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Home My WebLink AboutVIII-08 Quarterly Financial Reports City Council Memorandum To: Mayor Fasbender & City Council Members From: Chris Eitemiller, Finance Manager and Ashley DeBernardi, Assistant Finance Manager Date: November 4, 2024 Item: 2024 2nd Quarter Financial Report Council Action Requested: Review and approve the attached second quarter financial report. Background Information: The second quarter financial report is a quarterly update of 2024 activity through June 30, 2024. Consistent with past practice, some numbers in the report are adjusted to take into consideration the effects of year-end accruals and year- to-year allocation differences. This quarter’s report is later than usual because of time demands associated with implementing our new finance system as well as training city staff to use it. Detail of the City’s investments holdings is provided in Appendix A. Financial Impact: N/A Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments:  2024 2nd Quarter Financials  Appendix A – 2024 Investment Holdings as of June 30, 2024 VIII-08 2024 2nd Quarter Financial Update 2 | P a g e 2024 2nd Quarter Financial Update Governmental Funds General Fund General Fund Revenue Summary:  The largest source of revenue is property tax levy. The General Fund’s revenues are lower than usual at this time of year because the City had not received the tax settlement by the end of June.  Our investments continue to perform well in the second quarter this year.  Public Works-Engineering charges a fee for engineering work related to the annual street project in the fall. Because that has not yet been charged, Engineering shows at just 3% of budgeted revenue.  Public Works-Streets has state aid payments for summer street maintenance and construction budgeted but not yet charged.  Building Inspection fees have slowed from recent years. However, they appear to be on track to meet budget for 2024. VIII-08 2024 2nd Quarter Financial Update 3 | P a g e General Fund Expense Summary:  None of the General Fund Departments have any budget concerns at this point in the year.  Variances from the typical mid-year spending pattern are largely due to capital or supplies purchases that are expected to be close to budget by year-end. VIII-08 2024 2nd Quarter Financial Update 4 | P a g e Parks - Fund 200  Income is tracking as expected with investment earnings performing well.  Expenditures look on target at 41% of budget spent at the mid-point during the year. VIII-08 2024 2nd Quarter Financial Update 5 | P a g e Aquatic Center – Fund 201  Similar to other funds, investment income is performing well and exceeding budget projections.  This fund will expend the bulk of its budget by the end of August. VIII-08 2024 2nd Quarter Financial Update 6 | P a g e Arena – Fund 202  The Arena upgrade project, including a new refrigeration system is reflected in the Miscellaneous revenue and capital outlay spending. As costs are updated closer to the end of this year, a budget amendment will be completed to reflect actual figures. VIII-08 2024 2nd Quarter Financial Update 7 | P a g e Fire & Ambulance – Fund 213 Fire & Ambulance Revenue Summary:  Public Safety Aid was received from the state in 2023. Of the City’s allotment, $900,000 was planned to help fund a new ladder truck. In order to save on the total cost, the department received approval to pre-pay for the truck in 2023. Therefore, there none of the $900,000 will received in 2024.  Ambulance revenues have improved from recent years. Fire & Ambulance Expense Summary:  Fire expense is below budget. The most significant factor is the purchase of the ladder truck in 2023. Revenues this year will replenish fund reserves.  The Capital Outlay spending is not going to approach budgeted levels because of the 2023 pre-paid ladder truck purchase already mentioned. VIII-08 2024 2nd Quarter Financial Update 8 | P a g e Enterprise Funds The Enterprise funds consist of our three utility funds and the hydro plant. Water – Fund 600  Water revenue is steady with 25% collected as of June 30th.  