HomeMy WebLinkAboutD-4 Staff Report - FY 2015-16 Mid-Year Budget ReviewSCHEDULED ITEM
D-4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: SUSAN PARAGAS, DIRECTOR OF FINANCE
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
DATE: FEBRUARY 22, 2016
SUBJECT: FISCAL YEAR 2015-16 GENERAL FUND MID -YEAR BUDGET REVIEW
AND ADJUSTMENTS
SUMMARY:
This report provides the City Council a Mid-Year budget and financial update for the General
Fund Fiscal Year 2015-16 adopted budget in preparation for the upcoming budget process. The
report also makes recommendations for budget amendments, both to estimated revenues and
expenditures, which would result in a decrease of $5,775 to the adopted budget surplus of
$250,815 to a revised surplus of $245,040.
RECOMMENDATION:
Staff recommends that the City Council take the following action:
1) Adopt Resolution No. 2016-C19 approving the listed proposed budget amendments.
DISCUSSION:
The presentation of the mid-year review is to identify and explain fiscal impacts to the Council
and to seek direction with respect to both the remainder of the current fiscal year and the
preparation of the budget for the upcoming year.
The FY 2015-16 General Fund Budget was adopted on June 15, 2015 with an operating surplus
of $250,815. Since this time, however, events have occurred which impacted the adopted
surplus. Budget amendments approved by Council were processed for a total of $270,000 and
APPROVED
CITY COUNCIL
2/22/2016, Special Meeting
Mid-Year Review and Adjustments
February 22, 2016
Page 2
reducing the surplus to $5,815. Here is the breakdown:
Purpose Amount
Engineering Consultants $ 75,000
Art Work-Parking Structure $ 50,000
Attorney Fees-Code Enforcement $120,000
TOTAL BUDGET AMENDMENTS: $245,000
The $50,000 for the parking structure art work is being funded through monies already received
and reserved in FY 2013-14. The $120,000 for additional attorney fees will be recovered from
the party involved in the litigation.
Most of the General Fund revenues (“Revenues”) and expenditures (“Expenditures”) are on track
to achieve its budget. However, there are some Revenues and Expenditures budgets that will
need to be adjusted.
FY 2015-16 Revenues
Building and Planning Fees
Due to the slowdown in housing construction primarily related to the downturn in certain foreign
economy, it is requested that the total revenue budget for the following line items be decreased:
Permits-Building ($ 240,000)
Permits-Electric ($ 27,000)
Permits-Plumbing ($ 22,000)
Total Proposed Revenue Budget Reductions-
Building and Planning Fees ($289,000)
Other Taxes
Sales tax revenues are estimated to increase due to a true up from the State of California’s end to
Triple Flip. Business License taxes have risen as a result of the increased enforcement of the
business license requirement for companies doing business in Azusa.
Sales Tax (Property Tax In-Lieu) $200,000
Business License Taxes $125,000
Total Proposed Revenue Budget Increase -
Other Taxes $325,000
Various Revenues
Based on the analysis of mid-year revenues collected, the following revenues are proposed to be
adjusted. A primary reason for the decrease in Utility related revenues such as the Franchise
Fees In-Lieu and Utility User Tax is the effect of the water conservation program enforced by the
City and customer compliance.
Mid-Year Review and Adjustments
February 22, 2016
Page 3
Alarm Registration-PD $ 25,000
Animal Licenses $ 50,000
Court Fines ($ 10,000)
Plan Check $ 36,000
Penalties-Business License ($ 50,000)
Penalties-Utilities (Citywide) $ 90,000
Franchise Fees In-Lieu (Utilities) ($100,000)
Utility User Tax ($250,000)
Total Proposed Revenue Budget Reduction -
Various Revenues ($209,000)
One-Time Revenues
The General Fund received one-time reimbursements from the State regarding state-mandated
processes. The City is also expected to prevail in a litigation matter where the attorney fees are
recoverable. The City prevailed from a settlement with Los Angeles County where the City
recovered excess property tax administration fees charged over a three-year period. The City is
no longer providing payroll services for Area D, thus, the reimbursement is reduced. The
reduction in expense for Area D will be reflected in the Expenditure section of this report.
SB90 Reimbursements $100,000
Attorney Fee Reimbursement $120,000
Court Reimbursement $ 35,000
MTA Contribution $ 20,000
Settlement-Property Tax Admin Fees(LA County) $275,625
Area D Reimbursement ($ 73,150)
Total Proposed Revenue Budget Increase -
One-Time Reimbursements $477,475
The total requested amendment to the revised budgeted revenues is an increase of $304,475.
FY 2015-16 Expenditures
Salaries and Benefits
There are several positions funded by the General Fund that resulted in a net salary savings. The
following positions produced salary savings due to months of being vacant, but, only two of the
four positions are currently filled. An amendment is also required to reflect the cost of the
Council approved contracts for three of the seven employee bargaining groups. Vacation
payouts from accrued leave banks have also increased as a result of unanticipated employee
separations from the City. To address this increasing payout matter, the City Manager has
initiated a special pay plan to help reduce the leave bank liability for the City. This will be
referenced under the One-Time Expenditures section of this report.
