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2015 Financial Report

July Finance Department


TABLE OF CONTENTS MARCH FINANCIAL SUMMARY ........................................................................... 3 GENERAL FUND ................................................................................................... 4 REVENUES .............................................................................................................. 4 EXPENDITURES ........................................................................................................ 5 REVENUE SOURCES ............................................................................................. 6 SALES TAX .............................................................................................................. 6 PROPERTY TAX ........................................................................................................ 7 FRANCHISE FEES ...................................................................................................... 8 USE TAXES ............................................................................................................. 9 BUILDING & PLANNING PERMIT FEES ......................................................................... 10 LODGING TAX ....................................................................................................... 10 WATER FUNDS .................................................................................................. 12 SEWER FUNDS................................................................................................... 13 STORMWATER FUNDS ...................................................................................... 14

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July Financial Summary The July Financial Report provides a brief summary for the first seven months of 2015. The largest source of revenue for the City of Greeley General Fund is Sales Tax. The General Sales Tax receipts for the first five months show a 6.5% increase above 2014. Year to date Food Tax revenues are also higher with a 5.7% increase over 2014. The 2015 budget for General Sales Taxes is at 1.7% above 2014 actuals and the Food Tax is budgeted at 3.5%. One area being monitored is Lodging Tax revenues. Year to date Lodging Tax revenue declined 5.6% for the first six months of 2015. For rooms rented in June, revenues decreased by 4.3% from 2014. The decline is not unexpected as the 2015 Lodging Tax budget is lower than 2014 actuals by 27%. For the first six months, occupancy rates are currently still above the state average, but the high revenue growth from the lodging tax last year has declined. New construction permits is tracked as an indicator of growth. Building Permit revenues have decreased by 14% in the first seven months due to fewer new commercial projects in 2015. Year to date valuations of new commercial projects and remodels in 2015 are at $14.8 million from 259 permits as compared to $52.1 million from 308 permits in 2014. Year to date growth continues to come from new single family units. Permits for single family increased from 194, at a value of $31.1 million, in 2014 to 298, at a value of $49.5 million, in 2015. New multi-family units increased from 2014 with 186 as compared to 304 in 2015 with the valuation increasing from $19.6 million in 2014 to $26.7 million in 2015. Oil prices continue to stay significantly lower than last year. At the end of June, the price of Colorado/Nebraska DJ Basin Oil was averaging $50 per barrel as compared to $90 a year ago. We are closely monitoring the impact of the oil and gas industry on the revenue streams for the City of Greeley. Use Taxes collected from oil and gas industries continue to be lower than last year, declining by 85% for the first six months of 2015. Auto sales continue to be above last year, but have started to decline from 2014 sales. We are seeing growth rates of over 13% in Auto Use Tax for the first 6 months of 2015. Auto Use Tax receipts in June were down 13% over June 2014. Year to date comparisons of the General Use Tax shows declines of 14.6%. In 2015 General Use Tax has not seen the same amount of major equipment purchases and General Use Tax collected from oil and gas industries. We continue to experience overall positive growth numbers for the first 7 months of 2015. The current revenue numbers are above budget in many instances. In each section actuals and budget will be compared. A conservative budget approach has been taken in 2015 due to the many different possible outcomes. We will continue to watch economic conditions and revenue streams to estimate the 2015 revenues. The following report will provide a brief summary of the major areas by comparing to 2014 and 2015 revenues and expenditures.

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General Fund Revenues Major sources of revenue in the General Fund include: Sales Tax, Use Taxes, Property Taxes, county, state, and federal intergovernmental funds, Franchise Fees, charges for services, transfers from other funds, fines and forfeits, licenses and permits, and miscellaneous sources. It is important to note most revenues are received a month later, while expenditures are recorded in the month they are incurred. The timing difference between revenues and expenditures creates an unequal comparison until the end of the year when revenues and expenditures have each been collected for 12 periods. Below is a summary of the General Fund revenue sources as compared to 2015 budget:

2015 General Fund Overview 2015 Budget 2015 Actual Use of Fund Balance Revenue Expenditures

Variance

% of Budget

$10,772,106 $6,312,414 $4,459,692 58.6% $84,945,217 $47,113,452 $37,831,765 55.5% $95,717,323 $53,425,866 $42,291,457 55.8%

Revenues have been collected for six months of Sales Tax, General Use Tax, Auto Use Tax, Lodging Tax and Property Tax. Revenues have been collected for seven months for Franchise Fees, Building & Planning Permit Fees, Building Use Tax, and Utility Charges. The General Fund Revenues have increased by 6.2% for the first seven months of 2015. Year to date revenues are 55.46% of the 2015 budget.

