HomeMy WebLinkAbout8.4 TV30 Funds Request
CITY CLERK
File # [[][{2][3J[Z2]-[3J[a
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: May 1,2007
SUBJECT:
Consideration of Request for Additional Funds for Fiscal 2006-2007
from TV30-Community Television
Report Prepared by Joni Pattillo, Assistant City Manager
ATTACHMENTS:
1)
Review ofTV30 Community Television Financial Status
Staff Report from April 26, 2007 Board of Directors Agenda
Report
Budget Change Form
2)
RECOMMENDATION: /1 A _~onsider the allocation of additional funds for TV30-Community
!\{/'J'\' Television for Fiscal 2006-2007 and approve Budget Change, or
provide Staffwith additional direction.
FINANCIAL STATEMENT:
If approved, this request would require an additional appropriation in
the amount of$65,000 from the General Fund Reserve.
DESCRIPTION:
Backg:round
TV30 Community Television operates on an annual budget of $650,000, with several funding sources
including production income, donations, underwriting, and local government funding. Over the past two
Fiscal Years (2005-2006 and 2006-2007), the expenses required to operate the station have significantly
exceeded income causing the organization to experience a budget deficit. These expenses are related to
increased expenditures in a few key budget categories including professional services, wages and salaries,
interest expense, equipment and supplies, and show sets.
The financial resources for the current Fiscal Year of 2006-2007 have been depleted and the organization
is unable to meet the estimated operating expenses. There are no guaranteed funding sources in place, or
identified, to cover the costs of these expenses. The services supplied by TV30 Community Television
have been a vital element for all four cities and the need to assist at this time would allow those services to
continue without interruption for Fiscal Year 2006-2007.
At the April 26, 2007 TV30 Community Television Board meeting, the decision was made by unanimous
vote of the Board of Directors to request from each of the four Cities of Dublin, Livermore, Pleasanton,
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COPY TO: City Managers of Livermore, Pleasanton, and San Ramon
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ITEM NO. ~.t.f
and San Ramon an additional appropriation of $65,000, for a grand total of $260,000. This amount would
fund the projected deficit for Fiscal Year 2006-2007 as well as fund the necessary monies needed for
consultant services for a financial audit and an organizational assessment to review and comment on the
appropriate structure of TV30. There were several actions items that the TV30 Community Television
Board took as part of the recommendation to request funds from each of the four cities. The following
actions made by the TV30 Community Television Board were made in order to restore the TV30
organization to a financially stable position for Fiscal Year 2006-2007:
An independent financial audit of Fiscal Year 2005-2006, and the current Fiscal Year 2006-
2007 to begin immediately.
Financial oversight that would consist of the Cities reviewing the monthly financial statements
that are prepared by the City that is responsible for the administrative oversight (this
responsibility currently resides with the City of Pleasanton in Fiscal Year 2006-2007 and will
be rotated to the City of Dublin in Fiscal Year 2007-2008).
Each of the Cities would make the additional contribution for Fiscal Year 2006-2007 payable
to the City of Pleasant on and then the City of Pleasant on would disburse the necessary funds to
TV30 to meet scheduled payroll/overhead expenses.
The hiring of a consultant to undertake an organizational audit.
The development of a balanced proposed budget for Fiscal Year 2007-2008.
The development and implementation of financial and budget policies and procedures to guide
the organization to adhere to an adopted Budget.
RECOMMENDATION:
Staff recommends that the City Council consider the allocation of additional funds for TV30-Community
Television for Fiscal Year 2006-2007 and approve the Budget Change, or provide Staffwith additional
direction.
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TV30 COMMUNITY TELEVISION
Board of Directors Meeting
Dublin Civic Center-City Manager's Conference Room
100 Civic Plaza, 2nd Floor
Dublin, California 94568
THURSDAY, APRIL 26, 2007
7:00 P.M.
