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'It <br />EN HILLS <br />MEMORANDUM <br />DATE: October 24, 2022 <br />TO: Honorable Mayor and City Councilmembers <br />Dave Perrault, City Administrator <br />FROM: Gayle Bauman, Finance Director <br />SUBJECT: 2022 3rd Quarter Financials <br />Budgeted Amount: Actual Amount: <br />N/A N/A <br />Council Should Consider <br />Motion to approve, table or deny the following: <br />CONSENT ITEM — 7B <br />Funding Source: <br />N/A <br />Quarterly budget to actual fund statements and investment portfolio detail for the City. <br />All items need a simple majority for action unless otherwise noted. <br />Background <br />Investments - per the Investment Policy, our Benchmark Rate is the 4M plus Rate. At September <br />30, 2022 — this rate was 2.248% and our portfolio is averaging 1.95%. Our average rate will <br />begin to increase as lower interest investments mature and we continue to invest in higher interest <br />investments. All of our investments are in government secured or government backed deposits. <br />Utility billing cycles and CIP projects are taken into account when determining how much to <br />invest and for how long. <br />Basis of accounting — during the year, City books are kept on a cash basis which means that only <br />items that are received are booked as revenue and items paid are booked as expenses. <br />Adjustments for accruals, deferrals and other accounting requirements are made at year end. <br />General Fund — The main source of revenue for the City is property taxes and these come in twice <br />a year. Expenditures are at 75.6% of budget through the end of the quarter, compared to 67.4% <br />last year. Some of this difference is due to the timing of invoices. <br />Other governmental funds, enterprise funds and internal service funds — Utility revenue for third <br />quarter will be booked in October 2022 and annual transfers between funds will be booked later <br />in the year. The allocation for insurance (Risk Management Fund) was completed in June. <br />Market value adjustments for investments total-$866,071.89 through the end of the quarter. It is <br />important to note that the City holds its investments to maturity and no principal is ever lost on an <br />investment. <br />Page 1 of 2 <br />