HomeMy WebLinkAbout2021 Quarterly Report - 4th QuarterDecember 2021
Quarterly
Financial
Report
Prepared by Richa Sigdel, Finance Director
Overview
The intent of this report is to provide an overview of activity in all of the City's major funds
through December 31, 2021. Despite the concerns surrounding the Omnicron variant, the
economy continues to surprise us and remain robust. The American Rescue Plan Act (ARPA)
funds and new federal grant opportunities for infrastructure are expected to directly assist the
City, but also help continue the economic vitalization of the community.
Quarterly Financial Report / Page 2
Employment is a key indicator
of the economic health of the
community. The preliminary
unemployment rate for
Franklin County was 5.5%,
greater than the state's
average of 4.5%, but a
decrease from 8.1% from the
prior year. Historically, the
County's 3-year average
unemployment rate during the
same period has been 7.7%.
This decrease in
unemployment is a good
indicator of the availability of
jobs in the region.
Another economic indicator is permit activity; it demonstrates not only the growth and
attractiveness of the community but also increased revenue in building-related sales tax
revenue. As the table below indicates, overall permit activity has more than doubled on a year-
over-year basis. Furthermore, an increase in commercial activity bodes well for the city. This
means an increased economic base to generate higher sales taxes. In the past, City of Pasco
residents have spent their income outside of the community, resulting in the City losing out on
significant sales tax revenue.
Finally, the number of active business licenses at the end of 2021 was 4,718 an increase of 400
from the prior year. It is important to note that due to the pandemic, there has been a significant
shift in operations for the City and the Department of Revenue (DOR). Both entities have not
been pursuing delinquent business licenses and this number could change as the normal process
is resumed.
Quarterly Financial Report / Page 3
Growth in commercial base of the City is providing
residents the opportunity to spend their income within
the community will continue to result in City's ability
to provide services at affordable rates in the future.
Similarly, in a landmark case known as South Dakota
v. Wayfair, Supreme Court decided that retail
businesses no longer had to have a physical presence
in a state to be potentially liable to collect state sales
taxes. The enactment of this law coupled with
increased online purchasing has helped the City meet
and exceed its revenue goals.
The City also benefitted from construction sales tax
generated from major permitting activities, especially
construction by large commercial and industrial
partners. These taxes are one-time in nature but the
City anticipates more of these projects to help
increase its sales tax base for next 2-4 years. The
sales tax for 2021 exceeded the target by $2 million,
at $18.6M. This represents an increase of 24% over
the prior year. Taking out a large one-time project,
the increase is closer to 14%. The adjoining graph
shows the significant growth in 2021.
Sales Tax
C i t y S t r e e t F u n d
A r t e r i a l S t r e e t F u n d
I -1 8 2 C o r r i d o r T r a f f i c I m p a c t F u n d
S t r e e t O v e r l a y F u n d
C o m m u n i t y D e v e l o p m e n t G r a n t F u n d
C D B G
H O M E
N S P
M .L . K i n g J r . C o m m u n i t y C e n t e r F u n d
A m b u l a n c e S e r v i c e s F u n d
C i t y V i e w C e m e t e r y F u n d
B o u l e v a r d P e r p e t u a l M a i n t e n a n c e F u n d
A t h l e t i c P r o g r a m F u n d
G o l f C o u r s e
S e n i o r C e n t e r O p e r a t i n g F u n d
M u l t i -M o d a l F a c i l i t y F u n d
S c h o o l I m p a c t F e e s
R i v e r s h o r e T r a i l & M a r i n a M a i n t e n a n c e F u n d
S p e c i a l L o d g i n g A s s e s s m e n t F u n d
L i t t e r A b a t e m e n t F u n d
R e v o l v i n g A b a t e m e n t F u n d
T r a c D e v e l o p m e n t & O p e r a t i n g F u n d
