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HomeMy WebLinkAboutE-13 Staff Agenda Report - 3rd Qtr budget reportQuarterly Financial Report November 16, 2015 Page 2 of 2 CONSENT ITEM E-13 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER FROM: TALIKA JOHNSON, DIRECTOR OF FINANCE DATE: MAY 15, 2017 SUBJECT: THIRD QUARTER FINANCIAL REPORT ENDING MARCH 31, 2017 SUMMARY: In an effort to be more transparent and to provide an opportunity to evaluate the City's fiscal health, the Finance Department has prepared a quarterly financial report. This report summarizes first quarter budget-to-actual analysis for the City’s General Fund, Gas Tax, Fire Safety Special Revenue funds, the Sewer Enterprise fund, and major Internal Services funds including Risk Management/Liability and Information Technology. The proposed action consists of receiving, reviewing and filing the quarterly financial report. RECOMMENDATION: Staff recommends that the City Council take the following action: 1) Receive, review, and file the third quarter financial report ending March 31, 2017. DISCUSSION: The Finance Department has prepared a quarterly financial report for the major non-utility funds to provide the City Council and public an update on the City’s financial position. Included in the report are the statuses of the General Fund, Gas Tax, Fire Safety Special Revenue Funds, Sewer Enterprise Fund, and Risk Management/Liability and Information Technology Internal Services funds. General Fund Summary: Through the third quarter (Q3) ended March 31, 2017, the General Fund received a total of $27.5M in revenues which represents approximately 70.4% of the estimated revenues for FY 16/17 while prior year’s third quarter revenues collected reflected 61.3% of budget. The higher FY 16/17 Q3 revenues in comparison with the same period last year is primarily due to the revenue the City received for the parking easement sold to the Metro Gold Line Foothill Extension Construction Authority for a purchase price of $2,000,000 that was approved by the City Council on December 7, 2015. APPROVED CITY COUNCIL 5/15/2017 Received & Filed 3rd Qtr Financial Report May 15, 2017 Page 2 With Q3 representing 75% of the budget year passed, overall, General Fund expenditures are on target with the adjusted budget of $32.2M at 74.6% spent or $24.0M. Q3 expenditures are 1.2% lower when compared to the same period prior fiscal year. Details of the General Fund’s revenues and expenditures Q3 budget-to-actual results can are highlighted in the attached report (Attachment 1). Major Special Revenue, Sewer and Internal Services Funds Summary: Gas Tax revenues are pacing at 68.0% of the FY 2016/17 third quarter ending adjusted budget due to the timing of when the State Controller Office distributes the revenues to the City, and the expenditures are tracking slightly higher at 85.2% due to timing of the planned expenditures. Fire Safety Fund’s operating revenues and expenditures are on the mark of 75% for the 3rd quarter ended, with revenues pacing slightly higher than anticipated. Sewer year-to-date operating revenues are 64.5% of estimated budget. Expenditures are lower than the 75% quarter end mark at 44.4% due to the timing of debt service payments that will be disbursed in the 4th quarter of the fiscal year. The revenues for the Risk Management Fund are at 83.9%. Actual expenditures are pacing slightly lower than budget at 68.0% primarily due to the annual property liability insurance premium that will not be disbursed until 4th quarter. The Information Technology Fund revenues and expenditures in the third quarter ended are pacing with budget at 74.7% and 72.9%, respectively. FISCAL IMPACT: Overall, the City’s financial position is stable and revenues/expenditures are consistent with the FY 2016/17 budget projections. However, Staff will continue to closely monitor revenues