HomeMy WebLinkAbout1994-02-15; City Council; 12595; 1993-94 mid-year financial report*
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WY OF CARLSBAD - AGWDA BILL !P (llA'
AB# l2,595 TITLE: DEPT. HD:
MTG. 9/15/94 MID-YEAR FINANCIAL REPORT FOR CITY ATTI
CITY MGR, DEPT. FIN
RECOMMENDED ACTION:
FISCAL YEAR 1993-94
Accept and file report.
ITEM EXPLANATION:
The attached report summarizes the financial status of the General Fund, the
Carlsbad Municipal Water District, the Sewer Enterprise fund and the
Redevelopment Agency based on data for the first half of fiscal year 1993-94. A few
significant items are highlighted below. Please see the report for more details.
GENERAL FUND
Revenues for the General Fund through December total $1 7,500,000 which is 46%
of the total revenue expected to be received in this fiscal year. Although, in total,
the general fund revenues are equal to budget, the performance of the individual
revenues are mixed with some strong revenues offsetting the weaker ones.
We are happy to report that both property taxes and sales taxes are higher than
expected at this the of the year. Property taxes are over the estimate by 8%, or
$400,000 and sales taxes are over by 12%, or $500,000. Although this is not
enough of a trend to announce the end of the City's budgetary problems, it is an
improvement over the past few years wlhen both of these revenue sources were
constantly falling below budget.
On the other hand, the development-related revenues are not faring as well. Much
of the planning process is completed on the projects in the pipeline and there is very
little new activity. This has resulted in the associated planning and engineering fees
falling $300,000 below last year's levels and $600,000 under budget as of December
31. However, we are starting to see a small increase in the number of construction
permits being issued which increased the permit revenues by $45,000 compared to
last year and $37,000 over the budget. 'We do not expect these trends to change
much over the second half of the year. Thus, planning and engineering fees may
end the year under budget by as much as $750,000 while construction permits may
offset this slightly by coming in over budget by $15,000 to $40,000.
General fund expenditures for the first half of the year total $18.4 million leaving
an available balance of $20.4 million or 52.7% of the total revised budget. Council
adopted revisions to the operating budget for the General fund on November 9,
1993 which cut $1,274,000 from the previously adopted budget. The revisions
were necessary due to the net loss of $554,000 from the state's budget actions and
a reduction in the property tax estimate of $750,000 as a result of a decrease in
assessed property values in Carlsbad. These changes have been reflected in the
attached report.
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PAGE TWO OF AGENDA BILL NO. w
OTHER FUNDS
The Water and Sewer operating funds are each performing close to their budgeted levels. Operating income through the first half of the year for the Water district is
almost $500,000 and for the Sewer fund is close to $300,000. It is expected that
these funds will break even or have a small operating income by the end of the
year.
The Redevelopment Agency’s budget is benefiting this year from the refunding of
the Tax Allocation Bonds in September. The refunding generated an additional $2.5
million for capital projects and allowed the Agency to pay interest costs from bond
proceeds rather than from its tax revenues until next year. This will free up
approximately $1.2 million in tax increment over the next 18 months that would
have otherwise been spent on interest payments. For the 1993-94 fiscal year, the
Agency will spend approximately $700,000 less than budgeted for debt service.
CASH BALANCES
the cash balances of the City which are held and invested by the Treasurer. The
balances totaled $103.8 million as of December 31, 1993.
Page seven of the attached report presents information regarding allowable uses of
EXHIBITS:
1. Financial Status Report - Second Quarter, Fiscal Year 1993-94
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Financial Status Report
Second Quarter - Fiscal Year 1993-94 Prepared by Finance Department
GENERAL FUND
Revenues
General Fund revenues at the end of the second quarter are performing at budgeted
levels. Revenues to date total $17.5 million which is the amount expected at this point
of the year. This is particularly salient as the City has received one of the two substantial
property tax payments in December, 1993. Another positive point is that while revenues
are equal to the budget, they are actually ahead of last year by $460,000 or 2.7%. While
total revenues are performing as expected, it is a mix of strong revenues offsetting those
that are falling short of the budget that result in our balanced revenue picture.
