Quarterly Financial Update Q1 2016

This is our first quarterly financial update. Up to this point staff has provided council with monthly
budget-to-actual expenditures for the General Fund. Monitoring the General Fund is important because
this is where a majority of the citys operational activities occur. However, there are other city funds
that also provide essential services or are legally required to be separated from the General Fund. For
example, the citys Sewer and Surface Water utilities are accounted for in the enterprise funds and the
Capital Improvement Fund is accounted for under the capital project funds.
Cash Balance Comparisons
Below is a cash balance comparison for both year-over-year and yearend for all city fund types.

Quarterly Cash Balance Comparison

30,000,000.00

25,000,000.00

20,000,000.00

15,000,000.00

10,000,000.00

5,000,000.00

0.00
General Fund

Special Revenue
Funds
Mar YTD
2015

Debt Service
Funds
Mar YTD
2016

Capital Project Enterprise Funds Internal Service

Funds
Funds
Dec YTD
2015

Variance Analysis
The General Fund cash balance decreases at the March 31, 2015 and 2016 compared to yearend is due
to the semi-annual tax collection process. The city receives tax settlements in July and December, so at
March 31 cash balances are decreasing as reserves are being utilized to cover expenditures.
Debt service funds typically also have a lower cash balance at the March 31 timeframe compared to
yearend. Tax collections are also received in December while debt service payments are made on
February 1 and August 1 each year. The February 1 payments include the principal portion of the debt
service payments compared to the August 1 payments which are typically interest only payments.

The enterprise funds experienced a decrease in cash compared to this same timeframe last year. The
Surface Water Fund saw a very modest decrease in cash over the past year, whereas the Sewer Fund
saw more of a decrease. This decrease is due in part to capital projects payments over the course of last
summer and the transfer of approximately $400,000 in restricted cash for Sewer Access Credits (SAC)
payments to the EDA fund for business subsidies. Both of these funds instituted a rate increases
beginning with the January 2016 billings. Below is a graph of each funds monthly cash balances dating
back to January 31, 2015.
17,000,000.00

16,000,000.00

15,000,000.00

14,000,000.00

13,000,000.00

12,000,000.00

11,000,000.00

10,000,000.00
Jan Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov Dec Jan Feb Mar
YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD
2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2015 2016 2016 2016
07100 - SEWER FUND

07300 - SURFACE WATER FUND

The internal service funds also experienced a cash decrease compared to the first quarter of 2015. In
the first quarter of 2015, the Capital Equipment Internal Service Fund purchased three plow trucks in
April 2015 for approximately $600,000. Also, in April of 2015 the Capital Equipment Internal Service
Fund made an internal loan for approximately $941,000 to the EDA fund for the purchase of MnDOT
land on the west end of the city.
General Fund Monthly Financial Report
In holding with our monthly General Fund revenue and expenditure budget-to-actual comparisons,
below is a comparison through April. One-third or 33 percent of the budget would ideally be accounted
for as of April 30th. An additional indicator has been added to aid in quickly seeing large positive or
negative variances. An upward pointing green arrow indicates a greater than 10 percent positive
variance. A downward pointing red arrow indicates a greater than 10 percent negative variance, and
yellow sideways arrow indicates the variance is within 10 percent of budget.

