TO: Urban Renewal Agency Board
THROUGH: Krishna Namburi, Interim Executive Director
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Urban Renewal Agency Fiscal Year 2025 Quarter 3 Financial Report
Ward(s): All Wards
Councilor(s): All Board Members
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance
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SUMMARY:
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The Fiscal Year (FY) 2025 Quarter 3 (Q3) Financial Report reflects all activity posted through the closed months ending March 31, 2025.
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ISSUE:
Information only.
RECOMMENDATION:
recommendation
Information only.
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FACTS AND FINDINGS:
The Urban Renewal Area (URA) is comprised of four funds: the Tax Allocation Bond Debt or Debt Service Fund (Fund 220), the Tax Allocation Improvement or Capital Improvements Fund (Fund 265), the Salem Convention Center Operations (Fund 345), and the Convention Center’s Gain / Loss Reserve (Fund 428). The quarterly report displays both the Debt Service Fund and Capital Improvements Fund financial activity by Urban Renewal Area.
The Q3 report for the URA reflects financial activity from July 1, 2024 through March 31, 2025.
For the Debt Service Fund, the primary revenues are property taxes with the majority received in November during the second quarter. Associated expenses are long-term debt payments which occurred in November and du jour debt repayments that occurred in March. The only other expense that occurred in FY 2025 was in Riverfront Downtown to transfer funds held in reserve for a prior borrowing to the Capital Improvements Fund.
Resources in the Capital Improvements Fund are largely comprised of beginning working capital at 81% of total resources and overnight / du jour proceeds at nearly 16% of total resources. Proceeds from borrowings that occur in the Debt Service Fund were recorded as revenue in the Capital Improvements Fund in the third quarter. Additionally, Q3 interest income is trending 205% higher than the same period last year. No Federal Highway reimbursements were received during FY 2025 Q3 as related projects in the McGilchrist URA, resulting in a decrease in this revenue category. Nearly 60% of Capital Improvements Fund expenditures through Q3 were for three projects: Riverfront streetscape improvements downtown at 12%, the Riverfront Grant Program at nearly 11%, and improvements to McGilchrist Street at 22nd Ave. SE at nearly 37%. Activity in South Waterfront in both resources and expenditures is trending higher year-over-year with working capital increasing by over $460k in FY 2025. In Jory Apartments URA, the developer incentive was not issued in Q3 as it was in FY 2024, resulting in a large decrease in expenditure in the area this quarter. Minimal capital grant payments occurred in West Salem, accounting for a larger year-over-year variance.
An item to note is that the Fairview URA is no longer collecting property taxes or issuing debt so there is no activity for Fairview in the Debt Service Fund. There is activity in the Fairview URA Capital Improvements Fund using beginning working capital to complete grant commitments. Additionally, the McGilchrist URA has reached maximum indebtedness which means no additional borrowings can occur and only spending of working capital or grant funds in the Capital Improvements Fund will continue.
For the Salem Convention Center Fund, operating revenues for food sales and rentals are trending 14% higher in the third quarter than the previous year, approximately $525k more than the same period in prior year. Operating expenditures are also trending 14.0% higher than previous year in professional services, about $492k.
The Gain / Loss Reserve was created to fund operations of the Convention Center if revenues through operations were not sufficient to cover expenses. The only time to date the reserve has been used to sustain operations since the Convention Center began operating was during the COVID-19 pandemic. With higher than budgeted working capital in the fund, interest income is also trending slightly higher through Q3 of FY 2025 at $25k.
BACKGROUND:
The Budget Office has provided quarterly reports to the Budget Committee and published them online for the public for over a decade. These reports are typically provided to the Budget Committee at their winter and spring meetings when they review the forecast and budget. During adoption of the FY 2025 budget, City Council requested that these reports be provided directly to the City Council within 45 days of the end of each quarter. Due to the URA Board meetings being once a month, the URA quarterlies will come to the Board at their first meeting after that 45-day period.
Emese Bihari
Management Analyst II
Attachments:
1. URA FY 2025 Quarter 3 Financial Report