To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Update: 2016 Mid-year Financial Review, Period Ending June 30, 2016
Body
________________________________________________________________________________
Executive Summary
Transparency is of critical importance to the Town of Castle Rock as demonstrated in this 2016 Mid-year Financial Review. The following review includes discussion and financial information regarding the Town’s overall financial condition through the first half of the year as strategic priorities identified for 2016 are accomplished. At the end of the second quarter of 2016, Castle Rock continues to encounter strong revenue collections on an overall basis combined with responsible expense management. Total revenues for the Town are nearly 11% higher, or approximately $7.6 million more than the budget for the half of the year, sales tax is projected to end the year higher than the previous year by an estimated 7%. Much of the total revenue increase noted above is due to sales tax, system development fees and impact fee revenue exceeding the budget. Townwide expenditures are approximately 21% lower than year to date budget, which is primarily due to the timing of capital expenditures.
Currently a fourth budget amendment is in process and planned to be presented to Town Council on August 2nd, followed by a second reading on August 16th. Requested amounts within the budget amendment are significant and are not included within this financial review as the budget amendment has not yet been approved. Additional details are included in the department information below pertaining to these requests. The year-end estimates included in this financial review developed in coordination with departments utilizes actual data through April. The timing of the estimates occurred earlier this year compared to previous years to coincide with the timing of the 2017 Budget process. The 2016 year to date budget has been adjusted to more accurately reflect the seasonal nature of the year to date budget information and to provide a more accurate financial review of the first six months.
This report includes:
• Incorporation of three Town Council approved budget amendments
• 2015 Audited Year End numbers
While several factors contribute to the overall financial picture of the Town, below are items of note from the first half of 2016:
• Sales tax revenue from January through May 2016 is yielding an increase of 6.2% when compared to the same period in 2015. Sales tax revenue for May in 2016, compared to the May in 2015, is up about 3.6%.
• General Fund operational expenditures are about 8% lower than the year to date budget for the second quarter. The status of key expenditure categories compared to the year to date budget is as follows:
- Personnel: under budget by 5%
- Services & Other: under budget by 17%
- Supplies: under budget by 19%
• Development activity remains strong; impact fee, system development, and use tax revenue is 45% higher and related building permit revenues are up approximately 14% when compared to the same period in 2015.
Discussion
Financial reporting for the Town is a team effort between Finance, Department Managers and staff. This reporting process is helpful in keeping departments apprised of potential revenue shortages that could trigger spending reductions and deferrals. This 2016 Mid-year Financial Review is a snapshot of the six month’s financial activity in comparison to the 2016 seasonally adjusted, amended budget. As demonstrated by the following information, departments are doing an excellent job managing budgets.
The funds most affected by growth revenues associated with increased development are transportation, capital funds, utility funds, and the Development Services Enterprise Fund. Total single family permits are budgeted at 700 for 2016. Single family building starts reflect 444 single family permits and multi-family permits with 324 units versus 457 single family permits and 83 multi-family for the same period in 2015. Growth related revenues are monitored closely by the Finance Department and revenue budgets may be revised as the year continues.
Financial Impact
Sales Tax:
Sales tax revenue, which is collected at the 4% rate, is trending ahead of 2015 for the year by an estimated 6.2%. Due to actual data not being available for June 2016, sales tax for June has been estimated by applying an expected growth percentage of 3.5% to the 2015 collection amount for purposes of comparison within this report. Total collections from January through May have increased more than $572k over the prior year for the same months. Year to date trends indicate that sales tax revenue will likely end the year at nearly 7% higher than 2015. The chart on the following page illustrates a comparison of activity for the past five years through the second quarter of the year. Please refer to Attachment B for Sales Tax collection information by categories and geographical areas.
Program Statistics
Business Licenses: Variances in the number of licenses are seasonal and tend to be higher during the holiday season and summer. As of June 30, 2016, licenses total 3,730 (1,788 in Town).
Business Reporting Sales Tax: Businesses can report sales tax on a monthly, quarterly, or annual basis depending on the business type and dollar amount of the remittance. The filing type depends on the amount of tax collected over a monthly period as shown below:
Monthly tax liability |
Sales Tax payment frequency |
>$300 |
Monthly |
<$300 |
Quarterly |
<$ 10 |
Annually |
Delinquency: The Sales Tax Division manages business accounts through a proactive renewal process and active management of account delinquencies. On a monthly basis, there are currently approximately 24 out of the 3,730 licenses, or about 1%, of businesses with some level of default. The average delinquency rate in Front Range communities is between 3% and 6%.
