To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Update: 2016 Third Quarter Financial Review, Period Ending September 30, 2016
Body
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Executive Summary
Transparency and financial reporting are critical to the Town of Castle Rock as demonstrated in this 2016 Third Quarter Financial Review. The following review includes discussion and financial information regarding the Town’s overall financial condition through the third quarter of 2016 and related status updates on key strategic priorities.
In addition, incorporated within this report are updated year-end estimates for each fund. In order to more accurately project actual revenues and expenditures, staff completed updates to these estimates in the third quarter. Updates to year-end estimates are critical to track trends in all Town funds in relation to the annual budget, and for future year planning.
Overall, the financial condition of the Town continues to be strong. As of the end of the third quarter, total Town revenues across all funds are 4.3% over the year-to-date budget and are estimated to end the year 2.4% over the 2016 Budget. Strong sales tax revenues coupled with higher than anticipated commercial and multifamily growth related revenues are fueling year-to-date revenue figures. Similarly, townwide expenditures are under the year-to-date budget by about 30% and are estimated to finish 2016 approximately 7% under budget. Additional updates on notable items within the Town budget are identified below.
• Sales tax revenue from January through August 2016 is 6.5% higher than the same period in 2015 and is estimated to end 2016 about 7.2% higher than 2015. Sales tax revenue in August 2016 is up 5.7%, compared to August 2015.
• General Fund expenditures are currently 6.9% under the year-to-date budget and are estimated to end the year approximately 2.1% less than budget. These estimated savings are primarily attributable to:
§ Personnel savings estimated at 2.4% under budget
§ Supplies savings of 5.4% less than budget
§ Capital savings of 1.6%
• Development activity remains strong, with impact fee, system development fee, and use tax revenue estimated to end 2016 about 15% higher than budget and related building permit revenues, which include building renovations and improvements, are approximately 30% higher than the same period in 2015.
• With the opening of Castle Rock Parkway/North Meadows Drive in August 2016, significant progress has been made through the third quarter on the Town’s number one Transportation priority. Payments will continue to accomplish various punch list items, which are anticipated to be complete by the end of the year. Year-end estimates indicate that the project will likely be under budget by approximately $570k.
• Significant progress toward the goal of bringing 75% renewable water to Castle Rock is occurring, with total estimated renewable water expenditures in 2016 of about $72.2 million. These projects include $36.3 million for WISE infrastructure, $20.8 million for the Alternative Source of Supply project including the Box Elder purchase and $1.9 million for the Plum Creek Central Well Field project. An additional $40 million was requested as part of a 4th amendment to the 2016 Budget in order to accommodate the purchase of water rights in Weld County and the construction of infrastructure to transport the water to Castle Rock. Water Resources fund includes significant capital items which are estimated to be 9.2% under budget at the end of 2016, with the remaining likely to be requested as carry forward to 2017. An additional $21 million has been requested as part of an 8th amendment to the 2016 Budget to accommodate the purchase of infrastructure and water rights. This amount has not been incorporated in this report as the amendment has not yet been approved.
• Planning is underway through the end of 2016 for significant projects, including the design of a new fire station in Crystal Valley Ranch planned for construction in 2017, construction of the redevelopment of Festival Park and construction of the addition to Town Hall.
This report includes:
• Third quarter year-to-date actual information for revenues and expenditure. (Please note that estimates have been incorporated for September sales tax revenue since that data is not yet available.)
• Adjusted year-to-date budget information for items that tend to be seasonal in nature or are considered one-time transactions.
• Incorporation of all Town Council approved budget amendments
• Updated 2016 year-end estimates for revenues and expenditures developed in coordination with departments
• The storm on July 1st caused significant damage to Town vehicles, generating an insurance claim. An insurance claim check in the amount of $465k was received and repair costs will likely be incurred into early 2017.
Proposed Motion
This memo is intended to be for discussion purposes only.
Attachments
Attachment A: 2016 Third Quarter Financial Reports
1. Schedule A - General Fund
2. Schedule B - Transportation Fund
3. Schedule C - Parks and Recreation Capital Fund
4. Schedule D - Municipal Facilities Capital Fund
5. Schedule E - Fire Capital Fund
6. Schedule F - Police Capital Fund
7. Schedule G - Transportation Capital Projects Fund
8. Schedule H - General Long Term Planning Fund
9. Schedule I - Water Fund
10. Schedule J - Water Resources Fund
11. Schedule K - Stormwater Fund
12. Schedule L - Wastewater Fund
13. Schedule M - Golf Course Fund
14. Schedule N - Community Center Fund
15. Schedule O - Development Services Fund
16. Schedule P - Employee Benefits Fund
17. Schedule Q - Fleet Services Fund
18. Schedule R - Conservation Trust Fund
19. Schedule S - Philip S. Miller Trust Fund
20. Schedule T - Public Art Fund
21. Schedule U - Economic Development Fund
22. Schedule V - Police Forfeiture Fund
23. Schedule W - Downtown Development TIF Fund
24. Schedule X - Special Events Fund
Attachment B: Sales Tax Collections by Category and Geographical Area