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HomeMy WebLinkAbout2010/05/25 Item 4CITY COUNCIL AGENDA STATEMENT wu®®I ® ~~ ~ CHULA VISTA MAY 25, 2010, Item~__ ITEM TITLE: QUARTERLY FINANCIAL REPORT FOR THE QUARTER ENDED MARCH 31, 2010 RESOLUTION OF THE CITY COUNCIL AND HOUSING AUTHORITY OF THE CITY OF CHULA VISTA AMENDING FISCAL YEAR 2009-20]0 BUDGET IN ACCORDANCE WITH THE COUNCIL POLICY ON FINANCIAL REPORTING AND TRANSFER AUTHORITY AND APPROPRIATING FUNDS THEREFOR (4/STHS VOTE REQUIRED) SUBMITTED BY: DIRECTOR OF FIN CE/TREASURER CITY MANAGER REVIEWED BY: ASSISTANT CITY AGERS~ 4/STHS VOTE: YES ~X NO SUMMARY Section 504 (~ of the City Charter requires quarterly fmancial reports to be filed by the Director of Finance through the City Manager. For government entities, a budget creates a legal framework for spending during the fiscal year. After the budget is approved there are circumstances, which arise that could require adjustments to the approved budget. Council Policy 220-02 "Financial Reporting and Transfer Authority" was established in January of 1996 and allows for budget transfers to be completed. Appropriations are requested for the Housing Authority, Public Liability Trust Fund and Traffic Signal Fee Fund. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that filing of the quarterly financial status report is not a "Project" as defined under Section 15378 of the State CEQA ~-~ May 25, 2010, Item ,~- Page 2 of 6 Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section ] 5060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. RECOMMENDATION 1. Council accepts the report. 2. Council approve the resolution. BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION Attached for your consideration is the financial report for the third quarter of fiscal year 2009-10. The detailed financial report for the quarter ending March 31, 2010 (Attachment 1) discusses the financial outlook for the City's General Fund for the remainder of fiscal year 2009-10. The City's General Fund ended the fiscal year 2008-09 with an available balance of $9.3 million or 6.7 percent of the fiscal year 2009-10 operating budget. For fiscal year 2009-10, the worst economic downturn since the Great Depression appears to have bottomed-out but its effects are still being experienced in the City. Housing prices appear to have stabilized however high unemployment continues to cause reduced consumer spending in the City. The City Manager has authorized ahiring/promotional freeze and administrative freeze on all non-essential services that are anticipated to result in additional expenditure savings. These actions will avoid impacts to reserves and continue to maintain a balanced budget for the current fiscal year per the third quarter analysis. The outlook for General Fund revenues is that no further reductions are projected at this time. During the third quarter, programmatic revenues have increased from second quarter projections while discretionary revenues appear to require no further adjustments. Projected expenditure savings of $3.6 million will mostly offset the revenue shortfall leaving a deficit of $750,000. To mitigate this deficit, it is anticipated that there will be a loan repayment from the Redevelopment Agency to the General Fund of $750,000. All General Fund departments with the exception of Fire will come in at or below budget. The Fire Department is currently projected to be over budget by approximately $800,000. The Fire Department overage is anticipated to be covered by a combination of better than anticipated revenues and additional expenditure savings identified in other General Fund Departments. Fiscal Year 2009-10 Budeet Transfer and Aoaropriation Requests For government entities, a budget creates a legal framework for spending during the fiscal year. After the budget is approved there are circumstances which arise that could require adjustments to the approved budget. Council Policy 220-02 "Financial Reporting and Transfer Authority" was established in January of 1996 and allows for budget transfers to be completed. The City Manager is authorized to complete budget transfer requests within departments that are $15,000 -` ~~ May 25, 2010, Item 4 _ Page 3 of 6 and below. City Council approval is required for budget transfers between departments and/or for amounts greater than $15,000. All recommended General Fund transfers can be done using existing appropriations. For fiscal year 2009-10, a budget transfer is requested for the Recreation department. The Recreation Department is requesting a transfer of $16,200 from Utilities to the Supplies and Services expense category. An unanticipated cost increase in pool chemicals combined with a necessary change in the type of chemicals that