PREPARED BY: J. KELLY SESSIONS DATE OF MEETING: 04/15/19
SUBJECT:
TITLE
RECEIVE AND FILE THE 3rd QUARTER BUDGET REPORT FOR FISCAL YEAR ENDING JUNE 30, 2019.
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CITY MANAGER RECOMMENDATION
Recommendation
Receive and file
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Compliance statements
Enhance Community Resilience (City Council) is a Top City Council Priority item under the adopted FY 2019-21 City Council Priority Workplan, effective March 1, 2019.
CEQA Compliance Statement
This is not a project as defined by CEQA.
BACKGROUND
Best Management Practices (BMP’s) established by the Government Finance Officers Association (GFOA) urge local governments to fulfill their financial reporting responsibilities by providing timely financial statements regarding the entire financial reporting entity. This 3rd quarter budget report, therefore, is provided to the City Council to support meeting the City’s fiduciary responsibilities to the residents of San Pablo.
This report uses unaudited figures and is for budgetary control purposes only for the fiscal year ending June 30, 2019. The final year-end audited fund balance will be contained in the Comprehensive Annual Financial Report (CAFR) and is generally presented to City Council in January, seven months after the end of the fiscal year.
3rd Quarter Revenues
With three-quarters of the fiscal year passed, the City is in good shape, having collected $34.0 million (84%) of its $40.3 million of its adopted revenue budget. Casino Revenue, comprising 52% of all budgeted revenues, is the City’s largest revenue source and leads the way with $21.0 million or 89% collected. Intergovernmental Revenue (e.g. Gas Tax, Property Tax In-Lieu of VLF, Measure C, etc.), the City’s second largest budgeted revenue, has picked up significantly, with $2.1 million collected out of its $4.2 million budget (50%); receipts typically lag behind by a fiscal quarter. With $2.7 million collected of the $3.9 million budget, sales tax, which lags behind a month or two, is also on target. The City’s two other largest revenue sources, Utility Users Tax (UUT) and Property Tax are coming in ahead of schedule at $1.8 million (76%) and $1.3 million (87%) collected respectively. By year end, staff projects overall revenue receipts to meet or exceed budgeted revenues.
FY 2018/19 Budgeted Revenues
3rd Quarter Expenditures
At the end of the third fiscal quarter, the operating expenditure budget is in good shape. With an adjusted budget of $42.8 million, a total of $28.3 million has been spent, leaving a remaining balance of $14.5 million (34% of budget).
At $18.0 million, the Police Department comprises 42% of the City’s budget, is the City’s largest department, and has the largest operating budget. General Government services, which includes Administrative Services, the City Manager’s Office and the City Attorney, takes up $13.6 million of the budget or 32%. Much of this expense is attributable to citywide expenses which are budgeted centrally, including unfunded accrued pension liability (“UAL,” $2.3 million), professional services ($1.7 million), and citywide property, fire, crime, and general liability insurances ($0.8 million). The City Council budget also makes up a large portion of General Government at $3.1 million, and includes $2.9 million in community grants and special events. Public Works and Community Services make up the remaining majority of the budget at $5.1 million (12%) and $4.1 million (10%) respectively. Community & Economic Development comprises $2.0 million (5%) of the budget for planning and economic development activities.
As noted in the following table, all departmental budgets have 25% or more of their overall budget remaining as of the end of the third quarter. Thus, overall the City is projected to end the fiscal year at or under its authorized expenditures:
Expenditures By Type. Salary & Benefits: At $26.2 million, Salary and Benefits makes up the largest part of the budget (63%). After the third fiscal quarter, $18.9 million was spent, leaving a remaining balance of $7.3 million (28% of budget).
With $15.8 million, Service and Supplies makes up 36% of the budget. $8.9 million was spent, leaving an available balance of $6.8 million (43%). Much of this, however, is already encumbered for other projects; therefore, staff expects the majority of these budgeted funds to be spent.
Capital outlay totals $0.9 million or 1% of budget. A total of $0.6 million was spent, leaving a balance of $0.3 million (34%). Most of these funds are also encumbered; therefore, staff expects the entirety of these funds to be spent by year end.
FISCAL IMPACT
This report describes the unaudited budget status of the City through the month of March for FY 2018/19 and has no direct fiscal impact.