City Of Ellensburg Washington
City Of Ellensburg Washington
Quarterly Financial Status Report For the Quarter Ending December 31, 2008
FINANCE DEPARTMENT
MEMORANDUM DATE:
February 9, 2009
TO:
Mayor & City Council
VIA:
Ted Barkley, City Manager
FROM:
Ade’ Ariwoola, Finance Director
SUBJECT:
4th Quarter 2008 Financial Status Report
This memo is an integral part of the 4th Quarter 2008 Financial Status Report, the quarter ending December 31, 2008. In addition to the charts, we have included some of the major City funds with their budget status as of the end of the quarter. Our financial plan continues to perform as we expected. We are constantly monitoring the economic development of our area and how it affects the City's financial health. We know that revenues from most of the major categories of our Sales Tax are lower than they were this time last year. The November Sales Tax paid to the City in January is actually 8% lower than the same month last year. The month of November decreased from $267,955 to $246,474. The major driver of this decrease was the Retail Trade sector that reported $106,845 in November 2008 against $126,958 reported the same time last year. The Accommodation and Food Service sector saw a 2.4% increase for the month. There was a decrease of 15.8% for the month in the Retail Trade sector. Real Estate, Rental, & Leasing had a 43.9% decrease compared to the same time last year. Meanwhile Professional, Scientific, & Technology Services sector, had an increase of 16% in November compared to the similar time last year. Health Care Social Assistance had a 5.9% growth. Generally, our sales tax revenue through October is holding a little ahead of last year. Ellensburg and Washington State economy is not as bad as the national average shows. Our YTD (November 2007 thru October 2008) is 5.0% ahead of last year. See more information on Sales Tax on pages 2 and 5. The City Council’s decisions and the City’s Financial Management Policies affect the day-today financial health of the City.
Please let us know if you have any question or comments on this report. You may reach me at 509-962-7205 or [email protected].
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Governmental funds are funds generally used to account for the tax-supported activities. There are five different types of governmental funds: general fund, special revenue funds, debt service funds, and capital project funds. Revenue The pie chart below shows the budget revenue make up of the governmental funds. Taxes make up 54.30%, Charges for fees – 18.36%, and Intergovernmental – 20.6% of the total revenue. Budget
YTD
$9,413,941
Taxes
%
9,597,257
102% 124%
730,586
907,930
Intergovt'l
3,571,492
2,921,779
82%
Charges
3,181,993
3,035,053
95%
437,347
444,673
102%
$17,335,359
$16,906,692
98%
Lic & Permits
Fines & Misc.
Governmental Fund Revenue Breakdown
Fines & Misc. 3%
Charges 18%
Taxes 54%
Intergovt'l 21% Lic & Permits 4%
Budget VS. YTD $12,000,000 $10,000,000 Budget
YTD
$8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Taxes
Lic & Permits
Intergovt'l
Charges
Fines & Misc.
Out of the $9.4 million in taxes, property tax accounts for only $2.128 million, the balance is mostly sales tax – $4.02 million and internal utility taxes - $1.73 million. In addition to the $4.02 million, there is $381,700 in the Motel/Hotel tax. Cable accounts for $146,000, phone accounts for $390,000, garbage $161,000. Sales Tax continues to bring the most tax revenue for the City and will continue to provide the largest share of funding for the community services in the future. The Utility Tax, the second largest tax revenue for the City moves with the price of natural gas and weather. Last year, the country paid a high price for gas to heat their homes and we have seen a little decrease since then. The price we pay for natural gas determines what we charge for gas and that in turn affects the amount of utility taxes that will be collected.
Due to the construction at CWU, the License and Permit revenues is 124% of the annual budget. As of the end of the 4th quarter, the City has collected about 102% of the budgeted taxes for 2008. Most of the property taxes usually come in the month of May and November to the City from the County. As shown in the table below, the Sales Tax collection exceeded the budget 2
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amount, the Utility Tax also exceeded the budget , but the Property Tax, Motel/Hotel Tax, Gambling Tax, and Excise Tax fell below the budget amount. Budget 2,000,488 127,750 261,824 84,000 165,300 381,700 3,200,000 563,473 1,729,406 703,000 197,000 9,413,941
Property Tax-General Property-Lib Debt Service Local Criminal Justice Admission Tax Gambling Tax Motel/Hotel Sales Tax-Retail Sales Tax-3/10 Utility Tax-Internal Utility Tax-Outside Excise & Leaasehold Tax
Actual 1,954,588 126,580 323,328 94,232 122,357 365,725 3,441,089 483,596 1,703,104 810,051 172,610 9,597,260
Property Tax-General Admission Tax Sales Tax-Retail Utility Tax-Outside 7.47%
% of Budget 21.25% 1.36% 2.78% 0.89% 1.76% 4.05% 33.99% 5.99% 18.37% 7.47% 2.09%
Sales Tax accounts for 43% of the total tax revenue, Utility Tax accounts for 26%, Property Tax accounts for 23%, Motel/Hotel Tax accounts for 4%, and the other 4% is spread between Gambling, Excise, and Leasehold taxes. 6% out of the 43% Sales Tax revenue is dedicated to Police Department. 1.36% of the 23% of the Property Tax is dedicated to servicing the debt on the Library remodeling
Property-Lib Debt Service Gambling Tax Sales Tax-3/10 Excise & Leaasehold Tax
Local Criminal Justice Motel/Hotel Utility Tax-Internal
2.09% 21.25%
1.36%
18.37%
2.78%
5.99%
0.89%
33.99%
1.76% 4.05%
Property Tax The property tax amount includes the regular property tax for the general administration ($2,000,488), and the voter-approved property tax to pay off the debt on the Library and Hal Holmes project ($127,750). In addition, there is a $264,375 portion of the regular property tax used for the Firefighter Relief and Pension Fund. Cumulative Property Tax A 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20,500 28,000 36,500 145,000 835,000 1,200,000 1,200,000 1,210,000 1,220,000 1,250,000 1,930,000 2,392,613
0 183 183 132,914 870,996 1,046,118 1,130,530 1,136,610 1,155,706 1,321,681 2,158,275 2,345,543
Cumulative Property Tax Receipts 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
3
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
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Sales Tax The City’s Sales Tax rate went to 8.0% from 7.70% in April of 2008 due to the voter-approved rate for Criminal Justice funding. The portion reported here is the Sales Tax collected for the Cumulative Sales Tax 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 350,000 600,000 701,000 800,000 1,000,000 2,000,000 2,500,000 2,980,000 3,400,000 3,900,000 4,406,997
0 356,012 594,482 831,619 1,109,057 1,387,070 2,057,629 2,550,346 2,990,068 3,427,039 3,885,588 4,613,737
Cumulative Sales Tax Revenue 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 J an
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov Dec
general use, the 3/10 of one percent levied for the Criminal Justice funding in 2008, and the Local Criminal Justice Tax. For the purpose of this report, December and January Sales Tax revenues are combined in December. In December 2008, two months worth of Sales Tax will be reported. The October sales tax activity was received by the City in December and recorded as revenue in December, the November sales tax activity was received in January, and booked back into 2008. Utility Tax Our second major source of tax revenue is Utility Tax. The activities illustrated below, show the 2007 Actual, 2008 Budget, and the 2008 YTD as of the end of December. Due to the increase in the utility rate this year, the Utility Tax revenues will also increase. Utility Tax revenues are influenced by three main factors. Those factors are (1) utility rate, (2) weather, and (3) system growth. Cumulative Utility Tax 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oc t Nov Dec
0 200,000 440,000 638,000 765,000 1,000,000 1,150,000 1,380,000 1,530,000 1,770,000 1,901,000 2,432,406
0 214,108 441,642 654,091 860,127 1,032,686 1,303,887 1,496,617 1,664,480 1,907,121 2,106,605 2,513,154
Cumulative Utility Tax Revenues 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb Mar Apr May Jun
Jul Aug Sep
Oct Nov Dec
The City generates utility tax revenues from a variety of sources like sale of City’s gas, electric, water, and sewer. We collect a major part of water utility tax in the summer due to the increased usage in the summer. The Cable revenue includes both the General Fund and the special revenue funds. 4
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October 533,586 384,246 174,418 163,219 107,847 340,800 127,042
2008 YTD November 596,270 416,317 200,252 185,451 107,847 392,586 127,042
07 Actual 08 Budget 703,114 736,064 486,866 07 Actual 535,816 191,035 08 Budget 233,295 200,174 December 230,231 116,001 146,000 470,652 390,000 165,233 161,000
December 722,883 531,831 233,267 220,164 171,359 464,257 169,393
07 Actual 703,114 486,866 191,035 200,174 116,001 470,652 165,233
Electric Gas Water Sewer Cable Telephone Garbage
800,000 700,000 600,000 500,000 400,000 300,000
Electric Gas Water Sewer Cable Telephone Garbage
08 Budget 736,064 535,816 233,295 230,231 146,000 390,000 161,000
December 722,883 531,831 233,267 220,164 171,359 464,257 169,393
200,000 100,000 0 Electric
Gas
Water
Sewer
Cable
Telephone
Garbage
Licenses/Permits The Licenses/Permits for the 2008 budget include $657,000 (YTD actual is $835,396) in Building Permits from the Community Development Department, $63,886 for Licenses and Permits in the Finance Department, $5,500 in Animal Control and Concealed Pistol Licenses in Cumulative Licenses/ Permits 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oc t Nov Dec
15,000 50,000 80,000 200,000 450,000 700,000 705,000 710,000 715,000 720,000 722,000 730,586
10,133 51,651 127,321 205,874 481,740 776,798 801,797 827,264 854,364 876,329 897,122 907,930
Cumulative Licenses/Permits Revenues
1,000,000 800,000 600,000 400,000 200,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
the Police Department, $3,700 in Street Use Permits in the Arterial Street Fund, and $500 for the Garbage Permits in the Non-departmental in accordance with Ordinance #2820-1970. Licenses and permits have continued to see growth over the past few years. The chart below illustrates the major components of this revenue source. Although the residential construction is down, there are still some major activities in the commercial and governmental construction. 5
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There was a major building permit payment in the last quarter mainly from the governmental sector. The following graph shows the two major revenue groups of Licenses and Permits revenue.
