HomeMy WebLinkAboutItem 8.4 Mid Year Financial Review (2) M E M O R A N D U M
TO: City Council
FROM: City Manager
SUBJECT: 1982/83 Mid-Year Financial Review
DATE : January 20 , 1983
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The following report represents an effort to provide the City Council with a
statement of the City ' s financial condition six months through the City ' s
first full year of operation. It is hoped that by providing the City
Council with such information, the City Council will be in a better position
to grapple with such issues as the street lighting assessment district, the
funding of capital improvements and other funding problems which may surface
between now and the end of the fiscal year. This report consists of a
review of both .revenues and expenditures, estimated fund balance and its
impact on reserves .
1982-83 REVENUES
As shown in Exhibit A, the first column identifies the revenues which the
City has received or should receive for the six month period ending
12/31/82 . All figures with the exception of sales tax are based on actual
revenue received to date . The figure identified for sales tax is actual
revenue received plus a monthly advance which is based on an estimate of
what the City will receive during the 3 month period ending 2/28/83 . The
sole purpose of the first column is to give the City Council a more accurate
picture of the City ' s receipts as of 12/31/82 than is provided in the
monthly financial report.
The second column shown in Exhibit A identifies the revenue estimates which
are part of the 1982-83 approved budget . The third column in Exhibit A
presents Staff ' s best estimate of what revenues the City will receive for
the entire fiscal year based on receipts to date, conversations with various
State and County officials who are responsible for disbursing revenues to
the City, and the League of California Cities . It' s important to remember
that these revenue estimates are based upon the best available information
to date, and will in all likelihood change before the end of this fiscal
year.
It appears that the discussions which are presently taking place in
Sacramento regarding the State budget deficit, have the greatest potential
for reducing the City ' s subventions this year by approximately $84 , 000 . If
this does occur, this City, along with other Cities in California will be in
a reverse bail-out position. This is extremely inequitable to non-property
tax cities and newly incorporated cities, such as Dublin, which received no
property tax bail-out at all . The subvention estimates in Exhibit A assume
the worst case now being discussed. The other major impact on 1982-83
ITEM NO.
revenues is the recessionary economy and its impact on subvention
collections . Building permit revenue shown as $20 , 000 appears down from the
estimated $100 , 000 because the City is not acting as the collection agent
for building permit fees in accordance with the City ' s agreement with
Alameda County. It is anticipated that when the City takes over the
building inspection function by approximately 5/1/83 , some building permit
revenues will be received during the last two months of the fiscal year.
The above reductions in revenue are partially offset by increased fines and
forfeitures, interest and sales tax revenues . In addition, depending upon
the outcome of the City ' s litigation with Alameda County, the City could
realize an additional $115, 000 in sales tax revenue. Additional revenues
which the City could receive during this fiscal year include .$210 , 000 in FAU
funds, and revenue sharing funds . According to Office of Revenue Sharing
officials, the City ' s allocation has not ben calculated, but the City will
definitely receive its first payment for the quarter ending 6/30/83 sometime
in August, 1983 . Based on the above information, revenue received by the
City for fiscal year 1982-83 could be anywhere from $100 , 000 to $325, 000
higher than projected in the budget.
1982-83 EXPENDITURES
As indicated in Exhibit B, it is anticipated that City operating
expenditures will be approximately $210 , 000 or 8 . 60 less than budgeted.
This is primarily attributable to the following factors :
1 . Employee salary and fringe benefit savings as a result of later than
anticipated recruitments and the late development of fringe benefit
programs .
2 . Savings on professional service fees for the City ' s contract bookkeeper.
3 . Lower than anticipated contract police services costs .
4 . The ability of the City to re-annex to the County Service Area for
street lighting, and thus defer these costs from the City' s General
Fund.
5 . The later than anticipated assumption of Building Inspection Services .
These savings are offset by greater than anticipated engineering costs and
the anticipated hiring of the General Plan Consultant.
With respect to Capital Improvements, none were included in the approved
1982-83 budget. As shown in Exhibit B, Staff anticipates the completion of
the Dublin/Silvergate Drive modifications and the Dublin Boulevard
Rehabilitation Project during this fiscal year.
1982-83 FUND BALANCE AND RESERVES
At the outset of fiscal year 1982-83 , the City had a total fund balance of
$494 , 672 , of which $413 , 681 had been reserved for street improvements and
$75 , 628 had been reserved for authorized expenditures & projects. In the
1982-83 preliminary budget, Staff estimated a net total of $1, 117, 416 in
excess revenues would be available by 6/30/83 . This amount was appropriated
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to the City' s Street Improvement Reserve ( $717 ,416 ) and to the Facility
Acquisition and Construction Reserve ( $400, 000 ) by the City Council . Thus ,
it was anticipated that the City' s reserves would be as follows by 6/30/83 :
Street Improvement Reserve. . . . . . . . . . . . . . . . . . . $ 1, 131, 097
Facility Acquisition & Construction Reserve. . 400 , 000
Reserve for Authorized Expend/Projects . . . . . . . 75 , 628
Total Estimated Reserves . . . . . . .$ 1, 606 , 725
As indicated above, an additional $100 , 000 - $325, 000 could be available
this fiscal year for appropriation. Although this reserve is quite healthy,
I might caution the City Council that: first, the City' s organizational
structure is yet to be completed and thus, operating expenditures will not
level off until the organization is complete; second, major street
improvements will need to be undertaken to handle anticipated increased
traffic volumes in Dublin. These two factors alone could have a significant
impact on the City' s reserves .
In summary, the financial condition of the City at this point in time is
better than anticipated during the preparation of the 1982-83 preliminary
budget. Staff will continue to keep the City Council informed with respect
to the City' s financial condition and update the City Council on State and
Federal legislation which may impact the City in the future .
