[Council Communication]  [Attachments]

Council Communication

Title:	Quarterly financial report: April - June, 2004
Dept:	Finance Department
Date:	September 7, 2004
Submitted By:	Lee Tuneberg, Finance Director
Approved By:	Gino Grimaldi, City Administrator

Synopsis:
Attached is the City of Ashland financial report for the fiscal year ended June 30, 2004. The preliminary end-of-year report includes:

1.	Summary of Cash and Investments as of June 30 for the last two years (page 1)
2.	Combined Statement of Financial Position City-wide (page 2)
3.	Schedule of Resources by Fund comparison for the last two years (page 3)
4.	Schedule of Budgetary Compliance per Resolution #2003-42 (pages 4 - 7)

The reports are intended to present preliminary end-of-year information in summary formats consistent with the information provided in the adopted FY 2003-2004 budget document as amended by Council action and the manner in which it will be shown in the end-of-year financial report. Many of these numbers will change before the audit is complete and the final report is issued.

Points of interest:

a.	Property tax revenue was $7.97 million exceeding budget by 3.25%
b.	Food & Beverage tax revenue was $1.68 million or 99.0% of budget
c.	Transient Occupancy Tax revenue was $1.31 million or 99.8% of budget
d.	Charges for Services (utility sales) was $18.86 million or 94.9% of budget
e.	Personal services were $19.0 million or $95.9 % of budget
f.	Materials & Services were $28.7 million or 91.1% of budget
g.	Expenditures for each fund were below total appropriations however the Telecommunications Fund - Operations Division did exceed the appropriation level by $5,540 with sufficient savings in Customer Relations/Promotions and Contingency to cover
h.	Expenses exceeded revenues by $1.3 million whereas the 2003-04 budget anticipated a greater ($8.1 million) shortfall

The numbers presented are unaudited and unadjusted.

Summary of Cash and Investments provides an understanding of changes in the City's cash position across funds and investment types. Please note that the city-wide cash balance was $18.5 million and has decreased $1.1 million dollars between years but decreased $1.9 million during the last quarter. During the year the City Recorder/Treasurer maintains reports on investment activities, the distribution of investments and trends that are available upon request.

The Combined Statement of Financial Position is similar to presentations provided in the annual financial report. It is intended to provide the reader an overall sense of the City's financial position at the present time. The preliminary end-of-year Ending Fund Balance is $5.3 million over budget. Last quarter the amount over budget was $8.1 million indicating a trend toward the targeted fund balances and a tendency to make large construction project payments in the last quarter.

Revenues and Budgetary Resources at June 30, 2004 total $68,274,366, as compared to total year-to-date requirements of $69,597,702 which results in a $1.3 million decrease to Unappropriated Ending Fund Balance. The City budgeted $8.1 million more in requirements than resources and that would reduce overall reserves for the ensuing year however, year-to-date Revenues are only 2% below budget and Expenses are 89% of appropriations. This helped the City to make up for the smaller carry forward from FY 2002-03 than was anticipated.

Fines and Forfeitures and Miscellaneous Revenues exceeded budgeted amounts generating an additional $720,000 primarily due to internal payments to the Insurance Fund for retirement reserves, donations and disposal of fixed assets.

Taxes, Charges for Services, and Systems Development Charges came close to the 100% mark, falling within 2.5% of projections for the year.

Licenses & Permits, Intergovernmental Revenues, Assessment Payments and Interest revenues ended below 80% of the budgeted amounts but within reason for each of the activities. Intergovernmental Revenues account for the largest shortfall due to timing since most of the money budgeted was received in the prior year. Licenses & Permits revenue fluctuates with activities, posting less than was projected for the year. Also, Assessments are less than budgeted due to pay-offs by land owners of the lien on their property as favorable refinancing was done last year. Interest earnings continue to be a smaller portion of total revenue as compared to prior years.

Budgetary Resources including operational loans and transfers were recorded as necessary.