are used has caused the department to exceed its budget for pool chemicals. There are sufficient savings in the Utilities category to offset this transfer, resulting in no net impact to the General Fund. [n the development of the fiscal year 2009-10 budget, the Finance Department allocated citywide overhead costs to the Development Services, Environmental Services, CV Housing Authority, Transit, Wastewater, and RDA funds based on the fiscal year 2008-09 budget. Since that time, the Finance Department has updated the City's Cost Allocation Plan and is now recommending adjushnents to the citywide overhead allocations. In total, the General Fund will receive $130,031 less of transfers-in from the various funds. This projected revenue shortfall has already been reflected in the third quarter projections. Approval of tonight's resolution will amend (appropriate) the Transfer-In revenue category in the General Fund and the Transfers-Out expenditure category in various funds. An additional adjustment to the Redevelopment Agency overhead rate of $45,209 is required and staff will bring the request back at a later date. The fiscal impact to the various funds is summarized below: Transfersln: General Fund $ 2165748 $ 2,035,717 $ (130,031) Total Transfer In $ 2,165,748 $ 2,035,717 $ (130,031) Transfers Out Development Services $ 809,490 $ 803,633 $ (5,857) Environmental Services $ 95,221 $ 94,410 $ (811) CV Housing Authority $ 156,569 $ 192,899 $ 36,330 Transit $ 92,321 $ 81,997 $ (10,324) Wastewater $ 1012147 $ 862,778 $ (149,369) Total Transfer Out $ 2,165,748 $ 2,035,717 $ (130,031) An appropriation of $1.7 million is requested for the Public Liability Trust Fund (Other Expenses Category). The City has received a reimbursement of $1.75 million paid from the City's Public Liability Trust Fund for costs (settlement and defense) related to a recently settled claim. The reimbursement payment comes from the City's liability insurance pool, SANDPIPA (San Diego Pooled Insurance Program Authority), for costs incurred in excess of the City's $250,000 Self-Insured Retention (aka deductible) to the SANDPIPA pool limit of $2.0 million. It is requested that this reimbursement be appropriated to the Public Liability Trust Fund to cover payments made. The entire amount of the reimbursement is not requested for appropriation to allow $50.000 to remain in the fund to offset the costs of defending the suit. ~-- 3 May 25, 2010, Item_~ Page 4 of 6 An appropriation is requested for the Traffic Signal Fee Fund of $16,990 to provide for a refund of fees paid. The Traffic Signal Fee Fund requires developers to participate in the cost of signalization needs of the City when there is an increase in the number of trips generated by a development project. The developer paid the Traffic Signal Fee required by his development project in the amount of $19,040, In addition to this fee, the developer also funded the improvement of the traffic signal required by his project. The total cost of the improvement was $16,990. The Public Works department is requesting a refund of the $16,990 however there are insufficient appropriations in the Traffic Safety Fund to accommodate the request. Fiscal Year 2009-10 Development Services Fund Update A projected deficit of $800,000 for the Development Services Fund is anticipated. There are currently no anticipated actions to resolving this deficit prior to the close of the fiscal year and a loan will be needed to prevent the fund ending the year in a deficit. The final loan amount will be determined at the time that the books are closed and upon completion of the annual financial statement audit. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT The preliminary outlook for General Fund revenues shows projected revenues to be $4.2 million below budget. 7~ May 25, 2010, Item~__ Page 5 of 6 General Fund Revenue Projections FY 2009-10 FY 20 09/10 ; Revenues Bud et°^~ Pro ected D'elta' Property Tax 25,299 25,311 12 Sales Tax 18,607 17,589 (1,018) Sales Tax In Lieu (1/4%) 6,838 5,655 (1,183) Motor Vehicle License Fee 18,287 17,717 (570) Franchise Fees 10,033 8,447 (1,586) Utility Users Tax 8,169 9,401 1,232 Transient Occupancy Tax 2,603 1,941 (662) Business License Tax 1,190 1,190 0 Real Property Transfer Tax 841 841 0 Licenses and Permits 880 955 75 Fine, Forfeitures & Penalties 2,380 2,188 (192) Use of Money and Property 1,813 1,846 33 Other Agency Revenue 2,791 2,996 205 Charges for Services 7,656 6,896 (760) Other Revenues 12,034 12,470 436 Transfers From Other Funds 14,340 14,126 214 Total $133,761 $129,569 $ 4,192 Projected expenditure savings of $3,5 million partially offsets the revenue shortfall leaving a deficit of $0.7 million. To mitigate this deficit, it is anticipated that there will be a loan repayment from the Redevelopment Agency to the General Fund of $750,000. In addition, the City Manager has authorized an immediate hiring/promotional freeze and administrative freeze on all non-essential services that are anticipated to result in additional expenditure savings. 