Personnel expense is again lower than budgeted in 2024, due to the vacancy of the PW Director position, which has been filled with a consultant. These consultant costs are reflected in Other Services and Charges expenses. This trend is seen in the other enterprise funds as well. VIII-08 2024 2nd Quarter Financial Update 9 | P a g e Sewer – Fund 601  The sewer revenue is also steady at 30% collected since June 30th.  Expense is in line with the budget. Capital outlay expects a large increase in the second half of the year. Storm Water – Fund 603  The storm water fund revenue in line with the other utilities.  Approved Capital Outlay spending was not yet reflected in spending as of June 30th. VIII-08 2024 2nd Quarter Financial Update 10 | P a g e Hydro – Fund 620  The City continues to assess the long-term viability of the Hydro Plant. There have been discussions about possibly selling the plant. City-Wide Debt Service  Debt Service expenditures are as anticipated. The principal payment due date is February 1st; all principal payments were made as of the end of the first quarter. Interest payments are made on February 1st as well as August 1st. VIII-08 2024 2nd Quarter Financial Update 11 | P a g e Transfers 2024 Transfers  Quarterly transfers are made for administrative charges, internal funding, and savings needs. Transfers posted for 2nd quarter 2024 were all budgeted transfers or budgeted use of stabilization funds. VIII-08 2024 2nd Quarter Financial Update 12 | P a g e Cash and Investments Balances  Cash balances fluctuate throughout the year based on planned spending, receipt of fund revenues and the timing of property tax payments. The cash balance within a fund can be one indicator of the health of the fund. FUND DESCRIPTION June 30, 2023 June 30, 2024 General Fund 8,499,951 4,341,907 Parks 608,025 (138,360) Aquatic Center 464,744 416,672 Arena 518,616 3,704,052 Cable TV 103,444 102,735 Cable Access 39,601 42,691 Heritage Preservation 95,371 100,646 Fire & Ambulance (1,053,152) (714,584) LeDuc Historical Estate Operations 129,403 89,144 Police Reserves 33,517 39,375 DUI Enforcement & Forfeitures 44,444 53,877 2013 Equipment Certificates 63,146 39,504 Parks Capital Projects 963,940 581,721 Budget Stabilization Fund 345,514 364,064 HEDRA 556,559 834,881 TIF 3 Guardian Angels (099) 9,840 40,908 TIF 5 NAPA (116) 517 16,480 TIF 4 Downtown Redevelopment (007) (21,288) (21,288) TIF 7 Hudson Sprayers 12,976 42,647 TIF 8 Schoolhouse Square 2,610 38,368 TIF 9 Block 28 Flats On Third - (31,937) PW Cold Storage Building 192 204 2022 Improvements 171,508 181,877 2023 Improvements (454,683) 58,236 Debt Redemption 961,761 910,957 2022 Cold Storage Building (13,183) (101,108) 2016A GO TIF (quasi refunding) Bonds 129,523 78,226 2012 GO Improvement Bonds 36,516 145,958 2013 GO Improvement Bonds 13,234 (35,274) 2014 GO Improvement Bonds 60,458 (38,643) 2015 GO Improvement Bonds 103,572 33,240 2016 GO Improvement Bonds 138,317 25,748 2017 GO Improvement Bonds 66,010 37,980 2018 GO Improvement Bonds (37,315) (116,827) 2019 GO Improvement Bonds 833,266 747,530 2020 GO Improvement Bonds 455,011 385,926 2021 GO Improvement Bonds 288,275 245,161 2022 GO Improvement Bonds 588,420 427,448 2023 GO Improvement Bonds - 163,061 Water 3,076,098 4,058,247 Wastewater 1,781,675 1,963,906 Storm Water 1,256,066 2,052,025 Hydro Electric 264,974 576,776 Retiree Health 255,237 262,950 Compensated Absences 118,257 358,849 VIII-08 2024 2nd Quarter Financial Update 13 | P a g e Vehicle Revolving Fund 708,288 767,836 Insurance Fund 771,269 663,103 Escrow -Dev/Eng/TIF-HRA 451,575 339,234 Ruth Doffing Trust Fund-Library 89,797 92,691 C. Simmons Trust 218,958 232,195 C. Simmons Residuary (10,126) 205.78 VIII-08 2024 2nd Quarter Financial Update 14 | P a g e Investments  The City’s total investment portfolio was valued at $36,294,160 as of June 30, 2024.  