Business Licenses Building Permits
Annual 06 Actual 44,092 481,203
Annual Annual 07 Actual 08 Budget 55,196 60,836 756,524 657,000
08 YTD Oct 54,403 806,835
08 YTD Nov 54,937 826,064
08 YTD Dec 55,726 835,396
Licenses & Permits Revenue 900,000 800,000 06 Actual
700,000
07 Actual
600,000
08 Budget
500,000
Dec
400,000 300,000 200,000 100,000 0 Business L icenses
Building Permits
Generally, the construction has slowed down as we have seen in other parts of the State. The construction on the Central Washington University campus is fueling our Sales Tax revenue growth. The same CWU construction activity is affecting our Building Permits revenue. Both the Sales Tax revenues and the Building Permits revenues that are due to one-time construction projects like this should be viewed with caution and spending of this fund should be handled with caution as well by spending it on one time projects and nonrecurring items. Excise Taxes (317) Excise Taxes Revenues for the 2008 budget includes gambling, bingo & card games. Excise Tax Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative 08 Budget 08 Actual 30,192 60,383 90,575 120,767 150,958 181,150 211,342 241,533 271,725 301,917 332,108 362,300
0 11,087 11,087 45,150 85,486 107,751 124,962 176,962 191,453 238,216 244,186 294,965
Cumulative Excise Taxes & Other Revenues 400,00 0 350,00 0 300,00 0 250,00 0 200,00 0 150,00 0 100,00 0 50,00 0 0 Ja n
Fe b
6
Ma r
Apr
May
Jun
Jul
Aug
Se p
Oc t
N ov
De c
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We budgeted about $264,000 for the UAB grant 2 in the Arterial Street and we have received only $65,358, although we have collected over $1.3 million on the UAB grant 1. The STP grant budget was $441,000 and we have processed $47,739. We have not collected anything out of the $225,000 RCO grant for Park Acquisition fund in the year. The $60,000 from the county is pending as well. We spent over $200,000 on baseball field capital improvement and over $160,000 in improving Alder Street Park accounting for most of the uncollected/unbilled revenue as shown above. Motor Vehicle Fuel tax budget is $293,794 (264,682 YTD) in the Street Fund and $138,256 (124,671 YTD) in the Arterial Street. Intergovt'l (330) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative 08 Budget 08 Actual 239,853 479,706 719,558 959,411 1,199,264 1,439,117 1,678,969 1,918,822 2,158,675 2,398,528 2,638,380 3,571,492
19,507 66,708 168,503 240,357 310,007 391,066 635,335 1,117,034 1,618,265 1,959,310 1,985,381 2,921,779
Cumulative Intergovernmental Revenues 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb Mar
Apr
May Jun
Jul
Aug Sep
Oct
Nov Dec
General Fund The 2008 General Fund property tax revenue budget went down from the 2007 budget due to a portion of the revenue ($264,375) being diverted to the Fire Relief & Pension Fund to fund the cost of the retirees’ medical and retirement payments to those firefighters that retired prior to the LEOFF retirement programs. Also, the Fire Department budget is no longer part of the City’s budget. Both the department’s expenditures and revenues are no longer included in the City’s annual budget. The General Fund departments are funded mainly by the Property Tax revenues, transfer from the Sales Tax Fund #140, Utility Taxes, Licenses & Permit Fees, and Charges for Services as shown below. There was a $5,003 donation to the Animal Shelter to be used for the purchase of new software. The total Sales Tax and Utility Tax out-performed the budget due to the tax revenue on the CWU construction and the utility tax revenue from telephone. The CWU construction also contributed to the good performance of the Licenses and Permit revenue, the City collected $184,000 more in building permits than was originally budgeted; that is almost 29%. In total, the General Fund collected more revenue than originally budgeted due to one time incidences explained above.
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Taxes Licenses & Perm. Intergovt Rev. Charges for Serv. Fines & Forfeits Misc Transfers Total
% of Budget Taxes + Transfers Combined 44.42% 59.87% 6.60% 6.60% 4.37% 4.37% 26.77% 26.77% 0.71% 0.71% 1.68% 1.68% 15.45%
08 Budget 08 YTD Actual 4,889,018 4,943,810 726,886 904,696 481,062 533,112 2,946,893 2,881,758 77,800 85,995 184,547 246,304 1,700,000 1,700,000 11,006,206 11,295,675
General Fund Revenues 6,000,000
08 Budget
5,000,000
08 YTD Actual
4,000,000 3,000,000 2,000,000 1,000,000 0 Taxes
Licenses & Perm.
Intergovt Rev.
Charges for Serv. Fines & Forfeits
Misc
Transfers
The “Transfers” in the table above is from Sales Tax Fund, therefore the actual total tax support of the General Fund is 59.87%, and “Charges for Services” is 26.77%. General government operations like policing, park maintenance, and the administration of the city government is mostly funded by taxes. Therefore, any decrease in the tax revenue will greatly affect the service delivery. The majority of our property tax revenues come into the City in two basic waves, May and November. A major part of the Sales Tax revenues come into the City at the tail end of the year and early in the year. General Cumulative Fund A 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
800,000 1,300,000 1,800,000 2,750,000 3,850,000 4,700,000 5,500,000 6,200,000 7,000,000 9,200,000 10,000,000 11,006,206
982,211 1,357,468 1,803,694 3,295,179 4,483,003 5,662,022 7,037,279 7,406,365 7,759,156 9,310,513 10,393,906 11,295,676
Cumulative General Fund Total Revenues 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
In addition to the actual revenue exceeding the budgeted amount, the actual total expenditure also came below the budgeted amount. Several departments spent less than the amount budgeted due to vacancies and great leadership. The amount overspent in the Library is due to the flooding in the Library and the amount is fully recovered from the insurance company. The insurance reimbursement of $208,742 ($175,629 budget) is not included in the revenue above. 8
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General Fund
Cumulative 08 Budget 08 Actual
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1,000,679 2,001,358 3,002,037 4,002,716 5,003,395 6,004,074 7,004,753 8,005,432 9,006,111 10,006,790 11,007,469 12,008,148
Dept
789,204 1,552,029 2,352,165 3,592,634 4,468,105 5,235,467 6,493,373 7,271,243 8,039,980 9,100,851 9,973,034 11,258,970
08 Budget
General
1,406,712
Finance
1,561,546
City Manager Fire
801,720 137,819
Police
3,709,696
Community Dev.
921,116
Engineering
731,819
Parks & Rec
1,658,165
Library
1,079,556
Total
Cumulative General Fund Total Expenditures
12,008,149
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
08 Actual Variance 1,301,385 105,327 1,357,987 203,559 760,564 41,156 111,787 26,032 3,457,991 251,705 757,777 163,339 720,674 11,145 1,710,186 -52,021 1,080,619 -1,063 11,258,970
11.71% 13.00% 6.68% 1.15% 30.89% 7.67% 6.09% 13.81% 8.99%
749,179
General Fund Expenditures 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0
General
Finance
City Manager
Fire
Police
Community Dev.
08 Budget
Engineering
Parks & Rec
Library
08 Actual
Police and Parks & Recreation Departments account for 44.70% of the City’s total General Fund budget in 2008. Police alone is 30.89% of the General Fund budget with additional Police related expenditures in the Police Reserve Fund and Criminal Justice Fund that are not part of the General Fund. The Finance Department is mostly influenced by the City utilities; almost 10 out of the 16 employees in the Finance Department are dedicated to servicing utility customers. The staff number and the cost will grow with the utility growth.
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The following are the revenue breakdown of the fee for services in both Parks & Recreation Department and the Police Department:
R a cqu e t C en te r Yo u th C e n te r Ad u lt Ac ti vity C e nte r Aq u atic C en te r An im al C o ntr ol
An nual
An nual
Ann ual
0 6 A ctu al 4 5,0 2 5 7,6 5 0 6 7,0 6 6 1 9 3,2 1 0 5 4,2 3 8
0 7 A ctu al 4 6,7 91 9,9 90 6 4,3 10 2 0 8,8 24 5 9,0 05
0 8 B ud g e t 5 2,0 00 6,7 50 5 3,6 52 2 2 5,1 00 6 2,3 97
08 YT D
08 YT D
O ct 38 ,7 63 4 ,1 96 58 ,6 10 1 73 ,7 97 62 ,7 72
08 Y T D
No v 4 0,7 5 9 5,3 6 0 6 3,4 8 4 1 8 2,9 0 7 6 5,0 6 0
De c
44,8 64 5,8 74 68,1 76 196,8 81 77,9 54
P ro g ra m R e ven u es
25 0 ,0 0 0
20 0 ,0 0 0
06 Actua l
0 7 Actu al
08 Budg et
O ct
15 0 ,0 0 0
10 0 ,0 0 0 5 0 ,0 0 0
0 R a cq u e t C e nte r
Yo u th C e n te r
A d ul t Ac tiv ity C e nte r
A q u a ti c C en te r
A ni m a l C o n tro l
The General Fund expenditure is mostly salaries and benefits of regular employees, therefore the expenditure growth is steady throughout the year. The revenue on the other side is different, most of the property tax comes in mainly May and November, the transfers are done at the beginning of each quarter, and the sales tax is recorded mostly early in the year and the tail end of the year. In order to adequately prepare to pay our monthly bills, the General Fund needs about one month expenditure, which is 8.3% of the budget, to help pay part of the bills in February, March, and April before the first batch of the property tax comes in May, and the second quarter transfer in April. General Fund
Cumulative Revenue Expenditures
Cumulative General Fund Total Revenues/Expenditures
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
982,211 1,357,468 1,803,694 3,295,179 4,483,003 5,662,022 7,037,279 7,406,365 7,759,156 9,310,513 10,393,906 11,295,676
12,000,000
789,204 1,552,029 2,352,165 3,592,634 4,468,105 5,235,467 6,493,373 7,271,243 8,039,980 9,100,851 9,973,034 11,258,970
10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun
10
Jul Aug Sep Oct Nov Dec
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Streets The City earned over $302,000 in Motor Vehicle Fuel Tax last year and as of the end of January we have received from the State $264,682 out of $293,794 budgeted for the year. In addition, the Actual Beginning Fund Balance is less than projected by $27,000. Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Streets Revenues
Cumulative Budget 2008 96,670 193,340 290,010 386,680 483,350 580,020 676,690 773,360 870,030 966,700 1,063,370 1,160,129
168,123 195,380 222,427 416,458 439,161 491,206 689,014 719,180 743,683 944,402 944,675 1,022,987
1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
Jan Feb Mar Apr May Jun
60,000 130,000 215,000 290,000 340,000 410,000 480,000 615,000 815,000 1,002,000 1,200,000 1,367,276
94,708 151,907 221,506 333,676 402,691 474,826 571,014 715,682 911,326 1,020,417 1,089,944 1,208,747
Aug Sep Oct Nov Dec
Cumulative Streets Expenditures
Cumulative StreetsA 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jul
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug Sep
Oct
Nov Dec
Revenues Expenditures 944,402 1,020,417 944,675 1,089,944 1,022,987 1,208,747
October November December
Revenues
1,500,000
Expenditures
1,000,000 500,000 0 October
November
December
Since the expenditure exceeded the revenue, the City used part or prior year fund balance.