1st Quarter 2nd Quarter July YTD Total

General Fund Revenue Comparisons % 2015 Change Actual to 2014 2015 Variance 2015 Budget 2014 2015 2015 Budget $14,234,680 $15,115,115 $880,435 6.2% $22,325,201 $23,202,208 $877,007 3.9% $7,783,832 $8,796,128 $1,012,296 13.0% $44,343,713 $47,113,451 $2,769,738 6.2% $84,945,217 55.46%

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Expenditures The General Fund is used to pay for the City’s basic municipal services such as police, fire, parks, culture, recreation, public works, community development, and general administration. Expenditures from the General Fund are consistent with expectations and the approved budget for 2015. Below is a summary of expenditures for the first seven months of 2015.

1st Quarter 2nd Quarter July YTD Total

General Fund Expenditure Comparisons % 2015 Change Actual to 2014 2015 Variance 2015 Budget 2014 2015 2015 Budget $15,487,056 $19,061,783 $3,574,727 23.1% $24,467,375 $28,309,616 $3,842,241 15.7% $6,062,907 $6,054,467 ($8,440) -0.1% $46,017,338 $53,425,866 $7,408,528 16.1% $95,717,323 55.82%

We monitor the changes in revenue and expenditures over time and compare them to historical trends. As shown by the graph below, the first seven months of revenues and expenses are following the trends of last year.

General Fund: Revenue & Expenditure Overview Analysis

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Revenue Sources Sales Tax The City collects Sales Tax on the retail sale of various goods and commodities. The state's tax rate is 2.9% and the City’s is 3.46%. Sales Tax is distributed to the Public Safety Fund (0.16%), Quality of Life Fund (0.30%) and General Fund (3.00%). The City of Greeley also imposes the same rate of 3.46% on food for home consumption – the “Food Tax” Fund. Sales Tax revenues have been collected for the first six months of 2015. General Sales Tax revenue increased by 6.5% for the first six months of 2015 as compared to 2014. Food Tax revenue is reported separately from General Sales Tax and increased by 5.7% for the first six months of 2015. 2015 Sales Taxes collections are still higher than budget. 2015 General Sales Tax revenue is budgeted at 1.7% above 2014 revenue and Food Tax revenue is budgeted at 3.5% over 2014 revenues. We review Sales Tax revenue in three areas as shown below. The first way is how the Sales Tax revenues are distributed to the four different funds, Public Safety, Quality of Life, Food, and General.

Sales Tax Only Comparisons

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Secondly retail sales are reviewed using the North American Industry Classification System (NAICS) codes for the City of Greeley. The codes are then simplified into major categories as shown below. Not all the categories are included below, but they give a good representation of how 2015 revenues compare to 2014.

Sales Tax by Major Categories

Lastly, retail sales are tracked by geographic locations, omitting businesses selling groceries and auto dealers. Below is a summary of the Sales Tax revenue collected by identified retail locations. In 2015 the St. Michaels area is seeing the largest growth rate of 15% as compared to 2014, while the Greeley Mall Area had the lowest growth rate of by 1.6%.

Retail Sales Tax by Location

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Property Tax Property Tax is levied upon the values of land, buildings, and business personal property. Assessments are determined by Weld County every two years using market values of recent sales of similar property in the area. The mill levy is currently set at 11.274 mils. Property Tax revenues are expected to remain near the same levels in 2015 as was received in 2014. Property Taxes have been received for six months in 2015. 93.6% of the budgeted Property Tax has been received in 2015. Currently 2015 property tax revenues are 2.4% above 2014.

Property Tax 2014 1st Quarter 2nd Quarter July YTD Total

$2,731,675 $4,013,232 $1,529,521 $8,274,428

2015

Variance

$2,315,222 ($416,453) $4,581,194 $567,962 $1,576,453 $46,933 $8,472,869 $198,442

% Change 2015 2014 Budget 2015 -15.2% 14.2% 3.1% 2.4% $9,050,000

% Of 2015 Budget 93.62%

Franchise Fees

Cable Electric Natural Gas Telephone YTD Total

Franchise Fees & Telephone Tax % % Of Change 2015 2014 YTD 2015 YTD 2015 2014 Budget Budget 2015 $203,231 $210,961 3.8% $850,000 24.8% $944,868 $940,066 -0.5% $2,660,000 35.3% $1,126,139 $1,163,276 3.3% $1,700,000 68.4% $74,624 $72,331 -3.1% $131,000 55.2% $2,348,861 $2,386,633 1.6% $5,341,000 44.7%

Franchise Fees are fees levied on companies in exchange for the right to use public right of way and otherwise operate as a franchise. Franchise Fees are collected for electric, natural gas and cable TV. Cable fees are currently up 3.8% in 2015 as compared to 2014. Electric fees are down .5 % from 2014. Natural Gas fees have been collected for seven months and show an increase of 3.3% over the last year. Telephone revenues are down 3.1% in 2015 from 2014. Total Franchise Fees for 2015 are up 1.7% from 2014. Total Franchise Fees for 2015 are budgeted at a 1% increase from 2014 revenues. 8


Use Taxes Use Taxes are taxes levied upon individuals using, storing, or consuming tangible personal property on property within the city limits. Three types of Use Taxes are collected: automobile, building, and general. All three Use Taxes are distributed to the Public Safety Fund, Quality of Life Fund, and General Fund.

