CITY OF SACOFINANCIAL OVERVIEW

Presented by: Roger A. Lebreux and Parker MaddenRUNYON KERSTEEN OUELLETTE

INSIDE2. Summary of Audit Results3. City General Fund – Fund Balance4. City General Fund – Revenues 5. City General Fund – Expenditures6. School General Fund – Fund Balance 7. School General Fund – Revenues8. School General Fund – Expenditures9. Unassigned Fund Balance as a Percentage of Budget10. General Fund – Fund Balance Analysis Last Ten Years11. Unassigned Fund Balance as a Percentage of Budget

Compared to other Cities12. Property Tax Collection Rates13. Property Tax Rates14. General Fund - Expenditure Distribution - 201815. General Fund - Expenditure Distribution – 201716. Long Term Debt & Capital Leases17. Debt Per Capita – Last Ten Fiscal Years

About this presentationThis presentation is intended as a tool to assist the City Council, School Department and management in understanding its financial operating results. The information contained in this publication should be read in conjunction with the audited financial statements and related disclosures and should not be used for any other purpose without the expressed consent of RUNYON KERSTEEN OUELLETTE.

Please contact us at 207-773-2986 or 1-800-486-178420 Long Creek Drive, South Portland, ME 04106

CITY OF SACOSUMMARY OF AUDIT RESULTS

2

• Financial Statement Opinion – Unmodified

• Awarded a certificate of achievement for excellence in financial reporting for the fiscal year ended June 30, 2017

• Report Required by Government Auditing Standards (GAS)• No Material Weaknesses

• No Significant Deficiencies

• There was one compliance finding

• Other Comments• There were 2 additional other comments

• Report Required by the Uniform Guidance• Programs Tested:

• Child Nutrition Cluster

• Findings: None

CITY OF SACOCity General Fund – Fund Balance

3

Observations: • Total fund balance increased by $131,647 from 2017 to 2018. This is attributable to favorable

revenue and expenditure variances that will be discussed in further detail on further slides.

2018 2017 2016 2015 2014

Unassigned 7,113,072 7,010,696 5,755,852 4,779,487 4,595,094

Assigned 2,444,329 2,363,922 2,208,198 1,752,647 1,850,781

Committed 16,407 87,841 89,733 90,300 86,903

Nonspendable 164,149 143,851 144,165 144,234 165,829

(600,000)

1,400,000

3,400,000

5,400,000

7,400,000

9,400,000

11,400,000

CITY OF SACOCity General Fund - Revenues

4

Observations:• Tax revenues exceeded budget due to higher than expected auto excise revenues as well as

real and personal property tax revenues.• Licenses and permits exceeded budget due to higher than anticipated building permit

revenues mostly related to new developments in FY2018. Cable television franchise fees also exceeded budget by $88,422.

• Interest earnings exceeded budget due to conservative budgeting and better rates of returns on investments.

Budget Actual Variance

Taxes $45,531,980 $46,508,400 $976,420

Licenses and permits 815,360 1,102,620 287,260

Intergovernmental 2,526,996 2,624,896 97,900

Charges for services 1,052,879 1,181,158 128,279

Interest earnings 30,000 219,137 189,137

Other revenues 170,500 173,376 2,876

Total revenues 50,127,715 51,809,587 1,681,872

Budgeted utilization of surplus 2,317,384 - (2,317,384)

Carryover of assigned fund balance 442,961 - (442,961)

Transfers in 1,203,659 1,024,487 (179,172)

Total revenues and other sources 54,091,719 52,834,074 (1,257,645)

CITY OF SACOCity General Fund - Expenditures

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Observations:• General Government was under budget due savings in technology, city clerks office, and

planning and economic development.• Public Safety was under budget due to vacancies in the police department that remained

unfilled. • Public Works came in under budget due to vacancies, as well as contracted bids for gas

and oil coming in lower than expected.• Unclassified was under budget due to savings in fringe benefits which is tied to position

vacancies throughout all departments.• Capital Projects is made up of several long term projects, many of which carry over into

future years before completion.