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Arterial Streets: There is $1.92 million in grant money included in the Arterial Street budget. Most of the work was done in the summer and fall, therefore most of the revenue will be received in the 4th quarter of the year. Arterial Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
250,913 500,000 700,000 850,000 950,000 1,200,000 1,400,000 1,800,000 2,000,000 2,500,000 2,900,000 3,204,779
Arterial Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Arterial Streets Revenues
Cumulative Budget 2008 191,709 209,403 222,464 423,288 444,755 457,249 679,120 1,136,021 1,550,676 1,993,971 2,041,442 2,574,219
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
October November December
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Cumulative Arterial Streets Expenditures
Cumulative Budget 2008 285,833 571,666 857,499 1,143,332 1,429,165 1,714,998 2,000,831 2,286,664 2,572,497 2,858,330 3,144,163 3,626,323
Feb
3,793 3,793 112,352 122,165 278,769 598,257 832,374 1,167,758 1,491,351 2,127,702 2,413,449 2,700,240
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Revenues Expenditures 1,993,971 2,127,702 2,041,442 2,413,449 2,574,219 2,700,240 Revenues
3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 October
Expenditures
November
December
Although the actual expenditure came below the budgeted amount, the revenue also came below the expenditure and we spent more than we brought in resulting in the use of the fund balance. 12
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Criminal Justice Fund The 3/10 of one percent additional Sales Tax took effect April 1st 2008. The City received the first of this revenue in June. The fund is dedicated to funding additional patrol officers and animal control officers throughout the City. In order to get a head start in recruitment and training of these officers, the Council approved an interfund loan for $75,000 between the Criminal Justice Fund and the Light Fund to provide a temporary funding for the Police Department, pending the receipt of the Sales Tax money. Criminal Cumulative JusticeA 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Criminal Justice Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 75,000 75,000 215,868 215,868 215,868 356,737 356,737 356,737 497,605 497,605 638,473
0 75,000 75,000 75,000 75,000 124,834 175,752 251,154 315,881 377,901 452,409 484,085
Cumulative 08 Budget 08 Actual 0 5,000 25,000 75,672 126,344 177,016 302,688 353,360 404,032 494,704 553,376 608,069
0 5,403 22,627 39,413 64,193 104,635 156,158 186,912 213,320 254,916 302,149 381,079
Cumulative Criminal Justice Sales Taxes Revenues 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Cumulative Criminal Justice Sales Taxes Expenditures 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
Jan
Feb
Mar Apr May Jun
Jul
Aug Sep
Oct
Nov Dec
Although the actual revenue came below the budgeted amount, the expenditures also came below the budgeted amount and the actual revenue exceeded the amount that was actually spent creating a positive fund balance for future use and paying off of the interfund loan. Sales Tax Fund As illustrated, our largest (General Retail) sales tax category is trending downward in 2008. This category includes such businesses as Motor Vehicle and Parts Dealers (down 23%), Furniture and Home Furnishings (down 57%), electronics and appliances (down 49%), Building Material & Garden (down 8%), Food & Beverage Stores (up 15%), Health & Personal Care Stores (up 12%), Gasoline Stations (up 1%), Clothing & Accessories (up 6%), Sporting Goods (up 4%), General Merchandise Stores (down 4%), Misc. Stores (down 28%), and Non-store Retailers (down 11%).
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Construction Retail T rade RE, R ental, Leas ing Manufac turing W holesale Trade Acc om . & Food Service
Cu rrent Period N ov-07 Nov-08 % Chang e 43,848 48,964 11.67% 126,958 106,845 -15.84% 7,097 3,984 -43.86% 966 14,029 1352.28% 18,081 12,725 -29.62% 28,901 29,591 2.39%
YTD (from No vember) No v-07 N ov-08 % Change 43,848 48,964 11.67% 126,958 106,845 -15.84% 7,097 3,984 -43.86% 966 14,029 1352.28% 18,081 12,725 -29.62% 28,901 29,591 2.39%
The Top 5 Sales Tax Group- 2007 & 2008
1 40 ,0 0 0 1 20 ,0 0 0 1 00 ,0 0 0
Nov-07
80 ,0 0 0
Nov-08
60 ,0 0 0 40 ,0 0 0 20 ,0 0 0 0 C on structio n
Re tail Tra de
RE , R en ta l, Le asi ng
Man ufa cturi ng
W h ol esa le Tra de
A ccom. & Foo d Servi ce
The construction category indicates an increase of 11.67% over November of 2007. This is much less than what we have experienced in the prior months. This is suggesting the construction is getting to the tail end. The University’s construction projects are helping the total sales receipts in this category despite the fact that there is a major reduction in the residential construction. Manufacturing in October of 2008 had a significant increase over 2007 due to major activities in the Food Manufacturing sector. The Accommodation part of the Accommodation and Food Service had a 0% YTD increase over YTD of October last year. Sales Tax-Last 12 Months 2008 2008 2007- October2008 Oth ers 441 Motor Vehicle & Parts Dealer 236 Re ntalConstruction & Le asi ng Se rvic es of Building 238 Specialty Trade contractors Tel eco mmun ica tio ns 423 Wholesale Trade-Durable No nsto re re ta il ers 424 Wholesale Trade-Nondurable Misc. Store Re ta il ers 444 Building Material & Garden Ge ne ra l Merch an di se Sto res 442 Furniture & Home Furnishings othi ng & Acces sori es 445Cl Food & Beverage Stores Gas oli ne Sta tio ns 722 Food Services Drinking Places 611 Educational Edu ca ti on al Se rvic es Services 447 Gasoline Stations Foo d Se rvice s Dri nki ng P lac es 448 Clothing & Accessories Fo od & B eve rag e Sto res 452 General Merchandise Stores Furn iture & Ho me Furn ish in gs 453 Misc. Store Retailers B ui ldi ng Materi al & Ga rde n 454 Nonstore retailers Wh ol esaTelecommunications le Tra de -No nd ura bl e 517 532 &uraLeasing Services Who Rental le sal e Trad e-D bl e Sp eci alOthers ty Trad e co ntra ctors Co nstru ction of Bu ild in g
386,094 487,018 439,018 108,279 209,343 162,826 144,802 133,590 71,523 54,875 131,098 126,839 80,950 106,646 128,931 124,567 352,455 334,483 125,431 107,766 98,281 95,746 27,113 26,387 370,542 370,598 147,014 137,496 39,147 33,111 92,424 89,212 85,271 79,217 533,096 719,641 3,462,533 3,298,297
11.15% 12.68% 6.05% 4.18% 2.07% 3.79% 2.34% 3.72% 10.18% 3.62% 2.84% 0.78% 10.70% 4.25% 1.13% 2.67% 2.46% 15.40%
2007 14.77% 3.28% 4.94% 4.05% 1.66% 3.85% 2008 3.23% 3.78% 10.14% 3.27% 2.90% 0.80% 11.24% 4.17% 1.00% 2.70% 2.40% 21.82%
2007
Motor Ve hi cle & P arts De al er
0
60,000
120,000
180,000
240,000
14
300,000
360,000
420,000
480,000
540,000
600,000
2/11/2009
The graph on the previous page shows the past 12 months as of the end of October 2008 and 2007, while the current month will show the trend and both graphs need to be read together to fully understand the economic situation of the City. Motor Vehicle and Parts Dealers (MV&PD) accounts for a large share of the City’s sales tax revenue and due to the gas prices, their sales have significantly dropped. Most auto dealers’ sales come from the sales of large vehicles. When there is a decrease in the sales of SUVs and large vehicles, their total gross sales decrease. The “Gasoline Stations” as shown in the graph have not seen a major jump in their gross sales over the last year, probably because the actual quantity purchased is decreasing because people are driving less. People are spending roughly about the same amount but getting less quantity. This time last year, MV&PD accounted for 15.89% of our total Sales Tax revenue; today, it has dropped to 11.16%. Last year, Construction of Buildings accounted for 13.03% compared to 18.20% today. Some of our automobile businesses are expecting a 30% sales decrease over 2007. Nationwide, over 18 million new vehicles were sold last year compared to 14 million projected for this year. The September through November Sales Tax receipts (the last 3 months on the table on the next page) indicate consistent exponent decline. This decline is also an indication that the CWU construction is nearing completion and we are beginning to feel the economic pinch everyone has being feeling for a while. The City enjoyed big increases in February and April of 2008 over the prior year in Sales Tax revenue due to the construction, but September, October, and November have seen declines. November had the biggest decline of 8.71% over the prior year.