General Use Tax

General Use Tax revenues are down for the first six months of 2015 by 14.6%. The revenue variance is due to major equipment purchases made in 2014 and additional General Use Taxes collected from oil and gas industries. 2015 General Use Tax is budgeted down 14% from 2014 collections.

Auto Use Tax For the first six months of 2015, Auto Use Tax revenues continue to come in higher than last year with an increase of 13%. The total 2015 Auto Use Tax budget is $2.4 million with 74% of the revenue being collected in the first six months of 2015.

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Building Use Tax Building Use Tax has been collected for the first six months of 2015. Building Use Tax revenue for 2015 is below 2014 total revenues, decreasing by 9.8%. The 2015 budget is projected to be 41% lower than actual revenues in 2014.

Building & Planning Permit Fees Building & Planning Permit Fees are collected on commercial, industrial and residential construction and improvements. Plan Filing and Check Fees decreased by 16.6% while Building Permit Fees decreased by 14% from 2014 for the first seven months of 2015. The 2015 budget planned for a decline of 19% in Plan Filing and Check Fees and a 9% decrease in Building Permit revenue from 2014 revenues.

Building & Planning Permit Fees

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Lodging Tax The Convention and Visitor’s Tax is a three percent lodging tax that is utilized to support convention and visitor activities. The City takes an active role in promoting the community by providing funding for Greeley Unexpected, the Greeley Convention and Visitor’s Center, and marketing other community events. Year to date the Lodging Tax revenue for the first six months of 2015 has decreased by 5.6%. In comparing just June lodging, revenues were down 4.3% from 2014. The declines have not been unexpected. As shown in the graph below, the 2015 budget is lower than 2014 actuals by 27%. The 2015 budget projection removes most of the growth seen in the last 2 years. The 2015 budget as compared to 2014 is still significantly lower than the current revenue declines.

Lodging Tax

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Water Funds The Water Department provides water to the citizens and industries of Greeley. This is water of a quality and quantity that meets all health and aesthetic criteria. Several projects are expected to be completed in 2015. Expenditures are expected to exceed revenues as fund balance is used to fund capital projects. Additional budget for expenditures was appropriated in April for the 2015 capital projects and capital project carryovers from 2014. Listed below is a summary of the budgeted capital expenditures for 2015:     

$37.5 million for the construction of the northern segment of the Bellvue 60" transmission pipeline. $6.5 million for the Water Acquisition Phase II. $5.5 million for the Five Million Gallon Treated Water Reservoir near the Gold Hill Reservoir. $20 million for 45 Water capital improvement projects. $3.5 million for 15 Water treatment and supply capital projects.

An overview of water revenues and expenditures is displayed below. Total water revenues for 2015 are currently 45.3% of budget for the first seven months. 2015 year to date revenues as compared to 2014 for Residential and Commercial rates decreased by 7.6% and 4.5%, while Industrial rates increased by 1.7%. 2015 Total rate revenue is currently down 4.6% from 2014 and is budgeted to be up 6.9% at the end of 2015 as compared to 2014. Expenditures are 28% of budget after the first seven months of 2015.

Water Overview YTD 2014 Actual

YTD 2015 Actual

% 2015 Budget Change

Residential Rates Commercial Rates Industrial Rates Other Rates Raw Water Sales Impact Fees Other* Total Revenue

$9,171,154 $2,371,067 $2,268,784 $2,472,749 $647,001 $3,364,641 $6,512,327 $26,807,722

$8,470,155 $2,264,401 $2,299,054 $2,502,006 $627,006 $5,074,851 $7,881,815 $29,119,289

Operating Capital Total Expenditures Difference (R-E)

$11,049,868 $7,468,710 $18,518,578 $8,289,144

$12,298,633 11.3% $36,051,654 $19,151,018 156.4% $73,339,506 $31,449,651 69.8% $109,391,160 ($2,330,362) -128.1% ($45,113,750)

-7.6% -4.5% 1.3% 1.2% -3.1% 50.8% 21.0% 8.6%

$19,529,401 $4,186,299 $4,166,741 $5,562,856 $125,000 $5,671,888 $25,035,225 $64,277,410

* Other includes year-end accounting adjustments that can continue through the audit process.

