City of Mountlake Terrace. Second Quarter 2016 Financial Report September 19, 2016

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Camilla Caldwell
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1 City of Mountlake Terrace Second Quarter 2016 Financial Report September 19,

2 Overview Reviewing the City s finances on a regular basis, and posting the review on the City s website, highlights the City Council s goals of: Protect and Enhance the City s Financial Health and Stability; Develop and Implement more effective Communication and Outreach with the Community Maintain appropriate and essential Public Services in a cost effective manner The City remains on target with the Adopted 2016 Six-Year Financial Forecast to continue providing cost-effective services, programs and projects for the community; This has been accomplished through the City Council s adherence to a practice of living within our financial means over the past 12 months. 2

3 Overview (continued) Tonight s review looks at several of the City s funds in terms of their performance during the year and the second quarter. General Fund Street Operating Fund Recreation Fund Enterprise Funds Water Utility Fund Wastewater Utility Fund Storm Water Utility Fund Capital Funds Real Estate Excise Tax Fund Street Construction Fund 3

4 General Fund General Fund revenues are used to pay for the following programs: City Council City Manager Administrative Services Community & Economic Development Fire (contracted through Fire District 1) Municipal Court (both in-house and contracted through Snohomish County and other providers) Parks & Property Management Police 4

5 General Fund (continued) Revenues in the General Fund: Property Tax-General Property Tax-EMS Sales Tax Legislative Backfill Utility Tax-Gas Utility Tax-Garbage Utility Tax/ Franchise-Cable Utility Tax-Telephone Utility Tax-Electric Utility Tax-Water/Sewer/Storm Admission Tax-Theatre Gambling Tax-Bingo/Pulltabs Gambling Tax-Mini Casino Business Licenses Building Permits Engineering Fees Planning, Zoning, Subdivision Permits Animal License Liquor Excise Tax Liquor Board Profits Criminal Justice Funds Grants Payments from Other Governments PUD Privilege Tax Emergency Medical Service Transport Solid Waste Admin Fee Off duty Officers Reimbursement Home Detention Records Charge Passports Other Charges for Service Fines and Forfeitures 5

6 Recession Action Strategies & Preventative Measures Revenue estimates reflect economic conditions Discretionary funding eliminated Restrictive General Fund spending practices Staff reductions through attrition. Finance providing services to SNOCOM Fleet management best practices Transitioning to more fuel efficient fleet Providing fleet services to Shoreline and Brier Transitioned animal shelter provider to PAWS Jail services agreement with other jurisdictions Programs transitioned from contract to in-house Animal control Public Works sewer and storm pipe line television inspection system Thermoplastic street marking (e.g., crosswalks, stop bars) Programs transitioned from in-house to contract Fire & EMS services Custodial services LED Street Light Retrofit project Unanticipated state & federal funds ($ mil) Opportunities for volunteers & interns Computer server virtualization Non-essential capital purchases delayed Fleet & equip, information technology, rec & parks Increased Services Public Safety (e.g., SWAT, animal control), Park Services, Streets & ROW Maintenance, and Facilities Maintenance Focus on economic development 6

7 Rent = Over $450,000 per year from General Fund 7

8 General Fund (continued) Even though we have taken steps to reduce the need to use our General Fund Balance in 2016, the Beginning Fund Balance was approximately $1 million less than forecasted. A control budget was put into place in mid-third Quarter of 2015 to keep expenditures in check. A property tax levy lid lift was approved by the voters in August to address the need to fund Interim City Hall rent and recreation & parks programs subsidized by the General Fund. 8

9 General Fund (continued) Sales Tax Collections for the second quarter came in slightly above the forecasted amount. Total sales tax collected during the second quarter was $1,116,320, which is 47.5% of the Adopted Budget. Gambling Tax Revenues were well under budget, totaling $458,648 for the quarter, or only 37% annual budget. It appears that the decline in gambling tax revenue that started in 2014 has started to level off. Development Services Fees totaled $559,453 or 62% of the Adopted Budget of $897,937. It is anticipated that development fees will exceed the 2016 adopted budget. Fines and forfeitures were 29% of the Adopted Budget. 9

