TO: Mayor and Members of City Council
THRU: Telly Whitfield, Assistant City Manager
FROM: Jay C. Toland, Chief Financial Officer
Brenda J. Powell, Financial Reporting Manager
DATE: March 18, 2019
RE:
Title
Revenue and Expenditure Reports for the Annual Funds for the Six-Month Period Ended December 31, 2018 with Comparative Information for the Six-Month Period Ended December, 2017, and Revenue and Expenditure Reports for the Multi-Year Funds from Inception and for the Six-Month Period Ended December 31, 2018.
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Mission Principle 2 - The City Government is financially sound and provides a full range of quality municipal services that are valued by our customers and delivered by a dedicated workforce in a cost effective manner focused on customer service.
Executive Summary:
The city’s revenue and expenditure reports for the six-month period ending December 31, 2018 is provided for Council’s information.
Background:
The attached reports consist of annual operating reports for the General Fund and Other Operating Funds. Revenue and expenditure reports for the Multi-Year Funds are also provided. The annual operating reports provide revenue and expenditure data for the current fiscal year as of December 31, 2018 with comparative data for the same period of the prior fiscal year. The current year annual budget along with positive or negative changes between the “Actuals” columns is also provided.
The revenue and expenditure reports for the multi-year funds provide revenue and expenditure data along with a listing of current projects and project authorizations, activity from inception, encumbrances and project balances.
Most revenues are reported when they are both measurable (cash flow from the revenue can be reasonably estimated) and available (revenue is available to finance current year expenditures to be paid within 60 days). Sales taxes and utility taxes are not measurable by the City until distributed by the State. Motor vehicle tax is not measurable by the City until distributed by the County. In order to present a full 6-months of sales tax and utility tax revenues, those revenues are reported on the cash basis.
Issues/Analysis:
As of December 31, 2018 General Fund revenues and other financing sources exceed expenditures and other financing uses by $14.7M. Overall, the excess in General Fund revenues over expenditures and transfers out to other funds increased $3.6M from the previous year for the same time period. General Fund revenues are up $2.2M due mainly to an increase in collections of current year ad valorem taxes in the amount of $2.5M, offset by reductions in Federal revenues for public safety due to the COPS Hiring Grant ending 8/31 of $500k, while General Fund expenditures and transfers out to other funds are down approximately $1.4M.
Significant variances and other items of note between actuals as of December 31, 2018 as compared to December 31, 2017 are described below.
GENERAL FUND REVENUES
Ad Valorem Taxes -
• The current year property tax levy as of December 31, 2018 is $63,145,230 including the levy for Public Service and late listings. This is an overall increase of $710,000 over the same time period last year. In addition, collections on the current year levy are at 76% as of December 31, 2018 versus a 73% collection rate for the prior fiscal year. This has resulted in an overall increase in revenues of approximately $2.5M as of December 31, 2018.
Intergovernmental Revenues -
• Federal revenues consist of federal grants for operating expenditures. The billing for these revenues are down $501,262 from the prior year due primarily to the COPS Hiring grant ending August 31.
• Local revenues consist of reimbursements from the County for HazMat, Fire Districts and Eastover Recreation, as well as payments from the County for the cost of the Red Light program and economic development payments from PWC. Revenues are down approximately $300k as of December 31, 2018 due mainly to a reduction in the receipts from the County for the Eastover Recreation District.
Functional Revenues -
• Property leases are down 74.62% primarily due to the termination of lease agreements in Festival Park Plaza due to the sale of the property.
• Engineering/Planning services are down 39.14% or $88,637 due primarily to the 2nd quarter payment from the NC Department of Transportation for the current year has not been received yet. The payment averages around $90,000 each quarter.
Other Revenues -
• Refunds and sundry revenues are up 231% or $210,808 due primarily to insurance settlement payments for Hurricane Florence related damages in the amount of $178,063 and non-governmental grants from the Arts Council totaling $43,500.
GENERAL FUND EXPENDITURES
Economic and Community Development -
• Expenditures are down 92.56% or $3,121,661 due mainly to a $3 million loan approved by Council in August of 2016 to Fayetteville Metropolitan Housing Authority for the revitalization of Grove Street paid in the prior fiscal year.
City Attorney’s Office -
• Expenditures are up 12.39% or $73,146 from the prior year due primarily to an increase in accounting, auditing and legal fees from prior year.
Information Technology -
• Expenditures are down 23.85% or $574,363 due primarily to the City’s Microsoft Office Suite renewal with Dell Marketing LP in prior year.
Mayor, Council and City Clerk -
• Expenditures are down 35.21% or $214,104 due to costs associated with the primary and municipal elections.
Public Services -
• Engineering and Construction Management expenditures are down 19.85% or $186,072 from the prior year due primarily to dam assessments required for Hurricane Matthew related damages in the prior year, as well as, vehicle purchases in FY18.
• Infrastructure maintenance expenditures are down 14.20% or $160,830 due to a decrease in vehicle maintenance costs.
• Real Estate expenditures are down 32.98% or $43,118 due to vehicle purchases in FY18.
Other Appropriations -
• Expenditures are up 102.89% or $1,742,685 due mainly to annexation payments to the County not made until the 2nd half of the year in FY18.
• Increase in debt service payments of $1,669,319 due mainly to the principal and interest payments made on the baseball stadium and parking deck debt through December 31, 2018.
Other Financing Sources (Uses) -
• Transfers out to other funds decreased 19.52% or $2,841,029 due primarily to a reduction in transfers needed for the Environmental Services Enterprise Fund in the amount of $643,920 and decreases in transfers to fund capital project in the amount $1,973,758.
OPERATING FUNDS REVENUES AND EXPENDITURES
Central Business Tax District Fund -
• Other operating expenditures decreased $32,628 or 32.22% from prior year due to the timing of payments made to the Cool Springs Downtown District for management of the downtown Arts and Entertainment District services and programs.
Emergency Telephone System Fund -
• Intergovernmental revenues are up 11.55% or $38,473 due to timing variance of payment received from state in prior year.
• Other operating expenditures are down $109,861 or 19.24% due to the timing variance of payments made for information technology services.
Parking Fund -
• Parking revenues are down 24.86% or $64,431 due to general fund transfers made to support parking expenditures in prior year.
Airport Fund -
• Airport transfers to other funds have increased by 100% or $2,224,148 primarily due to transfers to the Airport Capital Project Fund to support the ongoing Terminal Renovation Project.
Environmental Services Fund -
• Solid waste fee revenue increased 82.10% or $5,262,031 from prior year due to the solid waste fee increase in the current year.
• Other operating expenditures increased $1,298,205 or 47.73% due to costs related to Hurricane Florence recovery.
Stormwater Fund -
• Storm water fee revenue increased 42.26% or $3,316,210 from prior year due to the storm water fee increase in the current year.
• Transfers to the Storm Water Capital Project Fund increased 35.60% or $1,237,851 due the addition of five watershed studies and a program management study totaling $2,087,250.
Transit Fund -
• State operating grant consist of grants for operating expenditures. The billing for these revenues is up 100.00% or $192,908 from the prior year due primarily to timing differences in the receipt of these funds.
• Property use/rent revenue has increased $1,473 or 20.66% due to additional rent revenue in the current year for American Coach Lines.
• Other operating expenditures have increased 20.95% or $280,527 due to operating costs associated with the new Multi-Modal Transit Center.
Budget Impact:
See attached reports.
Options:
Not applicable.
Recommended Action:
For information only.
Attachments:
Revenue and Expenditure Reports for the Annual and Multi-Year Funds for the six-month period ended December 31, 2018.