General Fund - December 2023 (see attachment) (Preliminary results)

These are preliminary results for the year ended 12/31/2023.  The city will be paying bills, collecting receipts and preparing journal entries related to 2023 over the next few weeks. In addition to the adjustments for payables/receivables, there will be a significant General Fund balance adjustments in accordance with adopted city polices.

The monthly report shows currently a net positive for the year of $5.4 million, over 90 percent ($4.9 million) were from revenues exceeding budget expectations.  Three revenue categories were responsible for the net positive; License and Permits (exceeded the budget by $2.9 million), Charges for Services (exceeded the budget by $1.1 million) and Miscellaneous (exceeded the budget by $850k, which was predominantly investment earnings).  

Revenues variances (100% target)

• Revenues, in total, exceeded amended budget expectations by $4.9 million.
• Taxes are currently under budget, current collections for the year were at 98.1%,  The difference represents both valuation adjustments and unpaid property taxes. The final tax settlement which was received at the end of January has not yet been reflected.
• Special Assessments are currently showing a positive balance.  We did modify how we account for special assessments in 2023, instead of netting the revenues with the expense amount we have separated the expenses from the revenues. 
• Licenses and permits are exceeding the budget amount and ahead of last year, primarily as a result of building permit revenue.  In 2023, the City received permits for 23 commercial buildings, one apartment building, 47 townhomes and 132 single family homes.  Total permit value was $405 million in 2023, compared to $360 million in 2022.
• Intergovernmental is currently ahead of budget targets as a result of the Traffic Safety Officer grant and Emerald Ash Borer grants.
• Charges for services are currently over budget as a result of the Shakopee Public Utilities PILOT and an uptick in recreational revenues. 
• Miscellaneous includes investment earnings, the City currently has a large unrealized gain which is reflected in the year-end amount shown.  Investment earnings in just the General Fund exceeded expectations by over $700k. 

Expenditure variances (100% target)

• Overall expenditures are within the amended budget. Preliminary amounts show in total expenses were $525k under.  Six departments were slightly over the budget amounts, however those overages only have a minor impact on the final annual operating financial results.  None of these departments exceeded their budget amounts by more than 6 percent.
• The City Clerk department exceeding the budget primarily as a result of the City Council special election,
• Facilities is currently exceeding the budget amount primarily as a result of building maintenance and utility costs for the year.
• Fire is currently exceeding the budget amount primarily as a result of supplies, uniforms, equipment maintenance, utilities and training expenses.

• The Building Inspection department exceeding the budget primarily as a result of the purchase of the Ford Lightning from building reserves and costs related to the Tyler software programming for rental inspections.
• Park Maintenance expenditures are currently over budget as a result of professional services related to Ash tree removals.  This was primarily funded by a $100k state grant received during the year.
• Recreation expenditures are currently over budget as a result of credit card fees, utilities, and building repair and maintenance costs.
• Planning, Police, Engineering and Fleet had open positions during the year which led to savings in those departments.

Community Center/Ice Arena/SandVenture - December 2023 (see attachment) (Preliminary results)

SandVenture

• SandVenture completed the year with $240k in total revenues, exceeding the budget of $192k.  The net loss of $124k exceeded the budget expectations of a net loss of $228k.

Ice Arena 

• The Ice Arena completed the year with $942k in total revenues in comparison to the budget of $986k.  The net loss of $118k is compared to budget expectations of a net gain of $119k.

Community Center

• The Community Center completed the year with $1.19 million in total revenues, exceeding the budget of $1.02 million.  The net loss of $1.07 million exceeded the budget expectations of a net loss of $1.14 million.

Quarterly Investment Portfolio Report - Q4, 2023 (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 16-19)
• 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.