February 2009 Financial Report
February 2009
Financial Report
MEMORANDUM To:
Littleton City Council, City Manager
From: Doug Farmen, Finance Director Date: March 25, 2009 Re:
February 2009 Financial Information
We have attached financial information for February 2009 for all funds and additional information on the General Fund and the Special Projects Fund. Summary of the February 2009 Financial Report General Fund: Revenues Total Revenues collected in February 2009 were $3,495,137 as compared to $3,782,798 in February 2008. This was a decrease of 8%. Total Sales and Use Taxes (retail sales tax, general use tax, motor vehicle tax and stadium tax) of $1,609,084 in February 2009 were 9% lower than February 2008. • Property tax revenues in February 2009 were $44,641 compared to $78,766 in February 2008. • The City collected $29,016 in specific ownership taxes in February 2009 compared to $31,238 in February 2008. This was a decrease of 7%. • Cigarette tax collections were $16,812 in February 2009 as compared to $18,327 in February 2008. This was a decrease of 1%. • Year-to-date tax revenues were lower than 2008 by 9%. • Year-to-date total revenues were higher than 2008 by 1% due to the 2009 approved transfers of $421,000 from Geneva Village and $100,000 from the Wildland Fires Special Revenue Fund. • Franchise Fees collected in February 2009 were $177,902 which was 8% lower than collections in February 2008 of $192,152. • Building permits in February 2009 were $45,733 compared to $28,980 in February 2008. This was an increase of 58%. • Interest earnings were $864 in February 2009 compared to $25,867 in February 2008. Beginning in February 2009, the City of Littleton implemented a new method of allocating interest earned based on specific fund investments instead of merely using ending cash balances. This method more accurately reflects invested balances but will create monthly revenue fluctuations depending on interest receipt dates. Expenditures • Expenditures in February 2009 were $3,603,095 as compared to $3,509,887 in February 2008. This was an increase of 3% above the previous year. Special Projects Fund: • Building Use Tax Collections in February 2009 were $95,407 as compared to $35,825 in February 2008. This was an increase of 166%. • Highway Users Tax revenues of $89,233 in February 2009 were higher than February 2008 revenues of $87,972. This was a slight increase of 1%. • Expenditures were $88,811 in February 2009 as compared to $136,603 in February 2008 which resulted in a 35% decrease.
1
Financial Report February 2009 General Fund Overview and Analysis The General Fund is the City’s primary operating fund and is used to account for all resources except those that are required to be accounted for in another fund. The General Fund accounts for activities such as police, fire, public services, library and museum. General Government services include the city council, city attorney, city manager, business and industry affairs, finance, information services, administrative services administration, courts, city clerk, employee relations, community development, building and zoning. Additional expenditures of the General Fund include general operations and transfers to other funds. The graph below depicts the history of revenues and expenditures for the General Fund from 2005 to the 2009 budget. In 2005, it was required of all departments of the City to reduce their line item budgets by 10%. This reduction allowed the City to reverse the excess of expenditures over revenues as evidenced by the graph. In 2007, expenditures exceeded revenues mainly due to the TABOR refund of over $1.1 million. In 2008, a transfer of $1.6 million from the General Fund to the Special Projects Fund was made pursuant to the November 2008 election to retain and spend the 2007 TABOR excess. Efforts will continue to contain discretionary expenditures as non-discretionary expenditures continue to rise.
General Fund Revenues vs. Expenditures $52,500,000 Revenues
$50,000,000
Expenditures
$47,500,000 $45,000,000 $42,500,000 $40,000,000 2005
2006
2007
2008
2009 Budget
The table below summarizes the General Fund year-to-date revenues and expenditures for the month ended February 2009 as compared to the month ended February 2008.
2008
2009
2008 vs. 2009 Increase/ (Decrease)
2008 vs. 2009 % Increase/ (Decrease)
General Fund Year-to-Date Revenues Year-to-Date Expenditures Net revenue over (under) expenditures
$7,223,479 6,830,506
$7,311,144 6,978,510
$392,973
$332,634
2
$87,665 148,004 ($60,339)
1.2% 2.2% -15.4%
CITY OF LITTLETON CASH FLOW STATEMENT-GENERAL FUND FOR THE PERIOD ENDED FEBRUARY 28, 2009 *** REVENUES *** Retail Sales General Use Sales - Motor Vehicle Tax Property Tax Specific Ownership Tax General Cigarette Tax Liquor Tax Stadium District Tax Total Taxes Total Franchise Fees Liquor Licenses Contractor License Fees Building Permits Other License and Permits Total Licenses and Permits $1.50 Motor Vehicle Fee $2.50 Motor Vehicle Fee Fire Services Contracts County Road and Bridge Other Intergovernmental Revenues Total Intergovernmental Revenues Fire Contract Administration Fees Plan Check Fees Library Services Museum Services Other Service Revenues Total Service Revenues Fines and Forfeitures Investment Interest Interfund Transfers Other Miscellaneous Revenues Total Miscellaneous Revenues Total Revenues
FINAL BUDGET $21,640,000 1,000,000 1,500,000 3,950,000 320,000 240,000 70,000 17,000 28,737,000 1,852,000 8,250 84,000 525,000 29,200 646,450 60,000 80,000 10,257,500 250,000 44,940 10,692,440 659,840 275,000 48,000 61,000 232,130 1,275,970 1,053,500 400,000 821,000 281,500 2,556,000 $45,759,860
*** EXPENDITURES ***
FINAL BUDGET (SEE NOTES)
City Council City Attorney City Manager Business/Industry Affairs Finance Information Services Administrative Services Police Services Fire Services Emergency Planning Public Services Community Development Library Museum General Operations Contingencies/Unanticipated* Interfund Transfers Total Expenditures
$404,920 567,655 936,960 592,430 999,960 1,215,479 4,267,771 10,801,940 15,620,828 8,130 5,594,961 1,982,015 2,168,218 1,513,169 1,098,846 200,000 876,690 $48,849,972
*** CASH BALANCE ***
FINAL BUDGET
Cash & Investments, last day of mo.