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2/11/2009
Sales Tax Payment Provided by State 3 ‐ Year Comparison by month
9/30 10/31 11/26
July August September
12/31 1/30
October November
$ 3,226,543
$ 3,325,874
400,000.00 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 ‐
4.56% 11.29% -5.54% 14.39% 10.30%
2.99% $ 3,441,080
2007
12.75% 1.44% 13.01% -8.00% 6.25% 8.82% 7.16% -2.28% -4.69% -8.71% 3.35%
2008
se
m ay
ap r il
ar ch m
ru ar
y
y fe b
ua r j an
de ce m
be
r
2006
2.08% 3.25%
6.38% 6.37%
m be r
May June
% of change from 2007
no ve
7/29 8/28
2.88% 0.35% -6.92%
oc to be r
February March April
-4.07% 4.60%
2008 356,012 238,470 237,128 277,438 278,013 264,014 343,940 302,401 302,052 315,701 279,435 246,475
be r
4/30 5/31 6/30
% of change from 2006
pt em
December January
2007 333,299 223,286 206,892 273,438 241,838 285,126 322,445 275,723 280,439 322,901 292,534 267,954
au gu st
2/29 3/31
2006 346,849 213,023 200,943 272,480 258,572 279,194 311,964 263,153 248,773 340,802 250,430 240,361
ju ly
Month Revenue Earned
ju ne
Month Received
The City’s Enterprise Funds are illustrated with both revenues and expenditures on the same chart. The funds accounted for in the Enterprise Funds are treated as businesses, therefore the revenues are expected to cover the expenses and have profit left over to be invested in the future expansions. Gas Operating revenues and expenditures are on track with the budget. Gas revenues depend a great deal on the weather and the commodity price. Gas is used mainly for heating and a major part of Gas Department revenue is generated during winter. The City buys gas wholesale and sells it to its customers with a markup to cover its cost and future expansions.
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2/11/2009
Gas Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 1,082,539 1,908,078 2,733,617 3,559,156 4,384,695 5,210,234 6,035,773 6,861,312 7,686,851 8,512,390 9,906,468
Cumulative Gas Revenues & Expenses
Cumulative Revenues Expenses 287,181 1,741,183 2,581,291 3,442,438 4,175,098 4,653,472 5,074,304 5,454,454 5,867,586 6,402,079 7,247,815 9,544,503
363,998 1,439,606 2,263,148 3,109,202 4,014,999 4,520,192 5,401,083 5,797,760 6,179,970 6,784,182 7,535,859 9,487,863
12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan
Feb
Mar
Apr May
Jun
Jul
Aug
Sep
Oct
Nov Dec
Light The revenue trend for the Light Department remains consistent while the budget and operating expenditures remain slightly below budget. This includes the operational budget only and does not include the construction budget. Light Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Light Revenues & Expenses
Budget
Cumulative Revenues
Expenses
650,000 1,723,717 2,797,434 3,871,151 4,944,868 6,018,585 7,092,302 8,166,019 9,239,736 10,313,453 11,387,170 12,884,609
423,432 1,875,708 2,902,551 3,852,832 4,724,302 5,620,516 6,736,045 7,677,976 8,656,416 9,747,550 10,778,639 12,856,840
664,867 1,729,683 2,616,125 3,737,520 4,550,908 5,175,021 6,141,445 6,945,315 7,858,183 7,948,059 9,493,072 11,364,033
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan
Feb Mar Apr May Jun
Jul
Aug Sep
Oct Nov Dec
Water The Water Department operation budget is $3,611,204. There is about $3.0 million in construction, which is not included in the information presented in the table below. This will require the sale of $3.0 million in bonds to finance the construction of two new wells at $1.0 million each and the extension of water main line from Vantage Highway along Pfenning Road to the end of the existing line that ends in front of Ellensburg High School near Locust Street. The total revenue exceeded the expenses which will in turn improve the fund balance. Water and Sewer Department borrowed money from Light Department to fund the construction projects and will sell bond later to repay the interfund loan. The Council approved the interfund loan late last year and the loan will be paid back in less than three years.
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2/11/2009
Water Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 500,000 600,000 1,000,000 1,300,000 1,600,000 1,900,000 2,200,000 2,600,000 2,800,000 3,100,000 3,611,204
Cumulative Water Revenues & Expenses
Cumulative Revenues Expenses 43,994 239,243 403,412 584,639 838,660 1,112,282 1,456,402 1,866,917 2,136,465 2,392,912 2,615,296 2,877,325
294,509 383,468 491,334 1,056,191 1,382,121 1,604,044 1,953,904 2,109,383 2,306,822 2,655,271 2,649,911 2,850,643
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar Apr May Jun
Jul
Aug Sep
Oct
Nov Dec
Sewer Sewer’s operation budget is only about 3.05 million as shown below. There is additional $1.6 million in capital projects, which will be financed with revenue bonds to extend the current main line, construction of Bio-Solids Thickener, and rehabilitation of approximately 1000 feet of sewer line. Sewer Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 500,000 600,000 800,000 1,000,000 1,250,000 1,500,000 1,800,000 2,100,000 2,500,000 2,800,000 3,046,207
Cumulative Sewer Revenues & Expenses
Cumulative Revenues Expenses 63,971 298,708 498,881 688,833 925,232 1,156,530 1,395,747 1,689,410 1,898,762 2,114,763 2,292,030 2,619,236
264,671 368,975 472,442 754,239 933,260 1,235,351 1,541,506 1,683,030 1,822,718 2,232,228 2,372,682 2,612,873
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Internal Services Funds These are funds used to account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. Shop Shop generates 57% ($756,000) of its revenues from renting equipment to other departments and bills monthly. The Warehouse Service Charges (21%) are billed quarterly and are charges for the storage and supplies that are purchased centrally and distributed to other City’s departments.
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Shop Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 100,000 224,101 348,202 472,303 596,404 720,505 844,606 968,707 1,092,808 1,216,909 1,341,010 1,489,211
Cumulative Shop Revenues & Expenses
Cumulative Revenues Expenses 197,249 267,208 343,796 536,238 603,702 682,106 1,040,049 1,126,682 1,207,923 1,257,277 1,345,576 1,425,401
105,630 164,437 203,651 343,632 418,698 692,958 871,975 921,043 1,034,868 1,175,669 1,231,472 1,340,652
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Information Technology (IT) The interdepartmental billings for IT Department are done quarterly. Therefore, the revenue will jump every quarter and remains almost flat thereafter, while the expenses will remain constant to cover the two FTEs in the IT Department pending the time the third position is filled. IT Department services all the computers, the network, and the City’s web site. IT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 60,000 122,059 184,118 246,177 308,236 370,295 432,354 494,413 556,472 618,531 680,590 744,704
Cumulative Revenues 191,563 192,405 193,022 384,589 384,589 385,107 576,388 577,276 577,775 769,149 770,713 771,190
Expenses 30,662 49,537 81,108 153,805 170,602 187,070 267,088 303,246 316,052 383,478 394,962 472,224
900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Despite the struggling economy, sluggish real estate market, and slow retail in other parts of the country, the City of Ellensburg’s financial condition remains favorable compared to various other cities of our size across the country. The low general retail and residential construction sales tax revenues are offset by high government construction sales tax revenue. This will most likely hold true for the next year. Sales Tax is the largest tax revenue source for the City. Therefore, the City needs to continue to expand this base in order to keep up with the service delivery cost, which is ever growing due to the labor cost and employees’ benefit cost. Our major retailers are having lower sales which will in turn affect their sister businesses, employment, community donations, etc. The Sales Tax receipts in October for the month of August excluding the sales tax on Construction shows a total decline, leading the way in this decline as expected is the Motor Vehicles and Parts Dealer. Therefore, the City needs to involve the business community to support this area of the economy. Motor Vehicle & Parts Dealer’s group provides the largest (over 13%) sales tax revenue for the City and the City of Ellensburg residents purchase about 80% of their used cars outside the 19
2/11/2009
Ellensburg area according to auto dealers. The City needs to find ways to enhance its revenue base by involving the business community to create strategies that will help create an environment to support new business coming into the community to complement the existing businesses. This way the community will be able to increase its employment base, and the City will be able to increase its revenue base by increasing the number of the sales tax payers. For this same group, about 70% of their sales come from the SUVs and trucks; unfortunately people are buying less SUVs and trucks now. There was a 41% decrease in December sales tax receipts (October Sales) and 20.7% decrease YTD. The City cannot do anything about the national trend of downward sales tax growth. Although the City can reduce the impact in the City of Ellensburg by encouraging new and complementing businesses to move into the City and in turn increase its own sales tax revenue. The City has a large population of students; we need to target this group, otherwise the City will continue to lose potential purchases and sales tax revenues from this group. Most of our major revenues like Sales Tax, Property Tax, and Charges for Services (gas revenue and water revenue) do not flow into the City at the same rate with our expenditures. Therefore, the City will need to continue to require adequate fund balances to be able to cover its expenditures during the low revenue cycle until the revenue catches up with spending. The City has a good fund balance policy in place and we need to continue to work toward maintaining the required fund balance ratio. The City supports the General Fund programs by mostly taxes – 60%, this is a large share of the budget and a big reliance on taxes for the funding of the City’s operations, especially where only two departments (Police and Parks) account for 45.6% of the total General Fund budget. The “Charges for Services” account for 26.8% of the total General Fund revenue and most of that are interfund and interdepartmental charges, therefore they are not outside generated revenues. The City needs to develop strategies to increase its “Charges for Services” revenue to reduce its excessive reliance on taxes. If the current trend continues without a strategy to increase Sales Tax revenues, the City will face declining revenue against increasing cost of service and without an adequate fund balance to soften the blow we face potential service reduction.