Salary Savings-Business License ($ 48,000)
Salary Savings-City Clerk’s Office ($ 47,500)
Mid-Year Review and Adjustments
February 22, 2016
Page 4
Salary Savings-PD IT ($ 40,000)
Salary Savings-Planning ($ 60,000)
Contract Negotiations $ 54,600
Vacation Payouts $175,800
Total Proposed Exp Budget Increase -
Salaries and Benefits $ 34,900
Various Expenditures
Based on the analysis of mid-year expenditures, the following budget revisions are
recommended. Here are some of the reasons for the major budget revisions: Due to the low gas
prices, Fuel and Oil total expenses are estimated to be lower for various departments; The
Humane Services budget is being adjusted to reflect an increase in cost; however, the contract for
jailer services are projected to be lower.
Fuel and Oil ($ 75,000)
Humane Services $ 70,000
Lease Payments-Copier (Finance) $ 3,000
Outside Services-PD Contracts ($ 50,000)
Parking Enforcement ($ 15,000)
POST Training ($ 25,000)
Postage-City Clerk ($ 15,000)
Professional Services-HR $ 24,000)
Tuition Reimbursement-PD ($ 10,000)
Total Proposed Exp Budget Decrease -
Various Expenditures ($ 93,000)
One-Time Expenditures
The City’s General Fund has the following one-time expenditures. The increase in HR’s
Professional Services budget was a result of a one-time implementation fee for the Affordable
Care Act reporting requirements and programs for staff development. As previously noted, Area
D is no longer utilizing payroll services from the City; therefore, a reduction in expenditures is
requested. As discussed earlier, the City Manager has initiated a special pay plan to help reduce
the City’s accrued leave bank liability and will help the City lower costs in the long run. The first
group to implement this plan is the Executive group and has necessitated a budget amendment.
Professional Services-HR $ 21,300
Salary Savings-Area D ($ 73,150)
Special Pay Plan $175,200
Total Proposed Exp Budget Increase -
Various Expenditures $123,350
Mid-Year Review and Adjustments
February 22, 2016
Page 5
The total requested amendment to the Expenditures is an increase of $65,250.
Based upon the direction received from Council at the review, Staff will prepare necessary
actions to implement any changes.
FISCAL IMPACT:
The recommended FY 2015-16 mid-year actions result in a projected increase of $239,225 to the
General Fund’s revised budget surplus projection of $5,815 and are summarized by a revenue
budget increase of $304,475 and an increase in appropriations/expenditures of $65,250.
Therefore, the requested mid-year budget adjustments result in a projected surplus of $245,040
to the FY 2015-16 General Fund budget, which is $5,775 lower than the adopted budget.
Prepared by: Reviewed and Approved:
Susan Paragas Louie F. Lacasella
Director of Finance Management Analyst
Reviewed and Approved:
Troy L. Butzlaff, ICMA-CM
City Manager
Attachments:
1) Resolution No. 2016-C19
ATTACHMENT 1
RESOLUTION NO. 2016-C19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA APPROVING AND ADOPTING THE MID-YEAR BUDGET ADJUSTMENTS FOR THE CITY OF AZUSA
WHEREAS, on June 15, 2015, the City Council of the City of Azusa adopted the General
Fund FY 2015-16 Operating and Capital Budget; and
WHEREAS, on February 22, 2016, City Council met and reviewed the mid-year financial
status of the General Fund and considered staff’s recommendation on the budget amendments.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Azusa does hereby approve and adopt the following FY 2015-16 General Fund Budget adjustments: SECTION 1.
Revenues
Alarm Registration-PD $ 25,000
Animal Licenses-PD $ 50,000
Court Fines-PD ($ 10,000)
Court Reimb.-Comm. Improv.* $ 35,000
Franchise Fees/In-Lieu ($100,000)
Penalties-Business License
Penalties-Utilities
($ 50,000)
$ 90,000
Permits-Building ($240,000)
Permits-Electric ($ 27,000)
Permits-Plumbing ($ 22,000)
Plan Check $ 36,000
Sales Tax (Prop. Tax In-Lieu VLF)
Reimbursement-Area D*
Reimbursement-Attorney Fees*
Contribution-MTA*
Settlement-Prop. Tax Adm. Fees*
State Mandate 90 Reimbursements*
Taxes-Business License
$200,000
($ 73,150)
$120,000
$ 20,000
$275,625
$100,000
$125,000
Taxes-Utility User Tax ($250,000)
Total Revenue Adjustments $304,475
*One-Time
Page 2
Appropriation/Expenditures
Contract Negotiations $ 54,600
Fuel and Oil ($ 75,000)
Humane Services $ 70,000
Lease Payments-Finance $ 3,000
Outside Services-PD Contracts ($ 50,000)
Parking Enforcement ($ 15,000)
POST Training ($ 25,000)
Postage-City Clerk ($ 15,000)
Professional Services-HR $ 24,000
Professional Services-HR* $ 21,300
Salary Savings-Business License ($ 48,000)
Salary Savings-City Clerk ($ 47,500)
Salary Savings-PD IT ($ 40,000)
Salary Savings-Planning ($ 60,000)
Salary-Area D* ($ 73,150)
Special Pay Plan* $ 175,200
Tuition Reimb.-PD ($ 10,000)
Vacation Pay-Out $ 175,800
Total Expenditure Adjustments
*One-Time
$ 65,250
SECTION 2. The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED and ADOPTED this 22nd day of February, 2016.
_____________________________ Joseph Romero Rocha
Mayor
ATTEST: _____________________________ Jeffrey Lawrence Cornejo, Jr.
City Clerk
Page 3
STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2016-C19 was duly adopted by the City Council of the City of Azusa at a meeting thereof, held on the 22nd day of February, 2016, by the
following vote of the Council: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCILMEMBERS:
_______________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk
APPROVED AS TO FORM: _______________________________ Best Best & Krieger, LLP
City Attorney