The URL can be used to link to this page

Home My WebLink AboutVIII-05 2022 3rd Quarter Financial Statements City Council Memorandum To: Mayor Fasbender & City Council Members From: Chris Eitemiller, Finance Manager and Ashley Bertrand, Assistant Finance Manager Date: November 21, 2022 Item: 2022 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 2022 activity through September 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 3rd Quarter Financials  Appendix A – 2022 Investment Holdings as of September 30, 2022 Appendix B – 2022 Capital Infrastructure Projects as of September 30,2022 VIII-05 2022 3rd Quarter Financial Update 2 | P a g e 2022 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, 2023.  Our investments are not performing well.  Beyond investments, General Fund Revenues look good.  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-05 2022 3rd Quarter Financial Update 3 | P a g e General Fund Expense Summary:  Finance is below trend due to schedule changes related to the new Finance system project. Any budgeted funds that remain at year-end will be carried forward to 2023 to complete the project.  Legal expenses continue to trend higher after a change in attorneys. The 2023 budget is anticipating this trend will continue.  Facilities expenses are significantly below budget because none of the approximately $2.9 million planned for the City Hall Dome Project and boilers has been spent. The City’s proposed project plan finally received approval from the State of MN, so considerable progress is expected in 2023.  Public Works’ spending is below budget due to supply chain delays in capital equipment purchases. VIII-05 2022 3rd Quarter Financial Update 4 | P a g e Parks - Fund 200  Revenues, aside from Investments, is in a good position. VIII-05 2022 3rd Quarter Financial Update 5 | P a g e Aquatic Center – Fund 201  This year’s pool operations are strong, continuing the 2021 trend that began after being closed in 2020 in response to the pandemic. Heritage Preservation – Fund 210 VIII-05 2022 3rd Quarter Financial Update 6 | P a g e Fire & Ambulance – Fund 213  The rural fire contact is paid bi-annually item, so 50% is appropriate.  Charges for Services revenue item is Ambulance revenue, which are running below projections.  The Miscellaneous category is higher, which consist of equipment sales, donations, and insurance recoveries.  Ambulance spending is below trend, so overall the department’s financial position isn’t concerning. VIII-05 2022 3rd Quarter Financial Update 7 | P a g e Police Reserve – Fund 221 Arena – Fund 615 VIII-05 2022 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 61% collected as of September 30th.  Expenditures are well below budget. The largest factor is capital outlay, which is nearly $1.7 million below budget. This is due to timing of the Water Tower reconditioning project and other capital expenditures. Overall expenditures will be close to budget at year-end. Sewer – Fund 601 VIII-05 2022 3rd Quarter Financial Update 9 | P a g e Storm Water – Fund 603 Hydro – Fund 620  The hydro plant’s production has improved in the third quarter. Beginning in late summer, the plant has been operating at maximum capacity.  For the final quarter of 2022, the plant is expected to continue producing at its highest capacity, which should improve the year’s revenue.  The plant should stay within budget for the year.  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-05 2022 3rd Quarter Financial Update 10 | P a g e Transfers 2022 Transfers Quarterly transfers are made for administrative charges, internal funding, and savings needs. Transfers posted for 3rd quarter 2022 were all budgeted transfers or budgeted use of stabilization funds. VIII-05 2022 3rd Quarter Financial Update 11 | 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, 2021 September 30, 2022 General Fund 6,519,194 8,750,109 Parks 1,265,617 1,373,356 Aquatic Center 306,145 342,423 Cable TV 111,762 103,620 Cable Access 39,423 37,508 Heritage Preservation 84,122 87,839 Fire & Ambulance 983,543 366,752 LeDuc Historical Estate Operations 174,633 152,027 Police Reserves 17,981 27,717 DUI Enforcement & Forfeitures 37,227 48,243 2016 Equipment Certificates 47,881 46,612 Parks Facility Bonds 323,179 213,637 2013 Equipment Certificates 85,370 83,584 2014 Equipment Certificates 16,461 16,461 Parks Capital Projects 260,903 119,448 Budget Stabilization Fund 345,232 345,232 Guardian Angels - TIF 19,690 7,064 HEDRA 1,369,161 1,059,552 NAPA-TIF 6,431 (15,984) Downtown Redevelopment - TIF (20,543) (21,288) Hudson Sprayers - TIF 7,455 11,152 School House Square – TIF 0 (1,994) PW Cold Storage Building 0 473,149 2020 Improvements (242,410) (242,410) 2021 Improvements (9,632) (369,760) 2022 Improvements (2,867) 1,598,090 Debt Redemption 1,016,100 987,187 2016A GO TIF (quasi refunding) Bonds 176,237 160,099 2010 GO Improvement Bonds 136,759 76,350 2011 GO Improvement Bonds 148,217 14,677 2012 GO Improvement Bonds 125,680 101,336 2013 GO Improvement Bonds 84,976 54,016 2014 GO Improvement Bonds 172,463 134,031 2015 GO Improvement Bonds 169,116 157,821 2016 GO Improvement Bonds 267,930 222,327 2017 GO Improvement Bonds 108,544 90,730 2018 GO Improvement Bonds 20,274 132 2019 GO Improvement Bonds 981,000 881,445 2020 GO Improvement Bonds 79,701 451,611 2021 GO Improvement Bonds 0 303,920 2022 GO Improvement Bonds 0 0 Water 3,016,737 3,909,871 Wastewater 2,055,014 1,857,691 Storm Water 1,011,317 1,004,285 Arena 503,433 492,075 VIII-05 2022 3rd Quarter Financial Update 12 | P a g e Hydro Electric (246,451) 153,673 Retiree Health 215,433 257,496 Compensated Absences 192,075 63,128 Vehicle & Equipment Fund 554,996 682,650 Insurance Fund 109,496 594,796 Escrow -Dev/Eng/TIF-HRA 219,974 584,813 Ruth Doffing Trust Fund-Library 97,927 89,262 C. Simmons Trust 221,578 212,912 C. Simmons Residuary 32,713 (358) VIII-05 2022 3rd Quarter Financial Update 13 | P a g e Investments The City’s total investment portfolio was valued at $32,151,798 as of September 30, 2022. Allocation of the City’s portfolio is as follows. Additional detail is available in Appendix A. VIII-05 2022 3rd Quarter Financial Update 14 | P a g e Appendix A – Investment Holdings Detail of Municipal Bonds, Agencies and CDs VIII-05 2022 3rd 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 ABertrand@Hastingsmn.gov. VIII-05 2022 3rd Quarter Financial Update 16 | P a g e Appendix B – Capital Infrastructure Status Through the third quarter in 2022 the Mill & Overlay and Seal Coat Programs have been completed. The City Hall Dome Remodel, PW Cold Storage, Water Tower Reconditioning, Water Meter Replacement program, and 2022 Neighborhood Infrastructure projects are all still in process. VIII-05