Delinquency Amount: The delinquent amount currently owed to the Town on a monthly basis is about $57,000. It is important to note that this amount changes monthly with seasonality occurring during the holiday and summer seasons.
Delinquency Collection Revenue: The Town collected $263,127 from delinquent accounts during the second quarter of 2016, compared to $215,492 in 2015.
Sales Tax Audits: On average, there are 36 audits in process per month. In total, there were 42 active audits in process in the second quarter 2016. The Sales Tax Division billed 7 audits in the second quarter. The second quarter of 2016 resulted in $94,953 in audit revenue.
New Businesses: The Town processed 172 new business licenses in the second quarter of 2016, which includes home based, in town and out of town businesses.
Business Terminations: There were 113 business terminations in the first half of 2016, including home based, in town and out of town businesses.
Permanent Default: There are certain accounts considered uncollectible that will likely be written off; the average of these is around $5,000 per year.
Impact Fees, System Development Fees, and Building Use Tax:
Budget amounts for growth related revenues, such as impact fees, building use tax, and tap fees, are based upon the expected number of single family, commercial, and other development permits issued. The table below shows new home permit issuance by year for the past five years. The 2016 budget was based on growth related revenues associated with 700 single family permits and 316 multi-family units. Year-end estimates currently project development revenue to be about 17% higher than budgeted with estimates at 800 single family permits and 316 multi-family units. Finance will continue to monitor the number of building permits issued to establish if revisions are necessary for revenue associated with development permits.
Impact fees, system development fees, and use tax collections are 45% higher in 2016 than the same period in 2015 with early year end estimates projected to be 18% over the 2016 budget. Single family building starts reflect 444 permits, or approximately 63% of the budgeted 700 permits. Another contributing factor to increased growth related revenues is the inclusion of multi-family permits consisting of 324 units issued in first half of 2016. The following charts reflect 2016 activity for impact fee and building use tax revenues over the past five years. Impact fee and building use tax revenue has risen compared to last year due to increased development activity through the second quarter.
* Impact fees collected in March 2015 included a large multi-family development consisting of 83 units and impact fees collected in April 2016 included the Promenade Ledges project, consisting of 316 units
*Use Tax in February 2012 included fees collected from construction activity at the hospital and April 2016 included use tax fees associated with the Promenade Ledges project, consisting of 316 units
Metered Water Charges:
Metered water collections for the first half of the year are approximately 7%, or $211,000 higher than the same period in 2015 and are approximately 3% over the adjusted year to date budget amount. Metered water sales are typically highly seasonal, with the majority of the revenue received during the spring and summer months. As a result, the year to date budget has been adjusted for seasonality, based on historical trends. The Utilities Department estimates that Metered Water Sales will ultimately be approximately 1% over the 2016 budget amount for the year. However, due to the timing of estimates this early in the year, estimates will be adjusted based on continuing collections during the 3rd quarter.
Franchise Fees:
Franchise fees are revenues generated by utility companies providing services within the Town limits. This fee gives utility companies access to public streets and right-of-ways enabling them to supply and maintain services to citizens. For the first six months, Franchise Fee revenue is about $365k, or 48% higher than 2015. With regard to 2016 year end projections, Franchise Fee revenue is anticipated to be approximately 3%, or almost $68k under the amended budget. Franchise Fee revenue is driven by the number of subscribers for the respective utility.
Motor Vehicle and Specific Ownership Tax:
Motor Vehicle Taxes are sales tax paid on the purchase price of a vehicle by Town residents. Douglas County collects the tax through the licensing process and remits the Town’s share on a monthly basis. For the first half of the year, Motor Vehicle Taxes are roughly 12% higher than the same period last year and projected to end the year at about 8% over 2015. The following chart shows Motor Vehicle Tax revenue received over the past five years.
Specific Ownership Tax is levied on all motor vehicles, wheeled trailers, semi-trailers, trailer coaches, mobile homes and self-propelled construction equipment. Tax schedules are established by the State based on age and type of vehicle. Revenues are allocated to each city based on actual pro rata share of dollar value of registration. Taxes are collected by the Douglas County Treasurer (1 month lag.) (42-3-104, C.R.S.) Specific ownership tax collections are approximately 3% higher when compared to the same period in 2015 and estimated to be 5% over the 2015 year end amount. The chart that follows demonstrates annual Specific Ownership Tax revenues over the past five years.
