WS 05-26-2009 - Laserfiche WebLink

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• The second half of market value homestead credit revenues from the State were eliminated resulting in an under final budget variance of $80,425. • Xcel Energy franchise fees revenues were $49,526 more than anticipated. • Investment income exceeded the budget by $36,737. • The Change in Fair Value of Investments revenue accounted for a favorable variance of $20,042. This "revenue" results from a financial reporting requirement, Governmental Accounting Standards Board # 31. We are required to "mark to market" our investment portfolio at year-end, December 31St for financial reporting purposes. The market can change rapidly. Today's market yields are much different than the market environment in which they were purchased. If every investment in our portfolio were liquidated on December 315`, then we would have realized a gain of $20,042 in the General Fund. However, the reinvestment of those monies would have been at a much lower yield. Our primary objective in accordance with our investment policy is to preserve capital. One of the methods used to preserve principal is to hold our investments to maturity. This "locks in" the yield at the time of purchase and effectively minimizes that market risk. It also "negates", at the time of maturity, the adjustment for the change in fair value. It is very possible that next year this revenue line item could have an unfavorable variance. It will depend upon the market conditions that exist on December 31, 2009, compared to our portfolio. • Temporary personnel vacancies resulted in savings of expenditures: o Parks — Parks and Recreation Director was out on FMLA for part of the year and fewer seasonal staff was hired - $55,601 o Recreation — Recreation Supervisor was out on FMLA for part of the year; classes were canceled due to low enrollment, a sport camp was taken over by the school district, and there were playground site/staff reductions - $75,040 o Family Service Center —The lead creative play leader position was vacant and 25% of fitness classes did not run - $42,288 • The 2008 budget included a contribution to fund balance of $59,200. This is a positive variance in the Central Services/contractual services budget. The fund balance of the General Fund as of December 31, 2008, was $5,667,942. The balance is consistent with the Office of State Auditors Statement of Position regarding fund balance level; however, it is in excess of the City's fund balance policy. DEBT SERVICE At December 31, 2008, the City had a number of debt issues outstanding totaling $61,896,300. The debt decreased from the 2007 outstanding balance of $65,924,800 by $4,028,500 due to principal payments of that amount and because no new debt was issued during the year. 0