Flash Report: July 2023

The City of Lake Forest Flash is a monthly summary of key financial indicators intended to track the City’s actual revenue and expenses compared to the adopted budget. It is not a comprehensive financial summary of the entire City budget. It instead highlights specific funds and revenues to ensure identification of any significant budget variances that might impact the City’s overall financial condition. Amounts reported in the flash report are based on cash receipts and disbursements throughout the year. Adjustments are made at the end of the fiscal year to meet governmental financial reporting requirements. The City’s fiscal year runs May 1 to April 30.

CITY WIDE OVERVIEW

As of JUly 31, City wide revenue totals $39.59 million compared to $23.55 million in City wide expenses.

As with last month To help explain why revenues are so much higher than expenses for July - Revenue and expenses can often be mismatched due to the timing of when they're recorded. This is especially common in governmental entities, where large cash inflows can occur at certain times of the year. This is particularly relevant for June & july's flash report due to the timing of property tax collections from lake county, causing revenues to be so much higher than expenses.

Users can select on the pie chart itself to drill down and see more detail of the revenues and expenses year to date.

By comparison, the fiscal year budget projects revenue of $118.76 million and $129.45 million in expenses for the full fiscal year.

FUND SUMMARIES

This section highlights specific City funds that together comprise 84% of the City’s total budgeted expenses for the current fiscal year. For each fund “Current Year %” is the percent of budgeted revenue/expense that has been received/incurred as of the report date. The current year % is compared to a three-year average to assess whether the current year is significantly different from the prior three years. In those cases, explanations are provided. As of July 31, the City’s fiscal year is 25% complete.

Capital Projects Fund – Both revenues and expenditures will fluctuate from year to year based on timing of capital projects and receipt of grant funds.

GOLF COURSE Fund – Both revenues and expenditures ARE EXCEEDING THE 3-YEAR AVERAGE. With golf reliant on weather we will continue to monitor the trends throughout the fiscal year.

Police & Fire Pension Fund – REVENUE IS DOWN SIGNIFICANTLY THIS YEAR DUE TO INVESTMENT LOSSES.

KEY REVENUES

Property Taxes account for the single greatest revenue source for the City’s budget. Highly reliable with a collection rate of more than 99%, there is no budget variance for this revenue source, so monthly monitoring is not necessary. Other key revenues are tracked below by showing the revenue collection by month compared to budget. A favorable budget variance (positive number) indicates the amount the revenue has exceeded budget projections for the year to date, by month. A negative number indicates that the revenue source is falling short of budget projections. Note: Revenue reported in the flash report is based on cash receipts throughout the year. Adjustments are made at the end of the fiscal year to meet governmental financial reporting requirements.


Building Permits – Fees generated by development occurring within the City.

Municipal Sales Tax (MST) – The City receives a 1% Municipal Sales Tax from all sales generated within the City.

Home Rule Sales Tax (HRST) – The City receives a 1% Home Rule Sales Tax on eligible sales generated within the City. Some sales are subject to MST, but not HRST.

Utility Tax – The City assesses a tax on natural gas, electricity, telecommunications and water

Income Tax – Personal and Corporate income taxes are collected by the State of Illinois, and a portion of this revenue is allocated to municipalities on a per capita basis.

Real Estate Transfer Tax – The City receives a transfer tax on eligible transfers of property within the City. More detailed information on real estate transfer taxes is provided later in the report.

Water Sales – The City operates a water plant and distributes potable water to all properties in the City. Water sales revenue is generated by both a fixed customer charge as well as actual water consumption, which can vary significantly from year to year based on summer weather and irrigation.

REAL ESTATE TRANSFER TAX (RETT)

The charts below provide additional information on real estate activity in the city

The charts below provide additional information on real estate activity in the City.

Transfer tax revenue generated by ownership transfers of commercial properties is particularly challenging to predict, yet provides significant revenue when it occurs. The City’s practice is to budget $100,000 in annual RETT revenue from commercial property transfers. The chart below shows the actual revenue received for the years reported and the current year to date:



The following chart shows the average sales price for a residential transfer going back to the inception of the RETT in Lake Forest and for the current year to date.

The average sales price reflects only the transfers in the designated reporting period and is not intended to provide any indicator of the overall valuations of property in the City.


INTEREST INCOME

The City is limited by State Statute in the types of investments that can be made with public funds. The Police Pension Fund, Fire Pension Fund and Cemetery Commission are the only funds that can invest in equity investments (ie. stocks), and they are not reported here. A quarterly investment report is prepared and provided to the City Council Finance Committee. The most current investment report can be found HERE.

The City receives interest income from: 1) investments, 2) loans approved by the City Council and 3) a Tax Increment Financing (TIF) note related to the Kelmscott Park development. The chart to the right shows the interest income generated by year and by source.

Questions may be directed to Finance Director Elizabeth Holleb at [email protected]