General Fund:
The second quarter data for 2016 reflects total General Fund revenue coming in almost 8% over the current year to date budget for the first half of the year and is projected to end 2016 over budget by nearly 5%. Expenditures in the General Fund are about 8% under the year to date budget generally due to position vacancies in a number of departments as well as fuel savings and timing of software agreement payments. The General Fund is estimated to end the year within approximately 1% of the total General Fund 2016 amended budget. The following graph identifies the percent of budget categories that have been expended through the second quarter. Please refer to Schedule A for additional information.
* Year to date Capital expenditures are within expected amounts and includes the Wolfensberger Pedestrian Bridge and construction documents for Festival Park
A summary is provided below pertaining to General Fund Departments (Please refer to Schedule A for more information):
Town Council
The Town Council Division is 4% under the year to date budget for 2016 through the second quarter. Year-end estimates indicate that the division will likely end the year slightly under the amended budget by about 2%.
Town Manager
The Town Manager Division is under budget for the first half of 2016 by 4%. The division is expected to be approximately 4% under the amended budget at year end.
Deputy Town Manager
The Deputy Town Manager Division is over budget for the first half of 2016 by about 2% due to incurring special event costs for the Season of the Star event in January. Although currently projected to finish the year within budgeted expenditures, staff will continue to monitor this division throughout the year to determine if any additional action will be required.
Human Resources
The Human Resources Division is about 5% over the year to date budget, primarily due to increased software costs and the employee recognition program. At this early point in the year, it is anticipated that the division will end the year right at the amended budget; however, Human Resources is currently researching a new Human Resources Information System program. Staff will monitor this request, including estimated costs, to determine any additional action that may be required.
Community Relations
The Community Relations Division is 14% under the amended budget for the first half of the year due to timing of video production expenses that will occur through the remainder of 2016. Current estimates indicate the division will likely end 2016 at the budgeted amount.
Information Technology
The Division of Information and Technology is under the year to date budget by 12%, primarily due to personnel vacancies and timing of software agreement payments. The year-end estimate currently reflects that the division will end the year under the amended budget by about 4%.
Facilities
The Facilities Division is under budget by 8% through the first half of the year. Savings can be attributed to personnel costs being under the year to date budget due to vacancy savings and lower than anticipated building repair and maintenance costs for the first half of the year. To date, this division expects to be right at the amended budget by the end of the year.
Town Attorney
The Town Attorney’s Office is under budget by 17% for the first six months of the year. Savings are projected in the Services & Other category due to lower than expected legal service and legal prosecution service costs for the first half of 2016. Current year-end estimates indicate the division will end the year under the amended budget by about 5%.
Town Clerk
The Town Clerk’s Office is under budget to date by 20% through the second quarter. This is due to funds appropriated for election expenditures not occurring in the first half of 2016. Year-end estimates reflect that the division will likely be under the amended budget by about 3%.
Municipal Court
The Municipal Court Division is under budget by nearly 17% through the second quarter. Personnel savings are anticipated due to less part time hours needed as a result of a decrease in ticket volume and unanticipated benefit selection changes in 2016. Current projections indicate that the Municipal Court Division will remain under budget by about 4% by the end of 2016.
Finance
The Finance Department is under budget by 9% through the first six months of the year. The majority of savings in Finance are due to positions vacancies for a Sales Tax Auditor and a Payroll Technician. The Finance Department expects to come in under the amended budget by approximately 2% at the end of the year.
Police
The Police Department is under budget by about 7% through June. The supplies category reflects lower utilization due to fuel savings in the first half of the year as well as the body-worn camera purchase being expected to occur in the third quarter of 2016. Current year-end estimates indicate this department will be just under the amended budget by the end of 2016.
Fire and Rescue
The Fire and Rescue Department is tracking under budget by about 6% at the end of the second quarter. The Fire Department has experienced savings due to no wildland fire deployments in the first half of the year. Early year-end estimates indicate this department will be just under the amended budget by the end of the year.
Development Services
The Development Services General Fund Division is under budget by around 20% for the first six months of the year. This department is currently yielding savings due to personnel changes within the division as well as savings in services reflected in the first half of the year. This division is anticipated to end 2016 with approximately 11% remaining.