10 New Developments Have Increased Jobs, Sales Tax, and Development Fee Revenues in Mountlake Terrace 10

11 General Fund (continued) $8,000,000 $7,000,000 $6,000,000 $5,000,000 Second Quarter General Fund Operating Revenues $4,000,000 $3,000,000 Second Quarter $2,000,000 $1,000,000 $

12 General Fund Operating Expenditures $8,000,000 Second Quarter $7,000,000 $6,000,000 $5,000,000 $4,000,000 Second Quarter $3,000,000 $2,000,000 $1,000,

13 General Fund (continued) At the end of the Second Quarter, Operating Revenues totaled 47% of the budget and Operating Expenditures totaled 45% of the Budget. The Ending Fund Balance at the end of the Second Quarter of 2016 totaled $1,002,

14 Street Operations Fund The Street Fund covers the maintenance of the City s public right-of-ways: More than 60 miles of City streets 400 City-owned street lights 15 traffic signals 3,000 signs 50 miles of sidewalk Numerous crosswalks and other pavement markings Vegetation maintenance for more than 19 miles of planting strips and brush control along unimproved right-of-ways. 14

15 Street Operations At Work 15

16 Street Operations Fund (continued) Street Fund Operating revenues are at 54% of the 2016 budget as of the end of the Second Quarter. Street Operating Fund expenditures were 38% of the total 2016 budget at the end of the Second Quarter. The General Fund transferred $167,754 or 50% of the 2016 Operating Transfers Budget to the Street Fund during the Second Quarter. 16

17 Recreation Fund The Recreation Fund covers the revenues and expenditures of the City s award-winning recreation services, including Aquatics, Athletics/Fitness, Youth and General Recreation Programs. The Fund has a target of recovering 84% of its overall cost through user fees; the remaining 16% of the cost for recreation programs is funded by the General Fund 17

18 Recreation Fund, continued Youth Program Revenues at 48% of Adopted Budget Aquatics Revenues Totaled $575,238 or 43.7% of the Adopted Budget 18

19 Enterprise (Utility) Funds These are funds with revenues from user rates and fees. Like a business enterprise, these funds cover their own costs, without help from outside funds. By and large, under Washington law these revenues cannot be used to subsidize programs other than those related to the utility. The City operates three utilities: Storm Water Sewer Water Rates in each utility are made up of three components: The first portion covers maintaining and operations; A second portion pays debt on funds previously borrowed to make repairs and upgrades; and The last portion of rates goes towards replacing and upgrading the system. 19

20 Storm Water Utility Fund The Storm Water Utility Fund covers the cost of maintaining the natural and developed storm and surface water conveyance system. These actions come about under regulatory requirements through the National Pollution Discharge Elimination System (NPDES) Phase II permit issued by the Washington State Department of Ecology. Work includes: Public education and outreach Inspection of commercial and multifamily housing sites for proper operation and maintenance of storm water treatment and control facilities Identification of illicit discharges to the storm water system Spill cleanup response for accidental discharges Water quality monitoring for Lake Ballinger 20

Storm Water Utility Fund (continued) Storm Water Operating Revenues totaled $971,287 or 53% of the Adopted 2016 Budget through the end of the Second Quarter.