AGENDA
1. CALL TO ORDER
2. ROLL CALL
3. AGENDA AMENDMENTS
4. ORAL COMMUNICATIONlPUBLlC COMMENTS
5. APPROVAL OF MINUTES FROM MARCH 22, 2007 MEETING
6. EXECUTIVE DIRECTOR'S REPORT
7. BOARD BUSINESS
(a) Review and discuss April 25 fund raising event
8. NEW BUSINESS
(a) Review and consider amendments to TV30 Bylaws
(b) Consider consulting services for organizational review
9. REVIEW OF FINANCIAL REPORTS
(a) Year-to-date financial reports
10. MATTERS INmATED FOR DISCUSSION
11. ANNOUNCEMENTS
12. ADJOURN TO MAY 24, 2007 MEETING
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t6...., fi/t/07
ATTACHMENT 1
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TV30 COMMUNITY TELEVISION
BOARD OF DIRECTORS
AGENDA REPORT
April 26, 2007
TITLE:
REVIEW OF TV30 COMMUNITY TELEVISION FINANCIAL STATUS
SUMMARY
TV30 Community Television operates on an annual budget of $650,000, with several
funding sources including production income, donations, underwriting and local
government funding. Over the past two fiscal years, the expenses required to operate
the station have significantly exceeded the income causing the organization to
experience a budget deficit. These expenses are related to increased expenditures in a
few key budget categories including professional services, wages and salaries, interest
expense, equipment and supplies, and show sets.
At this point in the fiscal year, the organization's financial resources have been depleted
and the organization is unable to meet estimated operating expenses through the
remainder of the fiscal year. With no guaranteed funding sources in place, or identified,
to cover the costs of these expenses, the TV30 Board of Directors may consider
requesting that each of the partner cities provide a financial contribution of $65,000 to
support the organization.
RECOMMENDATION
Recommend to the City Councils of Dublin, Livermore, Pleasanton and San Ramon that
each City authorizes the allocation of $65,000 to TV30 Community Television to support
the ongoing operations of the station through the current fiscal year ending June 30,
2007.
FINANCIAL STATEMENT
If the respective City Councils approve the requested allocations, there will be sufficient
income to support the operations of the TV30 station through the current fiscal year.
30 f'l
BACKGROUND
In 1983, the TV30 Community Television organization was formalized as a public, non-
profit corporation with a three member board of directors. Today, the organization is
governed by a full-time Executive Director and a seven member board of directors, and
employs a staff of fourteen. Over the past several years, and in particular the past two
years, the demands of operating a community television station with quality
programming have grown substantially, requiring an escalating amount of financial
resources.
DISCUSSION
Financial Position
Accordingly, keeping pace with changing technology and programming has
necessitated a more sizable organization and budget. In Fiscal Year 2005-2006, the
TV30 operating budget was $590,600; the FY 2006-2007 budget is $650,000
(Attachment 1).
Currently, 62% of the funding income for TV30 Community Television comes from the
Cities of Dublin, Livermore, Pleasanton and San Ramon, provided via a franchise
agreement with Comcast wherein a fee of $.50 per subscriber is allocated, or "passed-
through," to TV30. In FY 2006-2007, this amounts to $403,668. A majority of the
additional income is derived from dubbing and production services, underwriting by
corporate sponsors and other donations.
A majority of the expenses are shared among several key budget categories: wages,
salaries and related taxes and insurance; equipment and supplies, including repairs and
maintenance; overhead, including rent and insurance; professional services; and show
sets. Significantly, in FY 2005-2006 the combination of total expenditures totaled
$713,333 with wages, salaries and related payroll taxes and workers compensation
insurance comprising almost $550,000 of that. Overall, at the end of FY 2005-2006, the
total expenses exceeded the budgeted amount by $123,000; at the same time, income
exceeded projected revenues by $71,000, resulting in a net deficit of $51,000 at the
close of the fiscal year on June 30, 2006.
Additionally, TV30 utilized a Line of Credit (LOC) to manage the uncertain timing of
cash flow and ensure that payrolVoverhead expenses could be paid as scheduled.
However, based on the rising expenses paid throughout the year, the LOC was used as
a primary source of cash and by the end of the fiscal year was drawn almost to its limit
of $100,000. Immediately upon receipt of the funding from the Cities at the start of the
new fiscal year (July 1, 2006) the LOC, plus accrued interest, was repaid in full. The
effect of this payment coupled with the year-end deficit was to reduce the operating
income for FY 2006-2007.
