The URL can be used to link to this page

Home My WebLink About1983-04-19; City Council; 7362; Budget UpdateCIT. OF CARLSBAD — AGEND.. BILL MTB. PEPT. FIN TJIUE; BUDGET UPDATE DEPT. HD._ CITY ATTY. CITY RECOMMENDED ACTION: Establish a budget expenditure limit and a contingency reserve level for the 1983-84 budget. ITEM EXPLANATION The Finance Director will make a presentation on the 1983-84 Fiscal Year Budget. The City Council will be asked to establish budget expenditure limit and a contingency reserve level. EXHIBIT Memorandum from the Finance Director to the City Manager dated 3/17/83. MEMORANDUM TO: City Manager FROM: Finance Director RE: Budget Update DATE: March 17, 1983 The 1983-84 preliminary budget figures are beginning to take shape and, at least for the general fund, times are going to be tight. A brief review of general fund finances provides the following information: * GENERAL FUND REVENUES: Budget Transfer From Gas Tax Sub Total Appropriation of Reserves to Cover Prior Year's Encumbrances & Continuing Appropriations Total Source of Funds EXPENDITURES: Budget Additional Appropriations Prior Yrs. Encumbrances Revenue Over (Under) Expenditures 1982 - 83 1983 - 1982-83 Budget Plus Adjustments $13,285,930 421,400 $13,707,330 . >s ig 267,519 $13,974,849 $13,520,000") 267,519 J $13,787,519 $ 187,330 1982-83 Current Estimates $12,706,000 421,400 $13,127,400 267,519 $13,394,919 $12,901,566 $12,901,566- $ 493,353 Increase (Decrease) {$579,930) ($579,930) «... ($579,930) ($885,953) ($885,953) 1 $306,023 Preliminary Estimates- $13,176,000 483,500 $13,659,500 $13,659,500 Increase (Decrease) Over 82-83 ($109,930) 62,100 ($ 47,330) ($ 47,830) % Chanqa (0.82) 14.7% (0.3%) (0.3%) $13,659,500 $139,500 $13,659,500 '•• $139,500 1.0% -0- As you can see, revenues are down about $580,000 or 4% from our original budget. This is primarily in the area of sales tax - $200,000, motor vehicle in lieu fees - $200,000, and building permits $100,000; although there have been other adjustments both up and down in other areas. It should be noted that sales tax and construction related revenues are showing some signs of improvement. Sales .2L Budget Update March 17, 1983 page 2 tax for the past three months is about 6% above the same period in 1981-82. Building permits valuation for the past four months is 110% above the building permit valuation for the first four months of this year, and is 96% above the same period of 1981-82. If these trends continue into 83-84 I may have to revise some of my revenue estimates upward for next year. Expenditures are showing . savings in almost all areas. With only a few exceptions, departments are below budgeted figures. It is important to note however, that the sharp drop in revenues has put us in a particularly tight situation. Had departments spent all funds available, we would find ourselves in a deficit position amounting to almost $400,000. The net general fund departmental savings is only $242,310. The remaining savings is found in the contingency account and is about $628,000. These two numbers are particulary important because we can see that departmental savings alone are not enough to balance the budget. A balanced budget position requires all departmental savings ($258,000) plus $135,000 from the contingency fund, as shown below: Total Revenues or Sources of Funds $13,394,919 Expenditures original budget $13,787,519 Less: Departmental savings - 257,769 Subtotal Expenditures $13,529,723 Additional savings required from contingency account for balanced budget $ 134,804 During the remainder of 1982-83 the Council should continue to be cautious in the allocation of contingency funds. Also departments should continue the prudent management of budgets shown so far this year. The sanitation fund is generally performing according to budget. Revenues will total about $700,000 up $70,000 from budget figures due to interest earnings. Expenditures will reach $780,000 as budgeted. The inclusion of depreciation is 82-83 will increase the expenses by about $150,000 before year end bringing total costs to about $940,000. The fund will show a deficit of about $240,000 at June 30, 1983. The water fund revenues are on target at $2.1 million for the year. Expenditures, including depreciation, will reach the $2.2 million mark as budgeted based on current estimates. 