The URL can be used to link to this page

Home My WebLink About1984-01-24; City Council; N/A; Revenue and Expenditure Reports3unuary 20, 1984 TO: CITY MANAGER M . FROM: Finance Directo;~ December 31• 1983 Revenue and Expenditure Reports Recommendaticn If Council concurs by minute motion, the Council may officially revise the budget estimates for revenues in the general fund as shown below: Source Sales Tax Construction Permits License Tax on New Construction Vehicle Code Fines Interest Total General Fund Changes Revised Estimate $4,700,000 800,000 500,000 265,000 700,000 Change $ 340,000 400,000 500,000 10 ,ooo .. (200,000) $1,050,000 Original Estimate ·$ 4,360,000 400,000 -0- 255,000 900,000 In addition, revenue estimates in the following capital funds may be revised as follows: Source Revised Estimate Change Original Estimate Public F acllities Fees $ 1,700,000 $ 306,000 $ 1,394,000 Sewer Construction Fees 1,000,000 215,000 785,000 Total Changes in Capital Funds $ 521,000 Revenues The reports as of the end of December continue to reflect the economic recovery that began in late 1982-83. Most of our major revenue sources are performing well and are on target or slightly ahead of our budgeted figures. A few of the important areas of note are: Sales Tax '" Revenue to date from sales tax is about $2.0 million or about 46% of our total estimated revenue of $4.4 million. Histqrically, the City has received only 43% of total sales tax revenue for tt',e year be December 31. This would indicate that, if the rest of the year cont lnues at the same level as the first six months, we could expect about $300,000 in additional revenue above our current estimate. This would bring our to::al revenue for 1983-84 to about $4.7 million. Construction Permits -The first six months have been extremely busy in terms of building permits. Development activity has improved drastically over 1982-83. Current Buildlng Permit Revenue totals $425,000 as of December 31, 1983. This exceeds the total estimate for the year of $400,000. Obviously we will have to adjust the Building Permlt Revenue estimat"'e/upward by dlmost $400,000 if ,.,. development continues at currnet levels. @) /j I License Tax on New Con5truction -The City ha:; received about $271,000 from license taxes to date. This was unbudgeted revenue since we had no prior experience with this source. At this rate, by year end, we could expect over $500,000 in license tax revenue. Zoning Fees, Plan Checking Fees & Engineering Fees -These sources have also seen a dramatic increase in revenue this year. I will detail these sources in a later report; however, it should be noted here that the recovery shown in cunstruction permits has generally been repeated here. Vehicle Code Fines -Revenue to date from vehicle code fines ls about $133,000 or 52% of the estimated total of $255,000 for the year. This I:; slightly above past years for this date and would indicate that our total revenue for the year may reach $265,000, an increase of about $10,000. Interest -The one negative note in our revenue picture has been interest revenue. With declining interest rates and with the restriction of all interest earned on special funds, the general fund interest revenue may be as much as $200,000 below the $900,000 budget by year end. Public Facilities Fees -PFF Revenue, like building permits, is ahead of estimates by a substantial amount. Revenue to date totals $896,000 and, if constant for the year, may reach $1.7 million by June 30, 1984. This is about $300,000 above current estimates. Sewer Construction -Again, this development related revenue source is well ahead of estimates. Total revenue to date is $539,000 and may reach $1 million be year end. This would be an increase of about $200,000 over current estimates. Overall, the City's