The URL can be used to link to this page

Home My WebLink AboutJ- 4 Mid-Year Review 2/1/441 r--F A?G� * ,.:,,,„,,t, . . The CiofAzusaJ ilh. 141 ct4' PO AGENDA ITEM TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL , FROM: STEVE BRISCO,FINANCE SUPERVISOR itio ___ 72Y-L----"--- VIA: RICK COLE, CITY MANAGEReC DATE: FEBRUARY 1, 1999 SUBJECT: MID-YEAR REVIEW Recommendation Staff recommends that Council accept the Mid-Year Budget Review as presented by staff. Background In the FY 1998 - 99 budget workshops the City Council challenged staff to find new ways to maintain high service levels to the community in the face of shrinking revenues. Staff scaled back programs, early retirements created salary savings by not filling vacated positions, executive staff gave up 10 % of their salary and a new rock extraction charge was negotiated. These measures and very cautious spending have helped the City live within its means. Staff offers, with this mid-year review, the progress thus far. Findings Azusa's fiscal year runs from July 1 to June 30. During the first half of the fiscal year the prior year's books are closed and financial reports are prepared. Finance has successfully closed the books and prepared the financial report for fiscal year 1997-98. Our auditor has reviewed and verified these numbers. This report verifies that the City has maintained its $2.5 million General Fund unrestricted reserve while continuing prudent increases in benefit reserves. Now, during the second half of the fiscal year, Finance can assist Council in its review of estimated revenues and appropriations and suggest adjustments and improvements that assure completion of the goals. /�� aIR99WFDWPD -/�j9 This fiscal year marked significant new challenges, particularly for the General Fund. Departmental operational funding was reduced and one-time resources were earmarked for a capital investment program. The customary Mid-Year Review has been accelerated, at the request of the City Manager, to ensure that budget targets are achieved. Progress on Council's Fiscal Year 1998-99 CIP Goals A. The Azusa Avenue streetscape was completed in December. B. The Foothill Boulevard overlay project between Orange and Rockvale will begin in February. The City qualifies for the Federal Government"Intermodal Surface Transportation Efficiency Authorization" (ISTEA) grant which will pay for 88.7 % of the project cost. C. New finance hardware and software was installed and data conversion and training is under way. With just 11 months until the year 2000,progress is on track. How the Budget Was Balanced After lengthy budget workshops and creative balancing plans, Council balanced the budget as follows: GENERAL FUND FY 1998 - 99 Budgeted Projected Beginning Fund Balance $2,500,000 $2,500,000 Revenues 18,802,741 18,971,966 Expenditures (18,089,705) (18,089,705) Net Transfers (interest income, gas tax, debt service) (720,398) (720,398) Ending Fund Balance $2,500,000 $2,500,000 Preliminary estimate of contingent reserve 0 (161,863) Budgeted CIP Projects (from fund balance reserves) (952,000) (952,000) Q:'QPAPPSVMYR99WPD WPI) Mid-Year Report- General Fund Total General Fund revenue collections are 0.9% more than what was estimated for midyear, for the same period expenditures are experiencing a 1.4% savings, due to conservative spending and due to unfilled staff positions, for a net budget that is essentially on target. By making conservative estimates and by departments tightly controlling spending, we have a preliminary positive estimate of$161,863 contingent reserve. Since this represents less than 1% of the General Fund budget, it provides a small margin for future contingencies in the remaining six months of the budget year. Below, six key accounts are discussed to explain some of the trends in the General Fund. 1. Current Secured Property tax collected through December 31 is $11,592 more than expected at Mid-year. This is due to new housing in the City being added to the property tax rolls and to slight increases in the assessed value of real estate that was purchased during the year. 2. Sales Tax revenues are $2,764 over-realized at December 31 and in February, when Christmas Sales Tax receipts are received, revenues will probably demonstrate the ability to achieve 100% of estimate by year end. Although sales taxes slump in the fiscal year third quarter they shouldn't slump enough to drop below total estimated revenue. 3. Collections of Motor Vehicle In-Lieu tax is $26,390 more than expected for December 31. However, slow car sales during the winter months may reduce the rate of Motor Vehicle In-Lieu tax to 100% of projection by the end of Azusa's fiscal year. 4. Business License revenue is $52,392 less than expected for this time of year. However, with spring business license renewals, this revenue should reach 100 % of estimate. 5. Special Franchise fees are ahead of estimate by $46,392. This fee is a derivative of the sale of electricity and water and is experiencing relatively modest growth due to increased revenue from light and water sales. 6. Police Department expenditures, as expected, are running ahead of budget. The plan approved by the Council in August anticipated taking gradual steps to bring spending down to the budget level by year end. The Police Department's exemplary record in budget management in previous years gives confidence these anticipated savings will be achieved. QiQPAPPSUl1'N99WPD.WPD The following chart illustrates the relationships between estimated revenues and actual revenues for five key General Fund accounts. Both estimated revenues and revenues are adjusted to reflect the period July 1 through December 31: Key General Fund Revenue Sources $1 ,200,000 $1,000,000 $800,000 $600,000 — z $400,000 $200,000 $0 Curr Secured Sales Tax Motor Vehicle Business Lic SpI Franchise Legend Adjusted Estimated Revenue • Revenue Q QPAPPSMYR99WPU.WPO This chart illustrates the comparison between appropriations and expenditures by General Fund mission. Both appropriations and expenditures are adjusted to reflect the period July 1 through December 31: General Fund Mission Expenditures $5,000,000 $4,000,000 $3,000,000 - $2,000,000 $1 ,000,000 a 111111 Public Safety City Admin Leisure/Culture Circulation Resource Mgt Legend Adjusted Appropriations 11 Expenditures Q:QPAPPS uvR99svr1,ro Mid-Year Report- Enterprise Funds The Light Fund has a budget surplus. The Water Funds also have a budget surplus. The Sewer Fund is underspent but expenses planned for the second half of the year should lead to zero net profit. The following are the details: 1. The Light Fund has a net operating profit of$1,941,431 at mid-year. However, expenses that are programed for the new sub-station have not yet commenced but we anticipate that most budgeted funds will be used or encumbered by June 30. 2. The combined City and Azusa Valley Water Funds have a net profit of$1,075,600 at the midyear point for fiscal year 1998-99. However, large water line projects and equipment purchases are programmed for the second half of the fiscal year and all appropriations should be used or encumbered by June 30. 3. The Sewer Fund displays an over appropriated condition. However, an increase in spending during the second half of the year should cause the Sewer Fund to complete the fiscal year on budget. 4. The Central Services Fund is on budgetary track. There are expenses totaling $1,478,325 and adjusted appropriations of$1,870,276. However, most of the favorable difference is or will be expended in May when the City pays its annual premium to ICRMA. (�',QP UPS 111 R99,A PD.N'PD