$4,586,140
FEBRUARY $1,422,086 81,210 105,788 44,641 29,016 16,812 10,440 0 1,709,993 177,902 1,138 4,650 45,733 1,860 53,381 4,784 6,365 1,319,107 0 4,409 1,334,665 80,730 23,736 3,844 3,481 6,286 118,077 82,319 864 10,000 7,936 101,119 $3,495,137
FEBRUARY $12,235 45,143 67,585 55,843 73,501 108,704 304,071 812,604 1,213,878 0 389,165 164,876 158,674 118,678 78,138 0 0 $3,603,095 FEBRUARY $5,695,597
YTD
ABOVE/(BELOW) BUDGET
$3,837,872 292,479 186,485 41,567 42,294 34,877 12,240 0 4,447,814 433,392 1,810 10,950 98,026 4,175 114,961 8,943 11,860 1,319,107 3,275 4,409 1,347,594 80,730 51,468 8,194 6,497 128,773 275,662 140,429 4,471 531,000 15,821 691,721 $7,311,144
YTD
($17,802,128) (707,521) (1,313,515) (3,908,433) (277,706) (205,123) (57,760) (17,000) (24,289,186) (1,418,608) (6,440) (73,050) (426,974) (25,025) (531,489) (51,057) (68,140) (8,938,393) (246,725) (40,531) (9,344,846) (579,110) (223,532) (39,806) (54,503) (103,357) (1,000,308) (913,071) (395,529) (290,000) (265,679) (1,864,279) ($38,448,716) ABOVE/(BELOW) BUDGET
$121,511 81,251 140,120 94,243 140,421 195,795 503,593 1,660,817 2,398,489 0 669,002 280,961 365,397 221,666 105,244 0 0 $6,978,510 YTD
($283,409) (486,404) (796,840) (498,187) (859,539) (1,019,684) (3,764,178) (9,141,123) (13,222,339) (8,130) (4,925,959) (1,701,054) (1,802,821) (1,291,503) (993,602) (200,000) (876,690) ($41,871,462) ABOVE/(BELOW) BUDGET
$5,695,597
*Note: The Final budget represents the ending balance after transfers and prior year encumbrances.
3
$1,109,457
2009 17.7% 29.2% 12.4% 1.1% 13.2% 14.5% 17.5% 0.0% 15.5% 23.4% 21.9% 13.0% 18.7% 14.3% 17.8% 14.9% 14.8% 12.9% 1.3% 9.8% 12.6% 12.2% 18.7% 17.1% 10.7% 55.5% 21.6% 13.3% 1.1% 64.7% 5.6% 27.1% 16.0%
2009 30.0% 14.3% 15.0% 15.9% 14.0% 16.1% 11.8% 15.4% 15.4% 0.0% 12.0% 14.2% 16.9% 14.6% 9.6% 0.0% 0.0% 14.3% 2009 124.2%
Revenues With an unstable economy and most of the City’s revenues derived from sales and use tax, the City has been conservative in budgeting revenues for 2009. February 2009 revenues were $3,495,137 as compared to $3,782,798 in the same period in 2008. Please see the graph below comparing 2009 revenues to the same period in 2008. General Fund Revenue Comparison $4,000,000 $3,500,000
February 2008 $3,000,000
February 2009
$2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $s Taxe
c Fran
F hise
ees nse Lice
an d
its P er m
. govt Inter
Serv
ices
eo ellan Misc
l Tota
us
Taxes The major source of revenues for the General Fund is taxes. The following information is for actual year-to-date collections as of February 28, 2009 compared to the same period in 2008. Retail Sales Tax – Overall, sales and use taxes (retail sales tax, general use, motor vehicle tax and stadium tax) were 9% lower in February of 2009 compared to 2008. Retail sales taxes through February 2009 were 5% lower than the same period in 2008. General Use Tax – General use taxes depend highly on the amount of equipment purchases and such from businesses in the City. In February 2009, as compared to the same period in 2008 general use tax collections were lower by $89,966 or 24%. Motor Vehicle Tax – Motor vehicle taxes are collected by the counties and remitted monthly to the City. Through February 2009, motor vehicle taxes collected were lower than the same period in 2008 by $72,026 or 28%. This decrease can be attributed to the slump in auto dealership sales and the slower economy. Stadium Taxes – This tax is received annually from the Denver Metropolitan Football Stadium District. This tax has historically been received by the City in July. Sales and Use Tax Budget to Actual Trends $3,300,000 $3,000,000
2008
2009
2009 Budget
$2,700,000 $2,400,000 $2,100,000 $1,800,000
`
$1,500,000 $1,200,000 $900,000 $600,000 $300,000 $January
February
March
April
May
June
July
August
September
October
Note: This graph includes retail sales tax, general use tax, motor vehicle tax and stadium tax.
4
November December
Property Taxes – Property taxes are collected based on the assessed value and the mill levy of properties in the City. The City’s mill levy is currently 6.662 mills. The property taxes collected in 2009 were assessed in 2008. Assessed values increased by 3% in 2009. Through February 2009, property taxes collected were lower than the same period in 2008 by $51,891 or 56%. We believe this is due to slower payment remittances by property owners but we’re still researching the cause for lower 2009 receipts to date. Specific Ownership Tax – Specific ownership taxes are assessed on certain vehicles and mobile equipment. They are collected by the Counties and remitted to the City. Year-to-date revenues were lower as compared to 2008 by 16%. Cigarette Taxes – These taxes are levied on the sale of cigarettes. Year-to-date collections were $34,877 as compared to $39,961 last year as of February, which is a 13% decline. Liquor Tax – This is the annual tax as required by the City Charter. Collections year-to-date were $12,240 as compared to $11,160 in 2008; this was an increase of 10%.