P a r k D e v e l o p m e n t F u n d
C a p i t a l I m p r o v e m e n t s F u n d (R E E T )
E c o n o m i c & I n d u s t r i a l D e v e l o p m e n t F u n d
S t a d i u m / C o n v e n t i o n C e n t e r F u n d
H o t e l /M o t e l E x c i s e T a x
G e n e r a l F u n d - G e n e r a l F u n d
S p e c i a l R e v e n u e F u n d
Annual Financial Report / Page 4
Types of Funds
W a t e r F u n d
S e w e r F u n d
I r r i g a t i o n F u n d
P r o c e s s W a t e r R e u s e F a c i l i t y F u n d
S t o r m w a t e r F u n d
E q u i p m e n t R e n t a l O p e r a t i o n s F u n d - G o v e r n m e n t T y p e
E q u i p m e n t R e n t a l O p e r a t i o n s F u n d - P r o p r i e t a r y T y p e
E q u i p m e n t R e n t a l R e p l a c e m e n t F u n d - G o v e r n m e n t
T y p e
E q u i p m e n t R e n t a l R e p l a c e m e n t F u n d - P r o p r i e t a r y
T y p e
M e d i c a l /D e n t a l I n s u r a n c e F u n d
M e d i c a l /D e n t a l I n s u r a n c e F u n d
D e n t a l
C e n t r a l S t o r e s F u n d
E n t e r p r i s e F u n d
I n t e r n a l S e r v i c e F u n d
Annual Financial Report / Page 5
Types of Funds
General Property Tax
Other Tax
Retail Sales Tax
Utility Tax
Licenses & Permits
Intergovernmental
Charges for Goods and Services
Fine and Penalties
Miscellaneous
Debt Principal
Transfers and Subsidy - Revenue
Licenses & Permits
Intergovernmental
Charges for Goods and Services
Fines and Penalties
Miscellaneous
Debt Interest
Debt Principal
Transfers and Subsidy - Revenue
Utility Tax
Hotel/Motel SalesTax
Real Estate Excise Tax
Licenses & Permits
Intergovernmental
Charges for Goods and Services
Fine and Penalties
Miscellaneous
Debt Principal
Transfers and Subsidy - Revenue
Intergovernmental
Miscellaneous
Transfers and Subsidy - Revenue
Charges for Goods and Services
Miscellaneous
Debt Principal
Transfers and Subsidy - Revenue
PFD Sales Tax
Intergovernmental
Charges for Goods and Services
Miscellaneous
23,554,637
2,342,780
38,315,746
23,947,157
5,806,781
16,508,804
17,898,565
2,066,354
4,591,272
586,528
1,269,762
527,878
35,702,000
64,633,213
0
17,618,454
4,749,442
3,285,273
26,347,095
2,057,588
757,002
4,400,000
813,400
28,028,515
26,340,795
280,000
3,384,065
64,291
21,472,778
32,608,038
6,595,047
39,850,976
79,054,061
21,728,692
293,110
0
0
2,021,802
1,000,000
0
40,000
400
11,496,330
1,466,522
22,789,546
10,863,886
3,649,967
6,185,189
8,767,672
1,066,369
951,652
784,801
803,492
258,603
7,046,033
33,196,262
500
321,588
3,068,799
7,957,388
9,732,565
0
666,312
4,236,720
466,470
9,053,377
13,160,731
262,390
1,542,144
127,643
19,357,607
7,107,596
775,894
14,488,778
22,372,268
11,564,763
212,718
-923,914
11,970
10,865,538
788,711
60,000
20,000
0
49%
63%
59%
45%
63%
37%
49%
52%
21%
134%
63%
49%
20%
51%
0%
2%
65%
242%
37%
40%
0%
88%
96%
57%
32%
50%
94%
46%
199%
90%
22%
12%
36%
28%
53%
73%
0%
0%
49%
79%
0%
50%
0%
Fund Category
General Fund
General Fund Total
Enterprise Fund
Enterprise Fund Total
Special Revenue Fund
Special Revenue Fund Total
Construction Fund
Construction Fund Total
Internal Service Fund
Internal Service Fund Total
Pasco Public Facility District
Pasco Public Facility District Total
Grand Total
Category Name
152,863,355
136,888,386
1,040,400
479,466,438
Budget
868,711
213,387,072
Actual
83%
45%
% Received
68,825,425 50%
61,581,737
48,873,39387,598,434 56%
Revenue
A N N U A L F I N A N C I A L R E P O R T / P A G E 6
Revenues outside of the miscellaneous and intergovernmental categories, all revenue streams
are within or exceeding expectations. Tourism-related industries are making a faster comeback
than the budget anticipated. Similarly, higher home values and sale activity is also resulting in
record Real Estate Excise Taxes. Higher than anticipated debt principal revenue is related to
interfund loans within utility services and its offset can be seen in expenses. Growth in taxable
sales, housing prices, and faster return of tourism has resulted the city to be in better financial
state than before the pandemic.