Total Requirements were in keeping with the year's activities and revenues showing an 88.8% level. Personal Services ended at 95.9% with actual benefit expenses less than projected and positions going unfilled. Materials & Services ended at 91.1% of budget, reflecting the year's activities and conservative approach to expending. Debt Service, Interfund Loans and Operating Transfers were below budget but consistent with the year's activities and $1.2 million in Contingency went unused thus contributing to a larger fund balance carried forward.

The Schedule of Revenues by Fund provides an overview of all resources year-to-date as compared to the prior fiscal year. In many cases, collections for FY 2003-04 are ahead of the prior year however, variations due to construction and related financing and transfers can affect these percentages and consistency between years. Total revenues, city-wide, were approximately $0.2 million ahead of the prior year.

The 206% of budget posted in the Insurance Services Fund was caused by the receipt of contributions from all other funds related to payroll in anticipation of larger payments to PERS becoming necessary in coming fiscal years. The amount set aside here will minimize the impact of court cases requiring PERS to higher amounts to retirees.

The Schedule of Budgetary Compliance is intended to present expenditures on a budget basis by fund consistent with the resolution adopting appropriation levels in the budget compliance section of the document.

Seasonal and construction changes will affect the percentage spent year-to-date but some assumptions can be applied providing a measure of compliance on a budget basis.

General Fund - Total expenditures are 90% with Finance - Social Services Grants, Miscellaneous and Band and Community Development - Planning Division posting well below budget.

CDBG Fund - Expenditures are consistent with activity.

Street Fund - Expenditures at 99% of budget. Operations required a transfer of appropriation from Contingency for project costs.

Airport Fund - Expenditures are 35% of budget with hangar construction carrying into FY 2004-05.

Capital Improvements Fund - Expenditures are at 50% of budget reflecting limited capital project activity carried forward from the prior year.

Debt Service Fund - Expenditures are consistent with activity at 78%.

Water Fund - Expenditures are within budget at 73% but re-budgeting of some projects is required for FY 2004-05. Interfund loan was at 100%.

Wastewater Fund - Expenditures are within budget at 89% with some projects completed early or deferred. Interfund loan was at 100%.

Electric Fund - Total expenditures are slightly above 93%. The department scaled back on some expenses to stay within the budget and the Interfund loan was 95% expended.

Telecommunications Fund - Expenses are consistent with the business plan but not the budget. Total expenditures were 96% of total appropriation but there was a technical violation of the Operations Division appropriation level by over expending $5,540. The $75,000 Contingency went unused.

Central Services Fund - All departments are below budget with $130,000 in Contingency unused.

Insurance Services Fund - Costs are within budget and consistent with activity.

Equipment Fund - Expenditures are consistent with activity and under budget.

Cemetery Trust Fund - Expenditures are consistent with activity.

Parks and Recreation Fund - Expenditures are consistent with activity and well below budget.

Ashland Youth Activities Levy Fund - Expenditures are consistent with activity.

Parks Capital Improvements Fund - Recorded Capital outlay well under budget but consistent with activity.

Unaudited, detailed balance sheets, revenues and expenditure reports and fund statements are available for your review in the Finance Department office should you require any additional information.

Recommendation:
Staff recommends acceptance of this report.

Fiscal Impact:
No impact. This is an update on FY 2003-04 operational activity as compared to budget.

Background:
There are three ways in which to change appropriations after the Budget is adopted.

1.	A transfer of appropriations decreases an appropriation and increases another. This is the simplest budget change allowed under Oregon Budget law. This does not increase the overall budget. This is approved by a City council resolution.
2.	A supplemental budget of less than 10 percent of total appropriations within an individual fund follows a process similar to the transfer of appropriations.
3.	A supplemental budget in excess of 10 percent of total appropriations requires a longer process. This process includes a notice in the paper and a public hearing.

There were three transfers of appropriations and four supplemental budgets during the year.

Attachment:       • Quarterly Financial Report

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