Comprehensive Annual Financial Report 2020

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Changes in Net Position Governmental Activities Business-type Activities Totals 2020 2019 2020 2019 2020 2019 Revenues: Program revenues: Charges for services $ 9,851,729 $ 1,794,898 $ 8,715,261 $ 8,009,066 $ 18,566,990 $ 9,803,964 Operating grants and contributions 1,372,677 575,728 - - 1,372,677 575,728 Capital grants and contributions 3,519,935 - 1,104,544 - 4,624,479 - General revenues: Property tax 8,000,818 6,917,413 - - 8,000,818 6,917,413 Sales tax 5,584,807 4,693,893 - - 4,693,893 Franchise tax 742,438 777,141 - - 742,438 777,141 Hotel occupancy tax 162,389 195,732 - - 162,389 195,732 Alcoholic beverage tax 9,878 13,950 - - 9,878 13,950 Investment earnings 332,046 353,138 8,215 14,194 340,261 367,332 Miscellaneous 56,382 152,782 - - 56,382 152,782 Gain on sale of assets - - 108,436 - 108,436 - Total revenues 29,633,099 15,474,675 9,936,456 8,023,260 39,569,555 23,497,935 Expenses: General government 1,876,147 1,667,818 - - 1,876,147 1,667,818 Public safety 8,680,540 9,257,914 - - 8,680,540 9,257,914 Culture and recreation 848,530 427,254 - - 848,530 427,254 Public works 2,774,598 1,847,970 - - 2,774,598 1,847,970 Industrial development 1,104,636 155,888 - - 1,104,636 155,888 Economic development 58,940 191,916 - - 58,940 191,916 Interest on long-term debt 1,550,846 454,153 - - 1,550,846 454,153 Utility - - 8,488,858 7,505,082 8,488,858 7,505,082 Storm water - - 323,665 333,913 323,665 333,913 Total expenses 16,894,237 14,002,913 8,812,523 7,838,995 25,706,760 21,841,908 Change in net position 12,738,862 1,471,762 1,123,933 184,265 13,862,795 1,656,027 Net position, beginning 19,005,765 17,534,003 3,905,262 3,720,997 22,911,027 21,255,000 Net position, ending $ 31,744,627 $ 19,005,765 $ 5,029,195 $ 3,905,262 $ 36,773,822 $ 22,911,027 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Governmental Funds: The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $39,493,996. Approximately 10.5% of this total amount ($4,154,178) is unassigned fund balance. The remainder of the fund balance is not available for new spending because it has already been restricted or assigned for other purposes. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $4,154,178, while total fund balance reached $4,955,029. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 32.2% of total General Fund expenditures, while total fund balance represents 38.4% of that same amount. The fund balance of the City's General Fund has a net increase of $1,876,247 during the current fiscal year adjustment. The increase is attributable to increases in property taxes, sales taxes, and licenses in permits. Property taxes and sales tax increased $1.1 million despite economic shutdowns caused by the COVID-19 pandemic. Licenses and permits increased $397 thousand due to continued growth in the area. Expenditures in the general fund increased $1.3 million, offsetting some of the increases in revenues. Increases in expenditures were mainly caused by an increase to Culture and recreation expenses of $430,000 due to the addition of the Parks Department including personnel, benefits, general supplies and maintenance costs, an increase to Public Works and Engineering expenses in contractual services, and increases to capital expenses of $100,000. 6
The Industrial Development Corporation fund has a total fund balance of $12,424,092. The net increase in fund balance during the current year in the Industrial Development Corporation fund was $4,358,333 and mostly attributable to the sale of land with net gain of $7.5 million, offset by transfers out of $3 million. The Economic Development Corporation fund has a total fund balance of $13,329,480. The net increase in fund balance during the current year in the Economic Development Corporation fund was $8,014,612. The increase is largely attributable to the issuance of Sales Tax Revenue Bonds, Series 2019A and 2019B, in the amounts of $2.9 million and $5.7 million, respectively. The Debt Service fund ended the year with total fund balance of $106,055, an increase of $20,414. The increase was caused by property tax revenues slightly exceeding debt service requirements for the year. The 2019 CO Bond Fund has a total ending fund balance of $4,329,883, a decrease of $1,017,335. The decrease was caused by current year capital expenditures of $1.1 million for the improvements to the future City municipal building and the construction of a sports complex exceeding investment income earned. Proprietary Funds: The City's proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. The two enterprise funds were previously combined on the financial statements but were separated this year to more closely align with internal reporting. Unrestricted Net Position of the Utility Fund at the end of the year amounted to $3,168,410. Net Position increased by a net amount of $998,621. The increase is caused by capital contributions of $1.1 million, which offset an operating loss of $93 thousand. Unrestricted Net Position of the Storm Water Fund at the end of the year amounted to $474,299. Net Position increased by $125,312. The fund experienced operating income of $31 thousand and nonoperating revenues of $95 thousand. General Fund Budgetary Highlights - Actual revenues collected exceeded management's original estimate of the General Fund's revenues by $1,320,139, mostly caused by larger than expected tax revenues and licenses and permits. Revenue budget amendments during the year included an increase to fire inspection fee revenue, fire department donations and miscellaneous revenues. Expenditures were less than appropriations by $1,671,045 due to reduced personnel and benefits costs due to staff turnovers during the year, reduced paper and supplies cost due to implementation of electronic processes, reduced training costs related to COVID-19 restrictions, delays to capital spending as well as an overall effort by all departments to reduce spending due to the unknowns related to COVID-19. These were offset some by an increase to public safety expenses in response to COVID-19. Significant budget amendments included increases to public safety vehicle maintenance, supplies, personal protective equipment, medical supplies and technology costs. CAPITAL ASSETS The City's investment in capital assets for its governmental and business-type activities as of September 30, 2020 amounts to $24,367,697 and $16,616,674, respectively (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, buildings, improvements, machinery and equipment, and infrastructure. Significant additions to capital assets included: • Purchases of land for $590 thousand • Increases in construction in progress of $1.4 million • Infrastructure and improvements of $4.1 million 7
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Comprehensive Annual Financial Report 2020

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