'these actions will avoid impacts to reserves and continue to maintain a balanced budget for the current fiscal year per the third quarter analysis. General Fund Projection as of March 31, 2010 Amended Projected General Fund Reserve ~ Bud et ' millions Reserves -July 1, 2009 $ 9.3 $ 9.3 Revenues & Transfers In 133.8 129.6 Expenditures & Transfers Out 134.0 130.3 Mid ear A ro riation - Contractin Initiative -0.1 Pro ected Deficit $ 0.1 -0.7 Mitigating Actions RDA Loan Re a ment 0 7 Subtotal 0.0 Projected Fund Balance -June 30, 2010 $ 9.2 $ 9.3 Percents a of Operatin Bud et 6.6% 6.7% ~- J May 25, 2010, Item_ Page 6 of 6 Development Services Fund Despite cuts made to the Development Services Fund over the past year, there is a projected deficit of approximately $800,000 in the current fiscal year. The shortfall is a result of a reduction in the fully burdened hourly rate due to reductions in administrative staffing levels and a reduction in billable hours to funded projects -combined these two changes result in a projected revenue shortfall of approximately $800,000. A projected deficit of $800,000 for the Development Services Fund is anticipated. There are currently no anticipated actions to resolving this deficit prior to the close of the fiscal year and a loan will be needed to prevent the fund from ending the year in a deficit which may impact General Fund Reserves. A loan amount will be determined at the time that the books are closed and upon completion of the annual financial statement audit. . ~,~~ ~ , ~ ~~ i~ a+'fr~irw.`~1 v ~~` ~.=Division;ar,,. P~ 7 d'«sa' ~ ,. R`e n a~ Wi'b)~et§a ~'i~ s4F . "' r~` ,Ex endikures PieoJ ~ ~ea~ ~`a~rar . ~c~,.. .Nat lin acY P&B Administration $ 270,069 $ (270,069) Planning 1,609,739 2,026,159 (416,420) Building 1,946,471 1,809,148 137,323 En ineerin 1,259,518 1,487,802 228,284 DSF TOTAL $ 4,815,728 $ 5,593,178 $ 777,450 ON GOING FISCAL IMPACT There is no on going fiscal impact associated with this item. ATTACHMENTS Attachment 1 -Quarterly Financial Report Prepared Gyr Phillip Davis, Assistant Director ojFinance, Finance Department ~~~ ~~S// ~~ ~~~u CnY OF CHULA VISfA OVERVIEW This financial report summarizes the City's General Fund financial position for the fiscal year through March 31, 2010 and projecting out to June 30, 2010. The purpose of this report is to provide the City Council, Management and the Citizens of Chula Vista an update on the City's fiscal status based on the most recent financial information available. ECONOMIC UPDATE In its first quarterly report of 2010, the UCLA Anderson Forecast explores the duality of a national economy, where GDP is growing while job creation remains scarce and is expected to remain scarce through 2012. The Forecast suggests that Washington's economic stimulus packages may have unintentionally caused the economic schizophrenia. Tax cuts and spending programs, coupled with anon-sustainable zero interest policy spur growth, but businesses do not make long- term hiring decisions based on temporary government policies. Nevertheless, the Forecast indicates that the economy is now on a growth path and employment will soon be increasing, albeit modestly. This slow growth outlook reflects the lagging effects of the implosion on consumer balance sheets and, according to the Forecast, is a result of the economy in transition from being an import-oriented/low-saving rate one to a more export and higher-savings oriented one. Fueling this transition is the administration's "weak dollar policy" which encourages exports and discourages the consumption of imports and the combined effect will cause real consumer spending to grow at a modest 2% rate- far below the historical 3-3.5% rate. In California, the UCLA Anderson Forecast notes that despite the recession having officially ended, California's unemployment rate continues to rise, and local governments continue to shed jobs. The outlook for the balance of 2010 is for little or no growth in the state, with the economy picking up speed slightly by the beginning of next year. More normal growth rates for California should be in place by the middle of 2011. The keys to California's recovery are a growing demand for manufactured and agricultural goods from outside the state, the recovery of U.S. consumption, which increased the demand for Asian imports and for products from California's factories, increased public works construction and increased investment in business equipment