Parks and Recreation
After the first six months of the year, the Parks and Recreation Division is under budget by about 5%. Personnel savings are related to position vacancies during the first half of the year. Capital expenditures have exceeded the year-to-date budget related to the addition of a concrete pathway to connect the Epic Sky Trek to a parking lot. Deferred revenues received from Castle Rock Zip Lines are being utilized to fund this project, meaning that there is no net cost to the Town. Current year-end estimates show that this division will be 3% under budget for the year.
Non-Departmental
The Non-Departmental budget, under the responsibility of the Finance Department, is about 29% under the year to date budget. The Non-Departmental budget includes items that are generally not attributable to just one department. The year-end estimate indicates that this department will finish the year at the 2016 budget amount.
Downtown Projects
The Downtown Projects Division, which accounts for the remaining funds from the 2012-2014 DDA TIF collections, is 2% under budget through the second quarter of the year. Costs in this area include design costs related to the Festival Park renovation project. This division is projected to be at budget at the end of the year.
Transportation Fund:
Transportation Fund revenues are about 11% over the year to date budget for the first six months of the year. This is primarily due to higher than expected Sales Tax and Building Use tax revenue. The Transportation Fund is under the year to date expenditure budget by about 5%, which is attributable to the highly seasonal nature of the annual Pavement Maintenance Program and numerous capital improvement projects. As a result, the year to date budget has been adjusted based on historical trending. At year-end, the expenditures are expected to be about 1% under budget.
Additional items are requested to be incorporated into the Transportation Fund as part of a 4th amendment to the 2016 budget. The most significant item includes offsetting revenue and expense to accommodate the accounting transaction in the amount of about $8.8 million to accomplish the accounting transaction for a refunding of the 2008 TAP Bonds. This refunding will result in a savings of approximately $1.2 million over the life of the bonds. Additional items are intended to advance projects which address the community priority of maintaining and improving transportation. These projects include an additional $200,000 for traffic signal improvements, $150,000 for traffic control at 3rd and Perry streets, and $200,000 for repairs needed for the retaining wall on 6th Street. Please refer to Schedule B for more information.
Capital Funds:
Capital projects within these funds are generally paid for from impact fees and interest earnings. All impact fee revenues in Capital Funds show total revenue collections higher as compared to budgets for the first quarter due to increased development. As discussed previously, new home permits were budgeted at a total of 700 for 2016 and 316 multi-family. There were 444 permits and multi-family permits with 324 units issued in the first six months.
Parks and Recreation Capital Fund
The Parks and Recreation Capital Fund is 30% over budgeted revenue for the first six months of the year due to increased impact fee revenue. This fund is under the year to date budget by 4% through June. The year-to-date budget for this fund has been adjusted based on anticipation of beginning construction of Festival Park in the last quarter of the year. The Festival Park renovation project is expected to begin after the annual Starlighting event and continue through most of 2017. Year-end estimates indicate that this fund will right at budget for the year. Please refer to Schedule C for more information.
Municipal Facilities Capital Fund
Revenues in this fund are 10% lower than budget for the first half of the year. Budgeted impact fees included revenue that should be attributed to Parks & Recreation and Transportation Capital Funds. Due to this revenue distribution change, impact fees are reflecting lower than budget despite the increase in development that is occurring in Castle Rock. This fund is less than 1% over budgeted expenditures through the second quarter and is projected to finish the year at budget. Please refer to Schedule D for more information.
Fire Capital Fund
The revenue in the Fire Capital Fund is 43% over the current year to date budget due to increased development in the first half of 2016. Expenditures in 2016 include costs related to the architectural design of the Crystal Valley Fire Station. The third budget amendment request included funds associated with the land purchase, closing costs, appraisal, environmental/soil study, architectural site evaluation and oversite of the Crystal Valley Fire Station for $190,000. Expenditures are showing right on budget through the second half of 2016. The Crystal Valley Fire Station project is expected to gain momentum in the third quarter of 2016 and anticipated to be open for service in August of 2018. Year-end estimates indicate this fund will be right at the amended budget. Please refer to Schedule E for more information.
Police Capital Fund
Revenues in this fund are 32% over the 2016 year to budget for the first half of the year due to increased impact fee revenue. The Police Capital Fund has expended almost 43% of the funds current budget through the second quarter. A large percentage of the remaining budget is attributable to the Transfers Out category for vehicles associated with the new positions to be hired in the third quarter of the year. In the first half of 2016, the Police Department finished the remodel of the basement to accommodate space needs within the department. This fund is projected to end the year right at the amended budget. Please refer to Schedule F for more information.
