2015 Financial Report
October Finance Department
TABLE OF CONTENTS OCTOBER FINANCIAL SUMMARY ........................................................................ 2 GENERAL FUND ................................................................................................... 4 REVENUES .............................................................................................................. 4 EXPENDITURES ........................................................................................................ 4 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
Front Cover: Lisa J. Cameron Russell is an International Award-Winning artist producing work in Public Places collections. Lisa’s paintings are displayed on the fence surrounding Centennial Village, in Greeley, CO.
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October Financial Summary The October Financial Report provides a brief summary for the first ten months of 2015. The largest source of revenue for the City of Greeley General Fund is Sales Tax. The General Sales Tax receipts are received a month in arrears. Thus, we have only 9 months of actual collections. For sales tax receipts between January and September show a 5.5% increase above 2014. Year to date Food Tax revenues are also higher with a 7.7% increase over 2014. In the nine months of collections of the general sales tax, we have receipted 75% of the 2015 estimate of $46,736,514 or a total of $35,029,723. In food tax collections in the first nine months of 2015, a total of $5,339,310 has been collected on a budget of $7,122,379. Again, approximately 75% of the estimated budget has been collected. We will definitely meet our budget expectations. If we continue to collect as we have the first nine months of the year, we will exceed our estimates in both areas. One area being monitored is Lodging Tax revenues. Year to date Lodging Tax revenue declined 8% for the first nine months of 2015. For rooms rented in September, revenues decreased by 16.6% from 2014. The decline is not unexpected as the 2015 Lodging Tax revenue estimate is $450,000; this was 27% lower than 2014 actuals. Total collections are $435,668. This is 97% of the estimate. New construction permits is tracked as an indicator of growth. Building Permit revenues have decreased by 6.6% in the first ten months due to fewer new commercial projects in 2015. Year to date valuations of new commercial projects and remodels in 2015 are at $34.7million from 386 permits as compared to $66 million from 455 permits in 2014. Year to date growth continues to come from new single and multi-family units. Permits for single family increased from 296, at a value of $47.6 million, in 2014 to 373, at a value of $61.1 million, in 2015. New multi-family units increased from 2014 with 198 as compared to 278 in 2015 with the valuation increasing from $32.3 million in 2014 to $52.1 million in 2015. Building permits also translate into building use tax revenue. Building use tax is collected at the time of the building permit, thus the reported receipts represent 10 months of collections. We have already collected $941,000 above our 2015 estimate. This is not expected to grow significantly more through the remainder of the year due to the fact construction normally slows in the last quarter of the year. Auto sales continue to be above last year. We are seeing growth rates of over 10% in Auto Use Tax for the first nine months of 2015. We have collected 9% or $221,648 over our total 2015 budget estimate through October. Thus, again, this particular revenue source will exceed expectations.
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The “gain� in auto use tax will be somewhat offset by a lower than estimate for general use tax. Year to date comparisons of the General Use Tax shows declines of 12%. The decrease is coming, primarily, from the oil and gas industry. To date, total collections in general use tax are at 73% of our estimate of $1,600,000. This may be as low as a 2% shortfall by the end of the year. Auto Use tax revenue will more than offset this decrease. Oil prices continue to stay significantly lower than last year. At the end of October, the price of Colorado/Nebraska DJ Basin Oil was averaging $42 per barrel as compared to over $67 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 84% for the first nine months of 2015. We continue to experience overall positive growth numbers for the first ten 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 Use of Fund Balance Revenue Expenditures
2015 Actual
$11,372,106 $85,001,320 $96,373,426
Variance
$4,088,486 $7,283,620 $70,049,901 $14,951,419 $74,138,387 $22,235,039
% of Budget 36.0% 82.4% 76.9%
Revenues have been collected for nine months of Sales Tax, General Use Tax, Auto Use Tax, Lodging Tax and Property Tax. Revenues have been collected for ten months for Franchise Fees, Building & Planning Permit Fees, Building Use Tax, and Utility Charges. The General Fund Revenues have increased by 4.5% for the first ten months of 2015. Year to date revenues are 82.4% of the 2015 budget.
1st Quarter 2nd Quarter 3rd Quarter October 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 $23,201,706 $876,505 3.9% $23,567,283 $24,977,195 $1,409,912 6.0% $6,926,206 $6,755,383 ($170,823) -2.5% $67,053,370 $70,049,398 $2,996,028 4.5% $85,001,320 82.41%
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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 ten months of 2015.