and software. The Forecast calls May 25, 2010 for employment in 2010 to climb but not to exceed levels of 2009. Once employment growth returns in 2011, employment will begin to grow faster than the labor force at a 2.3% rate and the unemployment rate will begin to fall.' The University of San Diego's Index of Leading Economic Indicators for San Diego County rose 1.0 percent in March. Leading the way to the upside were strong moves in local stock prices and the outlook for the national economy. Building permits, initial claims for unemployment insurance, and help wanted advertising were also positive, but to a lesser extent. The only down component was local consumer confidence, which fell slightly. With March's advance, the USD Index has now been up for 12 months in a row. San Diego Index of Leading Economic Indicators 1so.o 145.0 1ao.o 135.0 130.0 1zs.o 1 zo 0 11so 110.0 105.0 moo ~ ss o Quarterly Financial Report Third Quarter Ending March 31, 2010 Jan-05 Jan-06 Jan-07 Jan-OB __ Jan-09 Jan-10 The outlook for the local economy remains unchanged from recent months: If the local economy did not bottom out at the end of 2009, it likely did in the first part of 2010. As was mentioned in previous reports, employment is the indicator that comes out most regularly at the local level, and employment tends to be a lagging indicator in recent recessions and recoveries. March employment numbers show a gain of 5,000 jobs compared to February, which was the best monthly gain in local employment since February 2008. The unemployment rate still edged up for the month because more workers returned to the workforce in search of employment, which itself is a positive development. It is a sign that the unemployed are a little mare optimistic ' UCLA Anderson Forecast Press Release March 2d. 1010. ~~7 QUARTERLY FINANCIAL REPORT THIRD QUARTER OF 2009-10 Page 2 of 5 about their prospects and not so discouraged as to give up looking for work altogetherz. continue to maintain a balanced budget for the current fiscal year based on the third quarter analysis. GENERAL FUND SUMMARY City Council Policy No 220-03 recommends the City maintain at least an 8 percent reserve level. As of June 30, 2009, the General Fund reserve level was at 6.7 percent (audited). ~ir}~.~. a +~.' „+~4 °i"zc ~e` ~~1r~' ~c Am4nd6d ` ;Proj~ted Genera Pdnil ReserS ~~ ~. B u~ e~"m ~ rnlllio Reserves -July 1, 2009 $ 9.3 $ 9.3 Revenues & Transfers In 133.6 129.6 Expenditures & Transfers Out 134.0 130.3 Mid ear A ro dation - Contractin Initiative -0.1 Pro acted Deficit $ 0.1 -0.7 Mitigating Actions RDA Loan Re a ment p.7 Subtotal 0.0 Projected Fund Balance -June 30, 2010 $ 9.2 $ 9.3 Percents a of O eratin Butl et 6.6°k 6.7% On November 5, 2009, the City Council approved a revised General Fund operating reserve policy setting along-term goal of building the reserves to 15%. In addition, the Council approved the establishment of two additional reserves, the Economic Contingency Reserve and Catastrophic Event Reserves at 5% and 3% respectively. The additional reserve categories were established to provide for greater distinction, increased security and accountability in the use of feseN2S. Based on the overall projected revenues and expenditures the City projects ending the current fiscal year with a balanced budget and with no impact to reserves. Although there are signs of moderate economic recovery, as discussed in the economic overview section, the City continues to experience downward adjustments to its major revenues primarily due to the continued impacts of the economic downturn in the housing and retail markets. Total expenditures are projected at $130.3 million offset by projected revenues of $129.6 million and an increased loan repayment from the Redevelopment Agency to the General Fund of $750,000. The projected expenditures take into account the City Managers hiring/promotional freeze and administrative freeze on all non-essential services. The City projects that these actions will avoid impacts to reserves and 2 University of San Diego .Schaaf ojBusiness Administration, L'SD [ndex of Leading Economic hxdicators, Apri128, 2010. Revenues Reflected in the table are discretionary and departmental programmatic revenues. Projections for discretionary revenues remain the same as projected in the Second Quarter report. Projections for Departmental programmatic revenues have been adjusted upwards to account for improvements in these revenues. ~~~ !''t d~'~'i" ~~ fiT~' ~wti PY1r20 09110 ~ ~ - _' ..d ~. a r:ReverrLed°:. > ~ +~B>ud e8~ ~t?i3 acted ~~'; Delta` Property Tax 25,299 25,311 12 Sales Tax 18,607 17,589 (1,018) Sales Tax In Lieu (1/4%) 6,838 5,655 (1,183) Motor Vehicle License Fee 18,287 17,717 (570) Franchise Fees 10,033 8,447 (1,586) Utility Users Tax 8,169 9,401 1,232 Transient Occupancy Tax 2,603 1,941 (662) Business License Tax 1,190 1,190 0 Real Property Transfer Tax 841 841 0 Licenses and Permits 880 955 75 Fine, Forfeitures & Penalties 2,380 2,188 (192) Use of Money and Property 1,813 1,846 33 Other Agency Revenue 2,791 2,996 205 Charges for Services 7,656 6,896 (760) Other Revenues 12,034 12,470 436 Transfers From Other Funds 14,340 14,126 214 Total $133,761 $129,569 $ 4,192 Property Taxes. The City of Chula Vista receives property tax revenue based upon a 1.0 percent levy on the assessed value of all real property. Property tax is the City's largest revenue source, representing 20.4 percent of General Fund budgeted revenue in fiscal year 2009/10. The fiscal year 2009/10 Property Tax budget anticipated an 8.4 percent decrease. However since adoption of the budget the County Assessor has advised the City that there has been a further decline of 2 percent in assessed values from the decline initially reported to the City resulting in a downward adjustment of $600,000 in the 1a` quarter. Based on the actual property tax revenues collected year to date, continued decline in supplemental taxes and refunds processed by the County, a downward adjustment of $1.3 million was made in the second quarter. These additional adjustments were provided by the County of San Diego Auditor & Controller in a January 2010 report to the City. It is anticipated that no -/ - QUARTERLY FINANCIAL REPORT THIRD QUARTER OF 2009-10 Page 3 of 5 further adjustments to the projections are required for the remainder of the fiscal year. The chart below compares the City's assessed values with the assessed values of all San Diego County. 25 zo % u% to% 5% 0% 5% -to% -15% -Chula Vista -County Overall _ Sales Tax. Sales tax is the City's second largest revenue source, representing 19.2 percent of fiscal year 2009/10 budgeted revenues. City staff met with the City's sales tax consultant, MuniServices, to review the most recent sales tax revenues. They report that the change in sales tax receipts between fourth quarter calendar year 2009 and the fourth quarter calendar year 2008 decreased by 6.0 percent Statewide, by 5.6 percent in Southern California and 2.6 percent in Chula Vista. The results of the 4`" quarter report suggest that the holiday sales period is responsible for improving the double digit declines experienced by the City since the 4'h quarter of calendar year 2008. In light of this and taking in to account adjustments to projections already taken in the first and second quarters it is anticipated that no further adjustments are required to the projections for the remainder of the fiscal year. $100 $so s° pel Mar Carlsbatl National a Caton Bcontlitlo La Mesa San Pego Chula 5264 $20s Crty $195 $1]0 $148 $158 5131 Vista 598 ^General Retail ^FOOtl Protlutls ^Transportation ^COns VUdion ^Business to Business ©b55cellaneous Motor Vehicle License Fee (VLF). With the State Budget Act of 2004, the allocation of VLF revenues to cities and counties was substantially changed. For FY 2005/06 and beyond, the majority of VLF revenues for each city will grow essentially in proportion to the growth in the change in gross assessed valuation. Due to the new formula that relies on assessed valuations, the continued decline in automotive sales, and the County Assessors additional adjustment of -2 percent in assessed values, this revenue source was adjusted downward in the first quarter by approximately $0.6 million. No further adjustments are anticipated for the remainder of the fiscal year. Franchise Fees. Franchise fee revenues are generated from public utility sources such as San Diego Gas & Electric (2% on gas and 1.25% on electricity), trash collection franchises (9.05% fee), and cable franchises (5% fee) conducting business within City limits. SDG&E is the single largest generator of franchise fees and accounts for approximately 35% of the total franchise revenues. SDG&E collects the franchise fee from Chula Vista customers and through a municipal surcharge imposed on the South Bay Power Plant based on their usage of natural gas. Due to the volatility of the price of natural gas and fluctuation in usage, this component is difficult to project. Trash franchise fees and cable fees are more predictable due to the fixed rates charged and the monthly and quarterly receipt of the revenues respectively. Revenue growth is projected based on population and inflation factors with the exception of the South Bay Power Plant, which is impacted by the cost of natural gas and the actual usage of the plant itself. s1z.o , ._._. __ $10.0 $6 0 $6A $4.0 $20 $(20) [v TrasNGable EnergY_COnsumercEnergy Power Plantj The Franchise Fee revenue projection was revised downward by $1.6 million based on two factors. Based on the most recent information on the price of natural gas, the price per unit has dropped by 51.2 percent ~- ! 