and expenditures, and if necessary, recommend revisions to the City Council as appropriate. Prepared by: Reviewed and Approved: Talika M. Johnson Louie F. Lacasella Director of Finance Management Analyst Reviewed and Approved: Troy L. Butzlaff, ICMA-CM City Manager Attachment: 1) Quarterly Financial Report-3rd Quarter, Ending March 31, 2017 2016/17 Quarterly Financial Report 3rd Quarter, Ending March 31, 2017 OVERVIEW This financial report summarizes the City’s General Fund’s position for the 3rd quarter of F iscal Y ear 2016/17 (July 1, 2016 through March 31, 2017). Also, included are the major Special Revenue Funds: Gas Tax and Fire Safety; the Sewer Fund; and the major Internal Services Funds: Risk Management/Liability and Information Technology. The purpose of this report is to provide the City Council, City Management, and the Azusa community with an update on the City’s fiscal status based on the most recent financial information available. GENERAL FUND SUMMARY With the 3rd quarter’s data, the projection through the end of the fiscal year for total sources (revenues and transfers-in) are estimated to slightly higher than the adopted budget of $40.45 million by $0.14 million to a revised total of $40.59 million. Total uses (expenditures and transfers-out) are estimated to be approximately $0.73 million higher than the adopted budget of $37.27 million to a revised estimate of $38.0 million. Table 1 shows the adjusted budget figures: As shown in Table 1, Fiscal Year 2015/16 financial activities resulted in an audited unassigned fund balance of $5.83 million. Given the beginning $5.83 million beginning fund balance, the Fiscal Year 2016/17 approved budget was expected to result in an ending available fund balance of $9.01 million by June 30, 2017. However, adjustments to sources and uses of $138,700 and $736,100, respectively, approved during mid-year budget review on February 27, 2017 resulted in a revised estimated available fund balance of $8.42 million by year ending June 30, 2017. A B C Adopted Budget 2016-17 Revised Budget 2016-17 Variance (B - A) Beginning Unassigned Fund Balance $ 5.83 $ 5.83 * $ - Plus Revenues 38.92 39.06 0.14 Transfers In 1.53 1.53 - Total 2016-17 Sources 40.45 40.59 0.14 Less Expenditures 31.49 32.22 0.73 Transfers Out 5.78 5.78 - Total FY 2016-17 Uses 37.27 38.00 0.73 Revenues in excess/(below) Exp-FY 2016-17 3.18 2.59 (0.59) Available Fund Balance $ 9.01 $ 8.42 $ (0.59) *Audited Table 1 Budget vs. Estimated Actual (in millions) Attachment 1 2016‐17 Quarterly Financial Report Attachment 1 3rd Quarter, Ending March 31, 2017 Page 2 of 5 GENERAL FUND REVENUES Below is a summary of revenues collected by the General Fund, excluding transfers in, for 3rd quarter of Fiscal Years 2015/16 and 2016/17 (75% of the budget year). Table 2 shows actual collections for the major revenue sources and the percent collected compared to the adjusted budget. Table 3 shows that revenues are trending $4.5M higher than the same period last year. Revenue Collection by Source as of 3/31/17 Chart 1 Revenues Collected by Source Quarter Ending: 3/31/16 vs. 3/31/17 Property Tax collections are higher in the current fiscal year compared to the same period last year due to rising home values throughout the City. The majority of the property tax collections are received in four payments in December, January, April and May of each calendar year. 2016-17 Actual % of REVENUE Adjusted Budget YTD 3/31/17 Adj. Budget Property Tax $9,847,188 $5,870,621 59.6% Sales Tax 5,764,711 2,974,229 51.6% UUT Tax 2,900,000 2,212,437 76.3% Other Taxes 8,496,283 6,108,204 71.9% Charges for Services 2,724,562 1,937,998 71.1% Cost Reimbursement 873,700 542,078 62.0% Fines & Penalties 1,200,050 791,252 65.9% License & Permits 3,081,561 2,196,034 71.3% Miscellaneous 2,431,900 3,350,735 137.8% Money & Property Use 1,740,833 1,515,102 87.0% Total