VII.4. Fourth Quarter Financial Update; Bishop
CITY OF HOPKINS
Memorandum
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: March 15, 2022
Subject: Fourth Quarter Financial Update
_____________________________________________________________________
The fourth quarter financial report has been prepared based on preliminary and unaudited
results. Audit field work is scheduled for April. Financial Statements are required to be
issued by June 30.
General Fund
The City’s General Fund revenues exceeded budget by $330,630 or 2.10%. General
Fund expenditures were $842,048 or 5.35% less than budget. The fund balance
increased by $1,172,408. The main factors for the increase in fund balance are:
• Approximately $400,000 of savings for salary and benefits due to open positions
that were not immediately filled due to hiring challenges, suspended operations
due to COVID-19 or eliminated during 2021.
• A reduction of the City’s paid leave accrual of approximately $400,000. This is a
result of a COVID-19 leave benefit expiring and increased use of paid time off by
employees due to eased travel restrictions from the pandemic in 2021.
• Increased revenue of approximately $300,000 due to an increase in inspections
revenue compared to budget and the private activity bond fee from Trellis Co. for
Raspberry Ridge II.
The City’s Fund Balance Policy aims for an unassigned fund balance of 42% of annual
expenditures or approximately 5 months. At the end of 2021, the unassigned fund balance
in the general fund was $8,094,422 or 50.05% of expenditures. The $1.35 million of fund
balance above policy can be used as a contingency balance for COVID-19, for transfers
to eliminate losses in other funds or any government purpose.
Finance
Department
Special Revenue Funds
The Chemical Assessment, Economic Development, Parking, Communications, Depot
Coffee House and Arts Center Funds collectively increased their fund balances by
$144,935.
• Chemical Assessment – increased fund balance by $1,104. Fund operates on a
reimbursement basis.
• Economic Development – increased fund balance by $45,491.
• Parking Fund – decreased fund balance by $68,573, due to decreased parking
demand at municipal lots and parking ramp.
• Communication Fund – decreased fund balance by $49,413, due to a planned
reduction in fund balance and decreased franchise fees collected.
• Depot Coffee House – decreased fund balance by $45,327, due to closures and
modified operations as a result of COVID-19.
• Arts Center - increased fund balance by $261,654.
Enterprise Funds
The Water, Sewer, Refuse, Storm Sewer and Pavilion Funds collectively increased their
net position (fund balance) by $357,333, which includes $1,475,608 of depreciation
expense. All funds, except the Pavilion have a positive cash balance.
• Water – increased net position (fund balance) by $202,107.
• Sewer – increased net position (fund balance) by $418,835.
• Storm Sewer – increased net position (fund balance) by $83,086.
• Refuse – decreased net position (fund balance) by $68,485.
• Pavilion – decreased net position (fund balance) by $278,191. The Pavilion Fund
has a negative cash balance of $251,557 due to closures and modified operations
as a result of COVID-19.
2021 4th Quarter
Financial Update
Prepared by Finance Department
2021 4th Quarter Results
Preliminary and Unaudited
General Fund Overview
At the end of the 4th quarter
Revenues are at 102.10%
Expenditures are at 94.65%
General Fund Performance Dashboard
YTD TOTAL
REVENUES 16,081,198$
EXPENDITURES 14,908,790$
% of Budget
36,946$
(138,057)$
OVER/(UNDER)
YEAR/YEAR
VARIANCE
17%
56%
21%
2%2%2%
Expense by Department
GENERAL GOVERNMENT
PUBLIC SAFETY
PUBLIC WORKS
RECREATION
COMMUNITY SERVICES
URBAN DEVELOPMENT
80%
10%
5%
3%
2%
0%
Revenue by Source
Taxes
Intergovernmental
Licenses, Permits & Fines
Charges for Services
Franchise Fees
Miscellaneous
102.10%
94.07%
General Fund Revenues
% of
Budget Actual Budget
Taxes 12,896,352$ 12,810,005$ 99.33%
Intergovernmental 1,474,671 1,550,225 105.12%
Licenses, Permits & Fines 784,515 898,360 114.51%
Charges for Services 229,550 478,530 208.46%
Franchise Fees 296,200 306,032 103.32%
Miscellaneous 69,550 38,046 54.70%
Total Revenues 15,750,838$ 16,081,198$ 102.10%
General Fund Expenditures
% of
Budget Actual Budget
General Government 2,488,599$ 2,455,836$ 98.68%
Community Services 879,588 633,441 72.02%
Public Safety 7,808,982 7,740,971 99.13%
Public Works 3,469,191 3,126,369 90.12%
Recreation 756,557 655,281 86.61%
Urban Development 347,921 296,893 85.33%
Total Expenditures 15,750,838$ 14,908,790$ 94.65%
2021 General Fund Surplus
Increased fund balance by $1.2 million
Estimated ending fund balance of $8,094,422
or 50.05% of 2022 Budget
Fund Balance Policy aims for an unassigned
fund balance of 42%
2021 General Fund Surplus
Possible Uses:
Contingency balance for COVID-19
Transfers to eliminate losses in other funds
Special Revenue Funds Revenues
% of
Budget Actual Budget
Chemical Assessment 65,000$ 74,236$ 114.21%
Economic Development 503,070 951,782 189.19%
Parking 121,500 93,168 76.68%
Communications 243,000 216,786 89.21%
Depot Coffee House 233,000 182,394 78.28%
Art Center 1,084,159 941,467 86.84%
Special Revenue Funds
Expenditures
% of
Budget Actual Budget
Chemical Assessment 65,000$ 73,132$ 112.51%
Economic Development 498,900 906,292 181.66%
Parking 154,875 161,741 104.43%
Communications 251,224 266,200 105.96%
Depot Coffee House 247,266 227,722 92.10%
Art Center 1,024,159 679,813 66.38%
Special Revenue Funds Financial Position
Change Ending
In Fund Fund
Revenues Expenses Balance Balance
Chemical Assessment 74,236$ 73,132$ 1,104$ (21,933)$
Economic Development 951,782 906,292 45,491 3,132,642
Parking 93,168 161,741 (68,573) 92,636
Communications 216,786 266,200 (49,413) 516,067
Depot Coffee House 182,394 227,722 (45,327) (102,839)
Art Center 941,467 679,813 261,654 (1,082,362)
Enterprise Funds Revenues
% of
Budget Actual Budget
Water 2,292,074$ 2,402,202$ 104.80%
Sewer 3,105,587 3,128,087 100.72%
Refuse 1,001,941 992,959 99.10%
Storm Sewer 789,332 802,772 101.70%
Pavilion 823,500 804,555 97.70%
Enterprise Funds Expenses
% of
Budget Actual Budget
Water 2,198,674$ 2,200,095$ 100.06%
Sewer 2,963,236 2,709,253 91.43%
Refuse 1,029,220 1,061,445 103.13%
Storm Sewer 596,969 719,704 120.56%
Pavilion 1,098,359 1,082,747 98.58%
Enterprise Funds Financial Position
All funds include depreciation expense
Net
Income
Revenues Expenses (Loss)
Water 2,402,202$ 2,200,095$ 202,107$
Sewer 3,128,087$ 2,709,253$ 418,835$
Refuse 992,959$ 1,061,445$ (68,485)$
Storm Sewer 802,772$ 719,704$ 83,068$
Pavilion 804,555$ 1,082,747$ (278,191)$
Next Steps
Audit fieldwork is scheduled for April
Financial Statements issued before
06/30/2022
Questions?