TO: Urban Renewal Agency Board
THROUGH: Krisha Namburi, Acting Executive Director
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Urban Renewal Agency Quarterly Financial Reports
Ward(s): All Wards
Councilor(s): All Board Members
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance
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SUMMARY:
summary
During the adoption of the FY 2025 budget, City Council motioned for staff to return within 45 days of the end of each quarter with a financial report showing budget to actuals in the General Fund. Although this motion was for the General Fund, staff plans to provide quarterly financial reports for the Urban Renewal Agency as well. The FY 2024 Quarter 4 (Q4) Final Financial Report reflects all audited activity for the fiscal
year. FY 2025 Quarter 1 (Q1) Financial Report reflects all activity posted through the closed months ending September 30, 2024. FY 2025 Quarter 2 (Q2) Financial Report reflects all activity posted through the closed months ending December 31, 2024.
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ISSUE:
Information only.
RECOMMENDATION:
recommendation
Information only.
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FACTS AND FINDINGS:
The 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 reports display both the Debt Service Fund and Capital Improvements Fund financial activity by Urban Renewal Area.
Fiscal Year 2024 Report
The final Q4 report reflects activity through June 30, 2024, and figures published in the audited financial statements.
Fiscal Year 2025 Reports
The final Q1 report displays financial information through September 30, 2024, which now includes fund balances reflecting the FY 2024 audited financial statements. Draft versions of the both the Q4 and Q1 reports have appeared on previous City Council agendas.
The second quarter ended on December 31, 2024, and the period was officially closed on January 9, 2025. The Q2 report for the URA reflects financial activity for half of fiscal year 2025. The following narrative will focus on the FY 2025 Q2 URA report.
For the Debt Service Fund, the primary revenues are property taxes with the majority received in Q2. Associated expenses are debt repayments (either long-term debt or overnight or du jour debt) which will occur in Q3 of the fiscal year. The only other expense that occurred for debt service payments was in Riverfront Downtown to transfer funds held in reserve for a prior borrowing to the Capital Improvements Fund.
Revenue in the Capital Improvements Fund is largely beginning working capital. Additionally, Q2 interest income is trending 316.7% higher than the same period last year but is offset by lower Federal Highway reimbursements in FY 2025 as projects are completed in the McGilchrist URA. Debt proceeds from borrowings will be recorded as revenue in Q3 of the fiscal year. The largest URA expenditures through Q2 are for streetscape improvements downtown, the Riverfront Grant Program, and improvements to McGilchrist Street. The large variances in South Waterfront represent an over $460k increase in working capital with an increase in expenditure activity due to the available resources. The variance for Jory Apartments expenditures is from staff time and a higher administrative allocation.
One 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 in the 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 13.9% higher in the second quarter than the previous year, approximately $269k more than the same period in prior year. Operating expenditures are also trending 15.6% higher than previous year in professional services, about $272k.
The Gain / Loss Reserve was a set aside created to fund operations of the Convention Center if revenues through operations were not sufficient to cover expenses. The only time this occurred since the Convention Center began operating was during the COVID-19 pandemic. With higher than budgeted working capital in the fund, interest income is trending high through Q2 of FY 2025 at $65k.
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 Board quarterlies will come to the Board at their first meeting after that 45-day period.
Emese Bihari
Management Analyst II
Attachments:
1. URA FY 2024 Final Quarter 4 Financial Report
2. URA FY 2025 Final Quarter 1 Financial Report
3. URA FY 2025 Quarter 2 Financial Report