Franchise Fees Included in these revenues are fees related to various utilities. The City collected $433,392 in 2009 as compared to $427,089 in 2008 or a 2% increase. Licenses and Permits The City collects various licenses and permits including building permits, liquor license and contractor licensing fees. Collections as of February 2009 were lower as compared to the same period in 2008. Year-to-date collections in 2009 were $114,961 compared to $125,433 in 2008; this was an 8% decrease. A large portion of this decrease in revenues was attributable to an 11% decline in building permits. Intergovernmental Revenues There are several services that the City provides in which it recoups revenues. Included in this category are revenues derived from the fire partners’ contracts with the Littleton Fire Protection District and Highlands Ranch Metro District in which the partners share in expenditures related to fire services. These payments are made quarterly to the City. Additional revenues included in this category are federal, state and local shared revenues. Total receipts-to-date were $1,347,594 as compared to $1,306,914 in 2008, which was a 3% increase. Service Revenues The fire partners are also contracted to pay administration fees of $659,840 in 2009. The fees are paid quarterly. In addition, there are several smaller fees that are charged by the City in various departments such as the library and museum. Service revenues as of February 2009 were $275,662, which was lower as compared to $288,467 in 2008. The major revenue source during February was for the fire partners’ administration fees. This year’s revenues are slightly lower than 2008 due to lower plan check fees and other miscellaneous service fees. The City of Littleton reinstated the issuance of passports in December 2008. Fines and Forfeitures This revenue source includes court fines. Year-to-date revenues were lower than revenues in the same period last year. Year-to-date revenues for 2009 were $140,429 and $155,591 in 2008; this was a 10% decline from 2008. Investment Interest This is the amount of interest earned on the City’s investments. As of February 2009, interest earnings in the General Fund were $4,471 compared to 2008 interest earnings of $42,988; this was a decrease of 88% or $38,517. Beginning in
February 2009, the City of Littleton instituted a new method of allocating interest earned based on balance of owned investments in each fund instead of merely using ending cash balance. This accounts for the decrease in interest in 2009.
5
As of February 2009, the City’s total investments in all funds were $40,480,475: City of Littleton Investment Report 2/28/2009
Description Cash Cash - WF Total / Average
CUSIP/Ticker
Coupon Rate
YTM @ Cost
Face Amount/Shares
Market Value
Cost Value
% of Portfolio
N/A
0.913 0.913
0.913 0.913
$3,004,609.37 3,004,609.37
$3,004,609.37 3,004,609.37
$3,004,609.37 3,004,609.37
7.42 7.42
CD's Colorado Business BankCD400006561A Colorado Business BankCD260072700 Total / Average
10/31/2009 4/25/2009
2.570 4.150 2.641
2.570 4.150 2.641
2,117,901.05 100,000.00 2,217,901.05
2,117,901.05 100,000.00 2,217,901.05
2,117,901.05 100,000.00 2,217,901.05
5.23 0.25 5.48
Treasury Notes T-Note T-Note Total / Average
912828FX3 912828FE5
11/15/2009 5/15/2009
4.625 4.875 4.764
4.664 4.728 4.699
2,000,000.00 2,500,000.00 4,500,000.00
2,054,920.00 2,523,050.00 4,577,970.00
1,997,812.50 2,508,789.00 4,506,601.50
4.94 6.18 11.12
Bonds FFC FFC FFC Total / Average
31331GLK3 31331GCJ6 31331V4M5
2/4/2011 9/29/2010 9/21/2009
1.850 3.200 5.000 3.412
1.850 3.200 5.002 3.412
2,000,000.00 4,000,000.00 2,500,000.00 8,500,000.00
1,995,000.00 4,043,760.00 2,557,025.00 8,595,785.00
2,000,000.00 4,000,000.00 2,499,775.00 8,499,775.00
4.94 9.88 6.18 21.00
Bonds FHLB FHLB FHLB FHLB FHLB FHLB Total / Average
3133XSBH0 3133XRT83 3133XSCX4 3133XFLG9 3133XGEQ3 3133XSWT1
10/6/2010 9/10/2010 10/15/2010 6/12/2009 8/5/2009 2/17/2011
3.000 3.375 3.800 5.250 5.250 1.750 3.721
3.000 2.710 3.800 2.495 2.509 1.750 2.733
4,050,000.00 2,500,000.00 1,000,000.00 2,500,000.00 2,500,000.00 2,000,000.00 14,550,000.00
4,055,062.50 2,567,200.00 1,002,810.00 2,532,025.00 2,548,450.00 1,991,260.00 14,696,807.50
4,050,000.00 2,531,650.00 1,000,000.00 2,577,700.00 2,573,950.00 2,000,000.00 14,733,300.00
10.00 6.18 2.48 6.18 6.20 4.95 35.94
Bonds FHLMC Total / Average
3128X64H6
3/4/2011
3.750 3.750
3.674 3.674
2,500,000.00 2,500,000.00
2,500,425.00 2,500,425.00
2,505,075.00 2,505,075.00
6.18 6.18
Bonds FNMA Total / Average
3136F6SC4
12/28/2009
4.250 4.250
2.659 2.659
2,500,000.00 2,500,000.00
2,558,600.00 2,558,600.00
2,565,500.00 2,565,500.00
6.18 6.18
Local Government Investment Pool ColoTrust Plus COTRUST247 ColoTrust Prime COTRUST117 Total / Average
N/A N/A
0.640 0.420 0.611
0.640 0.420 0.611
780,674.47 120,773.36 901,447.83
780,674.47 120,773.36 901,447.83
780,674.47 120,773.36 901,447.83
1.93 0.30 2.23
Money Market Wells Fargo Sweep Total / Average
N/A
0.900 0.900
0.900 0.900
1,806,616.32 1,806,616.32
1,806,616.32 1,806,616.32
1,806,616.32 1,806,616.32
4.46 4.46
3.344
2.879
$40,480,574.57
$40,860,162.07
$40,740,826.07
100.00
Total / Average
WF0983
Maturity Date
WFSWEEP
6
The US is currently in a severe recession (that began in December 2007) affecting all sectors of the economy. Gross Domestic Product (GDP) is estimated to have contracted 5% annualized in the last quarter of 2008 and is projected to decline significantly in the first quarter of 2009. Based on real GDP, the recession is on pace to rival the magnitude of the 1973-1975 contraction. On 12/31/08, Wells Fargo Bank, the City’s bank for most of its services, completed an acquisition of Wachovia Bank. The effects of this acquisition for Wells Fargo meant absorbing $219 billion of commercial real estate and corporate loans, and a big book of at-risk mortgages. During its fourth quarter ending December 31, 2008, Wells set aside $21.7 billion in reserves for potential losses. For the quarter, Wells suffered a $2.55 billion loss but added $2.84 billion as net income for the year. A positive result for Wells during 2008 was adding 10% or $30 billion in deposits. Another outcome from the Wachovia acquisition was a slightly lower S&P credit rating of AA+, down from AAA. This is still a “High Quality” investment grade and the highest in the banking industry. Over the last few months, the City purchased two securities (Federal Farm Credit and Federal Home Loan Bank) and opened a new savings account at Wells Fargo. The securities are AAA rated; the new bank account was opened to provide more diversification and yield compared to the ColoTrust “Plus” account. There is $3 million in the new account and we will gradually draw down those funds, as needed, for cash flow purposes. Interfund Transfers Included in these revenues are revenues derived from the fire partners’ contracts with the Littleton Fire Protection District and Highlands Ranch Metro District in which the partners share in the expenditures related to fire services. These payments are made quarterly to the City and transfers vary year to year. In 2009, the Water Fund will no longer transfer annual interest earnings of approximately $460,000 to the General Fund. There are also one-time transfers in 2009 of $100,000 from the Consolidated Special Revenues Fund and $421,000 from the Geneva Village Fund. These transfers were completed in January. Other Miscellaneous Revenues This revenue source includes all other miscellaneous revenues. As of February 2009, this amount was $15,821 compared to $12,509 in 2008.
