Agenda 02/24/2004 - Laserfiche WebLink

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Martinsville DATE: TO: FROM: SUBJECT: February 23, 2004 City Council W. W. Bartlett, Interim City Manager Financial Report for the Month Ending January 2004 Attached are the "Comparison of Revenues and Expenditures" for the major funds and the "Combined Balance Sheet" fbr all funds as of January 31, 2004. The purpose of these schedules and the following comments are to reflect the financial performance of the City as compared to the annual budget. Comparison of Revenues and Expenditures Combined revenues in all funds are almost $222,000 greater than budget expectations. The only two funds with a significant variance Rom the budget forecast are the Capital Reserve Fund and the School Fund. The School Fund has a negative variance of $438,305. As usual this is due to the state's process for providing revenues to localities. If the State provided the City funds based on a single straight-line method, we would have received an additional $591,000 through the end of January. The delay in the transfers of these dollars means the City must front fund the expenditures and is one reason why maintaining an adequate fund balance is essential. The Capital Reserve has a positive variance slightly greater than $754,000. This is the result of receiving $400,000 from the sale of the shell building, the $127,000 received f¥om the Partnership for Economic Progress in support of bringing MZM to the City, the $150,000 from the sale of fire trucks and a Fire Act Grant of $59,160. A review of the Local Sales and Use Tax provides some verification that the economy both local and regional is improving. Amounts collected in both December and January have been the largest amounts collected for those particular months in the last six years. Why that has occurred is hard to say, but several local retailers have stated the Christmas seasons was one the of the best they have had in a long time. One theory I have is the JC Penney Outlet Store has served as a catalyst for drawing people from outside the local area, particularly North Carolina, that have historically not shopped in Martinsville and Henry County. Once the shoppers are here they not only shop at the Penney store, but visit and spend at other local stores thereby increasing the City's Sales Tax receipts. Expenditures are slightly more than $1.3 million less than anticipated through December. Almost half of that amount is due to the Electric Fund's positive variance of $644,209. Of that amount almost $600,000 is the result of savings in the purchase of power for resale. The variances in the Water, Sewer and General Funds are misleading because of the timing associated with the completion of various projects. The final variance at year end for each of these funds will be approximately $ I00,000 - $110,000 less than currently reported. Balance Sheet The total fund balance at the end of January is almost $3.5 million. This is a decrease of almost $127,000 since the end of December. The largest decreases occurred in the School and Meals Tax Fund. The decline in the School Fund is normal and will continue until the transfer from the General Fund of $3.5 million is completed in June. The decrease of $232,089 in the Meals Tax Fund was the result of making the $355,000 annual repayment of the Literary Loan used to renovate the Middle School. 55 West Chumh Street RO. Box 1112 Martinsville, VA 24114-1112 540-656-5000 www.ci.martinsville.va.us