revenue picture is more healthy than it has been in many years. As with ariy business, the economy continues to play a very important part in our fiscal well being. Expenditures In general, the City's operating expense picture ls good. We are running behind budget in almo~t all areas. A quick review of the attached expenditure report reveals the following: General Fund -Almost all departments have expended less than 50% of their budgeted funds. This is generally a good sign since payroll expenses, which make up about 2/3 of the total budget, have been recorded through December or. about 50% through 1983-84. Other expenses are therefore slightly behind budget. Although it ls difficult to predict an exact savings at this time, it appears that we can expect a general fund savings of $300,000 or more by year end before considering contingencies. Contingency Account ~ The December 31, 1983 balance li1 Lh~ Conbingen~y Account is $381,000. This is about $560,000 below the original budget of $943,900. Allocations have been made for salary adjustments, police staffing, capital projects and other purposes. Although the Council should always use caution in allocating the contingency account ba'lance, the report on add! tlonal revenues and expenditure savings gives the Council considerable flexibility in the use of these funds. Capital Project Funds -These funds generally show an expenditure rate of 9% of total budget. This may not be meaningful since the flow of capital funds to projects tends to be made in large blocks of funds. Summary The City's Revenue report is in good shape. If all things remain equal, the general fund could receive as much as $1.3 million above the present budgeted revenues. Expenditures for the general fund could be as much as $300,000 behind budgeted levels, thus giving the City a total of a~out $1.6 million in additional funds available in this year in all funds. Remember the criteria ls that the economy must remain at the present level and development cannot slow at all between now and the end of the fiscal year. JANUARY i7, 1984 TO: CITY MANAGER AND CITY COUNCIL FROM: City Treasurer and Finance Director INVESTMENT PROGRAM The City TI'easurer ls responsible for the safe-•keeping of all City funds and is charged wit~ the duty of investing all inactive funds (funds not needed for payment of current obligations) in safe, secure investments which will yield a reasonable interest return to the City. The tity of Carlsbad presently has about $20 million in inactive funds invested in a variety of instruments. INVESTMENT OPTIONS The State of California government code regulates the type of investments which can be used by the City, and puts certain restrictions on selected types of investments. The investments available to the City generdlly fall into the following categories. Certificates of Deposit -Certificates of Deposit, or CD's, are obligations issued by banks and savings and loan associations. These are instrltments typically issued for a specific number of days or months yielding a pre- determined amount of interest. Under State law, the institution must guarantee these investments by pledging to the State Treasurer an amount in excess of the City's investment. The institution may, upon the City's approval, secure the investment using 110% of the invested amount in Government backed securities, or 150% of the invested amount in first mortgages. Government Securities -There ls a wide range of government securities including Treasury Bills, Treasury Bonds, Treasury lfotes, Federal Farm Credit Notes, Small Business Administration Notes authorized for investment. There are also a large number of investment vehicles issued by state and local governments, all of which are available to the City. Repurchase Agreements -These are typically