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2/11/2009
Quarterly Financial Status Report For the Quarter Ending December 31, 2008
FINANCE DEPARTMENT
MEMORANDUM DATE:
February 9, 2009
TO:
Mayor & City Council
VIA:
Ted Barkley, City Manager
FROM:
Ade’ Ariwoola, Finance Director
SUBJECT:
4th Quarter 2008 Financial Status Report
This memo is an integral part of the 4th Quarter 2008 Financial Status Report, the quarter ending December 31, 2008. In addition to the charts, we have included some of the major City funds with their budget status as of the end of the quarter. Our financial plan continues to perform as we expected. We are constantly monitoring the economic development of our area and how it affects the City's financial health. We know that revenues from most of the major categories of our Sales Tax are lower than they were this time last year. The November Sales Tax paid to the City in January is actually 8% lower than the same month last year. The month of November decreased from $267,955 to $246,474. The major driver of this decrease was the Retail Trade sector that reported $106,845 in November 2008 against $126,958 reported the same time last year. The Accommodation and Food Service sector saw a 2.4% increase for the month. There was a decrease of 15.8% for the month in the Retail Trade sector. Real Estate, Rental, & Leasing had a 43.9% decrease compared to the same time last year. Meanwhile Professional, Scientific, & Technology Services sector, had an increase of 16% in November compared to the similar time last year. Health Care Social Assistance had a 5.9% growth. Generally, our sales tax revenue through October is holding a little ahead of last year. Ellensburg and Washington State economy is not as bad as the national average shows. Our YTD (November 2007 thru October 2008) is 5.0% ahead of last year. See more information on Sales Tax on pages 2 and 5. The City Council’s decisions and the City’s Financial Management Policies affect the day-today financial health of the City.
Please let us know if you have any question or comments on this report. You may reach me at 509-962-7205 or [email protected].
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2/11/2009
Governmental funds are funds generally used to account for the tax-supported activities. There are five different types of governmental funds: general fund, special revenue funds, debt service funds, and capital project funds. Revenue The pie chart below shows the budget revenue make up of the governmental funds. Taxes make up 54.30%, Charges for fees – 18.36%, and Intergovernmental – 20.6% of the total revenue. Budget
YTD
$9,413,941
Taxes
%
9,597,257
102% 124%
730,586
907,930
Intergovt'l
3,571,492
2,921,779
82%
Charges
3,181,993
3,035,053
95%
437,347
444,673
102%
$17,335,359
$16,906,692
98%
Lic & Permits
Fines & Misc.
Governmental Fund Revenue Breakdown
Fines & Misc. 3%
Charges 18%
Taxes 54%
Intergovt'l 21% Lic & Permits 4%
Budget VS. YTD $12,000,000 $10,000,000 Budget
YTD
$8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Taxes
Lic & Permits
Intergovt'l
Charges
Fines & Misc.
Out of the $9.4 million in taxes, property tax accounts for only $2.128 million, the balance is mostly sales tax – $4.02 million and internal utility taxes - $1.73 million. In addition to the $4.02 million, there is $381,700 in the Motel/Hotel tax. Cable accounts for $146,000, phone accounts for $390,000, garbage $161,000. Sales Tax continues to bring the most tax revenue for the City and will continue to provide the largest share of funding for the community services in the future. The Utility Tax, the second largest tax revenue for the City moves with the price of natural gas and weather. Last year, the country paid a high price for gas to heat their homes and we have seen a little decrease since then. The price we pay for natural gas determines what we charge for gas and that in turn affects the amount of utility taxes that will be collected.
Due to the construction at CWU, the License and Permit revenues is 124% of the annual budget. As of the end of the 4th quarter, the City has collected about 102% of the budgeted taxes for 2008. Most of the property taxes usually come in the month of May and November to the City from the County. As shown in the table below, the Sales Tax collection exceeded the budget 2
2/11/2009
amount, the Utility Tax also exceeded the budget , but the Property Tax, Motel/Hotel Tax, Gambling Tax, and Excise Tax fell below the budget amount. Budget 2,000,488 127,750 261,824 84,000 165,300 381,700 3,200,000 563,473 1,729,406 703,000 197,000 9,413,941
Property Tax-General Property-Lib Debt Service Local Criminal Justice Admission Tax Gambling Tax Motel/Hotel Sales Tax-Retail Sales Tax-3/10 Utility Tax-Internal Utility Tax-Outside Excise & Leaasehold Tax
Actual 1,954,588 126,580 323,328 94,232 122,357 365,725 3,441,089 483,596 1,703,104 810,051 172,610 9,597,260
Property Tax-General Admission Tax Sales Tax-Retail Utility Tax-Outside 7.47%
% of Budget 21.25% 1.36% 2.78% 0.89% 1.76% 4.05% 33.99% 5.99% 18.37% 7.47% 2.09%
Sales Tax accounts for 43% of the total tax revenue, Utility Tax accounts for 26%, Property Tax accounts for 23%, Motel/Hotel Tax accounts for 4%, and the other 4% is spread between Gambling, Excise, and Leasehold taxes. 6% out of the 43% Sales Tax revenue is dedicated to Police Department. 1.36% of the 23% of the Property Tax is dedicated to servicing the debt on the Library remodeling
Property-Lib Debt Service Gambling Tax Sales Tax-3/10 Excise & Leaasehold Tax
Local Criminal Justice Motel/Hotel Utility Tax-Internal
2.09% 21.25%
1.36%
18.37%
2.78%
5.99%
0.89%
33.99%
1.76% 4.05%
Property Tax The property tax amount includes the regular property tax for the general administration ($2,000,488), and the voter-approved property tax to pay off the debt on the Library and Hal Holmes project ($127,750). In addition, there is a $264,375 portion of the regular property tax used for the Firefighter Relief and Pension Fund. Cumulative Property Tax A 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20,500 28,000 36,500 145,000 835,000 1,200,000 1,200,000 1,210,000 1,220,000 1,250,000 1,930,000 2,392,613
0 183 183 132,914 870,996 1,046,118 1,130,530 1,136,610 1,155,706 1,321,681 2,158,275 2,345,543
Cumulative Property Tax Receipts 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
3
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2/11/2009
Sales Tax The City’s Sales Tax rate went to 8.0% from 7.70% in April of 2008 due to the voter-approved rate for Criminal Justice funding. The portion reported here is the Sales Tax collected for the Cumulative Sales Tax 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 350,000 600,000 701,000 800,000 1,000,000 2,000,000 2,500,000 2,980,000 3,400,000 3,900,000 4,406,997
0 356,012 594,482 831,619 1,109,057 1,387,070 2,057,629 2,550,346 2,990,068 3,427,039 3,885,588 4,613,737
Cumulative Sales Tax Revenue 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 J an
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov Dec
general use, the 3/10 of one percent levied for the Criminal Justice funding in 2008, and the Local Criminal Justice Tax. For the purpose of this report, December and January Sales Tax revenues are combined in December. In December 2008, two months worth of Sales Tax will be reported. The October sales tax activity was received by the City in December and recorded as revenue in December, the November sales tax activity was received in January, and booked back into 2008. Utility Tax Our second major source of tax revenue is Utility Tax. The activities illustrated below, show the 2007 Actual, 2008 Budget, and the 2008 YTD as of the end of December. Due to the increase in the utility rate this year, the Utility Tax revenues will also increase. Utility Tax revenues are influenced by three main factors. Those factors are (1) utility rate, (2) weather, and (3) system growth. Cumulative Utility Tax 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oc t Nov Dec
0 200,000 440,000 638,000 765,000 1,000,000 1,150,000 1,380,000 1,530,000 1,770,000 1,901,000 2,432,406
0 214,108 441,642 654,091 860,127 1,032,686 1,303,887 1,496,617 1,664,480 1,907,121 2,106,605 2,513,154
Cumulative Utility Tax Revenues 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb Mar Apr May Jun
Jul Aug Sep
Oct Nov Dec
The City generates utility tax revenues from a variety of sources like sale of City’s gas, electric, water, and sewer. We collect a major part of water utility tax in the summer due to the increased usage in the summer. The Cable revenue includes both the General Fund and the special revenue funds. 4
2/11/2009
October 533,586 384,246 174,418 163,219 107,847 340,800 127,042
2008 YTD November 596,270 416,317 200,252 185,451 107,847 392,586 127,042
07 Actual 08 Budget 703,114 736,064 486,866 07 Actual 535,816 191,035 08 Budget 233,295 200,174 December 230,231 116,001 146,000 470,652 390,000 165,233 161,000
December 722,883 531,831 233,267 220,164 171,359 464,257 169,393
07 Actual 703,114 486,866 191,035 200,174 116,001 470,652 165,233
Electric Gas Water Sewer Cable Telephone Garbage
800,000 700,000 600,000 500,000 400,000 300,000
Electric Gas Water Sewer Cable Telephone Garbage
08 Budget 736,064 535,816 233,295 230,231 146,000 390,000 161,000
December 722,883 531,831 233,267 220,164 171,359 464,257 169,393
200,000 100,000 0 Electric
Gas
Water
Sewer
Cable
Telephone
Garbage
Licenses/Permits The Licenses/Permits for the 2008 budget include $657,000 (YTD actual is $835,396) in Building Permits from the Community Development Department, $63,886 for Licenses and Permits in the Finance Department, $5,500 in Animal Control and Concealed Pistol Licenses in Cumulative Licenses/ Permits 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oc t Nov Dec
15,000 50,000 80,000 200,000 450,000 700,000 705,000 710,000 715,000 720,000 722,000 730,586
10,133 51,651 127,321 205,874 481,740 776,798 801,797 827,264 854,364 876,329 897,122 907,930
Cumulative Licenses/Permits Revenues
1,000,000 800,000 600,000 400,000 200,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
the Police Department, $3,700 in Street Use Permits in the Arterial Street Fund, and $500 for the Garbage Permits in the Non-departmental in accordance with Ordinance #2820-1970. Licenses and permits have continued to see growth over the past few years. The chart below illustrates the major components of this revenue source. Although the residential construction is down, there are still some major activities in the commercial and governmental construction. 5
2/11/2009
There was a major building permit payment in the last quarter mainly from the governmental sector. The following graph shows the two major revenue groups of Licenses and Permits revenue.