Transportation Capital Projects Fund
The Transportation Capital Projects Fund is intended to fund growth related Transportation capital projects. Revenues in this fund, which include Impact Fees and Building Use Tax, are approximately 37% over the year to date budget. This is primarily due to growth in building permit issuance. The 2016 expenditure budget in this fund includes two projects, the largest of which is the North Meadows Extension, with a 2016 amended budget of $14.5 million. $3.2 million has been expended on the North Meadows Extension Project during the first half of 2016 with anticipated completion in August of 2016. Remaining funds will likely be expended in the 3rd quarter concurrently with completion of the project. Additional expenses in this fund include improvements to Plum Creek Parkway at Wilcox and Perry Streets at a cost of approximately $3 million.
Additional items are requested to be incorporated into the Transportation Capital Fund as part of a 4th amendment to the 2016 budget. Similar to the Transportation Fund, these amounts are intended to advance the design costs of two growth related road improvement projects, in order to accelerate projects intended to address community traffic concerns. These items include $400,000 for improvements at Founders Parkway (SH 86) and Allen Way and $650,000 for improvements at Founders Parkway (SH 86) and Crowfoot Valley Road. 2016 year end estimates do not reflect these budget amendment items and will be updated upon council approval. Please refer to Schedule G for more information.
General Long Term Planning Fund
Revenue for this fund is received from Building Use Tax which is trending higher than budget by about 25% for the first half of 2016 due to increased development. Overall revenue is estimated to be 5% over the amended budget due to anticipated development for the year. Budgeted expenditures in 2016 include general facility improvements as well as Information System projects. The fund is under the year to date expenditure budget by 33% due to the timing of projects in this fund. By the end of the year, this fund is projected to be within the budgeted expenditures for the year. Please refer to Schedule H for more information.
Utility Funds:
Both revenues and expenditures are highly seasonal for the utility funds as the majority of the revenue is related to water demand, which is greater in warmer months, and the majority of the budgeted expenditures in these funds are associated with capital construction projects that are also dependent upon weather.
Revenue in all four Utility funds is higher than the previous years for the same period. This is primarily attributable to System Development Fees, which are about 31% over the year to date budget. The year to date budget for metered water sales has been adjusted for seasonality in this report and these revenues are about 14% under budget for the first half of the year. This is due to higher levels of precipitation earlier in the year. When considering all revenue sources in all Utilities Funds combined, revenue is about 11% higher than the adjusted year to date budget.
Total expenditures for all four Utilities funds are approximately 30% under the year to date budget. Similar to the highly seasonal nature of Utilities revenues, capital expenditures are dependent on warm weather in order to complete construction on numerous projects. As a result, capital year to date budgets have been adjusted for seasonality based on historical trending. Total Utilities expenditures are currently estimated to finish 2016 approximately 2% under budget. Due to the early timing of year end estimates, figures will be adjusted later in the year based on actual trends and information.
Significant additional items are requested to be incorporated into the Utilities funds as part of a 4th amendment to the 2016 Budget. The largest of these items includes approximately $65 million in the Water Resources Fund for the refund of variable rate Certificates of Participation into fixed rate revenue bonds. As part of this issuance, Standard & Poors increased its rating for the Town’s outstanding water and sewer enterprise bonds from AA to AA+. Additional requests include items which are needed to complete significant capital projects and water rights purchases. Significant items within the Water Resources Fund include a total of approximately $40 million, all of which are associated with current opportunities related to the Town’s long term water initiatives. These items include $7.4 million for a water rights purchase with PV, LLC, $7.7 million for the Box Elder purchase, $2.4 million for pipeline construction and $22.4 million for WISE related pipelines and improvements, all of which will help to address the priority of bringing additional renewable water to Castle Rock. Stormwater fund requests include $620,000 for stabilization of East Plum Creek at Meadows Parkway, which will be split with the Water fund. Within the Water fund, $175,000 is included for design of new deep groundwater wells. Please refer to Schedules I through L for more information
Golf Course Fund:
The presentation of information in the attached financial statements has been adjusted to reflect a more accurate, seasonally adjusted, year-to-date budget for the Golf Fund. Year to date budgets for Charges for Service revenue and operational expenditures, including personnel, services and supplies have been adjusted based on actual performance during the first half of the year from 2012 - 2015.