20DY 2002 2003 2004 2005 2DD6 200] 200a 2009 2010 QUARTERLY FINANCIAL REPORT THIRD QUARTER OF 2009-10 Page 4 of 5 ($7.69 Sept OS vs. $3.75 Sept 09). In addition, the Public Utilities Commission recently ruled that only two of the power plant's four generators now have Reliability Must Run status which is also impacting projected revenues for the current fiscal year and on an on-going basis. It is anticipated that no further adjustments to the projections are required for the remainder of the fiscal year. Transient Occupancy Tax (TOT). The first quarter report reflected a downward adjustment to TOT revenues based on actual revenues from the prior year. The downward trend reported in the second quarter report of 17.8% continues to trend in that direction. This is on top of the 14.6% decline experienced in the prior year. Based on the Quarterly Travel Forecast prepared for the San Diego Convention and Visitors Bureau dated December 2009, "Average daily rates in San Diego fell more sharply than in some other areas early in the downturn improving San Diego's competitive position. The Average Daily Rate is expected to grow again next year as occupancy improves." Due to the decline in rates in San Diego and low occupancy rates local motel/hotels have reduced their daily rates in order to stay competitive. Accounting for the reduced rates (ranging from 10% to 40%), the weak economy, less travels to/from Mexico and less overflow from hotels in downtown San Diego, the City's TOT revenues are projected at approximately $1.9 million which brings the TOT revenues back to fiscal year 2000 levels. Below is a chart showing the percentage change in TOT revenues compared to prior year. It is anticipated that no further adjustments to the projections are required for the remainder of the fiscal year. TOT Revenues z0.oi 1s.oi 1o.or s.or o.oi -s o r -10.0 -lsoi -zo.oi Utility Users Tax (UUT). Revenues are budgeted at $8.2 million for fiscal year 2009/10. This revenue is projected to come in $1.2 million higher as a result of new UUT vendor collections. No further adjustments are anticipated for the remainder of the fiscal year. Expenditures " »'~"~"° °`'~°" a`J.k' De arh118lrt t , ;",. tAmendB,~l -.. Bud `84",r 3M Quarter : ?`Actual .' ; %.~,~3:. ' Eir lBilded City Council $ 1,218 $ 704 57.8% Boards/Commissions 15 2 13.2% City Cleric 1,166 538 46.2% City Attorney 1,971 1,326 67.2% Administration 1,727 1,141 66.0% Information Technology 3,146 2,234 71.0% Human Resources 3,823 2,795 73.1% Finance 3,251 2,115 65.1% Non-Departmental 8,736 7,358 84.2% Animal Care Facility 2,404 1,409 58.6% Planning & Building 4,108 2,627 64.0% Police 44,052 30,874 70.1% Fire 21,419 15,629 73.0% Public Works 26,396 17,151 65.0% Recreation 5,346 3,747 70.1% Libra 5,147 3,393 65.9% Totals $ 133,925 $ 93,044 69.5% The General Fund's Amended Budget reflects the Council adopted budget of $133.0 million and all mid- year appropriations ($494,400) approved by City Council. Actual expenditures to date are reflected in the chart above. It indicates that Departments have expended 69.5 percent of the General Fund budget after 75 percent of the fiscal year has elapsed. ., „~5 -x..a~,t.R'k« x De artment ~ `Amendeda „ B d ~ et H. ~P~!OJ?cted+ ~ ifi 6%30/a OH`: ~~`i t,~;^ ~ Delta,:` City Council $ 1,218 $ 1,158 $ 61 Boards/Commissions 15 15 - CityClerk 1,166 1,134 31 City Attorney 1,971 1,867 104 Administration 1,727 1,595 132 Information Technology 3,146 2,952 194 Human Resources 3,823 3,702 121 Finance 3,251 3,058 193 Non-Departmental 8,736 8,058 678 Animal Care Facility 2,404 2,125 279 Planning & Building 4,108 4,047 60 Police 44,052 43,734 318 Fire 21,419 22,067 (648) Public Works 26,396 24,783 1,613 Recreation 5,346 5,286 60 Libra 5,147 4,740 407 Totals $ 133,925 $ 130,320 $ 3,605 The table above shows the General Fund departments expenditure budgets and the projected expenditures for the fiscal year. The updated department projections anticipate savings of approximately $3.6 million. -/0 2000 2001 2002 2003 2004 2005 200fi 2007 2008 2009 2010 QUARTERLY FINANCIAL REPORT THIRD QUARTER OF 2009-10 Page 5 of 5 Budget Transfers Mid-Year Budget Amendments Mid-year appropriations through the third quarter totaled $958,844 with offsetting revenues of $795,193 for a net impact of $163,651, which have been mitigated through savings in the General Fund. The following discusses new appropriations for the third quarter. The Police Department received a $7,000grant for participating in the Fugitive Task Force. The Nature Center appropriated donations collected to offset General Fund cost above