A similar pattern was followed in FY 2006-2007. As of April 22, 2007, after meeting
scheduled payrolVoverhead expenses, TV30 had expended all cash on hand and had
drawn the LOC to its $100,000 limit. The current fiscal year shortage is a result of the
combination of a budget that showed a $9,000 deficit when adopted, a shortfall in
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anticipated revenues of up to $41 ,000, and over expenditures in several budget
categories.
Based on projected revenues of $22,000 and expenses of $130,000 ($50,000 in
payrolVoverhead for each May and June and $30,000 in accounts payable) provided by
TV30 Executive Director Glenn Davis, it is estimated the TV30 organization needs
$108,000 to meet scheduled expenses. Coupled with the outstanding $100,000 balance
on the LOC, a total of $208,000 is needed to return TV30 to a financially balanced
position. Accounting for unanticipated repairs and supplies (based on a 15%
contingency), as well as other professional services such as financial and/or
organizational audits, financial support of $260,000 is warranted. Divided equally
between the four partner cities, each of the Cities of Dublin, Pleasanton, Livermore and
San Ramon, would be asked to allocate $65,000.
Actions
To begin to return the TV30 organization to a financially stable position several action
steps have been identified:
City of Pleasanton staff has undertaken a cursory review of the TV30 financial
system, the results of which are provided in this staff report.
The Cities have requested an independent financial audit to develop more
accurate financial reports that clearly state the organization's current financial
position. This process will begin immediately.
The Cities will be instituting financial oversight constraints including review of
monthly financial statements by City staff. As well, should the recommended
funds be allocated by the Cities, the money will be held by the City of Pleasanton
and disbursed to TV30 to meet scheduled payrolVoverhead expenses. Prior to
payment, City staff will review and approve additional expenditures.
The TV30 Board of Directors will be asked to consider hiring a consultant to
undertake an organizational audit designed to review and comment on the
appropriate structure of the TV30 Board and management.
A FY 2007-2008 balanced budget will be developed.
A financiallbudget policy and procedure document will be developed to guide the
organization when purchasing and budget decisions are made outside a set of
accepted constraints.
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Submitted by:
Pamela Ott
City Liaison
Attachments:
1. TV30 Community Television Budget Overview vs. Actuals Financial Report
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Tri-Valley Community Television
Budget Overview vs. Actuals
r_'___'_.._.-..._.___._.___.... ~-_._-_._._._-_.._-_.._--#
, FY 05/06 , , FY 06107 ,
, Year to Date Variance , ! Year to Date Total Variance ,
, , ,
f Actual. Total Budget Over/(Under) , , Actuals Budget Over/(Under) ,
, , ,
Income , , , ,
Government Funding , 399,000.00 399,000 , , 302,863.50 403,668 (100,804.50);
, 0.00 , ,
Studio Upgrade Contribution , 10,442.00 10,442.00 ; , ,
, , ,
Underwriting , 48,398.40 40,000 8,398.40 , , 60,681.48 70,000 (9,318.52),
Barter Income , 15,330.00 12,000 3,330.00 ! , 9,000.00 12,000 (3,000.00)!
, ,
Donations-Restricted , 25,538.65 25,538.65 , , 2,500.00 7,000 (4,500.00)'
Production Income , , , ,
, 144,332.27 130,000 14,332.27, , 100,474.38 141,565 (41,090.62),
Dubbing Income , 11,415.00 2,300 9,115.00 ; , 4,775.00 8,400 (3,625.00);
, ,
Other Income , 5,500.00 6,000 (500.00); , 5,515.00 5,500 15.00 ;
Interest , 2,084.83 1,300 , 1,026.10 1,800
, 784.83 , , (n3.90),
Total Income . 662,041.15 590,600 71,441.15 ! . 486,835.46 649,933 (163,097.54)!
, ,
Expenses , , , ,
Employee Expenses , , , ,
, , , ,
Salaries , 93,099.74 95,000 (1,900.26); , 85,279.88 113,556 (28,276. 12};
, ,
Wages , 368,527.63 331,000 37,527.63 ; , 288,256.31 345,000 (56,743.69);
Contract Services , 16,534.80 7,000 , 6,592.43 10,000
, 9,534.80 , , (3,407.57),
Medical , 7,581.95 5,650 1,931.95 ! , 4,996.93 8,400 (3,403.07)!