Budget Actual Variance

General government $3,221,927 $2,846,036 $(375,891)

Public safety 7,135,269 6,891,441 (243,828)

Public works 5,626,890 5,425,048 (201,842)

Culture and recreation 1,684,409 1,616,769 (67,640)

County tax 1,283,733 1,293,389 9,656

Unclassified 5,286,584 5,089,474 (197,110)

Debt service 2,724,127 2,614,227 (109,900)

Capital projects 943,499 702,422 (241,077)

Total expenditures 27,906,438 26,478,806 (1,427,632)

Transfers to other funds (includes education) 26,185,281 26,223,621 (38,340)

Total expenditures and other financing sources 54,091,719 52,702,427 (1,389,292)

CITY OF SACOSchool General Fund – Fund Balance

2018 2017

Unassigned (490,728) (1,603,903)

(1,700,000)

(1,500,000)

(1,300,000)

(1,100,000)

(900,000)

(700,000)

(500,000)

(300,000)

(100,000)

100,000

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Observations: • Total fund balance increased by $1,113,175 from 2017 to 2018. This is attributed to an additional

$1,087,903 that was transferred from the City to help restore the School’s deficit fund balance.

CITY OF SACOSchool General Fund – Revenues

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Observations:• State subsidy exceeded budget due to additional subsidy being received after the budget

passed.• Tuition fees were under budget because there were less Dayton students enrolled than

anticipated.• Transfer from the City general fund was less than budgeted due to the additional state subsidy

that was received. Therefore, less local funds were needed.

Budget Actual Variance

Intergovernmental:

State subsidy – operating costs $10,780,639 $11,487,706 $707,067

State agency clients 125,000 163,894 38,894

Medical reimbursements 140,000 92,484 (47,516)

Other revenues:

Tuition fees 231,666 104,154 (127,512)

Rentals 12,000 3,153 (8,847)

Transportation 277,000 306,616 29,616

Miscellaneous 35,000 41,085 6,085

Transfer from the City General Fund 23,946,957 23,591,957 (355,000)

Transfer from the City - 1,087,903 1,087,903

Total revenues and other sources 35,548,262 36,878,952 1,330,690

CITY OF SACOSchool General Fund – Expenditures

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Observations:• Regular instruction was under budget due TA enrollment being less than expected as well

as teachers retiring with replacements paid at a lower pay scale.• Special education was over budget due to more positions added which were needed to

provide necessary services to meet student demand.

Budget Actual Variance

Regular instruction $21,748,321 $21,413,748 $334,573

Special education instruction 6,071,542 6,300,865 (229,323)

Other instruction 175,173 163,361 11,812

Student and staff support 2,095,088 2,172,632 (77,544)

System administration 694,939 760,883 (65,944)

School administration 1,046,784 1,124,575 (77,791)

Transportation 1,573,415 1,637,105 (63,690)

Facilities maintenance 1,815,550 1,825,555 (10,005)

Debt service 327,450 327,450 -

Transfer to other funds - 7,543 (7,543)

Total expenditures and other uses 35,548,262 35,733,717 (185,455)

CITY OF SACOUNASSIGNED FUND BALANCE AS A PERCENT OF BUDGET

2014 2015 2016 2017 2018

City - General Fund 9.88% 10.15% 11.86% 13.58% 13.15%

City - All Funds 7.25% 6.02% 9.04% 9.04% 11.63%

City & School - General Fund 0.00% 8.15% 11.45% 10.40% 12.24%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

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Observations:• Fund balance provides working capital for the City and enhances its credit worthiness.• RKO recommends a ratio of fund balance to equal approximately one and a half to two months of expenditures

which equals 12.5% to 16.67%.