Revenues $39,060,788 $27,498,690 70.4% Table 2: YTD % of Budget Actual Actual Increase/ REVENUE YTD 3/31/16 YTD 3/31/17 (Decrease) Property Tax $5,317,452 $5,870,621 $553,169 Sales Tax 2,788,682 2,974,229 185,547 Utility User Tax 2,220,811 2,212,437 (8,374) Other Taxes 5,891,917 6,108,204 216,287 Charges for Services 990,818 1,937,998 947,180 Cost Reimb.838,499 542,078 (296,421) Fines & Penalties 957,886 791,252 (166,634) License & Permits 2,095,750 2,196,034 100,284 Miscellaneous 623,282 3,350,735 2,727,453 Money & Property Use 1,323,113 1,515,102 191,989 Total Revenues $23,048,210 $27,498,690 $4,450,480 Table 3: Year-to-Year Comparison 2016‐17 Quarterly Financial Report Attachment 1 3rd Quarter, Ending March 31, 2017 Page 3 of 5 Sales Tax collections are at 51.6% of the adjusted budget. The main reason for the low rate of collections is due to the timing of when the revenues are available. The City will not receive the February and March tax revenues from the State of California Board of Equalization until April and May of 2017 respectively. Utility User’s Tax collections are at 76.3% of the adjusted budget. This percentage is reflective of the consumption of utility services such as gas, electric and water. Other Taxes collections are at 71.9% of the adjusted budget, and is mainly comprised of Transient Occupancy Taxes and Franchise Fees. Charges for Services collections are at 71.1% of the adjusted budget. Revenues are collected as services are rendered and fees for Recreation programs are primarily collected during the 4th quarter. Cost reimbursement collections are at 62.0% of the adjusted budget. Revenues in this category have decreased compared to the same period in prior fiscal year mainly due to traffic fine amnesty programs through the State resulting in lower reimbursements to the City in addition to one-time reimbursement monies collected from LA County in FY 2015/16. Fines and Penalties collections are at 65.9% of the adjusted budget. Revenues are pacing lower than prior year primarily due to staffing constraints. With priority focused on public safety, parking enforcement and motor vehicle ticketing activities have decreased. License and Permits collections are at 71.3% of the adjusted budget and pacing higher than prior year. Revenues in this category are mainly for Planning fees, Building Permits and Public Works fees. Timing of when these fees are collected is based on development activity which is anticipated to increase due to several developments in the City such as the new Hilton Hotel, Smart and Final, and Lagunitas. Miscellaneous collections are at 137.8% of the adjusted budget. Revenues are pacing high primarily due to the revenue the City received for the parking easement sold to the Metro Gold Line Foothill Extension Construction Authority for a purchase price of $2,000,000 that was approved by Council on December 7, 2015. Money and Property Use collections are at 87.0% of the adjusted budget. Revenues in this category include interest earnings, facility rental fee, and water rights leases. Facility rental fees are pacing higher than expected through 3rd quarter ended. GENERAL FUND EXPENDITURES General Fund expenditures are tracking close to the anticipated 75% 3rd quarter budget mark. Expenditures by Category as of 3/31/17 Table 4: % of Budget Table 5: Year-to Year Comparison The overall expenditures outlined in Table 4 are on target and consistent with the 3rd quarter budget. The personnel category in Table 4 is higher primarily due to a lump-sump CalPERs payment for the pooled Public Safety fund in the amount of $1,181,914 made in 1st quarter. Third quarter expenditures on table 5 compared to the same period last year were lower due to controlled spending. FY 16-17 Actual % of EXPENDITURE Working Budget YTD 3/31/17 Budget Used Personnel 22,807,060 $18,031,457 79.1% Operating 9,413,124 