Allocation of the City’s portfolio is as follows. Additional detail is available in Appendix A. VIII-08 2024 2nd Quarter Financial Update 15 | P a g e Appendix A – Investment Holdings Detail of Municipal Bonds, Agencies and CDs VIII-08 2024 2nd Quarter Financial Update 16 | P a g e Additional Information Further detail of the information presented here may be obtained by contacting the Finance Department. The Finance Manager may be reached for questions at 651-480-2347 or CEitemiller@hastingsmn.gov. The Assistant Finance Manager may be reached at 651-480-2354 or ADeBernardi@hastingsmn.gov. VIII-08 City Council Memorandum To: Mayor Fasbender & City Council Members From: Chris Eitemiller, Finance Manager and Ashley DeBernardi, Assistant Finance Manager Date: November 4, 2024 Item: 2024 3rd Quarter Financial Report Council Action Requested: Review and approve the attached third quarter financial report. Background Information: The third quarter financial report is a quarterly update of 2024 activity through September 30, 2024. Consistent with past practice, some numbers in the report are adjusted to take into consideration the effects of year-end accruals and year-to-year allocation differences. Detail of the City’s investments holdings is provided in Appendix A. Financial Impact: N/A Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments:  2024 3rd Quarter Financials  Appendix A – 2024 Investment Holdings as of September 30, 2024 VIII-08 2024 3rd Quarter Financial Update 2 | P a g e 2024 3rd Quarter Financial Update Government Funds General Fund Revenue Summary:  The largest source of revenue is property tax levy. The City received the first-half settlement in July. The second half will be paid in two payments; we will receive an advance in December, and the remainder in January 2025.  Our investments are performing better than in 2023 and each department’s revenues reflect this.  The Public Works-Engineering revenue is low because there is a one-time Engineering charge applied to the annual street project, which doesn’t occur until December. VIII-08 2024 3rd Quarter Financial Update 3 | P a g e General Fund Expense Summary:  Finance is at trend after implementing the new Finance system project.  Most departments’ spending is at or near trend through 3 quarters. One exception is Facilities, due to the City Hall renovation project. Once year-end costs can be reasonably projected, a budget amendment will be done to properly reflect the budget and expenditures for this project in 2024. The City can only recognize revenue for these funding sources equal to the actual spending, so staff is waiting to do the budget amendment until the year-end total is either known or a reasonable projection can be made. VIII-08 2024 3rd Quarter Financial Update 4 | P a g e Parks - Fund 200  Revenues are showing less than expenditures due to planned fund balance use and carry forward items.  Most expenditures are at trend except for capital and services. These are expected to be closer to budget near year-end. VIII-08 2024 3rd Quarter Financial Update 5 | P a g e Aquatic Center – Fund 201  Revenues are showing less than expenditures due to planned fund balance use and carry forward items.  Expenses for this fund are largely finished for the year in the 3rd quarter. With the second half property tax payment, this fund should show a positive year-end financial position. VIII-08 2024 3rd Quarter Financial Update 6 | P a g e Arena – Fund 202  Both revenues and expenditures are showing as exceeding budget.  The reason for this is the Arena upgrade capital project. Once final expenses this year are known, there will be a budget amendment done to properly reflect these expenses as well as the bond revenue that is funding this project. VIII-08 2024 3rd Quarter Financial Update 7 | P a g e Fire & Ambulance – Fund 213  Charges for Services revenue item is Ambulance revenue, which are running below projections. Since changing Ambulance billing provider, our revenue has improved.  The Miscellaneous category is higher, which consist of equipment sales, donations, and insurance recoveries.  Spending is below trend. The largest factor is prepaying in 2023 for the new Ladder Truck to both save money and have it completed sooner. Aside from capital, the department is expected to be near budget at year-end. VIII-08 2024 3rd Quarter Financial Update 8 | P a g e Enterprise Funds The Enterprise funds consist of our three utility funds and the hydro plant. Water – Fund 600  Water Revenue is steady with 65% collected as of September 30th.  Expenditures are well below budget. The largest factor is capital outlay, because the utility’s share of the annual street project has yet not been allocated. Overall expenditures will be close to budget at year-end. VIII-08 2024 3rd Quarter Financial Update 9 | P a g e Sewer – Fund 601  Sewer Revenue stands at 56% collected as of September 30th.  