THE GOOD NEWS: The good news is that property taxes are performing ahead of
budget at the end of December by 8% or $400,000. It appears that our estimate for
these taxes is satisfactory and may provide a balance to other weak revenues. In
contrast, a comparison of last year’s receipts to those received to date in 1993-94 shows
that actual property taxes collected are behind by $300,000 or 5%. This reduction was
anticipated as we budgeted in response to the reduced assessed valuations and the $1.2
million loss to the State when revising the property tax revenue estimate.
Sales taxes are performing above budget by $524,000 or 12%. Although the press has
indicated that Christmas sales improved in 1993, we will not know how it affected our
revenues until we receive our sales tax payment in March, 1994.
Revenues generated from the issuance of construction permits indicate a stronger than
expected construction pace. These revenues are above budget by $37,000 or 28%.
According to our Building Official, much of the revenue increase can be attributed to a
small blip and is not expected to be sustainable. The strength in these revenues is due
to the industrial construction in the Koll Park area. Permits for residential units total 73
through December, 1993, an increase of 22 over the same period last year.
Other revenues that are doing well through the second quarter include business licenses,
up $58,000 or 15%, ambulance fees, up 32% or $31,000, recreation fees, up 15% or
$60,000 and other charges and fees, up $29,000 or 14%. While interdepartmental
revenues show an increase of 9% over budget, by year end these revenues will come in
as budgeted.
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Financial Status Report Page Two
THE BAD NEWS: The highlight in the bad news camp is development related revenues.
Although construction permits are coming in stronger than expected as noted above, the
remaining development related categories are showing disappointing receipts. To date,
the net result of all development related revenues has yielded $808,000 in receipts, which
is $800,000 or 50% below budget. These revenues are not expected to pick up much
in the second half of the year.
The tax revenue that falls into the bad news category is transient occupancy taxes (TOT),
down $140,000 or 10% below budget. It is apparent the poor economy has resulted in
reduced travel to Carlsbad. According to Steve Link, Manager of the Carlsbad
Convention and Visitor’s Bureau (CCVB), overnight stays in the latter part of the second
quarter are reported to be down. Mr. Link also indicated that a noticeable amount of
multi-month winter visitors were reducing the length of their stays by 50%. The CCVB is
hoping that the inclement winter weather in the East will yield more travelers to Carlsbad
during the third quarter. If winter travel does not materialize, TOT revenues may fall short
of the budget.
Vehicle in-lieu revenues continue to fall behind budget by $286,000 or 23%. We have
received word from the State that vehicle in-lieu revenues due from the round-about used
in balancing their budget, will be received in two payments, February and June. The
estimated total annual revenues to be received from the round-about is estimated at
$457,000. The timing of these payments most likely explains the weakness we are
experiencing in these revenues at the end of the second quarter. After the receipt of the
round-about funds, this revenue is expected to be close to budgeted levels.
Expenditures
General Fund expenditures for the first half of the fiscal year total $18.4 million, leaving
an available balance of $20.4 million (52.7%). If funds were spent evenly throughout the
year, the amount available would be 50%, thus there is a 2.7% savings at the end of
December.
Three departments showed an available balance exceeding 60% at the end of December.
The Treasurer’s department has a current available balance of 62%, and will realize salary
savings of 8% ($7,350) by the end of the fiscal year. The Assistant’s position in that
department was budgeted as a 3/4 time position, but remains at a part-time level in the
current year. In the Human Resources department, the 63% available balance is primarily
due to unspent training monies. The Training Subcommittee of the Organizational
Excellence Committee is formulating a plan for allocating training and education dollars
equitably across all departments. The training money is expected to be spent or
encumbered by the end of the fiscal year. The Community Development departments
show a combined available balance of 60%. The GIS department expects to encumber
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Financial Status Report Page Three
a significant amount of its budget on a contract for consulting, application, programming
and data conversion of GIS software. Once this occurs the departmental expenditures
will be closer to the anticipated budget.