Business Licenses Building Permits
Annual 06 Actual 44,092 481,203
Annual Annual 07 Actual 08 Budget 55,196 60,836 756,524 657,000
08 YTD Oct 54,403 806,835
08 YTD Nov 54,937 826,064
08 YTD Dec 55,726 835,396
Licenses & Permits Revenue 900,000 800,000 06 Actual
700,000
07 Actual
600,000
08 Budget
500,000
Dec
400,000 300,000 200,000 100,000 0 Business L icenses
Building Permits
Generally, the construction has slowed down as we have seen in other parts of the State. The construction on the Central Washington University campus is fueling our Sales Tax revenue growth. The same CWU construction activity is affecting our Building Permits revenue. Both the Sales Tax revenues and the Building Permits revenues that are due to one-time construction projects like this should be viewed with caution and spending of this fund should be handled with caution as well by spending it on one time projects and nonrecurring items. Excise Taxes (317) Excise Taxes Revenues for the 2008 budget includes gambling, bingo & card games. Excise Tax Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative 08 Budget 08 Actual 30,192 60,383 90,575 120,767 150,958 181,150 211,342 241,533 271,725 301,917 332,108 362,300
0 11,087 11,087 45,150 85,486 107,751 124,962 176,962 191,453 238,216 244,186 294,965
Cumulative Excise Taxes & Other Revenues 400,00 0 350,00 0 300,00 0 250,00 0 200,00 0 150,00 0 100,00 0 50,00 0 0 Ja n
Fe b
6
Ma r
Apr
May
Jun
Jul
Aug
Se p
Oc t
N ov
De c
2/11/2009
We budgeted about $264,000 for the UAB grant 2 in the Arterial Street and we have received only $65,358, although we have collected over $1.3 million on the UAB grant 1. The STP grant budget was $441,000 and we have processed $47,739. We have not collected anything out of the $225,000 RCO grant for Park Acquisition fund in the year. The $60,000 from the county is pending as well. We spent over $200,000 on baseball field capital improvement and over $160,000 in improving Alder Street Park accounting for most of the uncollected/unbilled revenue as shown above. Motor Vehicle Fuel tax budget is $293,794 (264,682 YTD) in the Street Fund and $138,256 (124,671 YTD) in the Arterial Street. Intergovt'l (330) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative 08 Budget 08 Actual 239,853 479,706 719,558 959,411 1,199,264 1,439,117 1,678,969 1,918,822 2,158,675 2,398,528 2,638,380 3,571,492
19,507 66,708 168,503 240,357 310,007 391,066 635,335 1,117,034 1,618,265 1,959,310 1,985,381 2,921,779
Cumulative Intergovernmental Revenues 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb Mar
Apr
May Jun
Jul
Aug Sep
Oct
Nov Dec
General Fund The 2008 General Fund property tax revenue budget went down from the 2007 budget due to a portion of the revenue ($264,375) being diverted to the Fire Relief & Pension Fund to fund the cost of the retirees’ medical and retirement payments to those firefighters that retired prior to the LEOFF retirement programs. Also, the Fire Department budget is no longer part of the City’s budget. Both the department’s expenditures and revenues are no longer included in the City’s annual budget. The General Fund departments are funded mainly by the Property Tax revenues, transfer from the Sales Tax Fund #140, Utility Taxes, Licenses & Permit Fees, and Charges for Services as shown below. There was a $5,003 donation to the Animal Shelter to be used for the purchase of new software. The total Sales Tax and Utility Tax out-performed the budget due to the tax revenue on the CWU construction and the utility tax revenue from telephone. The CWU construction also contributed to the good performance of the Licenses and Permit revenue, the City collected $184,000 more in building permits than was originally budgeted; that is almost 29%. In total, the General Fund collected more revenue than originally budgeted due to one time incidences explained above.
7
2/11/2009
Taxes Licenses & Perm. Intergovt Rev. Charges for Serv. Fines & Forfeits Misc Transfers Total
% of Budget Taxes + Transfers Combined 44.42% 59.87% 6.60% 6.60% 4.37% 4.37% 26.77% 26.77% 0.71% 0.71% 1.68% 1.68% 15.45%
08 Budget 08 YTD Actual 4,889,018 4,943,810 726,886 904,696 481,062 533,112 2,946,893 2,881,758 77,800 85,995 184,547 246,304 1,700,000 1,700,000 11,006,206 11,295,675
General Fund Revenues 6,000,000
08 Budget
5,000,000
08 YTD Actual
4,000,000 3,000,000 2,000,000 1,000,000 0 Taxes
Licenses & Perm.
Intergovt Rev.
Charges for Serv. Fines & Forfeits
Misc
Transfers
The “Transfers” in the table above is from Sales Tax Fund, therefore the actual total tax support of the General Fund is 59.87%, and “Charges for Services” is 26.77%. General government operations like policing, park maintenance, and the administration of the city government is mostly funded by taxes. Therefore, any decrease in the tax revenue will greatly affect the service delivery. The majority of our property tax revenues come into the City in two basic waves, May and November. A major part of the Sales Tax revenues come into the City at the tail end of the year and early in the year. General Cumulative Fund A 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
800,000 1,300,000 1,800,000 2,750,000 3,850,000 4,700,000 5,500,000 6,200,000 7,000,000 9,200,000 10,000,000 11,006,206
982,211 1,357,468 1,803,694 3,295,179 4,483,003 5,662,022 7,037,279 7,406,365 7,759,156 9,310,513 10,393,906 11,295,676
Cumulative General Fund Total Revenues 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
In addition to the actual revenue exceeding the budgeted amount, the actual total expenditure also came below the budgeted amount. Several departments spent less than the amount budgeted due to vacancies and great leadership. The amount overspent in the Library is due to the flooding in the Library and the amount is fully recovered from the insurance company. The insurance reimbursement of $208,742 ($175,629 budget) is not included in the revenue above. 8
2/11/2009
General Fund
Cumulative 08 Budget 08 Actual
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1,000,679 2,001,358 3,002,037 4,002,716 5,003,395 6,004,074 7,004,753 8,005,432 9,006,111 10,006,790 11,007,469 12,008,148
Dept
789,204 1,552,029 2,352,165 3,592,634 4,468,105 5,235,467 6,493,373 7,271,243 8,039,980 9,100,851 9,973,034 11,258,970
08 Budget
General
1,406,712
Finance
1,561,546
City Manager Fire
801,720 137,819
Police
3,709,696
Community Dev.
921,116
Engineering
731,819
Parks & Rec
1,658,165
Library
1,079,556
Total
Cumulative General Fund Total Expenditures
12,008,149
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
08 Actual Variance 1,301,385 105,327 1,357,987 203,559 760,564 41,156 111,787 26,032 3,457,991 251,705 757,777 163,339 720,674 11,145 1,710,186 -52,021 1,080,619 -1,063 11,258,970
11.71% 13.00% 6.68% 1.15% 30.89% 7.67% 6.09% 13.81% 8.99%
749,179
General Fund Expenditures 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0
General
Finance
City Manager
Fire
Police
Community Dev.
08 Budget
Engineering
Parks & Rec
Library
08 Actual
Police and Parks & Recreation Departments account for 44.70% of the City’s total General Fund budget in 2008. Police alone is 30.89% of the General Fund budget with additional Police related expenditures in the Police Reserve Fund and Criminal Justice Fund that are not part of the General Fund. The Finance Department is mostly influenced by the City utilities; almost 10 out of the 16 employees in the Finance Department are dedicated to servicing utility customers. The staff number and the cost will grow with the utility growth.
9
2/11/2009
The following are the revenue breakdown of the fee for services in both Parks & Recreation Department and the Police Department:
R a cqu e t C en te r Yo u th C e n te r Ad u lt Ac ti vity C e nte r Aq u atic C en te r An im al C o ntr ol
An nual
An nual
Ann ual
0 6 A ctu al 4 5,0 2 5 7,6 5 0 6 7,0 6 6 1 9 3,2 1 0 5 4,2 3 8
0 7 A ctu al 4 6,7 91 9,9 90 6 4,3 10 2 0 8,8 24 5 9,0 05
0 8 B ud g e t 5 2,0 00 6,7 50 5 3,6 52 2 2 5,1 00 6 2,3 97
08 YT D
08 YT D
O ct 38 ,7 63 4 ,1 96 58 ,6 10 1 73 ,7 97 62 ,7 72
08 Y T D
No v 4 0,7 5 9 5,3 6 0 6 3,4 8 4 1 8 2,9 0 7 6 5,0 6 0
De c
44,8 64 5,8 74 68,1 76 196,8 81 77,9 54
P ro g ra m R e ven u es
25 0 ,0 0 0
20 0 ,0 0 0
06 Actua l
0 7 Actu al
08 Budg et
O ct
15 0 ,0 0 0
10 0 ,0 0 0 5 0 ,0 0 0
0 R a cq u e t C e nte r
Yo u th C e n te r
A d ul t Ac tiv ity C e nte r
A q u a ti c C en te r
A ni m a l C o n tro l
The General Fund expenditure is mostly salaries and benefits of regular employees, therefore the expenditure growth is steady throughout the year. The revenue on the other side is different, most of the property tax comes in mainly May and November, the transfers are done at the beginning of each quarter, and the sales tax is recorded mostly early in the year and the tail end of the year. In order to adequately prepare to pay our monthly bills, the General Fund needs about one month expenditure, which is 8.3% of the budget, to help pay part of the bills in February, March, and April before the first batch of the property tax comes in May, and the second quarter transfer in April. General Fund
Cumulative Revenue Expenditures
Cumulative General Fund Total Revenues/Expenditures
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
982,211 1,357,468 1,803,694 3,295,179 4,483,003 5,662,022 7,037,279 7,406,365 7,759,156 9,310,513 10,393,906 11,295,676
12,000,000
789,204 1,552,029 2,352,165 3,592,634 4,468,105 5,235,467 6,493,373 7,271,243 8,039,980 9,100,851 9,973,034 11,258,970
10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan Feb Mar Apr May Jun
10
Jul Aug Sep Oct Nov Dec
2/11/2009
Streets The City earned over $302,000 in Motor Vehicle Fuel Tax last year and as of the end of January we have received from the State $264,682 out of $293,794 budgeted for the year. In addition, the Actual Beginning Fund Balance is less than projected by $27,000. Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Streets Revenues
Cumulative Budget 2008 96,670 193,340 290,010 386,680 483,350 580,020 676,690 773,360 870,030 966,700 1,063,370 1,160,129
168,123 195,380 222,427 416,458 439,161 491,206 689,014 719,180 743,683 944,402 944,675 1,022,987
1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
Jan Feb Mar Apr May Jun
60,000 130,000 215,000 290,000 340,000 410,000 480,000 615,000 815,000 1,002,000 1,200,000 1,367,276
94,708 151,907 221,506 333,676 402,691 474,826 571,014 715,682 911,326 1,020,417 1,089,944 1,208,747
Aug Sep Oct Nov Dec
Cumulative Streets Expenditures
Cumulative StreetsA 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jul
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug Sep
Oct
Nov Dec
Revenues Expenditures 944,402 1,020,417 944,675 1,089,944 1,022,987 1,208,747
October November December
Revenues
1,500,000
Expenditures
1,000,000 500,000 0 October
November
December
Since the expenditure exceeded the revenue, the City used part or prior year fund balance.