As is the case with Water, expenditures are below budget due to timing of the capital allocation related to the street project. Storm Water – Fund 603  Expenditures, as with Water & Sewer, are below budget because of capital allocation timing related to the street project. VIII-08 2024 3rd Quarter Financial Update 10 | P a g e Hydro – Fund 620  The hydro plant’s production has been limited due to mechanical problems.  The plant’s expenditures should stay below budget for the year. City-Wide Debt Service  Debt Service expenditures are as anticipated. The principal payment due date is February 1st; all principal payments were made as of the end of the first quarter. Interest payments are made on February 1st as well as August 1st. VIII-08 2024 3rd Quarter Financial Update 11 | P a g e Transfers 2024 Transfers Quarterly transfers are made for administrative charges, internal funding, and savings needs. Transfers posted for 3rd quarter 2024 were all budgeted transfers or budgeted use of stabilization funds. VIII-08 2024 3rd Quarter Financial Update 12 | P a g e Cash and Investments Balances Cash balances fluctuate throughout the year based on planned spending, receipt of fund revenues and the timing of property tax payments. The cash balance within a fund can be one indicator of the health of the fund. FUND DESCRIPTION September 30, 2023 September 30, 2024 General Fund 7,734,224 6,088,619 Parks 1,027,770 266,115 Aquatic Center 330,574 405,708 Arena 581,960 3,004,056 Cable TV 102,844 101,012 Cable Access 40,098 43,103 Heritage Preservation 91,658 113,127 Fire & Ambulance (492,551) 89,031 LeDuc Historical Estate Operations 118,930 74,863 Police Reserves 35,771 43,410 DUI Enforcement & Forfeitures 50,264 52,692 2013 Equipment Certificates 85,764 39,850 Parks Capital Projects 1,199,978 587,091 Budget Stabilization Fund 345,514 364,064 HEDRA 527,906 827,483 TIF 3 Guardian Angels (099) 7,290 40,066 TIF 5 NAPA (116) (483) - TIF 4 Downtown Redevelopment (007) (21,288) (21,288) TIF 7 Hudson Sprayers 12,098 41,820 TIF 8 Schoolhouse Square (3,324) 4,458 TIF 9 Block 28 Flats On Third (19,723) (47,056) PW Cold Storage Building 194 207 Capital Projects Fund - (12,880) 2022 Improvements 173,208 183,470 2023 Improvements 782,743.03 58,746 2024 Improvements (14,419) 919,535 Debt Redemption 968,738 968,738 2022A Cold Storage Building (23,092) (56,469) 2016A GO TIF (quasi refunding) Bonds 165,538 175,143 2012 GO Improvement Bonds 71,854 148,127 2013 GO Improvement Bonds 40,458 (16,399) 2014 GO Improvement Bonds 130,200 25,679 2015 GO Improvement Bonds 160,575 126,536 2016 GO Improvement Bonds 199,632 151,845 2017 GO Improvement Bonds 82,902 74,382 2018 GO Improvement Bonds 2,691 (797) 2019 GO Improvement Bonds 839,637 816,599 2020 GO Improvement Bonds 467,286 435,354 2021 GO Improvement Bonds 285,844 252,941 2022 GO Improvement Bonds 579,445 544,223 2023 GO Improvement Bonds - 176,761 Water 3,832,684 4,196,089 Wastewater 2,233,613 1,991,175 Storm Water 1,370,160 2,140,243 Hydro Electric 305,232 555,687 VIII-08 2024 3rd Quarter Financial Update 13 | P a g e Retiree Health 262,284 252,767 Compensated Absences 142,888 399,926 Vehicle & Equipment Fund 844,610 713,461 Insurance Fund 798,328 706,112 Escrow -Dev/Eng/TIF-HRA 449,824 330,317 Ruth Doffing Trust Fund-Library 90,687 93,501 C. Simmons Trust 221,128 234,228 C. Simmons Residuary (10,125) 209 VIII-08 2024 3rd Quarter Financial Update 14 | P a g e Investments The City’s total investment portfolio was valued at $31,265,349 as of September 30, 2024. Allocation of the City’s portfolio is as follows. Additional detail is available in Appendix A. VIII-08 2024 3rd Quarter Financial Update 15 | P a g e Appendix A – Investment Holdings Detail of Certificate of Deposits, Asset-Backed Securities, and Municipal Bonds VIII-08 2024 3rd Quarter Financial Update 16 | P a g e Additional Information Further detail of the information presented here may be obtained by contacting the Finance Department. The Finance Manager may be reached for questions at 651-480-2347 or CEitemiller@Hastingsmn.gov. The Assistant Finance Manager may be reached at 651-480-2354 or ADeBernardi@Hastingsmn.gov. VIII-08