the agreed-upon General Fund contribution. The appropriation of $2.0 million of Prop 42 funds reflects the reimbursement of staff time related to street maintenance costs from Prop 42 to the General Fund. Prop 42 monies will be used to reimburse the General Fund for eligible fiscal year 2008-09 expenditures and fiscal year 2009-10 expenditures. Property Tax and Sales Tax budgets were reduced by the $2.0 million appropriated for the Prop 42 in order to avoid overstating budgeted General Fund revenues. An appropriation of $243,704 was requested for the Fire Department to account for reimbursements received for Strike Team overtime. The appropriation of $59,740 from the General Fund to the Waste Management and Recycling Fund allowed for the transfer of grant revenue that was incorrectly posted to the General Fund in fiscal year2008-09. Bud etAmandment5 .Revenri6 Ex endlWre Net Im act SD Police Foundation Grant $6,500 $6,500 $0 ConVacting Initiative Ballot Measure $0 $93 X00 ($93.0001 Coun of SD Re Istrar of Voters $0 $21,000 $21.000) Total of 1st Duarter Bud e[ Amendments §6,600 $120,600 b114,000 Fugitive Task Force Vehicle $6,000 $6,000 $0 OCDETF Regional Operations Suppod $10,089 $0 $10,089 Nature Genter Transition 8163,400 5163,400 $0 Heritage Museum Grant $6000 $6000 $0 Nature Center Transition $198,500 $198,500 $0 Total of 2nd Quarter BUd et Amentlmen[s 5363,969 5373,900 $10,089 Fugitive Task Force Grant $7 000 $7 000 $0 NaWre Center Transition $149,000 $149,000 $0 Reimbursement from Prop 42 Funds $2,000 000 $2.000 000 $0 Property antl Sales Tax Reduction (Prop 42) (52,000.000) ($2,000.0001 $0 Fire Strike Team Reimbursement $243704 5243704 $0 Waste MgmURecycling Budget Cleanup $0 $59,740 ($59]401 State Grant for Nature Center $5.000 $5.000 $0 Total of htl puarter BUd et Amentlments §404,706 $464,666 $69]60) Year-to-Dale BUd elAmendmen[s $795,193 $968,846 $163.661 Da artment From To Dsacd Tion Amount Fire Dept Personnel 585 Atljustments to 985 Bueget ],314 aly council umioes sas Aejustmems m sas s„e9et 1s4 Clt Council Personnel 58S Communication Services t R6 '- - Totat of lst Quarter BUd mTrensfars 59198 Public Works Uflfties U66ties Transfafs fOl Pllone Service 1,164 Public Works Personnel Personnel Transfer for Hourly Wages 15,000 HR Dept 585 S89 Recruitment Expense 10a0 HR Dept S89 985 Safety Training FUntls 10000 Cit council Personnel s8S Miscellaneous Su lies and Services 15000 Total of 2rM Cuarter Bud M Tranafen §13154 Planning Personnel Capital Transfers for Wireless Access Charges 9,5]8 Recreation Personnel Personnel Bunker Rack for Ball Fields 11 993 -~ Total of3N puarter BUd Tnnafm 21571 There were two administrative budget transfers during the third quarter that totaled $21,571. Development Services Fund With the approval of the fiscal year 2008/2009 budget, the City Council authorized the creation of the Development Services Fund (DSF) comprised of staff from the Departments of Planning & Building, Public Works and Engineering that are responsible for the planning, permitting, plan review, and inspection of development applications. Since then Public Works was transferred back to the General Fund. .Division... :~:~ Projected Revenues Projected Ex enditures Projected Net lm act P&B Administration $ 270,069 $ (270,069) Planning 1,609,739 2,026,159 (416,420) Building 1,946,471 1,809,148 137,323 En ineerin 1,259,518 1,487,802 228,284 DSF TOTAL $ 4,815,728 $ 5,593,178 $ 777,450 Despite cuts made to the Development Services Fund over the past year, there is a projected deficit of approximately $800,000 in the current fiscal year. The shortfall is a result of a reduction in the fully burdened hourly rate due to reductions in administrative staffing levels and reduction in billable hours to funded projects -combined these two changes result in a projected revenue shortfall of approximately $800,000. There are currently no anticipated actions to resolving this deficit prior to the close of the fiscal year and a loan will be needed to prevent the fund ending the year in a deficit. The loan amount will be determined at the time that the books are closed and upon completion of the annual financial statement audit. ~° ~l RESOLUTION NO. 2010- RESOLUTION OF THE CITY COUNCIL AND HOUSING AUTHORITY OF THE CITY OF CHULA VISTA AMENDING FISCAL YEAR 2009-2010 BUDGET IN ACCORDANCE WITH THE COUNCIL POLICY ON FINANCIAL REPORTING AND TRANSFER AUTHORITY AND APPROPRIATING FUNDS THEREFOR WHEREAS, the City's General Fund ended the fiscal year 2008/09 with an available balance of $9.3 million or 6.7 percent of the fiscal year 2009/10 operating budget; and WHEREAS, for fiscal year 2009/10, the worst economic downturn since the Great Depression appears to have bottomed-out but the effects are still being