By Sheryl Hamlin
Two important items on the March 20, 2019 Santa Paula City Council Meeting were 1) the mid-year financial report and 2) the new contract for the sewage collection. The sewage will be covered in a second report.
Mid-Year Financial Report
The Assistant Finance Director Anthony Rainey presented the mid-year financial report saying that members of his profession were called “bean counters”, but he can attest that it is really jelly beans, where each color of bean represents a different city fund.
Reporting Date Unclear
The staff report says the General Fund balance is as of March 10, 2019, which is 8 months and 10 days into the FY 18/19 fiscal year. The Measure T data is from January 2019. Licensing and Permits reflect data through February 2019. Such chronological inconsistency makes extrapolation to the year-end forecast impossible because of the differenc dates. Note that no attempt was made to extrapolate a year-end estimate in the staff report, rather a percentage “complete” was reported.
For example, the General Fund expenditures are reported as $8,754,843.34. Since we were told this data is as of March 10, let’s call this an eight month accumulation of expenses. To make an estimated annualized value the calculation would be:
($8,754,843.34 / 8) X 12 = $13,132,265 for an estimated year end value.
The budgeted expenses for the General Fund were $13,211,605.00 per the staff report. The difference between the estimated year end and budget General Fund expenses is $79,340, which means expenses were slightly less than budgeted. The staff report says that there are 33.73% remaining to be spent in the General Fund Expenses, but without knowing over what period, the value of 33.73% is unclear.
The General Fund revenues are reported at $8,638,013.46. Dividing by 8 and multiplying by 12 as we did above yields $12,957,702 which is significantly less than the Adopted Budget of $13,389,018.00. This is a $431,998 difference. Presumably this is because the inter-departmental transfers to the General Fund from the Enterprise Funds have not yet been completely posted. The staff report said that $496,477 has not yet been posted.
Differences between Previously Approved Budget
This chart shows the difference between the staff report of March 20, 2019 and the previously adopted budget.
This difference was not explained and should have been highlighted. It is potentially due from the fire annexation. Because the first year is a partial year, the payment to county fire will be made manually. In subsequent years, the AB8 TRA report will be modified. If this is the cause of the extra expense, then there should have been a corresponding property tax revenue from which to pay VCFPD. Note that the approved budget showed net property tax revenue after the VCFPD split and zero payment to VCFPD. See pie chart from the FY 18/19 budget meeting.
Staff Text Cannot be Substantiated from the Report
There are no individual line items to substantiate the following paragraph.
Staff Discussion
Council Member Araiza said he understood the report based on years of working with the fire budget. Council Member Juarez said it was unfortunate that Measure T monies had been consumed so quickly. Council Member Crosswhite suggested we return to the estimated year-end format from previous years.
City Manager Rock said that he understood the report from years of experience, but perhaps the council should have a study session to design a perfect report.
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