CITY OF SHAKOPEE
Monthly Financial Report
Di
YTD
April
YTD
vis
2016
2016
2016
io
Budget
Actual
Actual
n
01000 - GENERAL FUND
REVENUES:
* - TAXES
17,150,900
23,391
66,476
* - SPECIAL ASSESSMENTS
11,500
0
(29,165)
* - LICENSES AND PERMITS
1,504,100
416,670
824,308
* - INTERGOVERNMENTAL
1,108,500
0
279,009
* - CHARGES FOR SERVICES
4,235,775
349,383 1,655,991
* - FINES AND FORFEITS
1,500
410
998
* - MISCELLANEOUS
215,748
17,314
56,127
TOTAL REVENUES
24,228,023
807,169 2,853,744
EXPENDITURES:
11 - MAYOR & COUNCIL
(185,260)
(5,823)
(75,406)
12 - ADMINISTRATION
(1,555,530)
(90,637) (357,728)
13 - CITY CLERK
(399,170)
(20,493)
(79,337)
15 - FINANCE
(1,243,700)
(61,345) (241,551)
17 - COMMUNITY DEVELOPMENT
(674,905)
(29,759) (116,803)
18 - FACILITIES
(408,986)
(22,203) (106,042)
31 - POLICE DEPARTMENT
(7,625,014) (524,654) (2,198,678)
32 - FIRE
(2,079,785) (124,520) (539,843)
33 - INSPECTION-BLDG-PLMBG-HTG
(669,967)
(61,317) (204,353)
41 - ENGINEERING
(739,178)
(40,536) (185,155)
42 - STREET MAINTENANCE
(2,225,116) (106,909) (509,169)
44 - FLEET
(429,595)
(32,373) (115,822)
46 - PARK MAINTENANCE
(1,644,596)
(77,776) (341,954)
66 - NATURAL RESOURCES
(198,092)
(19,468)
(47,951)
67 - RECREATION
(2,529,679) (150,094) (614,539)
91 - UNALLOCATED
(218,450)
(9,886)
(1,425)
TOTAL EXPENDITURES
(22,827,023) (1,377,793) (5,735,755)
OTHER FINANCING
* - TRANSFERS IN
250,000
0
0
* - TRANSFERS OUT
(2,100,000)
0
0
OTHER FINANCING TOTAL
(1,850,000)
0
0
FUND TOTAL
(449,000) (570,624) (2,882,011)

Budget
April YTD
Balance Percent
2015
Remaining Used
Actual

17,084,424
0%
40,665 (254)%
679,792
55%
829,491
25%
2,579,784
39%
502
67%
159,621
26%
21,374,279
12%
(109,854)
(1,197,802)
(319,833)
(1,002,149)
(558,102)
(302,944)
(5,426,336)
(1,539,942)
(465,614)
(554,023)
(1,715,947)
(313,773)
(1,302,642)
(150,141)
(1,915,140)
(217,025)
(17,091,268)

57,914
(32,274)
394,800
312,523
1,292,098
2,735
62,156
2,089,954

41%
(68,629)
23% (296,182)
20%
(90,042)
19% (212,290)
17% (150,617)
26% (109,250)
29% (2,149,040)
26% (587,589)
31% (181,117)
25% (169,508)
23% (473,083)
27%
(97,795)
21% (349,124)
24%
(37,131)
24% (593,774)
1%
(1,995)
25% (5,567,166)

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250,000
(2,100,000)
(1,850,000)
2,433,011

0%
0%
0%

0
0
0
(3,477,212)

Key
Varies more than 10% than budget positively
Varies more than 10% than budget negatively
Within 10% of budget

Variances worth noting on the revenue side of the budget include Taxes and Licenses & Permits. As I
have mentioned in previous presentations, revenues and expenditures can vary on the frequency of
collection and payment. Large infrequent payments or collections such as tax payments that happen
twice a year can skew budget-to-actual comparisons significantly. Understanding these unique
variances is important in gaining a complete financial picture.
License & Permit collections are continuing to come in at higher than anticipated rates. Below is a
report for the first quarter comparing year-over-year building related permits. The quantity of permits
is up over 100 and the valuation of all the permits is over four times the amount of first quarter 2015.

Expenditures are all within or significantly below anticipated budget allotments as of April 30, 2016.
Investment Analysis
The city contracts with Advantus Capital Management to manage the citys investment portfolio. Below
is a summary of the citys investment return through March 31, 2016. The chart compares gross return,
net return (after the deduction of investment manager fees) and a benchmark return. We just added
the income return column to the graph over the past year. This column is beneficial in comparing actual
interest income to the gross and net return, which includes book-to-market value adjustments.
Governmental accounting standards require the city to book market value fluctuations from year-toyear even though the citys investment policy requires investments to be held to maturity with a few
exceptions.

Investment Policy Tidbits

The citys investment portfolio adheres to both its investment policy and State Statutes. Cities are
limited legally on investment types to minimize the risk of principal loss. In addition, all investments are
held in a safekeeping account with U.S. Banks custody department. Below is additional information on
the citys investment portfolio.

Investment Summary
Given the citys limited investment markets and historically low interest rates, the city is achieving a very
respectable rate of return while first assuring safety and liquidity.