GENERAL FUND REVENUE COMPARISON
THROUGH DECEMBER 1993
ESTIMATE ACTUAL
THROUGH THROUGH DOLLAR PERCENT
DEC 1993 DEC 1993 CHANGE CHANGE
Taxes 11,344,Ooo 12,265,000 921,000 8%
Licenses and permits 784,000 785,000 1 ,OOo 0%
Charges for services 2,041,000 1,433,000 (~*OOo)
Fines and forfeitures 130,000 . 121,000 (9,000)
In terdepartm til tal charges 925,000 1,010,000 85,OOo 9%
Other revenue sources 147,000 70,000 (mm -52%
TOTAL REVENUES 17,526,000 17,468,000 (58,000) -0%
State Subventions 1,305,000 1 ,Ooo,000 (305,Ow - 23%
-30%
-7% Interest 850,000 784,000 (=,m - 8%
Page Four e TAX REVENUE
YTD BUDGET TO ACTUAL DECEMBER 1993
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DOLLARS IN MILLIONS
6
5
4
3
2
1
0 PROP.TAX SALES TAX TOT TAX
DEVELOPMENT FEE REVENUE
YTD BUDGET TO ACTUAL DECEMBER 1993
DOLLARS IN THOUSANDS
Rl
OTHER REVENUE
YTD BUDGET TO ACTUAL DECEMBER 1993
DOLLARS IN THOUSANDS
UP?5% UP1574 .. __
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GENERAL FUND
EXPENDITURE STATUS BY DEPARTMENT
TOTAL AVAILABLE K
BUDGET*** COMMITIED' BALANCE AVAILABLE**
DEPT DESCRIPTION M 1993-94 12/31/93 12131/93 12/31/93
GENERAL GOVERNMENT
101 0 CITY COUNCIL 167,401 76,586 90,815 54.2%
1020 CITY MANAGER 754,507 356,267 398,240 52.8%
1030 CrrYCLERK 17,680 7,962 9,718 55.0%
121 0 AlTORNEY 421,269 170,113 251,156 59.696
1310 FINANCE 1,011,126 448,217 562,909 55.7%
1320 TREASURER 101,400 38,582 62,818 62.0%
1410 PURCHASING 353,753 1 7231 8 181,435 51 3%
1510 HUMAN RESOURCES 799,505 295,559 503,946 63.096
1710 INFORMATION SYSTEMS 387,553 199,801 187,752 48.4%
1990 OTHEWNON-DEPT/CONllNGENCY 1,973,085 1,052,286 920,799 46.7%
TOTAL GENERAL GOVERNMENT 5,9a7,279 2,817,691 3,169,588 52.9%
PUBLIC SAFETY
2lxxPOUcE 8,903,511 4,2@,74a 4,613,781 51.896
2;3otFIRE 6,938,635 3,339,108 3,599,527 51.3%
TOTAL PUBLIC SAFETY 15,842,156 7,620,848 8,213,308 51.8%
COMMUNITY DEVELOPMENT
~OXXCOMMUNTTY DEVELOPMENT 854,919 339,545 515,374 60.3%
3lxxENGINEERING 3,094,125 1,552,597 1,541,528 49.8%
32mPLA"ING 2,040,117 924,016 1,116,101 54.7%
341 1 HISTOFUC PRESERVATION 3,550 21 3 3,337 94.0%
3610 BUILDING 896,534 436,637 459,897 51.396
TOTAL COMMUNITY DEVELOPMENT 6,~,2~ 3,253800a 3,636,237 52.8%
CULTURE & RECREATION
4OxxLlBRARY 2,459,177 1,182,251 1,276,926 51.9%
4lxxPARKs & RECREATION 3,792,607 l,776,tX3 2,016,544 53.2%
42mCULTuRAL ARTS 252,863 103,830 149,033 58.9%
TOTAL CULTURAL ARTS 6,504,647 3,062,144 3,442.m 529%
MAINTENANCE & UTILITIES 3,583,w 1,602,112 1,981,328 55.396
TOTAL GENERAL FUN0 38,806,767 18,363,803 20,442,964 527%
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Financial Status Report Page Seven
CASH BALANCES - ALL FUNDS
Over the past several years, Finance has been asked many times about the large cash
balances held by the City and what the City plans to do with it. In response to that question, we are providing the following illustration and a brief explanation of the
spending restrictions on each portion of the balances.
