VII.3. 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: April 16, 2024
Subject: Fourth Quarter Financial Update
_____________________________________________________________________
The fourth quarter financial report has been prepared based on preliminary and unaudited
results. Audit field work was completed the second week of April. Financial Statements
are required to be issued by June 30.
General Fund
The City’s General Fund revenues exceeded budget by $1,047,145, or 6.09%. General
Fund expenditures exceeded budget by $517,638 or 3.01%. The fund balance increased
by $529,507. The main factors for the increase in fund balance are:
• The City exceeded its revenue budget for inspections department charges and
interest revenue which was offset by tax settlements.
• The City had higher than anticipated costs for contracted services, supplies,
workers compensation insurance and paid leave accruals.
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 2023, the unassigned fund balance
in the general fund was $9,004,792 or 48.9% of 2024 budgeted expenditures and
$1,267,635 over policy. City Council approved a 2024 Budget that decreases fund
balance by $400,000. The remaining $867,635 can be kept as fund balance or reallocated
for any governmental 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
$265,577.
• Chemical Assessment – decreased fund balance by $3,574. Fund operates on a
reimbursement basis and we are reviewing the decrease.
• Economic Development – increased fund balance by $156,683
• Parking Fund – decreased fund balance by $87,135, due to decreased parking
demand at muncipal lots and the parking ramp.
• Communication Fund – decreased fund balance by $142,135, due to a planned
reduction in fund balance, decreased franchise fees collected and equipment
purchases from PEG fee revenue.
• Depot Coffee House – increased fund balance by $23,886, primarily due open
positions and closing coffee operations.
• Arts Center - increased fund balance by $317,852. The increase can be attributed
to cost-effective operations and ARPA grant revenue. All allocated ARPA funds
have been recorded.
The following chart shows additional detail on ending fund balances and ARPA revenue
allocated to special revenue funds.
Enterprise Funds
The Water, Sewer, Refuse, Storm Sewer and Pavilion Funds collectively increased their
working capital by $1,038,787. Working capital is the difference between current assets
and current liabilities. It represents the amount available to meet current financial needs.
It does not include capital assets and is not affected by depreciation expense. The chart
below shows changes to working capital for enterprise funds.
Chemical
Assessment
Economic
Development
Parking
Fund
Communications
Fund Depot Fund Arts Center
Fund Balance on 1/1/2023 (51,685) 4,525,777 (6,406) 215,157 (214,597) (357,204)
Normal Revenue 62,148 772,860 87,535 200,297 134,296 1,226,243
ARPA Revenue - - - - - 136,052
Total Revenue 62,148 772,860 87,535 200,297 134,296 1,362,295
Expenditures 65,722 616,177 174,670 342,432 110,410 1,044,443
Increase (decrease) in Fund Balance (3,574) 156,683 (87,135) (142,135) 23,886 317,852
Fund Balance on 12/31/2023 (55,259) 4,682,460 (93,541) 73,022 (190,711) (39,352)
Water Sewer Refuse Storm Sewer Pavilion
Working Capital on 1/1/2023 1,124,041.00 1,492,848.00 1,273,734.00 2,574,249.00 98,706.00
Increase (Decrease) to Working Capital
Operating Activities 524,526.00 340,058.00 433,702.00 (22,563.00) 183,775.00
Capital & Financing Activities 34,383.00 (38,505.00) (419,996.00) 327,655.00 (324,248.00)
Total Increase (Decrease) to Working Capital 558,909.00 301,553.00 13,706.00 305,092.00 (140,473.00)
Working Capital on 12/31/2023 1,682,950.00 1,794,401.00 1,287,440.00 2,879,341.00 (41,767.00)