short term investments ranging from one day to two weeks. This type of investment involves the sale of government securities owned by the bank to the City in exchange for cash, The bank agrees to repurchase the securities on a given date at a specific interest rate. Local Agency Investment Fund -This is d pool of money administered by the State Treasurer. The City may invest or withdraw inactive funds in this pool on a day's notice. The interest rate varies on a daily basis but changes very slowly with relation to the market. This gives the City a ready source for short term investment of cash flow needs as well as a relatively stable place to put longer term investments when interest rates drop below that of the Local Agency Investment Fund. Saving:; or Money Market A.cGotmt.s -The City is authorized to maintain savings or money market funds similar to those offered to the private investor. The City has open accounts with a few institutions which could be activated if interest rates offered by these accounts become more attractive. Bankers Acceptance Notes -The larger banks often issue Bankers Acceptance Notes. These instruments are used by the banking industry to finance international trade and are obligations upon the issuing bank and the drawing bank, giving the City a double guarantee of repayment. Interest rates earned on Bankers Acceptance Notes will vary widely and may change rapidly depending on the market. Once the investment is placed, the interest rate does not change. In addition to the above types of investments, the State allows the City to invest in the following instruments. Although the City Treasurer may at some time in the future use one or all of these investment options, the City to date has not invested in these types of securities. Commodity Futures -The City is now authorized to invest in the commodity market. This is the practice of buying a future commodity at todays prices and selling that commodity if and when the price increases. The possibility of decreasing prices and loss of the City's principle is a very real risk in this type of investment and must be considered before the City enters the market. Negotiable Certificates of Deposit -These are Certificates of Deposit typically offered by a-Savings and Loan Association. This CD differs from the usual time deposit in that these are not secured by collateral pledged to the Stat6 Treasurer. A negotiable CD can be sold at any time during its life if the City requires funds to meet cash flow needs. The risk, however, is that the CD may sell at a discount depending on the condition of the market at that time. The City is exposed to the loss of principle as well as interest in this type of investment. Commercial Paper -Corporatlons having a Moody's rating of "A" or better can offer commercial paper (short term promissary notes) for sale that can be purchased by the City. These are negotiable securities and can be bought or sold during the Note's life at a premium or discount depending on the market. The full faith and credit of the corporation is the only collateral behind the note. CASH FLOW In addition to selecting the type of investment desired, the Treasurer must d~~ermine the length of time before the invested funds will be required. To do this properly, an accurate cash flow forecast is required. The Trea&urer can then match the term and size of the investment with need. The Treasurer has requested that the Finance Director furnish a cash flow 9rojection that will cover at least twelve months into the future. A cash flow modt:l covering 1983-84 has been prepared foz.