6,016,750 63.9% Total Expenditures $32,220,184 $24,048,207 74.6% Actual Actual Increase/ EXPENDITURE YTD 3/31/16 YTD 3/31/17 (Decrease) Personnel $17,862,331 $18,031,457 169,126$ Operating 6,475,962 6,016,750 (459,212) Total Expenditures $24,338,293 $24,048,207 ($290,086) 2016‐17 Quarterly Financial Report Attachment 1 3rd Quarter, Ending March 31, 2017 Page 4 of 5 DEPARTMENT EXPENDITURES At the end of the 3rd quarter, most departments are tracking at the 75% budget mark or below. Some expenses are paid in the beginning of the year such as Recreation seasonal staff, the lump-sum CalPERs payment for Public Safety as mentioned earlier, liability and worker’s compensation premiums charged to the City-wide cost center. Table 6 Chart 2 Expenditures by Department % of Budget by Department As of 3/31/17 as of 3/31/17 MAJOR SPECIAL REVENUE, SEWER AND INTERNAL SERVICES FUNDS SUMMARY The major Special Revenue funds including the Gas Tax, Fire Safety Fund, Sewer Fund, and the major Internal Services Funds such as Risk Management/Liability and Information Technology funds are reflected below. Table 7: Major Special Revenue and Internal Services Fund Revenues Table 8: Major Special Revenue and Internal Service Fund Expenditures 2016/17 Actual EXPENDITURE Adj. Budget YTD 3/31/17 % of Budget Council $135,525 $91,649 67.6% City Clerk 664,155 350,110 52.7% City Attorney 250,000 142,289 56.9% City Treasurer 203,870 103,088 50.6% Administration 597,880 437,319 73.1% Finance 1,362,760 968,640 71.1% Economic & Comm. Dev.2,199,290 1,458,276 66.3% Human Resources 583,391 372,551 63.9% Library 1,165,420 740,879 63.6% Public Safety 18,178,652 13,866,309 76.3% Public Works 816,485 608,537 74.5% Recreation & Fam. Serv.3,178,932 2,638,152 83.0% City-Wide 2,883,824 2,270,407 78.7% Total Expenditure $32,220,184 $24,048,207 74.6% 2016-17 Actual % of REVENUE Adjusted Budget YTD 3/31/17 Adj. Budget Gas Tax Fund $1,097,670 $745,986 68.0% Fire Safety 4,656,973 3,744,504 80.4% Sewer Fund 2,910,870 1,878,785 64.5% Risk Management/Liab Fund 3,020,012 2,534,966 83.9% IT Fund 1,500,500 1,121,058 74.7% Total Revenues $13,186,025 $10,025,299 76.0% 2016-17 Actual % of EXPENDITURE Adjusted Budget YTD 3/31/17 Adj. Budget Gas Tax Fund $1,359,125 $1,157,834 85.2% Fire Safety 4,576,973 3,432,730 75.0% Sewer Fund 2,839,483 1,259,684 44.4% Risk Management/Liab Fund 2,797,170 1,900,795 68.0% IT Fund 1,539,934 1,123,301 72.9% Total Expenditures $13,112,685 $8,874,344 67.7% 2016‐17 Quarterly Financial Report Attachment 1 3rd Quarter, Ending March 31, 2017 Page 5 of 5 Chart 3 Major Special Revenue & Internal Services Funds Revenues by Funds Ending 3/31/17 Chart 4 Major Special Revenue & Internal Services Funds Expenditures by Funds Ending 3/31/17 Gas Tax Fund Gas Tax revenues are pacing at 68.0% of the FY 2016/17 third quarter ending adjusted budget due to the timing of when the State Controller Office distributes the revenues to the City, and the expenditures are tracking slightly higher at 85.2% due to timing of the planned expenditures. Fire Safety Fund Fire Safety Fund’s operating revenues and expenditures are on the mark of 75% for the 3rd quarter ended, with revenues pacing slightly higher than anticipated. Sewer Fund Sewer year-to-date operating revenues are 64.5% of estimated budget. Expenditures are lower than the 75% quarter end mark at 44.4% due to the timing of debt service payments that will be disbursed in the 4th quarter of the fiscal year. Risk Management Fund The revenues for the Risk Management Fund are at 83.9%. Actual expenditures are pacing slightly lower than budget at 68.0% primarily due to the annual property liability insurance premium that will not be disbursed until 4th quarter. Information Technology Fund The Information Technology Fund revenues and expenditures in the third quarter ended are pacing with budget at 74.7% and 72.9%, respectively.