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% of 2015 Budget 43.4% 54.1% 55.2% 45.0% 501.6% 89.5% 31.5% 45.3% 34.1% 26.1% 28.7%


Sewer Funds The Sewer Department collects water-borne waste from residences and businesses. This in turn provides treatment and an environmentally safe release of waste collected. The Sewer Department also continues to rehabilitate dated sewer collection segments throughout the City in need of repair. Sewer projects in 2015 include $6.3 million for the North Greeley Sewer Phase II, $3.2 million in projects at the Water Pollution Control Facility, and $1 million in Lift Station upgrades, expansions, and rehabilitations. Sewer debt of $6 million was issued in June 2015 to fund Sewer Capital Projects. Below is a summary of Sewer revenues and expenditures. Residential and Industrial revenues are higher by 2.9% and 9.3% for the first seven months of 2015 as compared to 2014. Year to date Commercial rate revenue is down by 5.2% from 2014. Total sewer revenue, excluding 2015 bonds, in 2015 is up by .1% from 2014 and is budgeted to be 13.7% lower than 2014 at the end of 2015. The 2015 budgeted yearend reduction is driven by an 18% budget reduction in impact fee revenues, while total rate revenue is expect to grow by .3%.

Sewer Overview YTD 2014 Actual

YTD 2015 Actual

% Change

Residential Rates Commercial Rates Industrial Rates Impact Fees Other* Total Revenue

$3,694,340 $1,185,328 $260,683 $1,696,794 $621,259 $7,458,404

$3,800,244 2.9% $1,123,858 -5.2% $284,864 9.3% $2,481,753 46.3% ($221,862) -135.7% $7,468,856 0.1%

Operating Capital Total Expenditures Difference (R-E)

$3,576,462 $1,180,965 $4,757,427 $2,700,977

$3,354,353 $2,135,404 $5,489,757 $1,979,099

2015 Budget $6,663,663 $2,141,905 $543,601 $2,729,300 $198,493 $12,276,962

-6.2% $8,812,338 80.8% $13,999,751 15.4% $22,812,089 -26.7% ($10,535,127)

% of 2015 Budget 57.0% 52.5% 52.4% 90.9% -111.8% 60.8% 38.1% 15.3% 24.1%

* Other includes year-end accounting adjustments that can continue through the audit process. Bond Revenues are not included.

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Stormwater Funds The Stormwater division is responsible for:      

developing a Capital Improvement Program for Stormwater facilities monitoring and creating maintenance plans for the existing system developing City drainage standards reviewing flood impact issues regulating illicit discharges managing the City’s Stormwater National Pollution Discharge Elimination System (NPDES) permit

Capital projects in 2015 include:     

$2,210,654 for 27th Avenue Storm Drain Improvements $402,000 for Westmoor West Improvement Project $300,000 for the Downtown Master Plan Update $220,000 for Sunrise Neighborhood Drainage Improvements $200,000 Flood Control Studies

A brief summary of Stormwater revenue and expenditures are shown below. Year to date 2015 revenue is 9.5% above 2014. Total Stormwater revenue for 2015 is budgeted at 4.3% over 2014 actual revenues. 2015 expenditures are expected to exceed revenues by $3.4 million as Stormwater fund balance is used. For the first six months of 2015, 25% of the expenditure budget has been spent.

Stormwater Overview YTD 2014 Actual

YTD 2015 Actual

% 2015 Budget Change

Rates Impact Fees Other* Total Revenue

$2,367,095 $152,803 ($108,478) $2,411,421

$2,565,226 $204,241 ($128,557) $2,640,911

8.4% 33.7% 18.5% 9.5%

$4,380,900 $173,400 $219,300 $4,773,600

Operating Capital Total Expenditures Difference (R-E)

$1,276,068 $944,022 $2,220,090 $191,331

$1,492,113 16.9% $557,827 -40.9% $2,049,940 -7.7% $590,971 208.9%

$3,267,972 $4,939,377 $8,207,349 ($3,433,749)

* Other includes year-end accounting adjustments that can continue through the audit process.

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% of 2015 Budget 58.6% 117.8% -58.6% 55.3% 45.7% 11.3% 25.0%


CITY OF GREELEY FINANCE DEPARTMENT | 1000 10TH STREET | GREELEY CO 80631

970-350-9731 |

WWW.greeleygov.com

PREPARED BY: ROBERT MILLER, BUDGET MANAGER WENDY BETHEL, FINANCIAL ANALYST

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July monthly report