Expenditures The total budgeted expenditures for 2009 are $48,849,972 (includes encumbrances from prior years). Of this amount, $35,827,053, or 73%, is related to personnel costs. The following graph reports expenditures for February 2009 as they relate to February 2008 for each department.
Expenditures by Department $2,500,000
February-08
February-09
$2,000,000 $1,500,000 $1,000,000 $500,000 $CC
CA
CM
BI
A
Fi
n
IS
AS
Po
l
Fi
re
EP
PS
CD
Li
b
M
us
G
O
Co
nt a Tr
ns
f.
For February 2009, City expenditures were $3,603,095 as compared to $3,509,887 in 2008. These costs were for normal operating expenditures such as personnel, supplies and vehicle maintenance.
7
Special Projects Fund Overview and Analysis The Special Projects Fund accounts for the financing, acquisition and construction of capital improvements and various special projects throughout the City. These projects include public facilities, new street construction, parks and open space information technology, public safety enhancements and cultural and recreational improvements. In addition, various capital leases are paid out of this fund. The following chart provides the revenues and expenditures as compared to the same period in 2008. 2008
2009
2008 vs. 2009 Increase/ (Decrease)
2008 vs. 2009 % Increase/ (Decrease)
Special Projects Funds Year-to-Date Revenues Year-to-Date Expenditures
$
Net revenue over (under) expenditures
$
376,070 380,820 (4,750)
$
396,810 88,811
$
20,740 (292,009)
5.5% -76.7%
$
307,999
$
312,749
N/A
The main sources of revenues are highway user taxes (HUTF) and building use taxes. HUTF revenues for the month of February 2009 were $89,233. These funds must be used to construct highways and streets. HUTF taxes averaged $91,826 a month in 2008. Building use taxes were $209,268 through February 2009 which was 30% higher than 2008. Building use taxes are highly volatile as there are several factors such as the economy and the housing market that highly affect these revenues. The cash balance in this fund has been decreasing over the past years as projects are being completed with minimal revenues to fund these projects. In 2009, a transfer from the General Fund has been budgeted at $500,000 to help fund projects. This fund will continue to be monitored as the cash balance continues to decline.
8
City of Littleton Operating Revenues and Expenditures- General Fund YTD Comparison 2007-2009 (February) *** REVENUES *** Sales and Use Taxes Property Taxes Building Permits Franchise Fees Fire Service Contracts Fines and Forfeitures Interest Income All Other Categories Total
*** EXPENSES *** City Council City Attorney City Manager BIA Finance Information Services Admin Services Police Fire Emergency Planning Public Services Community Development Library Museum General Ops Total
$
$
$
$
2007 4,343,468 79,723 65,562 425,354 1,300,563 149,566 82,035 250,786 6,697,057
2007 119,245 89,814 135,808 124,188 137,232 167,352 509,645 1,504,251 2,237,743 762,772 229,106 312,645 204,631 129,005 6,663,437
$
$
$
$
2008 4,669,779 93,458 109,866 427,088 1,283,014 155,591 42,989 441,695 7,223,480
2008 113,301 69,309 149,019 63,171 173,164 195,779 504,577 1,554,905 2,359,464 716,739 262,673 367,426 210,412 90,565 6,830,504
$
$
$
$
2009 4,316,836 41,567 98,026 433,392 1,319,108 140,430 4,471 426,314 6,780,144
YTD Receipts/ Annual Budget 2007 2008 2009 19% 20% 18% 2% 3% 1% 12% 21% 19% 26% 24% 23% 13% 12% 13% 13% 13% 13% 21% 10% 1% 9% 17% 16% 16% 16% 15%
2009 121,511 81,251 140,120 94,243 140,421 195,795 503,593 1,660,817 2,398,489 669,002 280,961 365,397 221,666 105,244 6,978,512
YTD Expenses/ Annual Budget 2007 2008 2009 32% 29% 30% 16% 12% 14% 16% 16% 15% 21% 10% 16% 12% 16% 14% 14% 16% 16% 12% 12% 12% 15% 15% 15% 16% 15% 15% 0% 0% 0% 14% 13% 12% 13% 14% 14% 15% 17% 17% 14% 14% 15% 5% 7% 10% 14% 14% 15%
Prior Year Change 2008 2009 9% 8% -8% -29% 17% -56% -3% 68% -11% 17% 0% 1% -3% -1% 3% -26% 4% -10% 132% -48% -90% 52% 76% -3% 7% 8% -6%
2007
Prior Year Change 2008 2009 2% -5% 7% 3% -23% 17% 6% 10% -6% 19% -49% 49% 9% 26% -19% -2% 17% 0% -1% -1% 0% 2% 3% 7% 8% 5% 2% -100% N/A N/A 34% -6% -7% 1% 15% 7% 17% 18% -1% 10% 3% 5% 10% -30% 16% 8% 3% 2%
2007
Please Note: Interfund transfer revenues/expenditures and contingencies are excluded.
