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HomeMy WebLinkAboutQuarterly Report - 4th Quarter Newsletter2.pdf IP December 2021IL T Quarterly Financial Report C;ryor waslvngton 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. Unemployment rate,not seasonally adjusted Select area Employment is a key indicator Franklin County Franklin C°only of the economic health of the ■ ■�r9 ■ °° ■ 7a.Q community. The preliminary 17.Q% unemployment rate for p lQ.av Franklin County was 5.5%, sa% greater than the state's 7.a9b average of 4.5%, but a 6.096 decrease from 8.1% from the Q� prior year. Historically, the daa Feb Mar Apr bay Jun Jul Aug Sap Qcl Nw Dee 7016 8.2% 8.0% 7.7% 58% 4.9% 5.0% 5.0% 5.0% 4.5% 4.8% 6.0% 7.9% County's 3-year average 20 8.6% 9.6% 8.8% 62% 5.3% 56% 5.4% 5.4% 4.5% 4.7% 5.8% 7.0% 2628 8.1% 79% 7.1% 13.5% 168% 102% 120% 9.0% 7.2% 6.1% 76% 8.1% unemployment rate during the -1 79% 80% 79% 67% 54% 5-1% 4.9% 52% 4.5% 46% 47% 55% same period has been 7.7%. Commercial $ 49,481 ,729 $ 176,402,033 5�°1/o This decrease in Industrial 82,689,087 276:881 :722 235% unemployment is a good Mobile Home 1 ;076:591 900.686 -16% indicator of the availability of Residential $ 151 ;436,646 $ 121 ,758,830 -20% jobs in the region. Total 284,684,053 $ 575;943:271 102°/0, 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. Report/Quarterly Financial Sales Tax Growth in commercial base of the City is providing residents the opportunity to spend their income within nM the community will continue to result in City's ability 17M to provide services at affordable rates in the future. 16M Similarly, in a landmark case known as South Dakota BM v. Wayfair, Supreme Court decided that retail businesses no longer had to have a physical presence 14M in a state to be potentially liable to collect state sales 13M taxes. The enactment of this law coupled with 12M increased online purchasing has helped the City meet uM and exceed its revenue goals. IOM 9M The City also benefitted from construction sales tax $M generated from major permitting activities, especially 7M construction by large commercial and industrial partners. These taxes are one-time in nature but the 6M City anticipates more of these projects to help $M increase its sales tax base for next 2-4 years. The dM sales tax for 2021 exceeded the target by $2 million, 3M 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 . 200 ZW9 202. Cr of M111P Pasco Quarterly Financial Report/ Page 3 Types of Funds General Fund - General Fund Special Revenue Fund • City Street Fund • Arterial Street Fund • 1-182 Corridor Traffic Impact Fund • Street Overlay Fund - • Community Development Grant Fund • CDBG • HOME • NSP • M . L. King Jr. Community Center Fund • Ambulance Services Fund • City View Cemetery Fund • Boulevard Perpetual Maintenance Fund • Athletic Program Fund • Golf Course • Senior Center Operating Fund • Multi- Modal Facility Fund • School Impact Fees • Rivershore Trail & Marina Maintenance Fund • Special Lodging Assessment Fund • Litter Abatement Fund • Revolving Abatement Fund • Trac Development & Operating Fund • Park Development Fund • Capital Improvements Fund (REET) • Economic & Industrial Development Fund • Stadium / Convention Center Fund • Hotel/Motel Excise Tax Types of Funds Enterprise Fund • Water Fund • Sewer Fund • Irrigation Fund r • Process Water Reuse Facility Fund • Stormwater Fund Internal Service Fund • Equipment Rental Operations Fund - Government Type • Equipment Rental Operations Fund - Proprietary Type • Equipment Rental Replacement Fund - Government Type • Equipment Rental Replacement Fund - Proprietary Type i r • Medical/Dental Insurance Fund LW - • Medical/Dental Insurance Fund • Dentals"" lllj-- Tt • Central Stores Fund _ _ # Annualmopm Revenue Fund Category Category Name Budget Actual %Received General Property Tax 23,554,637 11,496,330 49% General Fund Other Tax 2,342,780 1,466,522 63% Retail Sales Tax 38,315,746 22,789,546 59% Utility Tax 23,947,157 10,863,886 45% Licenses& Permits 5,806,781 3,649,967 63% Intergovernmental 16,508,804 6,185,189 37% Charges for Goods and Services 17,898,565 8,767,672 49% Fine and Penalties 2,066,354 1,066,369 52% Miscellaneous 