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Home My WebLink AboutVIII-18 Approve Financial Report - 2nd Quarter 2025City Council Memorandum To: Mayor Fasbender & City Council Members From: Chris Eitemiller, Finance Manager and Ashley DeBernardi, Assistant Finance Manager Date: August 18, 2025 Item: 2025 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 2025 activity through June 30, 2025. 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: 2025 2nd Quarter Financials Appendix A – 2025 Investment Holdings as of June 30, 2025 VIII-18 2025 2nd Quarter Financial Update 2 | P a g e 2025 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. At this time, it’s possible the department will not meet budgeted revenues for 2025. Looking forward to 2026, these revenues have been reduced for the proposed 2026 budget. VIII-18 2025 2nd Quarter Financial Update 3 | P a g e General Fund Expense Summary: Most of the General Fund Departments do not have any budget concerns at this point in the year. Facilities at this point in the year shows as being well over budget. This is due to the City Hall renovation project. Once final costs are completed later this year, a budget adjustment will be made. 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-18 2025 2nd Quarter Financial Update 4 | P a g e Parks - Fund 200 Income through June looked to be behind budget. However July tax settlements have improved the forecasted revenue to the point that this fund should be at or near budget. Expenditures look on target at 44% of budget spent at the mid-point during the year. VIII-18 2025 2nd Quarter Financial Update 5 | P a g e Aquatic Center – Fund 201 Similar to fund 200, when accounting for July tax receipts, this fund’s revenues look likely to meet 2026 budget. This fund will expend the bulk of its budget by the end of August. VIII-18 2025 2nd Quarter Financial Update 6 | P a g e Arena – Fund 202 The Arena upgrade project, including a new refrigeration system is driving capital outlay spending beyond the adopted budget. In 2024, there was $5.4 million of bond proceeds credited to this fund. These resources, currently in this funds’ reserves will fund 2025 spending for this project. As costs are costs are finalized later this year, a budget amendment will be completed to reflect actual figures. VIII-18 2025 2nd Quarter Financial Update 7 | P a g e Fire & Ambulance – Fund 213 Fire & Ambulance Revenue Summary: Ambulance revenues improved in 2024 from recent years, and are trending still higher in 2025. Other Fire/EMS revenues are trending well and overall the department appears on track to meet the overall revenue budget. Fire & Ambulance Expense Summary: Fire expense is on track to meet budget or possibly be slightly below budget. Most of the Capital Outlay budget has already been spent, so the spending trend for the remainder of the year, should be less than through June. VIII-18 2025 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 20% collected as of June 30th. State grant reimbursement for water treatment plant design accounts for over $1.1 million of overall revenues. This is related to PFAS mitigation efforts. Expenses are ahead of trend through June largely because of capital spending. Land purchase expenses for the site of the first water treatment plant have driven services spending over mid-year projections. VIII-18 2025 2nd Quarter Financial Update 9 | P a g e Sewer – Fund 601 The sewer revenue is also steady at 31% 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 is beyond mid-year projections, and is expected to stay within budget for the full year. Therefore, spending for this fund should be within budget. VIII-18 2025 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-18 2025 2nd Quarter Financial Update 11 | P a g e Transfers 2025 Transfers Quarterly transfers are made for administrative charges, internal funding, and savings needs. Transfers posted for 2nd quarter of 2025 were all budgeted transfers or budgeted use of stabilization funds. VIII-18 2025 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, 2025 June 30, 2025 General Fund 4,341,907 7,552,809 Parks (138,360) 369,593 Aquatic Center 416,672 648,982 Arena 3,704,052 988,715 Cable TV 102,735 98,040 Cable Access 42,691 45,568 Heritage Preservation 100,646 121,417 Fire & Ambulance (714,584) (336,729) LeDuc Historical Estate Operations 89,144 71,862 Police Reserves 39,375 49,077 DUI Enforcement & Forfeitures 53,877 60,744 Parks Capital Projects 581,721 207,875 Budget Stabilization Fund 364,064 46,481 TIF 3 Guardian Angels (099) 40,908 19,877 HEDRA 834,881 357,837 TIF 4 Downtown Redevelopment (007) (21,288) (21,288) TIF 7 Hudson Sprayers 42,647 103,067 TIF 8 Schoolhouse Square 38,368 19,720 TIF 9 Block 28 Flats On Third (31,937) (42,628) Capital Projects Fund 0 2,105,930 Debt Redemption 910,957 1,891,667 2022 Cold Storage Building (101,108) (64,383) 2016A GO TIF (quasi refunding) Bonds 78,226 128,083 2014 GO Improvement Bonds (38,643) (259,050) 2015 GO Improvement Bonds 33,240 (14,382) 2016 GO Improvement Bonds 25,748 10,045 2017 GO Improvement Bonds 37,980 38,001 2018 GO Improvement Bonds (116,827) (116,827) 2019 GO Improvement Bonds 747,530 (54,470) 2020 GO Improvement Bonds 385,926 400,652 2021 GO Improvement Bonds 245,161 238,961 2022 GO Improvement Bonds 427,448 560,503 2023 GO Improvement Bonds 163,061 75,170 2024 GO Improvement Bonds 0 568,103 Water 4,058,247 3,892,607 Wastewater 1,963,906 2,087,968 Storm Water 2,052,025 2,354,313 Hydro Electric 576,776 354,655 Retiree Health 262,950 157,187 Compensated Absences 358,849 590,054 Vehicle Revolving Fund 708,288 1,032,265 Insurance Fund 771,269 1,056,021 Escrow -Dev/Eng/TIF-HRA 451,575 380,341 Ruth Doffing Trust Fund-Library 89,797 98,086 C. Simmons Trust 218,958 245,706 C. Simmons Residuary (10,126) 217.04 VIII-18 2025 2nd Quarter Financial Update 13 | P a g e Investments The City’s total investment portfolio was valued at $36,294,160 as of June 30, 2025. Allocation of the City’s portfolio is as follows. Additional details are available in Appendix A. VIII-18 2025 2nd Quarter Financial Update 14 | P a g e Appendix A – Investment Holdings Detail of Certificate of Deposits and Share Certificates, Asset-Backed Securities, and Municipal Securities VIII-18 2025 2nd Quarter Financial Update 15 | 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-18