Cash Balances
December 1993 Total Cash = $103.8 Million
Capital Projects Special Rev/Debt SVC
Sewer/Solid Waste
$1 6.1
internal Service
$1 0.6 $1 5.5
Dollars in M8~iofW
The graphic above shows the distribution of the cash balances of the City as of
December 31, 1993. Below is a description of the allowable uses of this money by fund
type.
General Fund - This cash is available to finance the general operations of the City. It can
be used to pay for the operation and maintenance of our parks and libraries, to pay for
the maintenance of our streets and other City-owned property, to provide safety services
to the citizens and to oversee and guide land uses within the City. Of the $1 1.9 million
that is in the fund as of December, approximately $3 million must be set aside to pay for
projects and services that have already been approved.
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Financial Status Report Page Eight
The remaining $9 million is similar to a savings account for the City. These funds are
available for emergencies and also for special council projects. As they are not a source
of on-going income to the City, these funds are typically spent on items which are of a
"one-time" nature. Once spent, the only way to replenish these funds is to have the City's
income exceed its expenses. Any such excess would add to the "savings" account.
Special RevenueIDebt Service Funds - The money in these funds is legally restricted to
a specific use and can not be spent on general government expenses. An example is
the Low and Moderate Income Housing fund. State law mandates that we set aside a
certain amount of the property taxes to be spent specifically on generating Low and
Moderate Income Housing. We can not legally use this money for any other purpose.
CaDital Projects - In almost all cases, this money is legally restricted to the construction
of certain capital projects. Most of the money comes from fees paid by developers so
the City can construct certain required infrastructure necessitated by new development.
The City is legally required to account for this money separately and to spend it only on
the projects for which it was paid.
CMWD, Sewer, Solid Waste Funds - This money is accumulated through charges to the
consumer of the service (water, sewer, trash). It must be segregated and spent only on
providing that service. A large portion of the cash balance as of December represents
money collected from developers to construct the water delivery system and the sewer
system for new development. As with the Capital Projects funds, these amounts can only
legally be spent on providing the improvements which have been promised.
Internal Service Funds - These funds collect money from all City departments to pay for
the service provided by the fund (Le. data processing, vehicle replacement and
maintenance, etc.). The amounts paid by the departments each year are set so they just
cover the projected operating costs of the service. Any excess in one year would reduce
the amount charged in the following year. The largest cash balance in this group
represents money set aside to purchase new City vehicles when needed.
Trust Funds - This money is being held by the City for somebody else and will have to
be paid back at some future date. The majority is held as security on projects being built
by developers. Upon satisfactory completion of the project, the money will be paid to the
developer.
If you have any questions as to the legal spending restrictions for any of the City's
money, please call the Finance department at 434-2867. We would be happy to review
it with you in more detail.
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Financial Status Report Page Nine
WATER DISTRICT
Revenues
To date, revenues exceed expenditures by $495,000. Revenues through the first half of
the fiscal year total $6.2 million, which is approximately one half of the amount budgeted
for the year. Water sales account for the largest source of revenue, totaling $5.1 million
at December 31, reflecting an increase of $1 million over last year’s receipts. The
increase in sales revenue is due to a rate increase implemented in September, 1993.
Fine and forfeiture revenue is up $1 04,000 over last year’s income, and is due to the large
amount of write-offs posted during the prior fiscal year, which had the effect of artificially
lowering the revenue amounts received last year. Interest earnings total $65,000 and are
below last year’s earnings by $16,000.