9
Financial Report
MEMORANDUM To:
Littleton City Council, City Manager
From: Doug Farmen, Finance Director Date: March 25, 2009 Re:
February 2009 Financial Information
We have attached financial information for February 2009 for all funds and additional information on the General Fund and the Special Projects Fund. Summary of the February 2009 Financial Report General Fund: Revenues Total Revenues collected in February 2009 were $3,495,137 as compared to $3,782,798 in February 2008. This was a decrease of 8%. Total Sales and Use Taxes (retail sales tax, general use tax, motor vehicle tax and stadium tax) of $1,609,084 in February 2009 were 9% lower than February 2008. • Property tax revenues in February 2009 were $44,641 compared to $78,766 in February 2008. • The City collected $29,016 in specific ownership taxes in February 2009 compared to $31,238 in February 2008. This was a decrease of 7%. • Cigarette tax collections were $16,812 in February 2009 as compared to $18,327 in February 2008. This was a decrease of 1%. • Year-to-date tax revenues were lower than 2008 by 9%. • Year-to-date total revenues were higher than 2008 by 1% due to the 2009 approved transfers of $421,000 from Geneva Village and $100,000 from the Wildland Fires Special Revenue Fund. • Franchise Fees collected in February 2009 were $177,902 which was 8% lower than collections in February 2008 of $192,152. • Building permits in February 2009 were $45,733 compared to $28,980 in February 2008. This was an increase of 58%. • Interest earnings were $864 in February 2009 compared to $25,867 in February 2008. Beginning in February 2009, the City of Littleton implemented a new method of allocating interest earned based on specific fund investments instead of merely using ending cash balances. This method more accurately reflects invested balances but will create monthly revenue fluctuations depending on interest receipt dates. Expenditures • Expenditures in February 2009 were $3,603,095 as compared to $3,509,887 in February 2008. This was an increase of 3% above the previous year. Special Projects Fund: • Building Use Tax Collections in February 2009 were $95,407 as compared to $35,825 in February 2008. This was an increase of 166%. • Highway Users Tax revenues of $89,233 in February 2009 were higher than February 2008 revenues of $87,972. This was a slight increase of 1%. • Expenditures were $88,811 in February 2009 as compared to $136,603 in February 2008 which resulted in a 35% decrease.
1
Financial Report February 2009 General Fund Overview and Analysis The General Fund is the City’s primary operating fund and is used to account for all resources except those that are required to be accounted for in another fund. The General Fund accounts for activities such as police, fire, public services, library and museum. General Government services include the city council, city attorney, city manager, business and industry affairs, finance, information services, administrative services administration, courts, city clerk, employee relations, community development, building and zoning. Additional expenditures of the General Fund include general operations and transfers to other funds. The graph below depicts the history of revenues and expenditures for the General Fund from 2005 to the 2009 budget. In 2005, it was required of all departments of the City to reduce their line item budgets by 10%. This reduction allowed the City to reverse the excess of expenditures over revenues as evidenced by the graph. In 2007, expenditures exceeded revenues mainly due to the TABOR refund of over $1.1 million. In 2008, a transfer of $1.6 million from the General Fund to the Special Projects Fund was made pursuant to the November 2008 election to retain and spend the 2007 TABOR excess. Efforts will continue to contain discretionary expenditures as non-discretionary expenditures continue to rise.
General Fund Revenues vs. Expenditures $52,500,000 Revenues
$50,000,000
Expenditures
$47,500,000 $45,000,000 $42,500,000 $40,000,000 2005
2006
2007
2008
2009 Budget
The table below summarizes the General Fund year-to-date revenues and expenditures for the month ended February 2009 as compared to the month ended February 2008.
2008
2009
2008 vs. 2009 Increase/ (Decrease)
2008 vs. 2009 % Increase/ (Decrease)
General Fund Year-to-Date Revenues Year-to-Date Expenditures Net revenue over (under) expenditures
$7,223,479 6,830,506
$7,311,144 6,978,510
$392,973
$332,634
2
$87,665 148,004 ($60,339)
1.2% 2.2% -15.4%
CITY OF LITTLETON CASH FLOW STATEMENT-GENERAL FUND FOR THE PERIOD ENDED FEBRUARY 28, 2009 *** REVENUES *** Retail Sales General Use Sales - Motor Vehicle Tax Property Tax Specific Ownership Tax General Cigarette Tax Liquor Tax Stadium District Tax Total Taxes Total Franchise Fees Liquor Licenses Contractor License Fees Building Permits Other License and Permits Total Licenses and Permits $1.50 Motor Vehicle Fee $2.50 Motor Vehicle Fee Fire Services Contracts County Road and Bridge Other Intergovernmental Revenues Total Intergovernmental Revenues Fire Contract Administration Fees Plan Check Fees Library Services Museum Services Other Service Revenues Total Service Revenues Fines and Forfeitures Investment Interest Interfund Transfers Other Miscellaneous Revenues Total Miscellaneous Revenues Total Revenues
FINAL BUDGET $21,640,000 1,000,000 1,500,000 3,950,000 320,000 240,000 70,000 17,000 28,737,000 1,852,000 8,250 84,000 525,000 29,200 646,450 60,000 80,000 10,257,500 250,000 44,940 10,692,440 659,840 275,000 48,000 61,000 232,130 1,275,970 1,053,500 400,000 821,000 281,500 2,556,000 $45,759,860
*** EXPENDITURES ***
FINAL BUDGET (SEE NOTES)
City Council City Attorney City Manager Business/Industry Affairs Finance Information Services Administrative Services Police Services Fire Services Emergency Planning Public Services Community Development Library Museum General Operations Contingencies/Unanticipated* Interfund Transfers Total Expenditures
$404,920 567,655 936,960 592,430 999,960 1,215,479 4,267,771 10,801,940 15,620,828 8,130 5,594,961 1,982,015 2,168,218 1,513,169 1,098,846 200,000 876,690 $48,849,972
*** CASH BALANCE ***
FINAL BUDGET
Cash & Investments, last day of mo.
