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Home My WebLink AboutVIII-13 2022 2nd Quarter Financial Report City Council Memorandum To: Mayor Fasbender & City Council Members From: Chris Eitemiller, Finance Manager and Ashley Bertrand, Senior Accountant Date: August 15, 2022 Item: 2022 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 2022 activity through June 30, 2022. 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. Detail of the City’s capital infrastructure projects is provided in Appendix B. Financial Impact: N/A Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments:  2022 2nd Quarter Financials  Appendix A – 2022 Investment Holdings as of June 30, 2022  Appendix B – 2022 Capital Infrastructure Projects as of June 30, 2022 VIII-13 2022 2nd Quarter Financial Update 2 | P a g e 2022 2nd Quarter Financial Update Governmental Funds General Fund General Fund Revenue Summary:  The largest source of revenue is property tax levy. The City received an advance payment in June, while the second half will be received in July.  Our investments are not performing as well as prior years due to the pandemic; you will see this repeatedly in each fund.  Public Works-Streets had a large increase in 2021 due to State Aid for the Highway 316 project, and the annual Mill & Overlay program. This has been reduced in 2022.  Transfers increased in 2021 due to a budget amendment which transferred funds from the Vehicle & Equipment Fund to the General Fund. These funds were used to fund IT expenditures for switches and a storage system. This has been reduced in 2022, causing this variance. VIII-13 2022 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-13 2022 2nd Quarter Financial Update 4 | P a g e Parks - Fund 200  Income is tracking as expected with investment earnings lower than previous years.  Joint Facility revenue is lower than anticipated; we are awaiting the second quarter payment.  Expenditures look on target at 42% of 50% being spent. VIII-13 2022 2nd Quarter Financial Update 5 | P a g e Aquatic Center – Fund 201  Capital Outlay including the Mechanical Room and Pool House Renovations were completed in the first half in 2021. This expense accounts for the large variance.  This fund will expend the bulk of its budget by the end of August. VIII-13 2022 2nd Quarter Financial Update 6 | P a g e Fire & Ambulance – Fund 213 Fire & Ambulance Revenue Summary:  In 2021, we had not received payment for the Rural Fire Contract. Payment has been received in 2022, which explains the variance.  In 2021, there was a budget amendment approved, transferring funds from the General Fund to Fire for equipment. This transfer was not needed in 2022, causing the variance. VIII-13 2022 2nd Quarter Financial Update 7 | P a g e Fire & Ambulance Expense Summary:  Fire expense is less in 2021, due largely to savings in the Dispatch contract with Dakota County. The City-wide dispatch budget decreased over $33,000 from 2020. Based on call data, Fire’s share of this total was reduced. In addition to the total budget decreasing, Fire’s Other Services and Charges category saw a nearly $60,000 net decrease.  Other Services & Charges expense is higher in Ambulance for 2022. The contract for medical services accounts for this increase.  Capital Outlay is higher in Fire for 2022. Two capital projects were completed (Radios and Station Alerting System) which accounts for the variance. VIII-13 2022 2nd Quarter Financial Update 8 | P a g e Arena – Fund 615  Arena Sales Income increased in 2022. Since the pandemic was still happening in early 2021, arena sales were lower than expected. VIII-13 2022 2nd Quarter Financial Update 9 | 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 24% collected as of June 30th.  