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REQUEST FOR COUNCIL ACTION Date: 8/5/2024 Item No.: 10.d. Department Approval City Manager Approval Item Description: Receive 2024 Second Quarter Financial Report 1 2 Background 3 The second quarter of 2024 is complete and financial results are available. The Finance Director 4 prepared the attached second quarter financial report for Council review. This report shows budget 5 versus actual performance for the period ending June 30, 2024. 6 7 The financial report includes those programs and services that constitute the City’s core functions and 8 for which changes in financial trends can have a near-term impact on the ability to maintain current 9 service levels. Programs such as debt service and tax increment financing which are governed by pre- 10 existing obligations and restricted revenues are not shown. In addition, expenditures in the City’s capital 11 improvement funds are not shown as these expenditures are specifically tied to pre-established capital 12 reserve funds. Unlike some of the City’s operating budgets, these reserve funds are not typically 13 susceptible to year-to-year fluctuations. In these instances, annual reviews are considered 14 sufficient. Enterprise funds do record both operations and capital within the fund as the revenues and 15 reserves pay for operations and capital improvements. 16 17 The information is presented strictly on a cash basis which measures only the actual revenues that have 18 been deposited and the actual expenditures that have been paid, except for the Enterprise funds (Water, 19 Sewer, Storm and Recycling) where revenues are based on amounts billed in the first three months of 20 the year. This is in contrast with the City’s audited year-end financial report which attempts to measure 21 revenues earned but not collected, as well as costs incurred but not yet paid. 22 23 It should be noted that some of the City’s revenue streams such as property taxes and 24 intergovernmental revenues, are non-recurring or are received intermittently throughout the year. This 25 can result in wide revenue fluctuations from month to month. In addition, some of the City’s expenditures 26 are also non-recurring and subject to wide fluctuations. The financial report notes those areas where 27 fluctuations occur during the year. At this point in time 50% of the year has passed and that sets the 28 estimated benchmark for the first quarter report. 29 30 General Fund Summary - The General Fund includes the activities associated with the City’s police, 31 fire, streets, administration & finance, legal, and other general functions. Property tax revenue and state 32 aid are the largest revenue sources for this fund. The general fund reserves carry the operations in this 33 fund until property taxes are received from Ramsey County in June. The majority of State Aids are 34 received in September and October. As a result, in the second quarter revenues were only at 16% of 35 the budget. Expenditures are trending near the benchmark with some exceptions as noted on the 36 report. Expenditures at this point in time are consistent with the prior two years. 37 38 Parks and Recreation Fund Summary – Revenues are running slightly ahead of 50%, similar to 2024. 39 This is due to several park building rentals reserved at the beginning of the year and program 40 participation reserved in advance of the various programs. As these programs are seasonal, the 41 expenditures are tracking below 50% as many of the programs are operated in the summer and fall. Page 1 of 3 Qbhf!23:!pg!2:4