$4,586,140
FEBRUARY $1,422,086 81,210 105,788 44,641 29,016 16,812 10,440 0 1,709,993 177,902 1,138 4,650 45,733 1,860 53,381 4,784 6,365 1,319,107 0 4,409 1,334,665 80,730 23,736 3,844 3,481 6,286 118,077 82,319 864 10,000 7,936 101,119 $3,495,137
FEBRUARY $12,235 45,143 67,585 55,843 73,501 108,704 304,071 812,604 1,213,878 0 389,165 164,876 158,674 118,678 78,138 0 0 $3,603,095 FEBRUARY $5,695,597
YTD
ABOVE/(BELOW) BUDGET
$3,837,872 292,479 186,485 41,567 42,294 34,877 12,240 0 4,447,814 433,392 1,810 10,950 98,026 4,175 114,961 8,943 11,860 1,319,107 3,275 4,409 1,347,594 80,730 51,468 8,194 6,497 128,773 275,662 140,429 4,471 531,000 15,821 691,721 $7,311,144
YTD
($17,802,128) (707,521) (1,313,515) (3,908,433) (277,706) (205,123) (57,760) (17,000) (24,289,186) (1,418,608) (6,440) (73,050) (426,974) (25,025) (531,489) (51,057) (68,140) (8,938,393) (246,725) (40,531) (9,344,846) (579,110) (223,532) (39,806) (54,503) (103,357) (1,000,308) (913,071) (395,529) (290,000) (265,679) (1,864,279) ($38,448,716) ABOVE/(BELOW) BUDGET
$121,511 81,251 140,120 94,243 140,421 195,795 503,593 1,660,817 2,398,489 0 669,002 280,961 365,397 221,666 105,244 0 0 $6,978,510 YTD
($283,409) (486,404) (796,840) (498,187) (859,539) (1,019,684) (3,764,178) (9,141,123) (13,222,339) (8,130) (4,925,959) (1,701,054) (1,802,821) (1,291,503) (993,602) (200,000) (876,690) ($41,871,462) ABOVE/(BELOW) BUDGET
$5,695,597
*Note: The Final budget represents the ending balance after transfers and prior year encumbrances.
3
$1,109,457
2009 17.7% 29.2% 12.4% 1.1% 13.2% 14.5% 17.5% 0.0% 15.5% 23.4% 21.9% 13.0% 18.7% 14.3% 17.8% 14.9% 14.8% 12.9% 1.3% 9.8% 12.6% 12.2% 18.7% 17.1% 10.7% 55.5% 21.6% 13.3% 1.1% 64.7% 5.6% 27.1% 16.0%
2009 30.0% 14.3% 15.0% 15.9% 14.0% 16.1% 11.8% 15.4% 15.4% 0.0% 12.0% 14.2% 16.9% 14.6% 9.6% 0.0% 0.0% 14.3% 2009 124.2%
Revenues With an unstable economy and most of the City’s revenues derived from sales and use tax, the City has been conservative in budgeting revenues for 2009. February 2009 revenues were $3,495,137 as compared to $3,782,798 in the same period in 2008. Please see the graph below comparing 2009 revenues to the same period in 2008. General Fund Revenue Comparison $4,000,000 $3,500,000
February 2008 $3,000,000
February 2009
$2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $s Taxe
c Fran
F hise
ees nse Lice
an d
its P er m
. govt Inter
Serv
ices
eo ellan Misc
l Tota
us
Taxes The major source of revenues for the General Fund is taxes. The following information is for actual year-to-date collections as of February 28, 2009 compared to the same period in 2008. Retail Sales Tax – Overall, sales and use taxes (retail sales tax, general use, motor vehicle tax and stadium tax) were 9% lower in February of 2009 compared to 2008. Retail sales taxes through February 2009 were 5% lower than the same period in 2008. General Use Tax – General use taxes depend highly on the amount of equipment purchases and such from businesses in the City. In February 2009, as compared to the same period in 2008 general use tax collections were lower by $89,966 or 24%. Motor Vehicle Tax – Motor vehicle taxes are collected by the counties and remitted monthly to the City. Through February 2009, motor vehicle taxes collected were lower than the same period in 2008 by $72,026 or 28%. This decrease can be attributed to the slump in auto dealership sales and the slower economy. Stadium Taxes – This tax is received annually from the Denver Metropolitan Football Stadium District. This tax has historically been received by the City in July. Sales and Use Tax Budget to Actual Trends $3,300,000 $3,000,000
2008
2009
2009 Budget
$2,700,000 $2,400,000 $2,100,000 $1,800,000
`
$1,500,000 $1,200,000 $900,000 $600,000 $300,000 $January
February
March
April
May
June
July
August
September
October
Note: This graph includes retail sales tax, general use tax, motor vehicle tax and stadium tax.
4
November December
Property Taxes – Property taxes are collected based on the assessed value and the mill levy of properties in the City. The City’s mill levy is currently 6.662 mills. The property taxes collected in 2009 were assessed in 2008. Assessed values increased by 3% in 2009. Through February 2009, property taxes collected were lower than the same period in 2008 by $51,891 or 56%. We believe this is due to slower payment remittances by property owners but we’re still researching the cause for lower 2009 receipts to date. Specific Ownership Tax – Specific ownership taxes are assessed on certain vehicles and mobile equipment. They are collected by the Counties and remitted to the City. Year-to-date revenues were lower as compared to 2008 by 16%. Cigarette Taxes – These taxes are levied on the sale of cigarettes. Year-to-date collections were $34,877 as compared to $39,961 last year as of February, which is a 13% decline. Liquor Tax – This is the annual tax as required by the City Charter. Collections year-to-date were $12,240 as compared to $11,160 in 2008; this was an increase of 10%.