Intergovernmental category is related to funds received from other local, state, and federal agencies.
This category is tied to our capital efforts as large portion of interagovernmental activities are related
grants for capital projects. Miscellaneous is a catch all category that also includes future bonds that
might be issued if the project meets its anticipated schedule. In this particular case, this category
includes almost $20 million in anticipated bond issuance. City has secured significant amount of low
interest loan from the State (>$50 million), reducing the need for the City to issue these higher cost debt.
The city is entering a phase where past trends cannot be counted upon for future growth. Historic growth
in commercial and industrial sectors means that the City will be able to rely upon higher population
growth, increased sales, and property tax bases. The next 2-4 years will be filled with projects providing
a one-time jump in revenues. The period after is expected to be a new baseline with standard growth
thereafter.
This significant growth will require significant investment and that can be seen through planned capital
projects in the City's long-term facilities planning effort (Capital Improvement Plan). As the City has
completed or is in process of completion of several long-term plans - Comprehensive Master Plan,
Downtown Master Plan, Parks Master Plan, Police Master Plan, Fire Master Plan, Transportation Master
Plan, Utility Comprehensive Plans, etc. Staff to support the capital and operational aspect of a City with
different size and complexity will be critical.
A N N U A L F I N A N C I A L R E P O R T / P A G E 7
L I N K T O C A P I T A L I M P R O V E M E N T P L A N
Revenue
Fund Category
General Fund Total
Enterprise Fund
Enterprise Fund Total
Special Revenue Fund
Special Revenue Fund Total
Construction Fund
Construction Fund Total
Internal Service Fund
Internal Service Fund Total
Pasco Public Facility District
Pasco Public Facility District Total
Grand Total
Category Name
23,232,430
1,043,700
531,710,529
Budget
10,959,774
821,915
196,973,173
47%
79%
37%
Actual % Spent
Transfers and Subsidy - Expense Salaries
and Wages
Personnel Benefits
Supplies
Services
Capital Outlays
Debt Principal
Debt Interest
Transfers and Subsidy - Expense Salaries
and Wages
Personnel Benefits
Supplies
Services
Capital Outlays
Debt Principal
Debt Interest
00
Transfers and Subsidy - Expense Salaries
and Wages
Personnel Benefits
Supplies
Services
Capital Outlays
Debt Principal
Debt Interest
Supplies
Services
Capital Outlays
Transfers and Subsidy - Expense Salaries
and Wages
Personnel Benefits
Supplies
Services
Capital Outlays
Services
26,481,405
52,308,610
17,863,243
4,989,649
37,051,097
4,730,105
4,970,273
2,095,250
890,100
9,329,803
4,311,564
4,626,213
31,544,708
108,272,500
5,764,524
4,103,698
50,349,769
13,449,416
4,013,755
2,031,774
25,763,382
12,464,000
100,000
155,500
0
0
79,774,061
79,774,061
451,762
1,129,320
453,489
2,447,330
12,826,954
5,923,575
21,697,571
24,301,482
8,349,354
1,984,725
18,925,492
229,099
4,113,923
1,065,272
140
4,015,954
497,962
2,086,280
13,183,938
19,566,487
8,150,073
2,123,070
9,868,927
6,178,071
1,865,253
869,213
12,986,297
132,943
377,554
179,547
172,152
24,433
22,246,272
22,442,857
451,762
438,208
42,266
1,320,483
7,309,191
1,397,864
82%
46%
47%
40%
51%
5%
83%
51%
0%
43%
12%
45%
42%
18%
141%
52%
20%
46%
46%
43%
50%
1%
378%
115%
0%
0%
28%
28%
100%
39%
9%
54%
57%
24%
79%
General Fund
150,489,632 80,666,918 54%
168,843,110 49,623,904 29%
108,327,596 32,457,804 30%
1,043,700 821,915
Expenses
Expenses for fund categories are within budget. However, the City budget includes a significant
capital outlay budget that is not linear in nature and exclusively reliant on project delivery. As
shown in the table below, expenses linear in nature are within and below budget and are
expected to stay that way for the remainder of the biennium. Labor currently shows below
budget due to the addition of new headcounts scheduled for 2022 and is anticipated to be
within budget by the end of the biennium. The debt principal category is over budget mainly
due to the payment of inter-fund loans between utility services.