4,591,272 951,652 21% Debt Principal 586,528 784,801 134% Transfers and Subsidy- Revenue 1,269,762 803,492 63% General Fund Total 136,888,386 68,825,425 50% Licenses& Permits 527,878 258,603 49% i Enterprise Fund Intergovernmental 35,702,000 7,046,033 20% Charges for Goods and Services 64,633,213 33,196,262 51% Fines and Penalties 0 500 0% Miscellaneous 17,618,454 321,588 2% Debt Interest 4,749,442 3,068,799 65% Debt Principal 3,285,273 7,957,388 242% Transfers and Subsidy- Revenue 26,347,095 9,732,565 37% Enterprise Fund Total 152,863,355 61,581,737 40% Utility Tax 2,057,588 0 0% Special Revenue Fund Hotel/Motel SalesTax 757,002 666,312 88% Real Estate Excise Tax 4,400,000 4,236,720 96% Licenses& Permits 813,400 466,470 57% Intergovernmental 28,028,515 9,053,377 32% Charges for Goods and Services 26,340,795 13,160,731 50% rt Fine and Penalties 280,000 262,390 94% fl' Miscellaneous 3,384,065 1,542,144 46% Debt Principal 64,291 127,643 199% Transfers and Subsidy- Revenue 21,472,778 19,357,607 90% Special Revenue Fund Total 87,598,434 48,873,393 56% Intergovernmental 32,608,038 7,107,596 22% Construction Fund Miscellaneous 6,595,047 775,894 12% Transfers and Subsidy- Revenue 39,850,976 14,488,778 36% ons�ion Fund Total 79,054,061 22,372,268 28% Charges for Goods and Services 21,728,692 11,564,763 53% Internal Service Fund Miscellaneous 293,110 212,718 73% Debt Principal 0 -923,914 0% Transfers and Subsidy- Revenue 0 11,970 0% Internal Service Fund Total wonow— ! 2,021,802 10,865,538 49% PFD Sales Tax 1,000,000 788,711 79% ` Pasco Public Facility District Intergovernmental 0 60,000 0% Charges for Goods and Services 40,000 20,000 50% Miscellaneous - 400 _ 0 0% Pasco Public Facility District Total 1,040,400 868,711 83% Grand Total 479,466,438 213,387,072 45% REPORTANNUAL FINANCIAL Revenue 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. Category Name Budget Actual %Received General Prope3tyTax 23,554.637 11,496,330 49% Other Tax 2.342,780 1.466,522 630/0 Retail Sales Tax 38,315.746 22,7B9,546 59% Utility Tax 26,004.745 10.863,886 42% Hotel/MOtel SalesTax 757,6132 666,312 88% Real Estate Excise Tax 4.400.DD0 4.236,720 960/D PFD Sales Tax 1,000.(@0 768,711 79°Jo Licenses&Permits 7.148.D59 4.375.040 610/0 Intergovernmental 112,847,357 29.452,195 26% Charges for Goods and Services 130.641.265 66.709.428 51% Fine and Penalties 2.346.354 1.329,259 57% Miscellaneous 32.482,348 3.803,995 12% Debt Interest 4.749.442 3.068.799 65% Debt Principal 3.936.092 7.945,918 202°Jo Transfers and Subsidy - Revenue 88,940,611 44,394,412 5_DG/o Grand Total 479,466,438 213,387,072 459/o 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. - •—� NEW — - 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 r 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. LINK TO CAPITAL IMPROVEMENT PLAN ANNUAL FINANCIAL REPORT / PAGE 7 Expenses Fund Category Category Name Budget Actual %Spent General Fund Transfers and Subsidy-Expense Salaries 26,481,405 21,697,571 82% and Wages 52,308,610 24,301,482 46% Personnel Benefits 17,863,243 8,349,354 47% Supplies 4,989,649 1,984,725 40% Services 37,051,097 18,925,492 51% Capital Outlays 4,730,105 229,099 5% Debt Principal 4,970,273 4,113,923 83% Debt Interest 2,095,250 1,065,272 51 General Fund Total 150,489,632 80,666,918 54% Enterprise Fund Transfers and Subsidy-Expense Salaries 890,100 140 0% and Wages 9,329,803 4,015,954 43% Personnel Benefits 4,311,564 497,962 12% Supplies 4,626,213 2,086,280 45% Services 31,544,708 13,183,938 42% Capital Outlays 108,272,500 19,566,487 18% Debt Principal 5,764,524 8,150,073 141 Debt Interest 4,103,698 2,123,070 52% Enterprise Fund Total 168,843,110 49,623,904 29% Special Revenue Fund Transfers and Subsidy-Expense Salaries 50,349,769 9,868,927 20% and Wages 13,449,416 6,178,071 46% Personnel Benefits 4,013,755 1,865,253 46% Supplies 2,031,774 869,213 43% Services 25,763,382 12,986,297 50% Capital Outlays 12,464,000 132,943 1 Debt Principal 100,000 377,554 378/ Debt Interest 155,500 179,547 115% Special Revenue Fund Total 108,327,596 32,457,804 30% Construction Fund Supplies 0 172,152 0% Services 0 24,433 0% Capital Outlays 79,774,061 22,246,272 28% Construction Fund Total 