PREPARED BY: J. KELLY SESSIONS DATE OF MEETING: 10/15/18
SUBJECT:
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RECEIVE AND FILE THE 1ST QUARTER BUDGET REPORT FOR FISCAL YEAR ENDING JUNE 30, 2019
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RECOMMENDATION
Recommendation
For Informational Purposes Only
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COUNCIL PRIORITY WORKPLAN COMPLIANCE STATEMENT:
General Fund Reserves Protection, Budget Spending Controls, and Increase Financial Transparency are adopted policy items under the FY 2018-21 Council Priority Workplan, effective November 1, 2017.
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 4th 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. The final year-end audited fund balance will be contained in the Comprehensive Annual Financial Report (CAFR) and will be presented to City Council no later than January 2019 for the prior fiscal year.
1st Quarter Revenues
With 25% of the fiscal year passed, the City is in good shape, having collected $9.1 million (22%) of its budgeted revenues. Revenue receipts typically lag each fiscal quarter by two or three months; indeed, at this time last fiscal year, the City had only collected 17% of budgeted revenue, and yet still ended the year at 110% of budget. Casino Revenue helps make up the shortfall with receipts of $717,000 over budget, along with slight gains in Charges for Services (2%) and Use of Property and Money (10%). Dragging revenue totals down is property tax, which begins arriving in the second quarter, and Intergovernmental Subventions, Sales Tax and Utility Users Tax, which stand at 5%, 16% and 19% of budget respectively. Staff expects these shortfalls to be made up in their entirety later in the fiscal year.
1st Quarter Expenditures
At the end of the first fiscal quarter, the operating expenditure budget is in good shape. With an adjusted budget of $43.1 million, a total of $9.9 million was spent (23% of budget). When accounting for the $3.6 million in encumbered funds, $29.7 million is left available (69% of budget). At this point in time, only Administrative Services is ahead of budget at 33% spent; this is due to an upfront payment of $2.1 million for unfunded accrued liability (UAL) to CalPERS for pension costs. The City is projected to end the fiscal year at or under budget.
Expenditure Detail (YTD Adjusted Budget). Salary & Benefits: At $26.2 million, Salary and Benefits makes up the largest part of the budget (60%). After the first fiscal quarter, $7.7 million was spent (29% of budget); after accounting for the upfront UAL payment to CalPERS, total spent for Salary and Benefits drops to 23% of budget. With $15.7 million, Service and Supplies makes up 36% of the budget. $1.7 million was spent (11% of budget), and with $3.2 million encumbered, a balance of $10.8 million remains available (68%). The capital budget totals $1.2 million or 2% of budget. A total of $528,536 was spent (44%), and $309,580 was encumbered, leaving $363,523 available (30%).
FISCAL IMPACT
This report describes the unaudited budget status of the City through the month of September for FY 2018/19 and has no direct fiscal impact.