11 - Laserfiche WebLink

development process, staff will bring forward recommended updates to the City's reserve policy for Council's consideration. BACKGROUND Annually, staff presents the year-end financial report (Report) to Council for approval. The Report summarizes the actual results of the financial activities for the fiscal year and details changes in reserves and recommended budget amendments or adjustments. The City's ACFR is still in progress; therefore, the financial information included in this Report is based on unaudited figures. The audited information will be presented to Council in the ACFR once the City's independent auditor has issued its opinion and the ACFR has been reviewed by the Audit Committee. All of this is expected to occur in January or February 2023. Any changes to the information presented in this Report as a result of the audit will be brought to City Council's attention at that time. DISCUSSION The following discussion addresses the General Fund, Enterprise Funds, and Internal Services Funds. Please note that unrealized investment loss/market value adjustments associated with the City's pool investment portfolio is not included in the revenue presented in this Report. For ACFR reporting purposes, the City is required to record the market value adjustments. Due to the removal of unrealized investment loss, the revenue reported in this staff report is higher than the revenue that will be reported in the ACFR. Investment loss is not expected as the City intends to hold the securities until maturity. Therefore, unrealized investment loss is not reported from a budgetary perspective as resources are expected to be available for spending. The unrealized investment loss associated with the City's PARS Pension Trust is also excluded for reporting consistency. Due to market volatility, FY 2021/22 market value adjustments are more significant than prior years' adjustments. Table 1 below presents an example of reconciliation between budgetary surplus and ACFR surplus. General Fund As shown in Table 1 below, in FY 2021/22 actual revenues received were greater than the amended budget by $6.1 million, or 4.5 percent. The amended budget is the original budget plus all budget amendments approved by City Council through June 30, 2022. Transfers in and out (net transfers) were $0.1 million less than the amended budget, and expenditures were $4.6 million or 3.7 percent less than the amended budget. Overall, inflows of cash exceeded outflows of cash by $10.2 million. This net surplus excludes an unrealized investment loss of $3.6 million incurred in FY 2021/22. Accounting for this unrealized loss, the revised revenue surplus and net surplus are $2.5 million and $6.6 million, respectively. A detailed explanation of these variances is included in Tables 2, 3, 4 and 5 in this Report. It should be noted that the City was allocated over $8.5 million in American Rescue Plan Act (ARPA) stimulus funds. $4.3 million in revenue was budgeted in FY 2021/22 and spent on General Fund operations including public safety, community services, operations services, and economic development. The remaining balance will be spent in FY 2022/23. ARPA funds are one-time revenue. Page 2 of 13