TO: Urban Renewal Agency Board
THROUGH: Krishna Namburi, Interim Executive Director
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Urban Renewal Agency of the City of Salem Fiscal Year 2025 Quarter 4 Financial Report - Preliminary
Ward(s): All Wards
Councilor(s): All Board Members
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance
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SUMMARY:
summary
The Fiscal Year (FY) 2025 Quarter 4 (Q4) Preliminary Financial Report for the Urban Renewal Agency of the City of Salem reflects activity posted year to date through June 30, 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 preliminary Q4 report for the URA reflects financial activity posted year to date from July 1, 2024, through June 30, 2025, all four quarters of fiscal year 2025. While most transactions have been recorded, certain revenues and some expenditures are still expected.
For the Debt Service Fund, the primary revenues are property taxes with the majority received during Q2. Associated expenses are debt repayments (either long-term debt, or overnight / du jour debt) which occurred in Q3 of the fiscal year. The only other expense that occurred 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 77.5% of total resources and overnight / du jour proceeds at 15.2% of total resources. Debt proceeds from borrowings were recorded as revenue in Q3 of the fiscal year. Additionally, Q4 interest income is trending 166.0% higher than the same period last year. The largest URA expenditures through Q4 in the Capital Improvements Fund are for Riverfront streetscape improvements downtown at 9.1% of total expenses, the Riverfront Grant Program at 11.3% of total expenses, and improvements to McGilchrist Street at 22nd Ave. SE at 27.6% of total expenses.
The large variances in South Waterfront represent an over $460k increase in working capital in FY 2025 with a corresponding increase in expenditure activity due to the available resources. In Q4 there were minimal capital grant payments from West Salem URA, accounting for the large variance in expenditures from prior year Q4. Fairview URA is no longer collecting property taxes nor 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 occur in the future.
For the Salem Convention Center Fund, operating revenues for food sales and rentals are trending 3.8% higher in Q4 than the previous year, approximately $222k more than the same period in prior year. Operating expenditures are trending 0.8% lower than previous year, about $47k.
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 and interest income also trending slightly higher through Q4 of FY 2025 at $24k, the fund is stable and continues to meet the $4M minimum for the reserve.
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 4 Financial Report - Preliminary