79,774,061 22,442,857 28% Internal Service Fund Transfers and Subsidy-Expense Salaries 451,762 451,762 100% and Wages 1,129,320 438,208 39% Personnel Benefits 453,489 42,266 9% Supplies 2,447,330 1,320,483 54% Services 12,826,954 7,309,191 57% Capital Outlays 5,923,575 1,397,864 24% Internal Service Fund Total 23,232,430 10,959,774 79% Pasco Public Facility District Services 1,043,700 821,915 47% Pasco Public Facility District Total 1,043,700 821,915 79% Grand Total 531,710,529 196,973,173 37% 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. Category Name Budget Actual %Spent Transfers and Subsidy-Experse 78,173,636 32,0'8,400 41':.� Salaries and Wages 76,2'7,149 34,933,715 46'% Pe-sornel Benefits 26,642,051 '0,754,83c 40% SuplI�lieS 14,094,966 6,432,853 46'+5 Services 168,229,841 53,251,265 49 Capital Outlays 211,16',241 43,572,664 21'% Debt Principa 10,834,797 2,641,550 117'% Debt Inte­est 6,354,448 3,367,896 53'% Grand Tota! 531,710,529 196,973,173 3745 REPORTANNUAL FINANCIAL apital Columbia East Forcemain and Lift Station -The lift Cstation was constructed in 2019. In 2021,the city constructed two force mains to serve multiple Pro ■ ��� current and future food processors,allowing the J 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, MAJOR PROJECTS IN PROGRESS state,and federal grants. $6.9 millionexpended during 2021. WWTP Improvements Phase 1 -The first phase of The city had over 70 projects with some improvements at the Waste Water Treatment Plant level of activity during 2021; expending (WWTP)focused on secondary treatment and partial close to $45 million during the same outfall replacement. The project is being funded by low-interest loans from Washington state. $5 million period. Most of these projects were expended during 2021. within the City's utility infrastructure, as Lewis Street Overpass-Construct a new overpass well as roadway and parks construction. 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. a Fire Station 84- Relocate Fire Station 84 from its temporary location to a permanent location including , : " 4!, 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. Q� PASCO FIRE STATION Northwest Area(Broadmoor)Sewer LID- Extends a (J`r 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 Chapel Hill Park- Built a 5-acre community park in the during 2021. Chapel Hill area of the City. Fully funded by Park Development fees collected from the nearby properties. $1.0 millionexpended during 2021. ReportAnnual Financial 9 Financial PANDEMIC I M PACTS HAVE BEEN MUCH LESS SEVERE Outlook THAN ANTICIPATED . STRONG COMMERCIAL AND In 2022, more than $266 million in revenue is I N DUSTRIAL anticipated, while$334 million is expected to be expended. Under normal conditions, $69 CONSTRUCTION AND million is a significant deficit and should be an ECONOMIC ACTIVITY HAVE area of concern; however, the variances can HELPED . HIGH DEMAND be covered by current reserves. The city's FOR CAPITAL PROJECTS , long-term strategy is to build reserves over the INFLATION , STAFFING WILL years to fund capital projects and make large REQUIRE CAREFUL purchases. This biennium has over$15 million in land purchase and $211 million in capital PRIORITIZATION AND outlays (projects). Fund balances currently MONITORING exist to withstand this deficit. Caution for the future is that it takes a long time to build up The city continues robust planningefforts reserves. However, the needs of the expenses to identify long-term needs and means to are well documented, understood, and needed fund them with the least impact on the to continue the positive economic vitality of community. Continuous effort to get the community. appropriations, grants, low-interest loans, and revision of rates for major services will We anticipate growth in the city's revenue be critical for the good financial health of streams through one-time and increased the City. economic base to assist the City in growing the reserves faster in the future. ReportAnnual Financial 10 Ou r Fi na nce Tea m Meet the dedicated team members of our finance department F m H v AllIffrte' nmw .\ ®'� �y!•f�� g�., o - �� - 'moi' _.. I - 2021 Food Drive ANNUAL FINANCIAL REPORT / PAGE 11