5F, Motion to Approve 2nd Quarter of 2012 Financial Reports

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� �fi` I��ENr�HILL5 MEMORANDUM DATE: July 30, 2012 TO: FROM: SUBJECT: Honorable Mayor and City Council Patrick Klaers, City Administrator Sue Iverson, Director of Finance and Administrative Services 2012 2°d Quarter Actuals � ,Y Background/Discussion: Attached are the 2°d Quarter Actuals for 2012. Overall expenditures are running slightly below budget estimates. Revenue estimates are running above budget estimates as a result of increased building permit activity, some additional conduit debt received from Presbyterian Homes, and increased participation in recreation programs. Please remember that we receive 50% of our revenue from property taxes and did not received the lst half until July. Governmental accounting is not done on an accrual basis, therefore the numbers reflect what was actually taken in as revenue or paid out as expenditures thru June 30, 2012. Accruals, deferred revenue adjustments, etc. are only done at year-end. Basically expenditures from operating activities are running close to the budget estimates or slightly below, revenues are slightly above budget estimates. (Please note that the overall percentages look lower because property taxes, liquor licenses, etc are collected at year-end.) New this year are the internal service funds. These funds are charged back to the operating departments. We have included estimated charges through June 30�` in these reports. These costs may seem to appear double counted when you look at the organization in total, as they appear in the internal service funds and then again as charges in the departments which used them — governmental accounting determines how we show this in our fund financial statements, but adjustments are made at audit time to show only the actual expenditures as any surplus or deficits in the internal service funds are rolled into the government-wide statements so actual expenditures and revenues are shown. They are meant to operate like the enterprise funds (our utility funds) but service our "internal" customers, which are our departments. They make it easier to manage budgets as we can see the "total" spent or received for these activities like Public Works, Insurance, Engineering, and Technology. An Investment Portfolio has also been included with these financial reports. Per the Investment Policy, our Benchmark Rate is the 4M plus Rate. At June 30, 2012 — this rate was 0.05% and our portfolio is averaging 1.974%. All of our investments are in government secured or government backed deposits. The section listed at the top of the portfolio are the "liquid" investments that we can access at anytime. (The large amount in the Evergreen US Govt Money Market Fund is a reflection of securities what were called in late June and have been reinvested, but settlement dates were not until July.) We are trying to