HomeMy WebLinkAbout070124 City Council Business Meeting Packet- Added After Meeting
Agenda Bill AB24-107
Meeting Date: July 1, 2024
Agenda Item: Added During Meeting
Regular Business Meeting
Workshop/Study Session
Special Business Meeting
Submitted By: Richard Gould, Finance Manager
Date Submitted: July 1, 2024
Department: Finance Contact Phone: 360-379-4406
SUBJECT:2024FirstQuarterFinancial Update
CATEGORY: BUDGET IMPACT:
Consent Resolution Expenditure Amount:
Staff Report Ordinance Included in Budget? Yes No
Contract Approval Other:
Public Hearing (Legislative, unless otherwise noted)
3-Year Strategic Plan: N/A
Cost Allocation Fund: N/A
SUMMARY STATEMENT:
The following analysis is on the first quarter financial report for 2024. This analysis
st
provides a summary of the financial activity through March 31. The first quarter is usually
not indicative of the budget due to the cyclical nature of many revenues and expenditures.
The fund balance had decreased by $619,868 in these first three months of 2024.
Financial results are still on target. The City’s reserves continue to remain strong and
within policy parameters, keeping the City in a strong financial position.
Overall, the City of Port Townsend’s cash position is currently budgeted to decrease by
$1.8m or 5.5% by the end of 2024. This averages to nearly 1.4% decrease per quarter.
The decrease in Q1 is 1.9%, a little higher than projections, though with the cyclical nature
of certain revenue and expenditure this is to be expected. This will have an impact on
reserve balances especially in the General, Capital Projects, Storm Operations & Fleet
funds. This was anticipated and will be monitored closely. The reserves will still be within
City established policy levels.
ATTACHMENTS:
1.2024FirstQuarterFund Summary
CITY COUNCIL COMMITTEE RECOMMENDATION:
N/A
RECOMMENDED ACTION: No Action Required
ALTERNATIVES:
Take No Action Refer to Committee Refer to Staff Postpone Action
Remove from Consent Agenda Waive Council Rules and approve Ordinance ____
Other:
2024FirstQuarter Report 2024-Fund Financial Status Analysis
The following analysis is on the firstquarter financial reportfor 2024. This analysis provides a
st
summary of the financial activity through March31.The first quarter is usually not indicative of the budget
due to the cyclical nature of many revenues and expenditures, such as property tax revenue and the liability
insurance annual payment. The fund balance had decreased by $619,868in these first three months of 2024.
The Enterprise funds had an increase of $1.54m which offset the General and Special Revenue funds decrease
of $1.25m. However, the Capital Project funds project activity eclipsed the revenue side (grant reimbursements
etc.) by over $1m. Financial results are still
policy parameters, keeping the City in a strongfinancial position. The following comments regard other
significant activity in Q1:
The primary reason for the over $990k decrease in the General Fundis due to the $867k for
liability insurance for 2024. Expenditures in total are 1% over budget which Iview asa positive
sign when you consider the large insurance payment to WCIA. Revenues are 4% below budget
projections, which is also on track as the property taxes start coming in during the second quarter
th
(April and May) as well as in the 4quarter (October and November). So, no concerns here.
Special Revenue funds, which are down by $350k, are impacted most significantly by3 funds,
ARPA ($131K), Street Operations ($37k) and the library fund ($192k). ARPA has very little
revenue, if any projected as it is a matter of spending the grant proceeds over the next 2.5 years.
Street Operations are a balancing act projected to break even. Interfund transfers are balanced to
be received over the year whereas expenditures may exceed the budgeted revenues of these
transfers and the cyclical nature of taxes such as the fuel tax. In Q1Street Operations expenditure
exceeded revenue by 2%. That will be managed to balance out by year end. The Library Fund
faced a similar challenge to both the General and Street Operations funds. Expenditures
ndth
surpassed revenue by 15% due to the cyclical nature of property taxes received (2& 4
quarters).This fund is still on track to break even in 2024.
The Capital Project Fundsare comprised of General & Street Capital. General is over budget in
both expenditure and revenue and on track to come in at budgetary projections of a $321K fund
decrease due to activity. Street Capital is also budgeted to overspendby approximately $1m in
2024 and is on track to do so, no surprises here.
Enterprise Fundsare projected to spend more than Q1 activity, significantly so. Revenue
exceeded expenditure in the first quarter by 6%. However,many projects have yet to get started
and this will change in the coming months. There arealso debt service payments over $1m
which are paid in June and December,so this leads to the overstated fund balance position at Q1
end.
The Internal Service Fundsare overspent by $222k at this point. However, they are budgeted to
add to the overall fund balances by $147k by yearend. The fund that has the most significant
impact on this group is Fleet Operating & Maintenance which is budgeted to overspendby
$571k and after Q1 is at $255k down. Capital machinery and equipment is projected to spend
$895k along with another $535k in Fleet Replacement, of which over $368k was spent in the
first quarter.
Overall,is currently budgeted to decrease by $1.8m or 5.5% by the
end of 2024. This averages to nearly 1.4% decrease per quarter. The decrease in Q1 is 1.9%, a little higher than
projections, though with the cyclical nature of certain revenue and expenditure this is to be expected.This will
have an impact on reserve balances especially in the General, Capital Projects, Storm Operations & Fleet funds.
This was anticipated and will be monitored closely. The reserves will still be within City established policy
levels.
Richard A. Gould
Finance Manager