Franchise Fees Included in these revenues are fees related to various utilities. The City collected $433,392 in 2009 as compared to $427,089 in 2008 or a 2% increase. Licenses and Permits The City collects various licenses and permits including building permits, liquor license and contractor licensing fees. Collections as of February 2009 were lower as compared to the same period in 2008. Year-to-date collections in 2009 were $114,961 compared to $125,433 in 2008; this was an 8% decrease. A large portion of this decrease in revenues was attributable to an 11% decline in building permits. Intergovernmental Revenues There are several services that the City provides in which it recoups revenues. Included in this category are revenues derived from the fire partners’ contracts with the Littleton Fire Protection District and Highlands Ranch Metro District in which the partners share in expenditures related to fire services. These payments are made quarterly to the City. Additional revenues included in this category are federal, state and local shared revenues. Total receipts-to-date were $1,347,594 as compared to $1,306,914 in 2008, which was a 3% increase. Service Revenues The fire partners are also contracted to pay administration fees of $659,840 in 2009. The fees are paid quarterly. In addition, there are several smaller fees that are charged by the City in various departments such as the library and museum. Service revenues as of February 2009 were $275,662, which was lower as compared to $288,467 in 2008. The major revenue source during February was for the fire partners’ administration fees. This year’s revenues are slightly lower than 2008 due to lower plan check fees and other miscellaneous service fees. The City of Littleton reinstated the issuance of passports in December 2008. Fines and Forfeitures This revenue source includes court fines. Year-to-date revenues were lower than revenues in the same period last year. Year-to-date revenues for 2009 were $140,429 and $155,591 in 2008; this was a 10% decline from 2008. Investment Interest This is the amount of interest earned on the City’s investments. As of February 2009, interest earnings in the General Fund were $4,471 compared to 2008 interest earnings of $42,988; this was a decrease of 88% or $38,517. Beginning in
February 2009, the City of Littleton instituted a new method of allocating interest earned based on balance of owned investments in each fund instead of merely using ending cash balance. This accounts for the decrease in interest in 2009.
5
As of February 2009, the City’s total investments in all funds were $40,480,475: City of Littleton Investment Report 2/28/2009
Description Cash Cash - WF Total / Average
CUSIP/Ticker
Coupon Rate
YTM @ Cost
Face Amount/Shares
Market Value
Cost Value
% of Portfolio
N/A
0.913 0.913
0.913 0.913
$3,004,609.37 3,004,609.37
$3,004,609.37 3,004,609.37
$3,004,609.37 3,004,609.37
7.42 7.42
CD's Colorado Business BankCD400006561A Colorado Business BankCD260072700 Total / Average
10/31/2009 4/25/2009
2.570 4.150 2.641
2.570 4.150 2.641
2,117,901.05 100,000.00 2,217,901.05
2,117,901.05 100,000.00 2,217,901.05
2,117,901.05 100,000.00 2,217,901.05
5.23 0.25 5.48
Treasury Notes T-Note T-Note Total / Average
912828FX3 912828FE5
11/15/2009 5/15/2009
4.625 4.875 4.764
4.664 4.728 4.699
2,000,000.00 2,500,000.00 4,500,000.00
2,054,920.00 2,523,050.00 4,577,970.00
1,997,812.50 2,508,789.00 4,506,601.50
4.94 6.18 11.12
Bonds FFC FFC FFC Total / Average
31331GLK3 31331GCJ6 31331V4M5
2/4/2011 9/29/2010 9/21/2009
1.850 3.200 5.000 3.412
1.850 3.200 5.002 3.412
2,000,000.00 4,000,000.00 2,500,000.00 8,500,000.00
1,995,000.00 4,043,760.00 2,557,025.00 8,595,785.00
2,000,000.00 4,000,000.00 2,499,775.00 8,499,775.00
4.94 9.88 6.18 21.00
Bonds FHLB FHLB FHLB FHLB FHLB FHLB Total / Average
3133XSBH0 3133XRT83 3133XSCX4 3133XFLG9 3133XGEQ3 3133XSWT1
10/6/2010 9/10/2010 10/15/2010 6/12/2009 8/5/2009 2/17/2011
3.000 3.375 3.800 5.250 5.250 1.750 3.721
3.000 2.710 3.800 2.495 2.509 1.750 2.733
4,050,000.00 2,500,000.00 1,000,000.00 2,500,000.00 2,500,000.00 2,000,000.00 14,550,000.00
4,055,062.50 2,567,200.00 1,002,810.00 2,532,025.00 2,548,450.00 1,991,260.00 14,696,807.50
4,050,000.00 2,531,650.00 1,000,000.00 2,577,700.00 2,573,950.00 2,000,000.00 14,733,300.00
10.00 6.18 2.48 6.18 6.20 4.95 35.94
Bonds FHLMC Total / Average
3128X64H6
3/4/2011
3.750 3.750
3.674 3.674
2,500,000.00 2,500,000.00
2,500,425.00 2,500,425.00
2,505,075.00 2,505,075.00
6.18 6.18
Bonds FNMA Total / Average
3136F6SC4
12/28/2009
4.250 4.250
2.659 2.659
2,500,000.00 2,500,000.00
2,558,600.00 2,558,600.00
2,565,500.00 2,565,500.00
6.18 6.18
Local Government Investment Pool ColoTrust Plus COTRUST247 ColoTrust Prime COTRUST117 Total / Average
N/A N/A
0.640 0.420 0.611
0.640 0.420 0.611
780,674.47 120,773.36 901,447.83
780,674.47 120,773.36 901,447.83
780,674.47 120,773.36 901,447.83
1.93 0.30 2.23
Money Market Wells Fargo Sweep Total / Average
N/A
0.900 0.900
0.900 0.900
1,806,616.32 1,806,616.32
1,806,616.32 1,806,616.32
1,806,616.32 1,806,616.32
4.46 4.46
3.344
2.879
$40,480,574.57
$40,860,162.07
$40,740,826.07
100.00
Total / Average
WF0983
Maturity Date
WFSWEEP
6
The US is currently in a severe recession (that began in December 2007) affecting all sectors of the economy. Gross Domestic Product (GDP) is estimated to have contracted 5% annualized in the last quarter of 2008 and is projected to decline significantly in the first quarter of 2009. Based on real GDP, the recession is on pace to rival the magnitude of the 1973-1975 contraction. On 12/31/08, Wells Fargo Bank, the City’s bank for most of its services, completed an acquisition of Wachovia Bank. The effects of this acquisition for Wells Fargo meant absorbing $219 billion of commercial real estate and corporate loans, and a big book of at-risk mortgages. During its fourth quarter ending December 31, 2008, Wells set aside $21.7 billion in reserves for potential losses. For the quarter, Wells suffered a $2.55 billion loss but added $2.84 billion as net income for the year. A positive result for Wells during 2008 was adding 10% or $30 billion in deposits. Another outcome from the Wachovia acquisition was a slightly lower S&P credit rating of AA+, down from AAA. This is still a “High Quality” investment grade and the highest in the banking industry. Over the last few months, the City purchased two securities (Federal Farm Credit and Federal Home Loan Bank) and opened a new savings account at Wells Fargo. The securities are AAA rated; the new bank account was opened to provide more diversification and yield compared to the ColoTrust “Plus” account. There is $3 million in the new account and we will gradually draw down those funds, as needed, for cash flow purposes. Interfund Transfers Included in these revenues are revenues derived from the fire partners’ contracts with the Littleton Fire Protection District and Highlands Ranch Metro District in which the partners share in the expenditures related to fire services. These payments are made quarterly to the City and transfers vary year to year. In 2009, the Water Fund will no longer transfer annual interest earnings of approximately $460,000 to the General Fund. There are also one-time transfers in 2009 of $100,000 from the Consolidated Special Revenues Fund and $421,000 from the Geneva Village Fund. These transfers were completed in January. Other Miscellaneous Revenues This revenue source includes all other miscellaneous revenues. As of February 2009, this amount was $15,821 compared to $12,509 in 2008.
