10% of 8% Target)

• This early in the year, one or two large receipts tend to skew the variances.  The Charges for Services category recorded receivables for the school resource officers and the SMSC police services contribution of $212,817 and $105,000, respectively. Additionally, $238,882 of intergovernmental revenue was recorded for the first installment of municipal state aid.
• Special Assessments is 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.

Expenditure Variances (+/- 10% of 8% Target)

• Similar to prior years, the Mayor and Council budget line appears to 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. 
• Facilities is within target, but it should be noted that an operational change took place on January 1. Rather than each building such as city hall, public works, fire stations and the police department having a separate facilities budget for operational maintenance and repair, the facilities division is now responsible for these activities. This change will allow the facilities maintenance supervisor more flexibility in directing where needed maintenance or repair dollars are needed. A budget amendment will be requested at a later date to officially move these budget dollars between departments.

Community Center & Ice Arena Year-over-Year Comparison (See Attachment)

December 2017

Ice arena revenues will end the year with close to $725,000 in revenues. This $35,000 great than budget and about 90% greater than the previous year. 

After adjusting the budget for utility costs, the ice arena expenditures are remaining steady from month-to-month and are very close to the revised budget numbers.

Year-to-Date community center and Sand Venture revenues are $727,040. This revenue is split between the community center and Sand Venture in the amounts of $522,048 and $204,993, respectively. Actual revenues surpassed budget by over $81,000 and were about $218,000 greater than 2017.

The community center & Sand Venture expenditures are ending the year very close to budget. The 2017 wages budget for the community center was amended late in the year to account for additional staffing needs.   

January 2018

Similar to the analysis of the city's General fund, reviewing revenue and expenditures early in the year can be easily distorted depending upon what type of transactions did or did not occur. You will notice the revenues for both the ice arena and the community center for January 2017 are actually negative amounts. This is due to the timing of 2016 yearend accounting entries. 

Ice arena expenditures are slightly higher than January of last year. This is due the payment of a couple service contracts related to equipment and facility maintenance.

Community center expenditures are higher than this time last year due to the facility not being fully functional until mid-summer. Individual line item expenditures will continue to be monitored as the year progresses.

Deferred membership revenue as of January 31, 2018 is just below $250,000 compared about $97,000 a year ago. This is direct result of strong annual membership sales throughout 2017.