1983-84 can be summarized in one word — "FLAT". In respect to general fund in particular, revenues will be 0.3% below the 82-83 budget, and expenditures cannot exceed the $13,659,500 level without pushing the city into a deficit position. Budget Update March 17, 1983 page 3 At our budget workshops with staff and council, I will discuss this in more detail. We will be asking council to set a general fund spending limit and set a contingency figure for 83-84. At these meetings, I will discuss the revenue sources in detail and also cover any changes in the budget process. I will meet with you at your convenience to discuss/these issues. JFE:dm MEMORANDUM TO: City Manager FROM: Finance Director RE: Budget Update DATE: March 17, 1983 The 1983-84 preliminary budget figures are beginning to take shape and, at least for the general fund, times are going to be tight. A brief review of general fund finances provides the following information: M I L L I 0 N 14 12 10 8 GENERAL FUND REVENUE $13. 9m ff^ Ijj C? SIT* l— l >— lry* L—u— r^ O COLUcoCO 1—1 LUCM CDCO Qcn ID «— 1 CQ $13.4 m 1 — LU LU <C Qi 21 CC 1-1 ID |— O CO LU CO 00 1—1 LU CM CD 00 Q CJ> ID i— 1 CQ $13. 7m *£. l—i LU 2! 1— ~l!LU i—i O. X LU CO 1—1 LUCO CD CO Qcn ID t— 1 CQ 14 MI L 12 LI 0 10 • N $ 8 • ft <O 4 • 2 « GENERAL FUND EXPENDITURES $13. 9m i <CLU i — i^ CDSi M iCon-ocoLUCOC01—1 LU CM CDCOOcniD r-HCQ $12. 9m HjLU LU CCa: 2:ry* 1—4m (— CJ (^ LUCO CO 1—1 LU CM CD CO Qcn ID T-H CQ $13. 7m Oi z l— l LU 2: h- Hl 21LU •— io: l—CL. CO LU 00 t-1 LUCO CD00 Qcn ID i-H CQ As you can see, revenues are down about $580,000 or 4% from our original budget. This is primarily in the area of sales tax - $200,000, motor vehicle in lieu fees - $200,000, and building permits $100,000; although there have been other adjustments both up and down in other areas. It should be noted that sales tax and construction related revenues are showing some signs of improvement. Sales Budget Update March 17, 1983 page 2 , tax for the past three months is about 6% above the same period in 1981-82. Building permits valuation for the past four months is 110% above the building permit valuation for the first four months of this year, and is 96% above the same period of 1981-82. If these trends continue into 83-84 I may have to revise some of my revenue estimates upward for next year. Expenditures are showing . savings in almost all areas. With only a few exceptions, departments are below budgeted figures. It is important to note however, that the sharp drop in revenues has put us in a particularly tight situation. Had departments spent all funds available, we would find ourselves in a deficit position amounting to almost $400,000. The net general fund departmental savings is only $242,310. The remaining savings is found in the contingency account and is about $628,000. These two numbers are particulary important because we can see that departmental savings alone are not enough to balance the budget. A balanced budget position requires all departmental savings ($258,000) plus $135,000 from the contingency fund, as shown below: Total Revenues or Sources of Funds $13,394,919 Expenditures original budget $13,787,519 Less: Departmental savings - 257,769 Subtotal Expenditures $13,529,723 Additional savings required from contingency account for balanced budget .. $ 134,804 During the remainder of 1982-83 the Council should continue to be cautious in the allocation of contingency funds. Also departments should continue the prudent management of budgets shown so far this year. The sanitation fund is generally performing according to budget. Revenues will total about $700,000 up $70,000 from budget figures due to interest earnings. Expenditures will reach $780,000 as budgeted. The inclusion of depreciation is 82-83 will increase the expenses by about $150,000 before year end bringing total costs to about $940,000. The fund will show a deficit of about $240,000 at June 30, 1983. The water fund revenues are on target at $2.1 million for the year. Expenditures, including depreciation, will reach the $2.2 million mark as budgeted based on current estimates. 1983-84 can be summarized in one word -- "FLAT". In respect to general fund in particular, revenues will be 0.3% below the 82-83 budget, and expenditures cannot exceed the $13,659,500 level without pushing the city into a deficit position. Budget Update March 17; 1983 page 3 At our budget workshops with staff and council, I will discuss this in more detail. We will be asking council to set a general fund spending limit and set a contingency figure for 83-84. At these meetings, I will discuss the revenue sources in detail and also cover any changes in the budget process. I will meet with you at your convenience to discuss/these issue JFE:dm