Revenues for the first half of the year are 4% under the seasonally adjusted budget. Charges for service revenue was affected by adverse weather that occurred in the spring months, thereby reducing the number of days that Red Hawk Ridge could be open for play. Comparing revenue received in the first half of prior years is helpful to understand the context of how the Golf Course is performing in 2016. When compared to 2015, current charges for service revenue is about the same through June; and when compared to 2014, they are about $12k higher. Due to the adverse weather that occurred earlier in the year, 13,251 total rounds have been played through June representing a decrease of about 3% from 2015. Although the number of rounds played is lower, the total revenue earned per player has increased by 3% from last year to a total of $81.19 per player. Expenditures are 3% under the adjusted year to date budget being expended due to timing of capital projects and supply purchases. At this time, the Golf Course Fund is projected to end the year within 1% of the annual budget. Please note that year-end estimates for 2016, as shown in Schedule M, are based on actual data through April and are planned to be refined during the third quarter.
The chart on the following page demonstrates a 5 year comparison of green fee revenue for the Golf Course Fund for the first six months of the year. For more information on the first quarter financial performance of the Golf Course Fund, please refer to Schedule M.
Community Center Fund:
The Community Center Fund includes operations of both the Recreation Center and the Miller Activity Complex (MAC). The presentation of information in the attached financial statements (Schedule N) represents seasonally adjusted budget information for revenue and expenditure categories. These items are adjusted based on actual data from 2010 - 2015 in order to provide more accurate information.
Charges for service are under the seasonally adjusted budget by 5% through June. Comparing revenue received in prior years is helpful to understand the context of how the Community Center Fund is performing in the first half of 2016. Total revenue collections are greater than the first half of 2015 by 3%, or $89k, primarily due to sales tax revenues.
Expenditures for 2016 are over the second quarter budget by about 2%, which is primarily related to timing of capital projects and personnel costs. Visits to the MAC, in its second full year of operation, total 52,991 for the first half of 2016. This represents a 9% decrease from the same period of 2015. The Recreation Center experienced an increase of 3,152 daily visits for the first half of the year, an increase of about 2% from 2015. Currently, the Community Center Fund is projected to be less than 1% under budget for 2016. Please note that year-end estimates for 2016, as shown in Schedule N, are based on actual data through April and are planned to be refined during the third quarter.
The charts to follow illustrates the programs and punch card revenue as compared to the first six months of the past five years for Community Center Fund, including the MAC.
Development Services Fund:
Overall revenues received in the Development Services Enterprise Fund to date are almost 23% higher than the year to date budget. Early year-end revenue estimates currently project ending the year at about 16% over the 2016 budget, which is associated with increased commercial and multi-family development in the first half of the year. These estimates reflect several developments including the Promenade Ledges and Mercantile Commons. Revenue in the charges for services category are higher than the year to date budget primarily due to inspection fee revenue associated with increased commercial and multi-family development as well. Expenditures for the fund are under the amended budget by approximately 5% through the second quarter primarily associated with personnel vacancy savings. Early year end estimates project this fund to end the year just under the 2016 budget. A fourth budget amendment is in process to request additional funds to address future space needs associated with the Town Hall expansion which are not yet incorporated into year-end estimates or the 2016 amended budget. This request is planned to be presented to Town Council on August 2nd for first reading with second reading scheduled for follow on August 16th. As stated for Impact Fee revenue, the issuance of permits will continue to be monitored with revisions to the budgeted revenues later in the year if needed. Please refer to Schedule O for more information.
Employee Benefits Fund:
Revenues in the Employee Benefits Fund are currently about 10% under the year to date budget due to actual benefit selections by town personnel as well as position vacancies. Expenditures in the Employee Benefits Fund are 13% under than the budget amount for the first six months of the year and are currently projected to finish the year under budget by about 7%. The annual budget is based on expected healthcare costs while actual fund performance is the result of employee benefit selections combined with position vacancies that occur. Staff will continue to monitor trends for this fund to determine if any budgetary change will be required later in the year based on actual healthcare claim costs. Please refer to Schedule P for more information.