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EXHIBIT A
1982 - 83
REVENUE PROJECTION
ESTIMATED ( 1)
ADJUSTED
REVENUES BUDGET ESTIMATED
AS OF 12/31/82 1982-83 1982-83
ALL FUNDS
Property Tax $ 27 , 686 $ 329 , 351 $ 329 , 351
Other Taxes
Sales and Use Tax $ 1, 002 , 327 ( 2 ) $ 2 , 152 , 000 $ 2 , 200 , 000
Real Property Transfer Tax 11, 470 19 , 000 25, 000
Electric Franchise Tax - 54 , 000 54 , 000
Gas Franchise Tax - 30, 000 30, 000
CATV Franchise Tax - 26, 500 26, 500
Total Other Taxes $ 1, 013 , 797 $ 2 , 281, 500 $ 2 , 335, 500
Licenses & Permits
Building Permits $ - $ 100, 000 $ 20, 000
Animal Licenses 1, 290 - 2 , 500
Encroachment Permits 763 - 1, 500
Total License & Permits $ 2 , 053 $ 100 , 000 $ 24 , 000
Fines & Forfeitures
Vehicle Code Fines $ 15 , 000 $ 15, 000 $ 30 , 000
Other Court Fines 1, 400 1, 000 2 ,800
Total Fines & Forfeitures$ . 16, 400 $ 16, 000 $ 32 , 800
Revenue From Use of Money & Property
Interest $ 43 ,173 $ 72 , 000 $ 110, 000
Rents & Concessions 324 - 324
Total Revenue From Use of
Money & Property $ 43 , 497 $ 72 , 000 $ 110, 324
Intergovernmental Revenues - State
Motor Vehicle In-Lieu Tax $ 168, 525 $ 380, 000 $ 289 , 000 (3 )
Trailer Coach In-Lieu Tax - 1, 280 -
Cigarette Tax 43 , 798 105, 000 55, 000 (3 )
Off Highway Motor Vehicle 149 330 300
In-Lieu Fees
State Gas Tax ( 2106 ) 42 , 772 86, 000 86 , 000
State Gas Tax ( 2107 ) 67 , 440 130 , 000 130 , 000 .
State Gas Tax ( 2107 . 5 ) 4 , 000 4 , 000 4 , 000
Total Intergovernmental
Revenue - State $ 326, 684 $ 706 , 610 $ 564 , 300
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EXHIBIT A
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ESTIMATED ( 1)
ADJUSTED
REVENUES BUDGET ESTIMATED
AS OF 12/31/82 1982-83 1982-83
Intergovernmental Revenue - County
County Gas Tax $ - $ 26 , 000 $ 28 , 000
Total Intergovernmental
Revenue - County $ - $ 26 , 000 $ 28, 000
Intergovernmental Revenue - Federal
Revenue Sharing $ - $ - $ -( 4 )
Federal Air Urban Funds - - 210 , 000 ( 5)
Total Intergovernmental
Revenue - Federal $ - $ - $ 210 , 000
Charges for Service
Zoning & Subdivision Fees $ 2 , 989 $ 20, 000 $ 18, 000
Sale of Maps & Documents 150 500 300
Animal Shelter Fees & Charges 1, 276 - 2 , 450
Special Police Dept. Services 910 - 1, 800
Other Charges for Service - 500 200
Total Charges for Service$ 5, 325 $ 21, 000 $ 22 , 750
Other Revenues
Contribution from Non-Government
Sources $ 13 $ - $ 13
Miscellaneous - 1, 000 500
Total Other Revenues $ 13 $ 1, 000 $ 513
TOTAL REVENUE - ALL FUNDS $ 1,435,455 $ 3,553,461 $ 3, 657,538
( 1) All figures in this column are close to actual as .of 12/31/82 , except as
noted.
( 2 ) Estimate Only.
( 3 ) Reductions in Motor Vehicle In-Lieu & Cigarette Tax based upon reverse
bail-out formula proposed by Governor for 1982-83 , and lower than antic-
ipated collections .
(4 ) Revenue Sharing payment will be received in August 1983 . Allocation will
not be known for several weeks .
( 5 ) Receipt of FAU funds predicated upon rehabilitation of Dublin Blvd.
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EXHIBIT B
1982 - 83
EXPENDITURE PROJECTION
BUDGET ESTIMATED
ALL FUNDS 1982-83 1982-83
Operating Expenses
City Council $ 27, 683 $ 27, 500
City Manager/Clerk 102 , 540 97 , 500
Legal Services 48, 000 48, 000
Finance 13 , 850 5,350
Building Management 58 , 350 58,350
Insurance 9, 500 9 , 000
Elections 2, 500 1, 000
Non-Departmental 35, 900 -
Police Services 1,114 ,442 11090, 000
Ambulance Services 5, 000 5, 000
Crossing Guards 16, 200 16, 200
Animal Control 31, 037 31, 000
Traffic Signals & Street Lighting 125, 900 45, 000
Street Maintenance 287 ,100 287 , 100
Street Sweeping & Litter Pickup 55, 000 55 , 000
Street Reconstruction/Resurfacing 154 , 000 154 , 000
Street Tree Maintenance 44 ,300 44 ,300
Community Beautification .50, 000 50, 000
Transportation 9 , 818 3 , 350
Planning 107, 125 122 , 000
Building & Safety 118, 400 25, 000
Engineering 15, 000 46 , 000
Total Operating Expenses $2 ,431, 645 $2 , 220, 650
Capital Improvements
Street Projects $ 4 ,400 $ . 232 , 000
Total Capital Improvements $ 4 ,400 $ 232 , 000
TOTAL EXPENDITURES $2,436,045 $2,452, 650