Personnel expense is lower than anticipated in 2022, due to the vacancy of the PW Director position. You will see this trend in the other enterprise funds as well. VIII-13 2022 2nd Quarter Financial Update 10 | 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. Storm Water – Fund 603  The storm water fund revenue in line with the other utilities.  A street sweeper was purchased in the first half of 2022, causing the large variance. VIII-13 2022 2nd Quarter Financial Update 11 | P a g e Hydro – Fund 620  Capital Outlay expense is lower in 2022; we purchased a generator and upgraded the controls for the hydro plant in 2021. 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-13 2022 2nd Quarter Financial Update 12 | P a g e Transfers 2022 Transfers  Quarterly transfers are made for administrative charges, internal funding, and savings needs. Transfers posted for 2nd quarter 2022 were all budgeted transfers or budgeted use of stabilization funds. VIII-13 2022 2nd Quarter Financial Update 13 | 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, 2021 June 30, 2022 General Fund 5,168,781 7,463,718 Parks 1,151,164 1,497,847 Aquatic Center 455,798 448,166 Cable TV 111,982 105,617 Cable Access 39,365 37,852 Heritage Preservation 83,364 88,136 Fire & Ambulance 481,775 189,198 LeDuc Historical Estate Operations 169,848 145,641 Police Reserves 16,050 23,437 DUI Enforcement & Forfeitures 34,814 44,944 2016 Equipment Certificates 33,095 32,236 Parks Facility Bonds 323,230 215,235 2013 Equipment Certificates 63,501 64,042 Parks Capital Projects 113,645 99,266 Budget Stabilization Fund 345,232 352,232 HEDRA 1,218,385 948,209 TIF 3 Guardian Angels (099) 20,687 570 TIF 5 NAPA (116) 7,431 23,226 TIF 4 Downtown Redevelopment (007) (20,543) (21,288) TIF 7 Hudson Sprayers 8,455 12,161 TIF 8 Schoolhouse Square 0 6 PW Cold Storage Building 0 902,106 2020 Improvements (181,194) (242,410) 2021 Improvements 0 (369,760) 2022 Improvements 0 3,252,840 Debt Redemption 1,009,730 989,875 2016A GO TIF (quasi refunding) Bonds 134,597 125,992 2010B GO Improvement Bonds 135,757 51,543 2011 GO Improvement Bonds 113,701 (57,670) 2012 GO Improvement Bonds 88,454 70,525 2013 GO Improvement Bonds 66,057 35,414 2014 GO Improvement Bonds 111,270 76,621 2015 GO Improvement Bonds 114,821 105,414 2016 GO Improvement Bonds 210,663 168,600 2017 GO Improvement Bonds 98,261 75,566 2018 GO Improvement Bonds (5,220) (25,301) 2019 GO Improvement Bonds 991,202 896,429 2020 GO Improvement Bonds 76,694 430,148 2021 GO Improvement Bonds 0 308,624 Water 2,024,820 3,997,077 Wastewater 1,422,062 1,840,306 Storm Water 949,761 934,673 Arena 525,821 575,908 Hydro Electric 30,405 116,825 Retiree Health 55,677 252,219 VIII-13 2022 2nd Quarter Financial Update 14 | P a g e Compensated Absences 109,052 78,013 Vehicle Revolving Fund 186,698 605,891 Insurance Fund 201,976 508,367 Cable Security Deposit 0 88 Escrow-Letter of Credit 0 316 Escrow -Dev/Eng/TIF-HRA 395,422 556,236 Ruth Doffing Trust Fund-Library 93,937 89,930 C. Simmons Trust 221,599 214,505 C. Simmons Residuary 11,425 (358) VIII-13 2022 2nd Quarter Financial Update 15 | P a g e Investments  The City’s total investment portfolio was valued at $32,418,694 as of June 30, 2022.  Allocation of the City’s portfolio is as follows. Additional detail is available in Appendix A. 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 Senior Accountant may be reached at 651-480-2354 or ABertrand@hastingsmn.gov. CD's $6,969,596 21% Municipal Bonds $7,430,000 23% Money Markets (Bond Proceeds) $18,019,098 56% City of Hastings Investment Portfolio-June 30, 2022 VIII-13 2022 2nd Quarter Financial Update 16 | P a g e Appendix A – Investment Holdings Detail of Municipal Bonds, Agencies and CDs VIII-13 2022 2nd Quarter Financial Update 17 | P a g e VIII-13 2022 2nd Quarter Financial Update 18 | P a g e Appendix B – Capital Infrastructure Status VIII-13