The capital outlay category that mostly consists of capital facilities like roadways, facilities,
utility infrastructure is underspent and the project schedules will dictate how much of the
allocated budget will be expended. Unspent capital allocations will be carried over to future
years.
A N N U A L F I N A N C I A L R E P O R T / P A G E 8
Annual Financial Report / Page 9
Capital
Projects
M A J O R P R O J E C T S I N P R O G R E S S
The city had over 70 projects with some
level of activity during 2021; expending
close to $45 million during the same
period. Most of these projects were
within the City's utility infrastructure, as
well as roadway and parks construction.
Columbia East Forcemain and Lift Station - The lift
station was constructed in 2019. In 2021, the city
constructed two force mains to serve multiple
current and future food processors, allowing the
diversion of 1.5 MGD of industrial waste away from
the municipal wastewater treatment plant. 70% of
the project budget was reimbursed by various local,
state, and federal grants. $6.9 million expended
during 2021.
WWTP Improvements Phase 1 - The first phase of
improvements at the Waste Water Treatment Plant
(WWTP) focused on secondary treatment and partial
outfall replacement. The project is being funded by
low-interest loans from Washington state. $5 million
expended during 2021.
Lewis Street Overpass - Construct a new overpass
between 2nd Ave and Oregon Ave on Lewis Street to
replace the existing underpass. 83% of the project
budget for this biennium is expected to be
reimbursed by various state and federal grants, with
the remainder coming from internal funds. $6.7
million expended during 2021.
Fire Station 84 - Relocate Fire Station 84 from its
temporary location to a permanent location including
admin space. The project was fully funded by
proceeds from a Limited tax general obligation
(LTGO) bond. $6.0 million expended during 2021.
Peanuts Park Restoration - Restoration of the Peanuts
Park at the heart of Pasco's downtown. 50% of the
project was funded via the U.S. Department of Housing
and Urban Development's Section 108 loan program.
$5.8 million expended during 2021.
Northwest Area (Broadmoor) Sewer LID - Extends a
sewer trunk line from Harris to Burns Road facilitating
growth in the city's northwest area. 99% of the project
is funded via a local improvement district formed by
benefitting property owners. $2.3 million expended
during 2021.
Chapel Hill Park - Built a 5-acre community park in the
Chapel Hill area of the City. Fully funded by Park
Development fees collected from the nearby
properties. $1.0 million expended during 2021.
Annual Financial Report / Page 10
Financial
Outlook
In 2022, more than $266 million in revenue is
anticipated, while $334 million is expected to
be expended. Under normal conditions, $69
million is a significant deficit and should be an
area of concern; however, the variances can
be covered by current reserves. The city's
long-term strategy is to build reserves over the
years to fund capital projects and make large
purchases. This biennium has over $15 million
in land purchase and $211 million in capital
outlays (projects). Fund balances currently
exist to withstand this deficit. Caution for the
future is that it takes a long time to build up
reserves. However, the needs of the expenses
are well documented, understood, and needed
to continue the positive economic vitality of
the community.
We anticipate growth in the city's revenue
streams through one-time and increased
economic base to assist the City in growing the
reserves faster in the future.
P A N D E M I C I M P A C T S H A V E
B E E N M U C H L E S S S E V E R E
T H A N A N T I C I P A T E D .
S T R O N G C O M M E R C I A L A N D
I N D U S T R I A L
C O N S T R U C T I O N A N D
E C O N O M I C A C T I V I T Y H A V E
H E L P E D . H I G H D E M A N D
F O R C A P I T A L P R O J E C T S ,
I N F L A T I O N , S T A F F I N G W I L L
R E Q U I R E C A R E F U L
P R I O R I T I Z A T I O N A N D
M O N I T O R I N G .
The city continues robust planning efforts
to identify long-term needs and means to
fund them with the least impact on the
community. Continuous effort to get
appropriations, grants, low-interest loans,
and revision of rates for major services will
be critical for the good financial health of
the City.
A N N U A L F I N A N C I A L R E P O R T / P A G E 1 1
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