experienced in the City as housing prices appear to have stabilized however high unemployment continues to cause reduced consumer spending in the City; and WHEREAS, all General Fund departments with the exception of Fire will come in at or below budget; and WHEREAS, the Fire Department is currently projected to be over budget by approximately $800,000; and WHEREAS, the Fire Department overage will be covered by a combination of better than anticipated revenues and additional expenditure savings identified in other General Fund Departments; and WHEREAS, for government entities, a budget creates a legal framework for spending during the fiscal year; and WHEREAS, after the budget is approved there are circumstances which arise that could require adjustments to the approved budget; and WHEREAS, Council Policy 220-02 "Financial Reporting and Transfer Authority" was established in January of 1996 and allows for budget transfers to be completed; and WHEREAS, the City Manager is authorized to complete budget transfer requests within departments that are $15,000 and below; and WHEREAS, City Council approval is required for budget transfers between departments and/or for amounts greater than $15,000; and WHEREAS, all recommended General Fund transfers can be done using existing appropriations; and ~- ! Resolution No. 2010- Page 2 WHEREAS, for fiscal year 2009/10, budget transfers and appropriations are requested for the Recreation department; and WHEREAS, the Recreation Department is requesting a transfer of $16,200 from Utilities to the Supplies and Services expense category; and WHEREAS, an unanticipated cost increase in pool chemicals combined with a necessary change in the type of chemicals that are used has caused the department to exceed its budget for pool chemicals; and WHEREAS, there are sufficient savings in personnel services to offset this transfer, resulting in no net impact to the General Fund; and WHEREAS, in the development of the fiscal year 2009/10 budget, the Finance Department allocated citywide overhead costs to the Development Services, Environmental Services, CV Housing Authority, Transit and Wastewater funds based on the fiscal year 2008/09 budget; and WHEREAS, since that time, the Finance Department has updated the City's Cost Allocation Plan and is now recommending adjustments to the citywide overhead allocations; and WHEREAS, those adjustments will result in an appropriation to the CV Housing Authority Transfers-Out Category ($36,330); and WHEREAS, in total, the General Fund will receive $130,031 less of transfers-in from the various funds due to reductions in overhead for various other funds in the Transfers- Out category (Development Services, Environmental Services, Transit and Wastewater Funds); and WHEREAS, this projected revenue shortfall has already been reflected in the third quarter projections; and WHEREAS, an appropriation request of $1.7 million is requested for the Public Liability Trust Fund (Other Expenses Category); and WHEREAS, the City has received a reimbursement of $1.75 million paid from the City's Public Liability Trust Fund for costs (settlement and defense) related to a recently settled claim; and WHEREAS, the reimbursement payment comes from the City's liability insurance pool, SANDPIPA (San Diego Pooled Insurance Program Authority), for costs incurred in excess of the City's $250,000 Self-Insured Retention (aka deductible) to the SANDPIPA pool limit of $2.0 million; and WHEREAS, it is requested that this reimbursement be appropriated to the Public Liability Trust Fund to cover payments made; and ~~ Resolution No. 2010- Page 3 WHEREAS, an appropriation is requested for the Traffic Signal Fee Fund of $16,990 to provide for a refund of fees paid; and WHEREAS, the Traffic Signal Fee Fund requires developers to participate in the cost of signalization needs of the City when there is an increase in the number of trips generated by a development project; and WHEREAS, the Developer paid the Traffic Signal Fee required by his development project in the amount of $19,040; and WHEREAS, in addition to this fee, the Developer also funded the improvement of the traffic signal required by his project; and WHEREAS, the total cost of the improvement was $16,990; and WHEREAS, the Public Works department is requesting a refund of the $16,990 however there are insufficient appropriations in the Traffic Safety Fund to accommodate the request. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby amend Fiscal Year 2009-2010 Budget in accordance with the Council Policy on Financial Reporting and Transfer Authority and appropriates funds therefor. Presented by Maria Kachadoorian Director of Finance Approved as to form by ~~~ l _~ r, art iesfe _ ~ity ttorney 7 ~{7