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    2918 - Quarterly Financial Update Q2-2016

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    Brad Tabke
    The city's finances through the second quarter of 2016 show an increase in the general fund cash balance compared to the same period last year. Revenues from licenses and permits increased almost $1 million, contributing to the higher cash balance. Some enterprise funds experienced decreases in cash balances due to capital project payments and equipment purchases. The city's investment portfolio continues to achieve respectable returns while maintaining a low-risk strategy in accordance with the city's investment policy.

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    2918 - Quarterly Financial Update Q2-2016

    Uploaded by

    Brad Tabke
    44 views6 pages
    The city's finances through the second quarter of 2016 show an increase in the general fund cash balance compared to the same period last year. Revenues from licenses and permits increased almost $1 million, contributing to the higher cash balance. Some enterprise funds experienced decreases in cash balances due to capital project payments and equipment purchases. The city's investment portfolio continues to achieve respectable returns while maintaining a low-risk strategy in accordance with the city's investment policy.

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    2918_Quarterly Financial Update Q2-2016

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    2918_Quarterly Financial Update Q2-2016

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    The city's finances through the second quarter of 2016 show an increase in the general fund cash balance compared to the same period last year. Revenues from licenses and permits increased almost $1 million, contributing to the higher cash balance. Some enterprise funds experienced decreases in cash balances due to capital project payments and equipment purchases. The city's investment portfolio continues to achieve respectable returns while maintaining a low-risk strategy in accordance with the city's investment policy.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    44 views6 pages

    2918 - Quarterly Financial Update Q2-2016

    Uploaded by

    Brad Tabke
    The city's finances through the second quarter of 2016 show an increase in the general fund cash balance compared to the same period last year. Revenues from licenses and permits increased almost $1 million, contributing to the higher cash balance. Some enterprise funds experienced decreases in cash balances due to capital project payments and equipment purchases. The city's investment portfolio continues to achieve respectable returns while maintaining a low-risk strategy in accordance with the city's investment policy.

    Copyright:

    © All Rights Reserved
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    of 6

    Quarterly Financial Update Q2 2016

    The midway point of 2016 has come and gone. This provides a good opportunity to review the citys
    financial position through the second quarter of 2016. As I have mentioned throughout our monthly
    and quarterly financial presentations, the citys revenue and expenditure cycles never recur equally from
    month-to-month. Therefore, it is important to view the financial position holistically, taking into
    consideration historical data, current happenings and future projections.
    Cash Balance Comparisons
    Below is a cash balance comparison for both year-over-year and year-end for all city fund types.

    Quarterly Cash Balance Comparison


    30,000,000.00

    25,000,000.00

    20,000,000.00

    15,000,000.00

    10,000,000.00

    5,000,000.00

    0.00
    General Fund

    Special Revenue
    Funds
    Jun YTD
    2015

    Debt Service
    Funds
    Jun YTD
    2016

    Capital Project Enterprise Funds Internal Service


    Funds
    Funds
    Dec YTD
    2015

    Variance Analysis
    The General Fund cash balance at June 30, 2106 has increased approximately $1.1 million compared to
    this same time last year. This increase is attributable to the increased revenues associated with Licenses
    and Permits, which has increased almost $1 million compared to this same time last year.
    Special Revenue and Debt Service Funds remain stable.
    The Capital Project Funds are reporting increased cash balance at June 30, 2015 and 2016 compared to
    the balance at December 31, 2015. This is a result of an annual scheduled transfer from the General
    Fund to the Capital Improvement Fund of $1.0 million and $1.2 million in 2015 and 2016 respectively.
    This transfer has traditionally been done during the month of June.
    1

    The Enterprise Funds experienced a decrease in cash compared to this same timeframe last year. The
    Surface Water Fund saw a very modest decrease in cash over the past year, whereas the Sewer Fund
    saw more of a decrease. This decrease is due in part to capital projects payments over the course of last
    summer and the transfer of approximately $400,000 in restricted cash for Sewer Access Credits (SAC)
    payments to the EDA fund for business subsidies. Both of these funds instituted a rate increases
    beginning with the January 2016 billings. Below is a graph of each funds monthly cash balances dating
    back to January 31, 2015. The Sewer Fund experienced another decrease in cash in June 2016. This
    drop is directly related to the Hilldale Drive Improvements. Almost $400,000 was paid to the contract in
    June as this project neared completion.

    The Internal Service Funds also experienced a cash decrease compared to the second quarter of 2015.
    This decrease is related to equipment purchases including seven police vehicles, three fire SUVs and a
    loader for the public works that replaces a 1992 loader. Future rent payments will aid in replenishing
    the cash balance.