11
2/11/2009
Arterial Streets: There is $1.92 million in grant money included in the Arterial Street budget. Most of the work was done in the summer and fall, therefore most of the revenue will be received in the 4th quarter of the year. Arterial Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
250,913 500,000 700,000 850,000 950,000 1,200,000 1,400,000 1,800,000 2,000,000 2,500,000 2,900,000 3,204,779
Arterial Streets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Arterial Streets Revenues
Cumulative Budget 2008 191,709 209,403 222,464 423,288 444,755 457,249 679,120 1,136,021 1,550,676 1,993,971 2,041,442 2,574,219
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
October November December
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Cumulative Arterial Streets Expenditures
Cumulative Budget 2008 285,833 571,666 857,499 1,143,332 1,429,165 1,714,998 2,000,831 2,286,664 2,572,497 2,858,330 3,144,163 3,626,323
Feb
3,793 3,793 112,352 122,165 278,769 598,257 832,374 1,167,758 1,491,351 2,127,702 2,413,449 2,700,240
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Revenues Expenditures 1,993,971 2,127,702 2,041,442 2,413,449 2,574,219 2,700,240 Revenues
3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 October
Expenditures
November
December
Although the actual expenditure came below the budgeted amount, the revenue also came below the expenditure and we spent more than we brought in resulting in the use of the fund balance. 12
2/11/2009
Criminal Justice Fund The 3/10 of one percent additional Sales Tax took effect April 1st 2008. The City received the first of this revenue in June. The fund is dedicated to funding additional patrol officers and animal control officers throughout the City. In order to get a head start in recruitment and training of these officers, the Council approved an interfund loan for $75,000 between the Criminal Justice Fund and the Light Fund to provide a temporary funding for the Police Department, pending the receipt of the Sales Tax money. Criminal Cumulative JusticeA 08 Budget 08 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Criminal Justice Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 75,000 75,000 215,868 215,868 215,868 356,737 356,737 356,737 497,605 497,605 638,473
0 75,000 75,000 75,000 75,000 124,834 175,752 251,154 315,881 377,901 452,409 484,085
Cumulative 08 Budget 08 Actual 0 5,000 25,000 75,672 126,344 177,016 302,688 353,360 404,032 494,704 553,376 608,069
0 5,403 22,627 39,413 64,193 104,635 156,158 186,912 213,320 254,916 302,149 381,079
Cumulative Criminal Justice Sales Taxes Revenues 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Cumulative Criminal Justice Sales Taxes Expenditures 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
Jan
Feb
Mar Apr May Jun
Jul
Aug Sep
Oct
Nov Dec
Although the actual revenue came below the budgeted amount, the expenditures also came below the budgeted amount and the actual revenue exceeded the amount that was actually spent creating a positive fund balance for future use and paying off of the interfund loan. Sales Tax Fund As illustrated, our largest (General Retail) sales tax category is trending downward in 2008. This category includes such businesses as Motor Vehicle and Parts Dealers (down 23%), Furniture and Home Furnishings (down 57%), electronics and appliances (down 49%), Building Material & Garden (down 8%), Food & Beverage Stores (up 15%), Health & Personal Care Stores (up 12%), Gasoline Stations (up 1%), Clothing & Accessories (up 6%), Sporting Goods (up 4%), General Merchandise Stores (down 4%), Misc. Stores (down 28%), and Non-store Retailers (down 11%).
13
2/11/2009
Construction Retail T rade RE, R ental, Leas ing Manufac turing W holesale Trade Acc om . & Food Service
Cu rrent Period N ov-07 Nov-08 % Chang e 43,848 48,964 11.67% 126,958 106,845 -15.84% 7,097 3,984 -43.86% 966 14,029 1352.28% 18,081 12,725 -29.62% 28,901 29,591 2.39%
YTD (from No vember) No v-07 N ov-08 % Change 43,848 48,964 11.67% 126,958 106,845 -15.84% 7,097 3,984 -43.86% 966 14,029 1352.28% 18,081 12,725 -29.62% 28,901 29,591 2.39%
The Top 5 Sales Tax Group- 2007 & 2008
1 40 ,0 0 0 1 20 ,0 0 0 1 00 ,0 0 0
Nov-07
80 ,0 0 0
Nov-08
60 ,0 0 0 40 ,0 0 0 20 ,0 0 0 0 C on structio n
Re tail Tra de
RE , R en ta l, Le asi ng
Man ufa cturi ng
W h ol esa le Tra de
A ccom. & Foo d Servi ce
The construction category indicates an increase of 11.67% over November of 2007. This is much less than what we have experienced in the prior months. This is suggesting the construction is getting to the tail end. The University’s construction projects are helping the total sales receipts in this category despite the fact that there is a major reduction in the residential construction. Manufacturing in October of 2008 had a significant increase over 2007 due to major activities in the Food Manufacturing sector. The Accommodation part of the Accommodation and Food Service had a 0% YTD increase over YTD of October last year. Sales Tax-Last 12 Months 2008 2008 2007- October2008 Oth ers 441 Motor Vehicle & Parts Dealer 236 Re ntalConstruction & Le asi ng Se rvic es of Building 238 Specialty Trade contractors Tel eco mmun ica tio ns 423 Wholesale Trade-Durable No nsto re re ta il ers 424 Wholesale Trade-Nondurable Misc. Store Re ta il ers 444 Building Material & Garden Ge ne ra l Merch an di se Sto res 442 Furniture & Home Furnishings othi ng & Acces sori es 445Cl Food & Beverage Stores Gas oli ne Sta tio ns 722 Food Services Drinking Places 611 Educational Edu ca ti on al Se rvic es Services 447 Gasoline Stations Foo d Se rvice s Dri nki ng P lac es 448 Clothing & Accessories Fo od & B eve rag e Sto res 452 General Merchandise Stores Furn iture & Ho me Furn ish in gs 453 Misc. Store Retailers B ui ldi ng Materi al & Ga rde n 454 Nonstore retailers Wh ol esaTelecommunications le Tra de -No nd ura bl e 517 532 &uraLeasing Services Who Rental le sal e Trad e-D bl e Sp eci alOthers ty Trad e co ntra ctors Co nstru ction of Bu ild in g
386,094 487,018 439,018 108,279 209,343 162,826 144,802 133,590 71,523 54,875 131,098 126,839 80,950 106,646 128,931 124,567 352,455 334,483 125,431 107,766 98,281 95,746 27,113 26,387 370,542 370,598 147,014 137,496 39,147 33,111 92,424 89,212 85,271 79,217 533,096 719,641 3,462,533 3,298,297
11.15% 12.68% 6.05% 4.18% 2.07% 3.79% 2.34% 3.72% 10.18% 3.62% 2.84% 0.78% 10.70% 4.25% 1.13% 2.67% 2.46% 15.40%
2007 14.77% 3.28% 4.94% 4.05% 1.66% 3.85% 2008 3.23% 3.78% 10.14% 3.27% 2.90% 0.80% 11.24% 4.17% 1.00% 2.70% 2.40% 21.82%
2007
Motor Ve hi cle & P arts De al er
0
60,000
120,000
180,000
240,000
14
300,000
360,000
420,000
480,000
540,000
600,000
2/11/2009
The graph on the previous page shows the past 12 months as of the end of October 2008 and 2007, while the current month will show the trend and both graphs need to be read together to fully understand the economic situation of the City. Motor Vehicle and Parts Dealers (MV&PD) accounts for a large share of the City’s sales tax revenue and due to the gas prices, their sales have significantly dropped. Most auto dealers’ sales come from the sales of large vehicles. When there is a decrease in the sales of SUVs and large vehicles, their total gross sales decrease. The “Gasoline Stations” as shown in the graph have not seen a major jump in their gross sales over the last year, probably because the actual quantity purchased is decreasing because people are driving less. People are spending roughly about the same amount but getting less quantity. This time last year, MV&PD accounted for 15.89% of our total Sales Tax revenue; today, it has dropped to 11.16%. Last year, Construction of Buildings accounted for 13.03% compared to 18.20% today. Some of our automobile businesses are expecting a 30% sales decrease over 2007. Nationwide, over 18 million new vehicles were sold last year compared to 14 million projected for this year. The September through November Sales Tax receipts (the last 3 months on the table on the next page) indicate consistent exponent decline. This decline is also an indication that the CWU construction is nearing completion and we are beginning to feel the economic pinch everyone has being feeling for a while. The City enjoyed big increases in February and April of 2008 over the prior year in Sales Tax revenue due to the construction, but September, October, and November have seen declines. November had the biggest decline of 8.71% over the prior year.