1st Quarter 2nd Quarter 3rd Quarter October 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% $21,652,359 $17,889,561 ($3,762,798) -17.4% $8,252,390 $8,877,427 $625,037 7.6% $69,859,180 $74,138,387 $4,279,207 6.1% $96,373,426 76.93%
We monitor the changes in revenue and expenditures over time and compare them to historical trends. As shown by the graph below, the first ten 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 nine months of 2015. General Sales Tax revenue increased by 5.5% for the first nine months of 2015 as compared to 2014. Food Tax revenue is reported separately from General Sales Tax and increased by 7.7%* for the first nine months of 2015. When comparing revenues reported in October from September Sales, General Sales Tax revenue is lower by 1% and Food Tax revenue was higher by 4.3%. The declines in October Sales Tax revenues are related to year over year declines in oil and gas related industries, equipment rental and leasing services, and one time payments in 2014. 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
*Entities previously reporting food tax as sales tax in 2014 have started reporting food tax in 2015
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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 13% as compared to 2014, while the Downtown Development declined by 3.1%.
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 nine months in 2015. 95.49% of the budgeted Property Tax has been received in 2015. Currently 2015 property tax revenues are 1.6% above 2014.
Property Tax 2014 1st Quarter 2nd Quarter 3rd Quarter October YTD Total
2015
$2,731,675 $4,013,232 $1,734,593 $24,349 $8,503,849
$2,315,222 $4,581,194 $1,719,761 $25,883 $8,642,060
Variance ($416,453) $567,962 ($14,832) $1,534 $138,211
% % Of Change 2015 Budget 2015 2014 Budget 2015 -15.2% 14.2% -0.9% 6.3% 1.6% $9,050,000 95.49%
Franchise Fees
Cable Electric Natural Gas Telephone YTD Total
Franchise Fees & Telephone Tax % Change % Of 2015 2014 YTD 2015 YTD 2014 2015 Budget 2015 Budget $412,984 $430,105 4.1% $850,000 50.6% $1,668,800 $1,651,125 -1.1% $2,660,000 62.1% $1,385,984 $1,330,733 -4.0% $1,700,000 78.3% $105,308 $102,468 -2.7% $131,000 78.2% $3,573,076 $3,514,431 -1.6% $5,341,000 65.8%
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 4.1% in 2015 as compared to 2014. Electric fees are down 1.1 % from 2014. Natural Gas fees have been collected for ten months and show a decrease of 4.0% over the last year. Telephone revenues are down 2.7% in 2015 from 2014. Total Franchise Fees for 2015 are down 1.6% from 2014. Total Franchise Fees for 2015 are budgeted at a 1% increase from 2014 revenues.
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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 revenues are down for the first nine months of 2015 by 12%. In 2015 the City has not had the same level of new businesses that generated use tax on major equipment purchases that the City experienced in 2014. Also, this is the area where oil and gas companies reported equipment purchases, and as noted, we are seeing a direct decline in use taxes from this industry.
General Use Tax
Auto Use Tax For the first nine months of 2015, Auto Use Tax revenues continue to come in higher than last year with an increase of 10.75%. The total 2015 Auto Use Tax budget is $2.4 million with $2.6 million in revenue being collected in the first nine months of 2015.