CITY OF SACOGENERAL FUND – FUND BALANCE ANALYSIS 2009 - 2018

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Assigned $2,457 $2,111 $773 $663 $1,622 $1,851 $1,753 $2,208 $2,364 $2,444

Unassigned $2,386 $2,089 $2,491 $3,671 $4,552 $4,595 $4,779 $5,756 $7,011 $7,113

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

10

* Amounts presented are rounded to nearest thousand.

CITY OF SACOUNASSIGNED FUND BALANCE AS A PERCENTAGE OF BUDGET COMPARISON

2016 2017 2018

Bangor 10.80% 11.54% 12.92%

Augusta 10.14% 9.60% 9.74%

Biddeford 3.62% 4.50% 3.19%

Gorham 12.99% 14.05% 12.32%

Saco 9.80% 8.46% 12.24%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

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Observations:• All of these calculations includes the City/Town and the School Department’s unassigned fund balance and their respective budgets.

CITY OF SACOPROPERTY TAX COLLECTION RATES

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Collected in fiscal year 96.54% 96.13% 96.48% 97.27% 97.78% 97.48% 97.92% 97.66% 97.66% 97.76%

Collected in subsequent fiscal years 99.97% 99.96% 99.98% 99.98% 99.98% 99.99% 99.98% 99.98% 99.97% 97.76%

94.00%

95.00%

96.00%

97.00%

98.00%

99.00%

100.00%

101.00%

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Observations:

• The collection of current taxes have remained relatively stable over the last ten years.

CITY OF SACOPROPERTY TAX RATES

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Rate $13.42 $13.62 $13.82 $14.42 $18.30 $18.58 $18.62 $19.22 $19.42 $19.38

$10.00

$11.00

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00

$19.00

$20.00

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Observations:

• Tax rates have remained fairly consistent through 2012 with a large spike in 2013 due to increases in the education assessment, along with a 7% reduction in values. They have increased 5.9% since then.

CITY OF SACOGENERAL FUND – Expenditure Distribution - 2018

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General government 5.40%

Public safety 13.08% Public works

10.29%

Culture and recreation 3.07%

County tax 2.45%

Unclassified 9.66%

Debt service 4.96%

Capital projects 1.33%

Transfer out (includes education)

49.76%

CITY OF SACOGENERAL FUND – Expenditure Distribution - 2017

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General government 6.09%

Public safety 17.63%

Public works 12.70%

Culture and recreation 3.91%

County tax 2.60%

Unclassified 2.85%

Debt service 4.69%

Capital projects 2.54%

Transfer out (includes education)

46.99%

CITY OF SACOLONG TERM DEBT & CAPITAL LEASES

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Bonds Payable- Gov't. Act.

Bonds Payable- Bus. Type

Notes Payable Capital LeasesNet Pension

LiabilityOther post-

employ. ben.

2014 $12,410,330 $510,000 $448,247 $1,817,653 $2,450,525 $817,143

2015 $13,163,163 $290,000 $336,185 $2,548,437 $1,197,303 $918,867

2016 $12,957,097 $145,000 $224,124 $2,994,112 $3,194,374 $1,013,935

2017 $11,366,531 $- $112,062 $2,577,325 $6,048,244 $1,490,873

2018 $21,703,731 $- $- $2,574,375 $5,419,452 $1,505,773

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Observations:• The City and School entered into $1,029,050 of new capital leases during 2018.• The change in the net pension liability is due to the actuarial calculation of the liability

based on investment performance and other assumptions. • Other post-employment benefit liability changed due to implementing GASB 75.

CITY OF SACODEBT PER CAPITA – LAST TEN FISCAL YEARS

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Outstanding Debt $960 $1,373 $1,131 $866 $782 $699 $728 $709 $635 $1,224

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

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Observations:

• Debt per capita increased significantly due to a new general obligation bond in 2018.

• Bonding agencies typically like this number to be $2,000 or less.