15
2/11/2009
Sales Tax Payment Provided by State 3 ‐ Year Comparison by month
9/30 10/31 11/26
July August September
12/31 1/30
October November
$ 3,226,543
$ 3,325,874
400,000.00 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 ‐
4.56% 11.29% -5.54% 14.39% 10.30%
2.99% $ 3,441,080
2007
12.75% 1.44% 13.01% -8.00% 6.25% 8.82% 7.16% -2.28% -4.69% -8.71% 3.35%
2008
se
m ay
ap r il
ar ch m
ru ar
y
y fe b
ua r j an
de ce m
be
r
2006
2.08% 3.25%
6.38% 6.37%
m be r
May June
% of change from 2007
no ve
7/29 8/28
2.88% 0.35% -6.92%
oc to be r
February March April
-4.07% 4.60%
2008 356,012 238,470 237,128 277,438 278,013 264,014 343,940 302,401 302,052 315,701 279,435 246,475
be r
4/30 5/31 6/30
% of change from 2006
pt em
December January
2007 333,299 223,286 206,892 273,438 241,838 285,126 322,445 275,723 280,439 322,901 292,534 267,954
au gu st
2/29 3/31
2006 346,849 213,023 200,943 272,480 258,572 279,194 311,964 263,153 248,773 340,802 250,430 240,361
ju ly
Month Revenue Earned
ju ne
Month Received
The City’s Enterprise Funds are illustrated with both revenues and expenditures on the same chart. The funds accounted for in the Enterprise Funds are treated as businesses, therefore the revenues are expected to cover the expenses and have profit left over to be invested in the future expansions. Gas Operating revenues and expenditures are on track with the budget. Gas revenues depend a great deal on the weather and the commodity price. Gas is used mainly for heating and a major part of Gas Department revenue is generated during winter. The City buys gas wholesale and sells it to its customers with a markup to cover its cost and future expansions.
16
2/11/2009
Gas Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 1,082,539 1,908,078 2,733,617 3,559,156 4,384,695 5,210,234 6,035,773 6,861,312 7,686,851 8,512,390 9,906,468
Cumulative Gas Revenues & Expenses
Cumulative Revenues Expenses 287,181 1,741,183 2,581,291 3,442,438 4,175,098 4,653,472 5,074,304 5,454,454 5,867,586 6,402,079 7,247,815 9,544,503
363,998 1,439,606 2,263,148 3,109,202 4,014,999 4,520,192 5,401,083 5,797,760 6,179,970 6,784,182 7,535,859 9,487,863
12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan
Feb
Mar
Apr May
Jun
Jul
Aug
Sep
Oct
Nov Dec
Light The revenue trend for the Light Department remains consistent while the budget and operating expenditures remain slightly below budget. This includes the operational budget only and does not include the construction budget. Light Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative Light Revenues & Expenses
Budget
Cumulative Revenues
Expenses
650,000 1,723,717 2,797,434 3,871,151 4,944,868 6,018,585 7,092,302 8,166,019 9,239,736 10,313,453 11,387,170 12,884,609
423,432 1,875,708 2,902,551 3,852,832 4,724,302 5,620,516 6,736,045 7,677,976 8,656,416 9,747,550 10,778,639 12,856,840
664,867 1,729,683 2,616,125 3,737,520 4,550,908 5,175,021 6,141,445 6,945,315 7,858,183 7,948,059 9,493,072 11,364,033
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Jan
Feb Mar Apr May Jun
Jul
Aug Sep
Oct Nov Dec
Water The Water Department operation budget is $3,611,204. There is about $3.0 million in construction, which is not included in the information presented in the table below. This will require the sale of $3.0 million in bonds to finance the construction of two new wells at $1.0 million each and the extension of water main line from Vantage Highway along Pfenning Road to the end of the existing line that ends in front of Ellensburg High School near Locust Street. The total revenue exceeded the expenses which will in turn improve the fund balance. Water and Sewer Department borrowed money from Light Department to fund the construction projects and will sell bond later to repay the interfund loan. The Council approved the interfund loan late last year and the loan will be paid back in less than three years.
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Water Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 500,000 600,000 1,000,000 1,300,000 1,600,000 1,900,000 2,200,000 2,600,000 2,800,000 3,100,000 3,611,204
Cumulative Water Revenues & Expenses
Cumulative Revenues Expenses 43,994 239,243 403,412 584,639 838,660 1,112,282 1,456,402 1,866,917 2,136,465 2,392,912 2,615,296 2,877,325
294,509 383,468 491,334 1,056,191 1,382,121 1,604,044 1,953,904 2,109,383 2,306,822 2,655,271 2,649,911 2,850,643
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar Apr May Jun
Jul
Aug Sep
Oct
Nov Dec
Sewer Sewer’s operation budget is only about 3.05 million as shown below. There is additional $1.6 million in capital projects, which will be financed with revenue bonds to extend the current main line, construction of Bio-Solids Thickener, and rehabilitation of approximately 1000 feet of sewer line. Sewer Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 257,000 500,000 600,000 800,000 1,000,000 1,250,000 1,500,000 1,800,000 2,100,000 2,500,000 2,800,000 3,046,207
Cumulative Sewer Revenues & Expenses
Cumulative Revenues Expenses 63,971 298,708 498,881 688,833 925,232 1,156,530 1,395,747 1,689,410 1,898,762 2,114,763 2,292,030 2,619,236
264,671 368,975 472,442 754,239 933,260 1,235,351 1,541,506 1,683,030 1,822,718 2,232,228 2,372,682 2,612,873
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Internal Services Funds These are funds used to account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. Shop Shop generates 57% ($756,000) of its revenues from renting equipment to other departments and bills monthly. The Warehouse Service Charges (21%) are billed quarterly and are charges for the storage and supplies that are purchased centrally and distributed to other City’s departments.
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Shop Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 100,000 224,101 348,202 472,303 596,404 720,505 844,606 968,707 1,092,808 1,216,909 1,341,010 1,489,211
Cumulative Shop Revenues & Expenses
Cumulative Revenues Expenses 197,249 267,208 343,796 536,238 603,702 682,106 1,040,049 1,126,682 1,207,923 1,257,277 1,345,576 1,425,401
105,630 164,437 203,651 343,632 418,698 692,958 871,975 921,043 1,034,868 1,175,669 1,231,472 1,340,652
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Information Technology (IT) The interdepartmental billings for IT Department are done quarterly. Therefore, the revenue will jump every quarter and remains almost flat thereafter, while the expenses will remain constant to cover the two FTEs in the IT Department pending the time the third position is filled. IT Department services all the computers, the network, and the City’s web site. IT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Budget 60,000 122,059 184,118 246,177 308,236 370,295 432,354 494,413 556,472 618,531 680,590 744,704
Cumulative Revenues 191,563 192,405 193,022 384,589 384,589 385,107 576,388 577,276 577,775 769,149 770,713 771,190
Expenses 30,662 49,537 81,108 153,805 170,602 187,070 267,088 303,246 316,052 383,478 394,962 472,224
900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Despite the struggling economy, sluggish real estate market, and slow retail in other parts of the country, the City of Ellensburg’s financial condition remains favorable compared to various other cities of our size across the country. The low general retail and residential construction sales tax revenues are offset by high government construction sales tax revenue. This will most likely hold true for the next year. Sales Tax is the largest tax revenue source for the City. Therefore, the City needs to continue to expand this base in order to keep up with the service delivery cost, which is ever growing due to the labor cost and employees’ benefit cost. Our major retailers are having lower sales which will in turn affect their sister businesses, employment, community donations, etc. The Sales Tax receipts in October for the month of August excluding the sales tax on Construction shows a total decline, leading the way in this decline as expected is the Motor Vehicles and Parts Dealer. Therefore, the City needs to involve the business community to support this area of the economy. Motor Vehicle & Parts Dealer’s group provides the largest (over 13%) sales tax revenue for the City and the City of Ellensburg residents purchase about 80% of their used cars outside the 19
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Ellensburg area according to auto dealers. The City needs to find ways to enhance its revenue base by involving the business community to create strategies that will help create an environment to support new business coming into the community to complement the existing businesses. This way the community will be able to increase its employment base, and the City will be able to increase its revenue base by increasing the number of the sales tax payers. For this same group, about 70% of their sales come from the SUVs and trucks; unfortunately people are buying less SUVs and trucks now. There was a 41% decrease in December sales tax receipts (October Sales) and 20.7% decrease YTD. The City cannot do anything about the national trend of downward sales tax growth. Although the City can reduce the impact in the City of Ellensburg by encouraging new and complementing businesses to move into the City and in turn increase its own sales tax revenue. The City has a large population of students; we need to target this group, otherwise the City will continue to lose potential purchases and sales tax revenues from this group. Most of our major revenues like Sales Tax, Property Tax, and Charges for Services (gas revenue and water revenue) do not flow into the City at the same rate with our expenditures. Therefore, the City will need to continue to require adequate fund balances to be able to cover its expenditures during the low revenue cycle until the revenue catches up with spending. The City has a good fund balance policy in place and we need to continue to work toward maintaining the required fund balance ratio. The City supports the General Fund programs by mostly taxes – 60%, this is a large share of the budget and a big reliance on taxes for the funding of the City’s operations, especially where only two departments (Police and Parks) account for 45.6% of the total General Fund budget. The “Charges for Services” account for 26.8% of the total General Fund revenue and most of that are interfund and interdepartmental charges, therefore they are not outside generated revenues. The City needs to develop strategies to increase its “Charges for Services” revenue to reduce its excessive reliance on taxes. If the current trend continues without a strategy to increase Sales Tax revenues, the City will face declining revenue against increasing cost of service and without an adequate fund balance to soften the blow we face potential service reduction.
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