Fleet Services Fund:
Fleet fund revenue is under the year to date budget, primarily due to the timing of salvage vehicle sales which have yet to occur. Expenditures for the Fleet Services Fund are over the year to date budget for the first half of the year by approximately 9% primarily due to the timing of multiple vehicle replacements that have already been completed. Expenditure estimates show that the fund will be at the 2016 budget by at year end. Please refer to Schedule Q for more information.
Conservation Trust Fund:
The Conservation Trust Fund is 34% over the seasonally adjusted budgeted revenue in 2016 primarily due to increased lottery revenue. Overall expenditures are under budget by 48% through June due to personnel savings as well as timing of projects including various park and safety improvements. This fund is projected to be under budget by about 2% at the end of the year. Please refer to Schedule R for more information.
Philip S. Miller Trust Fund:
Revenue received in the Philip S. Miller Trust Fund is about 4% under the year to date budget. The first of the semi-annual disbursements from the Philip S. Miller Trust have been received and are $5k less than budget for the first half of the year. Additionally, budgeted revenue includes repayment of a loan to the Downtown Development Authority that was paid in full in 2015; accordingly, no revenue will be received in 2016 for this. Expenditures in the Philip S. Miller Trust Fund are under the year to date budget by 14%. Expenditures are currently estimated to be under budget by 6% for the year. Please see Schedule S for more information.
Public Art Fund:
Revenue for the Public Art Fund is about 2% over the year to date budget and consists primarily of the semi-annual disbursement from the Philip S. Miller Trust. Expenditures are currently 32% of the annual budget for this fund and are on track for the year. Expenditures include payments to artists for participation in the Art Encounters program. This fund is projected to be at budget at the end of the year. Please see Schedule T for more information.
Economic Development Fund:
The Economic Development Fund continues to focus on priorities of creating primary employment jobs, expanding the tax base and an outstanding business climate. Revenue through June exceeded the budgeted forecast by 71% due to timing of commercial development in Town. Through June, a total of 41 new commercial permits were issued, as compared to 11 in 2015. Appropriated expenditures in 2016 are allocated to meet current obligations and to fund potential future economic development assistance agreements. Two payments have been made on existing agreements through June, reflecting use of only 7% of the budget for the first half of the year. Timing of payments for existing and new agreements varies throughout the year. Please refer to Schedule U for more information.
Police Forfeiture Fund:
Other than interest, there has been no revenue generation through the second quarter of 2016. The Police Forfeiture Fund includes funds received from cooperative efforts using the Town of Castle Rock’s Police resources assisting state or federal authorities in seizures of illegal items. Body-worn cameras are planned for a large portion of the Police Forfeiture Fund balance and have been included in the 2016 budget. The Police Department does not anticipate any revenue in addition to interest or expenditures in this fund through year end. Please refer to Schedule V for more information.
Downtown Development Tax Increment Financing (TIF) Fund:
Revenue in this fund includes a quarterly disbursement of Sales Tax TIF revenue. This is an estimated amount through the second quarter and will be adjusted as needed by year end. Expenses through the first half are less than 1% of the annual budget due to the timing of a loan to The Move, LLC and a contribution to Parks & Recreation Capital for the purpose of renovating Festival Park that are expected to occur in the second half of the year. Please refer to Schedule V for more information.
Special Events Fund:
The Special Events Fund was established and approved by a budget amendment on February 2, 2016. This fund accommodates revenues and expenditures for 20 Townwide Events that were approved by Town Council as part of the Special Events Strategic Plan on January 5, 2016. A total of 20 events are incorporated in this area including the Celebration Concert Series at Philip S. Miller Park, Downtown After Five events, Harvest Fest, Rocky Mountain Sports Festival, Scavenge the Rock, Western Heritage and the Season of the Star event series.
This fund received 93% of the budgeted revenues for the first half of the year. The revenue received during the first quarter consists primarily of a transfer in from the Philip S. Miller Trust Fund and ticket sales revenue. Expenditures are 8% under budget through June. The year-to-date budget shown in Schedule X has been seasonally adjusted to reflect the number of ticketed events that occurred during the first half of the year and to incorporate event costs incurred for events that are scheduled to take place from July to December. This fund is projected to be on track at this point and will continue to be monitored throughout the remainder of the event season.
Proposed Motion
This memo is intended to be for discussion purposes only.
Attachments
Attachment A: 2016 Second 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
25. Schedule Y - Townwide Summary
Attachment B: Sales Tax Collections by Category and Geographical Area