21 Storm Water Utility Fund (continued) Storm Water Operating Revenues totaled $971,287 or 53% of the Adopted 2016 Budget through the end of the Second Quarter. Storm Water Operating Expenses not included debt service totaled 43% of the Adopted 2016 Budget at the end of the Second Quarter. Operating Revenues exceeded Operating Expenses by $228,134. These funds will be used to fund future Storm Water Capital Projects and Debt Service. The Ending Fund Balance of $2,699,012 includes $1,762,893 of unspent bond proceeds to be used for capital projects. 21

22 Storm Water Utility Fund Operating Revenues $1,200,000 Second Quarter $1,000,000 $800,000 $600,000 Second Quarter $400,000 $200,000 $

23 Sewer Utility Fund The Sewer Utility Fund covers the expense of providing sanitary sewer service to the community. 70 miles of mains 30 miles of laterals Four lift stations 1,400 manholes The majority of sewer treatment services are provided by the Wastewater Treatment Plant in Edmonds, of which Mountlake Terrace is part-owner. Smaller amounts of wastewater flows to King County METRO via Brier and Shoreline. The Sewer Utility Fund is also the funding source for capital improvements to the City s wastewater collection system, and for the City s share of the cost of capital improvements to the Wastewater Treatment Plant. 23

24 Sewer Utility Fund (continued) Revenues Sewer service revenues are at 52.5% of the Adopted 2016 Budget as of the end of the Second Quarter. Expenditures Sewer operating expenses, total 46% of the Adopted 2016 Budget at the end of the Second Quarter. Operating Revenues exceed Operating Expenses by $620,116. These funds will be used to fund future Sewer Capital Projects and Debt Service payments. 24

25 Sewer Utility Fund Operating Revenues $2,500,000 Second Quarter $2,000,000 $1,500,000 $1,000,000 Second Quarter $500,000 $

26 Water Utility Fund The Water Utility Fund covers the expense of providing potable water to the community. 79 miles of water mains Three water reservoirs 850 hydrants 2,700 system valves 5,900 service connections. Cross-connection and backflow prevention program Sampling of the water to insure all standards are met Capital improvements and replacements 26

27 Water Utility Fund (continued) Total water operating revenues are 47.9% of the Adopted 2016 Budget for the Second Quarter. Total water operating expenses, are at 42.8% of the Adopted 2016 Budget at the end of the Second Quarter. Operating revenues in the exceed Operating Expenses by $173,269. These funds will be used to fund future Water Capital Projects and Debt Service payments. The Ending Fund Balance of $3,568,272 includes $2,343,049 of unspent bond proceeds to be used to fund future Water Capital Projects. 27

28 Water Utility Fund Operating Revenues $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Second Quarter Second Quarter 28

29 Real Estate Excise Tax (REET) Revenues $600,000 Second Quarter $500,000 $400,000 $300,000 Second Quarter $200,000 $100,000 $

30 Street Construction Fund The Street Construction Fund covers projects to provide, preserve, and improve street, pedestrian, bicycle, and traffic control facilities. A portion of the City s allocation of the Motor Vehicle Fuel Tax Traffic impact fees Interest that accrues on funds in the account. State and federal grants and appropriations Loan proceeds Interagency financial participation Real Estate Excise Tax (REET). Because so much of these funds are restricted by law to be used only for street construction, and not street maintenance, they are kept in a fund that is separate from the Street Operations (Maintenance) Fund. 30

31 Street Construction Projects Are Funded by Grants, Motor Vehicle Fuel Tax, REET and TBD 31

32 Street Construction Fund (continued) The capital projects supported by the fund are those identified in the Transportation Capital Facilities and Improvement Program (TCFIP) and the Transportation Improvement Program (TIP). Street pavement overlays Seal coats Sidewalk and sidewalk ramp construction Bicycle route signing and striping Street reconstruction Traffic control system upgrades 32

33 33

34 CONCLUSION Even though we have taken steps to reduce the need to use our General Fund Balance in 2016, the Beginning Fund Balance was approximately $1 million less than forecasted. A control budget was put into place in mid-third Quarter of 2015 to keep expenditures in check. This will continue into 2017 when levy funds become available. 34

City of Mountlake Terrace. Fourth Quarter 2014 Financial Report April 2, 2015

City of Mountlake Terrace. Fourth Quarter 2014 Financial Report April 2, 2015 City of Mountlake Terrace Fourth Quarter 2014 Financial Report April 2, 2015 1 Overview Reviewing the City s finances on a regular basis, and posting the review on the City s website, highlights the City