-operating funds and the Finance Director is working with the City Engineer to develop a capital needs cash flow forecast. BANKING S£RV1CES Thi" Treasurer is the keeper of all public funds which includes those funds needed for day to day operations. In this capacity, the Treasurer is charged with the responsibility of selecting a depository which will provide the needs of the City with respect to banking services. The City's relation with lts banker goes beyond dally handling of deposits or checks. Although the basic banking serv lees of checking accounts, monthly reports, armored car services and many more are important, the City's banker should also be able to provide advice on financing of capital projects or fixed asset purchases, investment services for the purchase of federal securities or other types of instruments, and safe keeping for all negotiable securitles. The Treasurer will be seeking proposals from sevet'al banks within the next few weeks in an effort to secure the best banking services possible for the City. The City's relationship with the present bani<, Rank of America, has been good, however, a check of the market has not been made for more than five years. CURRENT INVESTMENTS As of the end of December, the City had about $19.5 million invested in various types of securities. The City had about $13 million in Certificates of Deposit, $1 million in Bankers Acceptance Notes, $5 million in local agency investment fund and about $1 million in other investments. Interest rates range from 9% to 10.9%, Many investments have been made for as long as one year. SUMMARY The City has a substantial pool of .inactive funds that require the attention of the City Treasurer. These funds are currently invested and earning interest for the City. The Cash Management System available to the Treasurer needs to be improved to allow better utilization of this important resource. The Finance Director and City Engineer c.an YIOrk together to build a cash flow model which will tell the Treasurer when funds will be needed and when funds can be invested. In addition to improving the investment process the Treasurer will be seeking the bast banking service available to serve the City. A Request for Proposal will be developed during the next month. It's anticipated that a bank will be selected in March or April. • a -~,~:!~~/~ ~ '· 24 ,IAH 84 IHVESTNEHT OATH Bi.iSE IHVESTNEHT ANOUHT F~•~E IHVESTMEHT DATE MATURE TYPE BANK DATE RETURN RATE INTEREST I fl'IESTt!EtlT RETURN TERtt ,: C,;:i'/S J 06 MAY 83 31 JAIi 84 CD GIBRALTAR SAVIHGS AND LOAN 100,000,00 9,375?. 7,031.25 107,031.25 270 11 JUL 83 06 FEB 84 CD SAH DIEGUITO NATIONAL BAHK 100,0~0.oo 10,000?. 5,833.33 105,833.33 210 25 FEB 83 21 FEB 84 CD GREAT 1.-JESTERH SAVINGS AHO LOAN 450,000, 00 9. 000?. 40,500.00 490,500, 00 360 25 FEB 83 27 FEB 84 CO STATE SAVINGS 500,000,00 9,500?. 47,500.00 547,500.00 365 14 l'h'iR 83 08 MAR 84 CO HOIIE SAVItlGS 100,(100,00 9.000?. 9,000,00 109,000,01) 3€0 19 SEP 83 16 MAR 84 co SAN DIEGUITO HATIOHAL BAHK soo,000.00 10.2sor. 25,625.00 525,625.00 ISO 12 OCT 83 09 APR 84 CO NATIONAL BANK OF.CA.~MEL 1,350,000,00 10,375?. 70,031.25 1,4:;.0,u31,.::5 ISO 11 OCT 83 13 APR 84 CD HAIHHORHE SAVINGS ANO LOAN soo,000.00 10,375;-,: 25,937.50 525,93-7.50 180 03 l'IAY 83 02 NAY 84 CO PACIFIC FEDERAL SAVINGS AND LOAN 100,000,00 9.375?. 9,37S.llO 109,375.01) 365 16 MAY 83 ~-JS NAY 84 co·-YALLEY FEDERACSAVINGS AHO LOAN ··300,·000.00~ 9.250?. 27;;rso.oo 327,750.00 365 15 DEC 83 f2 JUN 84 CD SAN DIEGUITO NATIONAL BAHK'f 300,000.00 10.375?. 41,500.00 841,500, 00 180 ·z 15 DEC 83 12 JUN 84 CD FIRST NAT. BANK OF NORTH COUNTY 500,GU0,00 10,475~ 26,187.50 526,187.50 180 . r-27 SEP 83 15 JUH 84 CD PACIFIC FEDERAL SAVIHGS AHD .. LOAH ----------600, 00-0, oo· -t o:Ja'o?.. 37,-771 :b7-... --·537;771 ;67 --2'52 ---- ·•1 20 SEP 83 15 JUN 84 CD PACIFIC FEDERAL 100,000.00 10.:;;oo?. 7,785.00 107,785.00 270 t9 SEP 83 tS JUN 84 CO PACIFIC FEDERAL 1,300,000.00 10,380?. 