, ,
Mileage Reimbursement , 8,n8.12 3,600 5,178.12 , , 3,369.45 9,300 (5,930.55)'
Payroll Taxes , 43,858.22 42,000 , , 38,429.60 47,919 ,
, 1,858.22 , , (9,489.40),
Workers Comp Ins , 10,725.56 9,800 925.56 ; , 6,936.00 11,418 (4,482.00);
Total Employee Expenses , 549,106.02 494,050 , 433,860.60 545,593
, 55,056.02 , , (111,732.40),
, , , ,
, , , ,
AutoNan , 4,364.60 3,700 664.60 , , 4,622.79 2,100 2,522.79 ,
Auto Insurance , , , 1,537.00 2,280 (743.00);
, , ,
Insurance , 13,887.90 17 ,500 (3,612.10); , 6,839.19 15,420 (8,580.81 );
Interest Exp , 8,724.17 100 , 8,820.62 8,400
, 8,624.17 , , 420.62 ,
Office Rent , 17,400.00 18,000 (600.oo)! , 13,050.00 17,400 (4,350.00)!
, ,
Office Expense , 10,632.67 4,800 5,832.67 , , 10,555.25 8,940 1,615.25 ,
Telephone , , , ,
, 3,912.79 3,100 812.79 , , 2,475.75 3,660 ( 1,184.25),
Payroll Processing Expenses , 6,437.22 5,800 " , 4,980.85 7,560 (2,579.15);
, 637.22 , ,
Professional Fees , 9,736.00 10,000 (264.00); , 6,647.23 10,000 (3,352.77);
Production Expense , , 7,691.00 6,000
, , , 1,691.00 ,
Studio Expense , , , 29,484.13 24,000 5,484.13 !
, , ,
Marketing & Comm. Relations , 1,726.00 2,200 (474.00)1 , 3,944.56 4,200 (255.44)1
Mise Expenses , , , 3,220 ,
, 5,521.06 3,050 2,471.06 , , 3,642.38 422.38 ,
Studio Upgrade , , , (3,535.18) (3,535.18);
, , ,
Equipment & Supplies , 32,197.10 19,000 13,197.10 ; , ,
Repairs & Main , 5,544.70 5,900 , ,
, (355.30), , ,
Show Sets , 39,908.75 39,908.75 ! , ,
, , ,
TapeslDVDs , 4,234.11 3,400 834.11 , , ,
, , , ,
, , , ,
Total Expenses , 713,333.09 590,600 122,733.09 ; , 534,616.17 658,773 (124,156.83);
, ,
, , , ,
Net Operating Income L_j!!~1.;.~L____;___J!J~~!~Jl ' ,
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1
CITY OF DUBLIN
BUDGET CHANGE FORM
7df7
CHANGE FORM #
New Appropriations (City Council Approval Required):
Budget Transfers:
X From Unappropriated Reserves
(If Other than General Fund, Fund No-
From New Revenues
From Budgeted Contingent Reserve (1080-799.000)
Within Same Department Activity
Between Departments (City Council Approval Required)
Other
Name: General Fund - Community Television
- Contract Services
Account #:
Name:
Account #: 001-80300-740-000
Name:
Account #:
Name:
Account #:
Name:
Account #:
Name:
Account #:
Name:
Account #:
Name:
Account #:
Name:
Account #:
Account #:
ASDlFin Mgr CYa.-J ~ I ~ '::)
Date: "'/1..7-/01-
Signature
REASON FOR BUDGET CHANGE ENTRY:
At the City Council meeting on May I, 2007, the City Council was requested by the Tri-Valley Community
Television Board to provide a supplemental appropriation of funding for the operation of TV 30 and to
undertake a financial audit and organizational review. Each ofthe participating cities were asked to make a
financial contribution in the same amount which was in addition to funding provided from subscriber fees.
City Manager:
~()d~ L. ~
SIgnature
Date -r (9-1( .n
As approved at the City Council Meeting on: Date:
Mayor:
Date:
Signature
Posted By:
Date:
KICC-FORMSIFORM-budget cha1lge,doc
Signature
Attachment #2