To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Update: Preliminary 2016 Unaudited Year-End Financial Review
Body
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Executive Summary
Transparency and financial reporting are critical to the Town of Castle Rock as demonstrated in this Preliminary 2016 Unaudited Year-End Financial Review. The following review includes discussion and financial information regarding the Town’s overall financial condition through 2016 and related status updates on key strategic priorities.
Overall, the financial condition of the Town continues to be strong. Preliminary year-end information indicates total Town revenues across all funds are 3.4% over the 2016 budget. Strong sales tax revenues coupled with higher than anticipated commercial and multifamily growth related revenues contributed to these revenue figures. Similarly, Town-wide expenditures are under the 2016 budget by about 34% or approximately $124 million. The difference in budget to actual expenditures is primarily attributable to the timing of major capital projects. Unspent capital funds in 2016 total $117 million. The Town routinely accumulates funds in order to accommodate significant capital projects, but planning, design and construction often spans multiple years. Unspent capital funding related to continuing projects will be carried forward into 2017 as part of the first budget amendment.
Although greater discussion is included in this memo for numerous factors that contributed to the successful financial picture of the Town, below are additional items of note based on preliminary 2016 financial information which are discussed in more detail on the following pages:
• General Fund expenditures are about 5% under the 2016 budget. These estimated savings are primarily attributable to:
§ Personnel savings at 3.4% under budget
§ Services & Other savings at 5.9% under budget
§ Supplies savings at 16% under budget
§ Capital savings at 41.4% under budget
• Development activity remains strong with impact fee, system development fee, and use tax revenue to end 2016 about 19% higher than budget. These fees are assessed as part of the permitting process to meet infrastructure needs caused by growth (roads, parks, trails, and recreation, water and wastewater lines). Also related to development activity, building permit revenues, including building renovations and improvements, are about 7% higher than in 2015.
• Significant progress toward the goal of bringing 75% renewable water to Castle Rock is occurring, with total renewable water expenditures in 2016 of about $14.8 million. These projects include approximately $8 million for the Box Elder Farm purchase, $1.9 million for the Plum Creek Central Well Field project, and $1 million for the Plum Creek South Well Field project. Significant funds will be carried forward to 2017 due to the variable timing of capital projects. Total requested renewable water carryforward is $51.6 million, including the WISE project at $27.5 million, $12.4 million for the Alternative Source of Supply project and $10.8 million for the purchase of infrastructure and assets in Douglas County.
• Planning in 2016 for other significant projects included 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:
• Preliminary 2016 year-end actual information for revenues and expenditure. Final numbers may change due to year-end processing and any audit adjustments.
• Incorporation of all Town Council approved 2016 budget amendments.
Discussion
See attached Staff Memo for further detail.