101,205,00 t,401,205.00 270 --16-JAH 84 16 JUL 84 co -VALLEY FEDERAL-S-Av·1trcs·• ANO._LOAH___ -------i o·o, OM. 00 ~·1 o:-soo:,; . --5,30S.33 I 05,3M,33 182 3t OCT 83 27 JUL 84 CD FIRST NATIONAL BANK OF NORTH COUNTY 750,000,00 10,375?. 58,359.3$ Sr)'3,35St.J::: 27u 26AUG83 27AUC84 CO f-IRSTHATIOHALBAHKOFSANOIEGO 100,000,00 10.t25?. 10,32.1.88 110,321.88 367 ,,---·02 !>EC 83 28 A·uc 84 ·co ·cREA'T-WESTERlfSAYINGS ANl>i.OAN's ____ -· -700,-ool:i.1)0--9~750:,.:·---5,;187.SO 751,187.50 270 ·-23 DEC 83 18 SEP 84 CD DEL AMO SAVINGS AND LOAN ~00,000.00 10,550Y. 31,650.00 431,650.00 270 31 OCT 83 31 OCT 84 CD PACIFIC FEDERAL SAVINGS AHO LOAN 650,000.00 10,375r. 68,374.13 718,374.13 365 -·021.fo•t 83 ·--02 HOY 8-4 co HA!'JTH•)RHECSAV:ING-SANO LOAN --------------· Yoo;oM.-w--1 o·."750::-: ·---10,899,31 110,899.31 3'55 ~ 08 NOV 83 07 NOV 84 CD FIRST KATIOHAL BANK OF NORTH COUNTY 100,000,00 10,875~ 11,026,04 111,026,04 365 " to HOY 83 13 HOY 84 CD DELAt-10 SAY!NGS AND t.OA!i 400,000,00 10,450% 42,845,00 442,845.00 369 ,,----21 li0\183 -2·1 HOY 84 .. CD -f>ACIFIC.FEDERAL.-SiWIHGS A'flDTCfAl.f----. ----600;000;-oo-"fO~<Joor.. ·-i;3,266.67 1563,266.67 365 '"~ 22 HOV 83 21 HOY 84 CD PACIFIC FEDERAL SAYINGS ANO LOAN 800,000,0C 10,400?. 84,355,56 884,355.56 365 28 HOY 83 21 HOV 84 CD PACIFIC FEDERAL SAVINGS AND LOAN1 • 100,000,00 10.400?. 10,544.44 110,544.44 365 ,.--. -03 JAN 84 -28 DEC 84 -CD CREAT.IJESTERH ·sAYlNGS-AND'LbAN ------·-,~40ir;ooo;oo -,o.350Y. "144,900.00 f,544,900.0•) "3o0 1-' 10 JAH 84 09 JAN 85 CO VALLEY FEDERAL SAVINGS AHO LOAN 250,000.00 I0.750~ 27,248.26 277,248.26 3b5 26 Af.lG 83 12 OCT 82 ,.- ~~ 17 FEB 84 BA 6. A, ·N, 10 FEB 84 j: 0 0 0 0 FED HAT MORTGAGE ASSH. GIBRALTAR/S/,IEEP ACCT. AS OF 01/24/84 GIBRALTAR/HUD ACCT, AS OF 01/24/84 LOCAL AGENCY INVEST. FUND AS OF OJ/24/84 CONI1ERCIAL REHAB LOAN 13,-bSO, 000. 00 --· T, 103,318.99 ·14, 753,318.99 953,090.00 10,125?. 953,090, 00 500,000,00 11.350?. soo, ouo. oo 5,205.43 213,481.93 4,Sl0,r)r)0,Ci0 142,786.00 5,171,473.36 20,274,563.36 7 ... ,6?. 7 ,466:! IO. 1'40?. .000?. 46,910.00 46,910.00 76,927.78 76,927.78 .oo .00 .oo .oo ,OrJ I , 227, 1 56, 77 1,000, OOu 00 1, 00•), 00•). 00 576, ':127. 7:3 576,92;".7$ 5,205.43 213,481.93 -f.,810,000.0r) 142, 7:3.;, 1)(1 S, I 71 , 4 73 • -:;,.; 21,501, 7.20. 13 175 4$8 (I 0 0 l) 1 ! TOTAL lNVESTED AT BANKS ANO SAVINGS & LOANS as of 01/24/84 ... • CONTRACT B.L\LANCES B.l\J'JKS AMOUNTS CONfRACT AMfS. BANK OF Af'.IBRICA -0-851,825,282 851,825,282 BANK OF C<.»1ERCE -0-2,000,000 2,000,000 c-c CROCKER NATIONAL -0-247.,916,640 247,916,640 FIRST INTERSTATE -0-5,000,000 5,000,000 FIRST NATIONAL OF SAN DIEGO 100,000 3,000,000 2,900,000 FIRST NATIONAL OF NORTH COll,.rrY 1,350,000 1,350,000 -0- ' LA JOLLA -0-8,800,000 8,800,000 1 MITSUBISHI -0-3,000,000 3,000,000 i ~ATIONAL BANK OF CARMEL 1,3Su,OOO 1,350,000 -0- ' SAN DIEGO TRUST & SAV: BANK -0-100,000 100,000 SA'J DIEGUITO NATIONAL 1,400,000 1,400,000 1,400,000 I ! SEQJRITY PACIFIC -0-sso,oop,ooo 550,000,000 I SOUTHl\1:EST BANK -0-10,080,000 10,080,000 I UNION -b-248,773,000 248,773,000 WELLS FARGO -0-20,000,000 20,000,000 SAVINGS & LOAN AMERICAN (STATE) 500,000 110,000,000 109,500,000 I I BBVERLY HILLS -0-100,000 ,100,000 I -0-100,000 100,000 •1 CENTRAL FEDERAL I cOAsr FEDERAL -0-100,000 100,000 I FAR WEST -0-100,000 100,000 I l GIBRALTAR 100,000 110,000,000 109,900,000 ' -0-luQ,000 100,000 I GLENDALE I GREAT WESTERi\J 2,550,000 10,000,000 7,450~000 ; HAWI'OORNE 600,000 19,605,780 19,005,780 H<J,1E FEDERAL -0-110,000,000 110,000,000 f-D\IE SAV./LOAN 100,000 100,000 -0- PACIF,IC FEDERAL 4,150,000 4,150,000 -0- SAN ~!EGO FEDEP-AL -0-100,000 100,000 : SEARS (ALLSTATE) -0-100,000 100,000 I 650,000 -0-! VALLEY FEDERAL 650,000 I • ' I ' l WESTERN FEDERAL -0-100,000 100·,000 i DEL AV/J: . . .. 800,000 800,000 .-::0-1 : .. ' .. TOTAL CD'S 13,650,000 .. ' • • ,.