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Building Use Tax Building Use Tax has been collected for the first ten months of 2015. Building Use Tax revenue for 2015 is above 2014 revenues by 3%. 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 increased by 19.5% or $59,298 while Building Permit Fees decreased by 6.6% or $92,684 from 2014 for the first ten 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 nine months of 2015 has decreased by 8.0%. In comparing just September lodging, revenues were down 16.6% from 2014. The declines have not been unexpected but are still above the state average. 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. The department is responsible for 467 miles of distribution lines and 69 million gallons of treated water storage reservoirs. Several projects are expected to be completed in 2015. Expenditures are expected to exceed revenues as fund balance is used to fund capital projects. Listed below is a summary of the budgeted capital expenditures for 2015:
$43.2 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. $20.4 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 71.9% of budget for the first ten months. 2015 year to date revenues as compared to 2014 for Residential, Commercial, and Industrial rates increased by 4.8%, 7.1%, and .7%. In 2015 total rate revenue is currently up 6.2% from 2014 and is budgeted to be up 6.9% at the end of 2015 as compared to 2014. Expenditures are 45.5% of budget after the first ten months of 2015. Water Overview YTD 2014 Actual
YTD 2015 Actual
Residential Rates Commercial Rates Industrial Rates Other Rates Raw Water Sales Impact Fees Other* Total Revenue
$15,276,714 $3,996,707 $3,329,067 $4,348,254 $647,001 $5,180,906 $8,578,050 $41,356,699
$16,013,054 $4,282,256 $3,351,964 $4,983,735 $810,666 $7,076,151 $9,678,784 $46,196,611
Operating Capital Total Expenditures Difference (R-E)
$22,663,628 $10,244,912 $32,908,540 $8,448,159
$28,577,581 $23,846,687 $52,359,908 ($6,163,297)
% Change 4.8% 7.1% 0.7% 14.6% 25.3% 36.6% 12.8% 11.7%
2015 Budget $19,529,401 $4,186,299 $4,166,741 $5,562,856 $125,000 $5,671,888 $25,035,225 $64,277,410
82.0% 102.3% 80.4% 89.6% 648.5% 124.8% 38.7% 71.9%
26.1% $36,051,654 132.8% $79,119,506 59.1% $115,171,160 -173.0% ($50,893,750)
79.3% 30.1% 45.5%
* Other includes year-end accounting adjustments that can continue through the audit process.
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% of 2015 Budget
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. At the end of 2014, the system had a total of 356 miles of line and 10 sewage pumping stations. 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 2.4% and 4.3% for the first ten months of 2015 as compared to 2014. Year to date Commercial rate revenue has increased by .3% from 2014. Total sewer revenue in 2015 is down by 1.5% 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
Residential Rates Commercial Rates Industrial Rates Impact Fees Other* Total Revenue Operating Capital Total Expenditures Difference (R-E)
YTD 2014 Actual
YTD 2015 Actual
$5,361,600 $1,809,807 $388,629 $2,648,388 $894,975 $11,103,399
$5,487,694 $1,815,298 $405,479 $3,382,703 ($151,951) $10,939,223
2.4% 0.3% 4.3% 27.7% -117.0% -1.5%
$6,663,663 $2,141,905 $543,601 $2,729,300 $198,493 $12,276,962
$5,558,383 $4,088,970 $9,647,353 $1,456,046
$6,703,507 $3,892,216 $10,595,723 $343,500
20.6% -4.8% 9.8% -76.4%
$8,963,921 $14,199,751 $23,163,672 ($10,886,710)
% Change
2015 Budget
% of 2015 Budget 82.4% 84.8% 74.6% 123.9% -76.6% 89.1% 74.8% 27.4% 45.7%
* 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:
$2,655,806 for 27th Avenue Storm Drain Improvements $200,000 Poudre River Flood Reduction Feasibility Study $300,000 for the Downtown Master Plan Update $220,000 for Sunrise Neighborhood Drainage Improvements
A brief summary of Stormwater revenue and expenditures are shown below. Year to date 2015 revenue is 10.5% 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 ten months of 2015, 43.7% of the expenditure budget has been spent. Stormwater debt of $8 million was issued in July to fund Stormwater capital projects.
Stormwater Overview YTD 2014 Actual
YTD 2015 Actual
% Change
2015 Budget
Rates Impact Fees Other* Total Revenue
$3,422,454 $218,187 ($81,331) $3,559,310
$3,681,306 $323,373 ($72,272) $3,932,407
7.6% 48.2% -11.1% 10.5%
$4,380,900 $173,400 $219,300 $4,773,600
Operating Capital Total Expenditures Difference (R-E)
$1,884,671 $1,543,796 $3,428,467 $130,843
$2,906,241 54.2% $738,655 -52.2% $3,644,896 6.3% $287,511 119.7%
$3,397,791 $4,939,377 $8,337,168 ($3,563,568)
* Other includes year-end accounting adjustments that can continue through the audit process.
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% of 2015 Budget 84.0% 186.5% -33.0% 82.4% 85.5% 15.0% 43.7%
CITY OF GREELEY FINANCE DEPARTMENT | 1000 10TH STREET | GREELEY CO 80631
970-350-9731 | WWW.greeleygov.com PREPARED BY: ROBERT MILLER, BUDGET MANAGER CATHY KIRIAKOS, FINANCIAL ANALYST
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