    General Fund Monthly Financial Report


    In holding with our monthly General Fund revenue and expenditure budget-to-actual comparisons,
    below is a comparison through July. 58 percent of the budget would ideally be accounted for as of July
    31.
    CITY OF SHAKOPEE
    Monthly Financial Report
    Di
    YTD
    June
    vis
    2016
    2016
    io
    Budget
    Actual
    n
    01000 - GENERAL FUND
    REVENUES:
    * - TAXES
    (17,150,900) (8,863,045)
    * - SPECIAL ASSESSMENTS
    (11,500)
    (23,140)
    * - LICENSES AND PERMITS
    (1,504,100) (251,009)
    * - INTERGOVERNMENTAL
    (1,108,500)
    (1,500)
    * - CHARGES FOR SERVICES
    (4,235,775) (410,392)
    * - FINES AND FORFEITS
    (1,500)
    (100)
    * - MISCELLANEOUS
    (215,748)
    (29,746)
    TOTAL REVENUES
    (24,228,023) (9,578,933)
    EXPENDITURES:
    11 - MAYOR & COUNCIL
    185,260
    7,666
    12 - ADMINISTRATION
    1,555,530
    99,641
    13 - CITY CLERK
    399,170
    24,725
    15 - FINANCE
    1,243,700
    336,923
    17 - COMMUNITY DEVELOPMENT
    674,905
    30,931
    18 - FACILITIES
    408,986
    22,189
    31 - POLICE DEPARTMENT
    7,625,014
    584,315
    32 - FIRE
    2,079,785
    140,384
    33 - INSPECTION-BLDG-PLMBG-HTG
    669,967
    48,599
    41 - ENGINEERING
    739,178
    60,342
    42 - STREET MAINTENANCE
    2,225,116
    136,514
    44 - FLEET
    429,595
    33,369
    46 - PARK MAINTENANCE
    1,644,596
    141,397
    66 - NATURAL RESOURCES
    198,092
    14,882
    67 - RECREATION
    2,529,679
    215,461
    91 - UNALLOCATED
    218,450
    772
    TOTAL EXPENDITURES
    22,827,023 1,898,108
    OTHER FINANCING
    * - TRANSFERS IN
    (250,000) (250,000)
    * - TRANSFERS OUT
    2,100,000 2,100,000
    OTHER FINANCING TOTAL
    1,850,000 1,850,000
    FUND TOTAL
    449,000 (5,830,824)
    Key
    Varies more than 10% than budget positively
    Varies more than 10% than budget negatively
    Within 10% of budget

    YTD
    2016
    Actual

    Budget
    Balance Percent
    Remaining Used

    (8,999,882) (8,151,018)
    6,025
    (17,525)
    (1,703,596)
    199,496
    (521,333)
    (587,167)
    (2,706,161) (1,529,614)
    (2,418)
    918
    (106,414)
    (109,335)
    (14,033,779) (10,194,244)
    105,440
    708,566
    158,222
    737,528
    223,404
    185,839
    4,150,971
    1,018,483
    383,839
    354,129
    988,552
    225,157
    751,790
    106,133
    1,281,321
    2,797
    11,382,171

    79,820
    846,964
    240,948
    506,172
    451,501
    223,148
    3,474,043
    1,061,302
    286,128
    385,049
    1,236,564
    204,438
    892,806
    91,959
    1,248,358
    215,653
    11,444,852

    (250,000)
    2,100,000
    1,850,000
    (801,608)

    0
    0
    0
    1,250,608

    Cumulative 6
    2015
    Actual

    52%
    (52)%
    113%
    47%
    64%
    161%
    49%
    58%

    (8,426,208)
    8,717
    (707,492)
    (312,700)
    (2,048,972)
    (4,838)
    (94,292)
    (11,585,786)

    57%
    46%
    40%
    59%
    33%
    45%
    54%
    49%
    57%
    48%
    44%
    52%
    46%
    54%
    51%
    1%
    50%

    92,362
    480,539
    147,727
    619,018
    351,986
    167,028
    3,542,650
    916,066
    294,776
    277,893
    697,019
    170,206
    637,117
    62,909
    997,479
    3,144
    9,457,919
    #

    100% #
    100% #
    100% #
    #

    (250,000)
    1,900,000
    1,650,000
    (477,867)

    Variances worth noting on the revenue side of the budget include Taxes and Licenses & Permits. As
    mentioned previously, revenues and expenditures can vary on the frequency of collection and payment.
    Large infrequent payments or collections such as tax payments that happen twice a year can skew
    budget-to-actual comparisons significantly. Understanding these unique variances is important in
    gaining a complete financial picture.
    License & Permit collections are continuing to come in at higher than anticipated rates. Below is a
    report for the second quarter comparing year-over-year building related permits. The quantity of
    permits is down slightly from 1,193 to 1,113, but the valuation of the second quarter 2016 permits is
    over double for the same time frame in 2015.

    Expenditures are all within or significantly below anticipated budget allotments as of July 31, 2016.

    Investment Analysis
    The city contracts with Advantus Capital Management to manage the citys investment portfolio. Below
    is a summary of the citys investment return through June 30, 2016. The chart compares gross return,
    net return (after the deduction of investment manager fees) and a benchmark return. The income
    return column was just added to the graph over the past year. This column is beneficial in comparing
    actual interest income to the gross and net return, which includes book-to-market value adjustments.
    Governmental accounting standards require the city to book market value fluctuations from year-toyear even though the citys investment policy requires investments to be held to maturity with a few
    exceptions.

    Investment Policy Tidbits


    The citys investment portfolio adheres to both its investment policy and State Statutes. Cities are
    limited legally on investment types to minimize the risk of principal loss. In addition, all investments are
    held in a safekeeping account with U.S. Banks custody department. Below is additional information on
    the citys investment portfolio.

    Investment Summary
    Given the citys limited investment markets and historically low interest rates, the city is achieving a very
    respectable rate of return while first assuring safety and liquidity.
    6

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