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Item No. 5.C. MOUNDS VIEW Meeting Date October 28, 2024 Type of Business: Consent Agenda Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Gayle Bauman, Finance Director Item Title/Subject: Financial Report for the Quarter Ended September 30, 2024 SUMMARY FINANCIAL REPORT The third quarter financial results are generally as expected. During the year, City books are kept on a cash basis which means that only items that are received are booked as revenue and items paid are booked as expenditures. The City should not see reductions in State revenues with the State in a surplus position. One of the greatest challenges has been filling the police officer positions. General Fund: The main source of revenue for the City is property taxes and these come in twice a year. Expenditures are at 59.8% of budget through the end of the quarter, compared to 51.6% last year. Some of this difference is due to the timing of invoices. Most of the General Fund revenues come in late in the second quarter and then again late in the fourth quarter, so it is important to maintain a fund balance that approximates 50% of budgeted expenditures and transfers for cashflow purposes. The General Fund ended 2023 with unassigned fund balance that is equal to 54.86% of the 2024 budgeted expenditures and transfers compared with 54.15% in 2022. Other Funds: The Street Improvement Capital Projects Fund ended 2023 with a fund balance of$1,286,624. This fund is integral in maintaining the newly reconstructed streets and reconstructing streets still in need. Some of the capital projects included in the various funds of the City are work on the Park System Master Plan, CIPP sanitary sewer lining, replacement of water meters, and storm water maintenance. Investments & Economy: Investment income to date for 2024 is $357,870 compared with $290,613 for the same period in 2023. The market value of our portfolio for September 30, 2024 was 18,755,165 compared with $20,087,615 for 2023. The decrease is mainly due to the water meter replacement, sewer lining, and 2023 street improvement projects. The Federal Open Market Committee (FOMC) has decided to lower the target range for the federal funds rate by '/2 percent to 4 3/4 to 5 percent. It seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate. Inflation has made further progress toward the Committee's 2 percent objective but remains somewhat elevated. Treasury securities are presently providing the following rates-of-return: Treasury Securities 2024 2023 1 year 3.980 5.460 2 year 3.660 5.030 5 year 3.580 4.600 10 year 3.810 4.590 30 year 4.140 4.730