4D, Motion to Accept 1st & 2nd Quarter Financial Reports as presented

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~ ~HILLS MEMORANDUM DATE: July 10, 2009 TO: Honorable Mayor and City Council Ronald Moorse, City Administrator FROM: Sue Iverson, Finance Director SUBJECT: 2009 1 st and 2nd Quarter Actuals Background/Discussion: Attached are both the 1 st and 2nd Quarter Actuals for 2009. Overall expenditures are running below budget estimates. Please remember that we receive 50% of our revenue from property taxes and will not received the 2nd half until December. 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, 2009. Accruals, deferred revenue adjustments, etc. are only done at year-end. Basically expenditures from operating activities are running below the budget estimates, revenues are slightly below budget estimates. (Please note that the overall percentages look lower because property taxes, liquor licenses, etc are collected at year-end.) 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, 2009 - this rate was 0.270% and our portfolio is averaging 1.951 %. This rate is slightly lower than actual as we have the TCAAP funds of $2,250,000 in our cash balance as of June 30, 2009. This will lower the overall rate calculations as it is at the 4M percentage. Without these funds the portfolio rate is 2.257%, which is our true average rate. 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. We are trying to stay diversified in this area and will be transferring between these accounts. We have had some of our high interest notes call and I have reinvested them but they will not settle until July which is why the Wachovia Evergreen fund balance is a little higher than normal. The majority of the funds are in the League of Minnesota Cities 4M Fund and 4M Plus accounts. Staff Recommendation: Staff requests that Council accept the 1 st and 2nd Quarter Financial Reports.