04-28-2014 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, April 28, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 8 of 13 (12. FIRST QUARTER FINANCIAL REPORT, Continued) Olson reported licenses and permits are already at 21 percent of budget, which is very good and that in his view they will be over 100 percent by the end of the year if the trend continues. Olson noted most grants are typically received at the end of the year and that the City will be receiving a $170,000 grant in October. Charges for services are at 43 percent of part. Part of that is related to the City of Mound, which pays their police contract in January. Olson noted fines consists of only two months, which puts that item slightly behind projections, but that he does not have any concerns relating to that specifically. Olson noted he has not allocated the interest for the first quarter since it is based on average fund balances by month and that he does not receive the investment statements until approximately April 16. Olson indicated that allocation of the first quarter interest will show up in the second quarter report. The City has currently earned approximately $27,000 overall in interest earnings. Last year at this time the City was at $30,000. Olson stated the decrease is due to the lower interest rates being paid. Olson stated he is estimating the City will be at 100 percent of revenues by the end of the year unless something drastic happens. Olson noted as it relates to expenditures, those are still on target for the year at 24.9 percent. Olson noted a couple of budgets are currently over budget, such as the Mayor and Council Department, but that is the result of the timing of payments. Assessing is at approximately 41 percent but is due to the payments being made only twice per year. The Fire Department is at 49 percent but is also impacted by the timing of payments and should be at 100 percent by the end of the year. Special services consist of pass-through charges and are currently at 43 percent, which is offset by that same amount of revenues. Olson stated the other General Fund department budgets are in good shape for this time of the year. Olson stated as it relates to investments, the graph on the overhead depicts all of the City’s investments. At the present time the City has approximately $8 million in CDs, which are FDIC insured and pose very little risk to the City. Olson stated the CDs highlighted in yellow depict the ones that were purchased since December of 2013. Olson stated according to the City’s current investment policy, the City Council is supposed to be informed of new depositories, which includes CDs. Olson stated to his recollection that notification has not been done in quite some time and that he is attempting to rectify that and bring it into compliance with the City’s policy. Olson stated the next graph depicts the City’s other investments. The City currently has approximately $6.7 million of government bonds. The ones highlighted in yellow are the new investments. Olson stated the number in the lower right-hand corner reflects the market value, which is $152,000 under the par value. Olson stated at the end of December that number was $230,000. Olson stated on paper the difference in the market value analysis is $70,000 in interest. Olson stated the City Council should not be too concerned about that number since it is not necessarily a real number. McMillan asked if that is what it would be if they were sold today. Olson stated it would be. Olson stated most cities hold their investments to maturity and that the City can take on more risk if they tend to buy and sell on a more frequent basis. Olson stated the number one rule is preservation of principal.