Expenditures The total budgeted expenditures for 2009 are $48,849,972 (includes encumbrances from prior years). Of this amount, $35,827,053, or 73%, is related to personnel costs. The following graph reports expenditures for February 2009 as they relate to February 2008 for each department.
Expenditures by Department $2,500,000
February-08
February-09
$2,000,000 $1,500,000 $1,000,000 $500,000 $CC
CA
CM
BI
A
Fi
n
IS
AS
Po
l
Fi
re
EP
PS
CD
Li
b
M
us
G
O
Co
nt a Tr
ns
f.
For February 2009, City expenditures were $3,603,095 as compared to $3,509,887 in 2008. These costs were for normal operating expenditures such as personnel, supplies and vehicle maintenance.
7
Special Projects Fund Overview and Analysis The Special Projects Fund accounts for the financing, acquisition and construction of capital improvements and various special projects throughout the City. These projects include public facilities, new street construction, parks and open space information technology, public safety enhancements and cultural and recreational improvements. In addition, various capital leases are paid out of this fund. The following chart provides the revenues and expenditures as compared to the same period in 2008. 2008
2009
2008 vs. 2009 Increase/ (Decrease)
2008 vs. 2009 % Increase/ (Decrease)
Special Projects Funds Year-to-Date Revenues Year-to-Date Expenditures
$
Net revenue over (under) expenditures
$
376,070 380,820 (4,750)
$
396,810 88,811
$
20,740 (292,009)
5.5% -76.7%
$
307,999
$
312,749
N/A
The main sources of revenues are highway user taxes (HUTF) and building use taxes. HUTF revenues for the month of February 2009 were $89,233. These funds must be used to construct highways and streets. HUTF taxes averaged $91,826 a month in 2008. Building use taxes were $209,268 through February 2009 which was 30% higher than 2008. Building use taxes are highly volatile as there are several factors such as the economy and the housing market that highly affect these revenues. The cash balance in this fund has been decreasing over the past years as projects are being completed with minimal revenues to fund these projects. In 2009, a transfer from the General Fund has been budgeted at $500,000 to help fund projects. This fund will continue to be monitored as the cash balance continues to decline.
8
City of Littleton Operating Revenues and Expenditures- General Fund YTD Comparison 2007-2009 (February) *** REVENUES *** Sales and Use Taxes Property Taxes Building Permits Franchise Fees Fire Service Contracts Fines and Forfeitures Interest Income All Other Categories Total
*** EXPENSES *** City Council City Attorney City Manager BIA Finance Information Services Admin Services Police Fire Emergency Planning Public Services Community Development Library Museum General Ops Total
$
$
$
$
2007 4,343,468 79,723 65,562 425,354 1,300,563 149,566 82,035 250,786 6,697,057
2007 119,245 89,814 135,808 124,188 137,232 167,352 509,645 1,504,251 2,237,743 762,772 229,106 312,645 204,631 129,005 6,663,437
$
$
$
$
2008 4,669,779 93,458 109,866 427,088 1,283,014 155,591 42,989 441,695 7,223,480
2008 113,301 69,309 149,019 63,171 173,164 195,779 504,577 1,554,905 2,359,464 716,739 262,673 367,426 210,412 90,565 6,830,504
$
$
$
$
2009 4,316,836 41,567 98,026 433,392 1,319,108 140,430 4,471 426,314 6,780,144
YTD Receipts/ Annual Budget 2007 2008 2009 19% 20% 18% 2% 3% 1% 12% 21% 19% 26% 24% 23% 13% 12% 13% 13% 13% 13% 21% 10% 1% 9% 17% 16% 16% 16% 15%
2009 121,511 81,251 140,120 94,243 140,421 195,795 503,593 1,660,817 2,398,489 669,002 280,961 365,397 221,666 105,244 6,978,512
YTD Expenses/ Annual Budget 2007 2008 2009 32% 29% 30% 16% 12% 14% 16% 16% 15% 21% 10% 16% 12% 16% 14% 14% 16% 16% 12% 12% 12% 15% 15% 15% 16% 15% 15% 0% 0% 0% 14% 13% 12% 13% 14% 14% 15% 17% 17% 14% 14% 15% 5% 7% 10% 14% 14% 15%
Prior Year Change 2008 2009 9% 8% -8% -29% 17% -56% -3% 68% -11% 17% 0% 1% -3% -1% 3% -26% 4% -10% 132% -48% -90% 52% 76% -3% 7% 8% -6%
2007
Prior Year Change 2008 2009 2% -5% 7% 3% -23% 17% 6% 10% -6% 19% -49% 49% 9% 26% -19% -2% 17% 0% -1% -1% 0% 2% 3% 7% 8% 5% 2% -100% N/A N/A 34% -6% -7% 1% 15% 7% 17% 18% -1% 10% 3% 5% 10% -30% 16% 8% 3% 2%
2007
Please Note: Interfund transfer revenues/expenditures and contingencies are excluded.
9