Expenses
Water District expenditures through December 31 total $5.8 million and are higher than
costs incurred last year at this time by $600,000. Most of the increased expenditures occur in water sales which are up $547,000 or 10% from last year and is due to the
higher rates the District is paying to obtain its water. Depreciation expenses have been
posted at $650,000 and are based on the value of the District’s assets. These funds are
transferred to the Water Replacement Fund and are used to replace worn and
deteriorated water lines.
Page Ten 0
CARLSBAD MUNICIPAL WATER DISTFICT
0
WATER OPERATIONS
DECEMBER 31,1993
REVENUES:
WATER SALES 4,064,150 5,099,086 1,034,936 25.5
CHARGES FOR CURRENT SERVlCES 1,595,000
FINES, FORFEITURES & PENALTIES
INTER E ST
OTHER REVENUES
TOTAL OPERATING REVENUE
EXPENSES:
SALARIES/8ENEFITS
INTERDEPARTMENTAL SERVICES
PURCHASED WATER 2,882,528 3,429,825 547,297 19.0
UTILITIES
OUTS1 DE SERVICES/MAINTENANCE
GENERAL OFFICE EXPENSE
MATERIALS AND SUPPLIES
DEPRECIATION
CAPITAL OUTlAY
MISCELLANEOUS EXPENSES
TOTAL OPERATING EXPENSES
OPERATING INCOME/LOSS (1 16,312) 494,541 610,853 (525.2)
Fila WAT
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Financial Status Report Page Eleven
SEWER OPERATIONS
Revenues
To date, revenues exceed expenditures by nearly $300,000. Revenues total $2.4 million
the largest portion coming from charges for services. The charges brought in a total $2.2
million, an increase of $170,000, of 8% over last year at this time. This is due to the rate
increase which was implemented in August, 1993. Accrued interest earnings total
$127,000 through the second quarter, posting a gain of $22,000 over earnings last year.
Exlsenses
Expenditures total $2.1 million, an increase of $237,000 over last year’s disbursements.
The largest increase is in Encina plant services at $969,000, up $353,000 over last year.
The increase is due to the timing of the 1991-92 second quarter operating payment and
because of a one-time overpayment credit of $377,000 received in 1991 -92.
Page Twelve
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CARLS8AD MUNICIPAL WATER DISTRICT
SEWER OPERATIONS FUND
DECEMBER 31,1993
0
REVENUES:
CHARGES FOR CURRENT SERVlCES
INTEREST
OTHER REVENUES
TOTAL OPERATING REVENUE
EXPENSES:
SALARIESBENEFITS
INTERDEPARTMENTAL SERVICES
UTIUTIES/RENTALS AND LEASES
OUTSIDE SERVICES/MAINTENANCE
MATERIALS AND SUPPLIES 10,961 (14,900) (51 DEPRECIATION
ENCINA PLANT SERVICES
CAPITAL OUTLAY
MI SCELIANEOUS EXPENSES
TOTAL OPERATING EXPENSES
OPERATING INCOME/LOSS
Fib SEWWMOSTATUS
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Financial Sfatus Report Page Thirteen
REDEVELOPMENT AGENCY
Revenues
Revenues through December total $691,000. Property tax revenues to date total
$649,000, an increase of $27,000 over last year’s receipts for the same time period. In
order to meet the budget for property tax revenues, the Agency will need to generate an
identical amount of revenues during the second half of the fiscal year.
Expenditures
Expenditures total $1.4 million through December 31, of which the largest is rentals and
leases on downtown parking lots. A full year’s expense has been encumbered and there
should be no new costs associated within this category. The expenditures for debt
expenses is not comparable to last year due to the bond refinancing. The only debt
service expenses that will be occurring this fiscal year will be the interest payment on the
bonds in March, 1994. The bond refinancing also generated an additional $2.5 million
which has been set aside to fund capital projects benefiting the redevelopment area.
Page Fourteen e e
CARLSBAD REDEVELOPMENT AGENCY
OPERATIONS AND DEBT SERVICE FUNDS
DECEMBER 91,1993
PROPERTY TAXES 1,280,000 622,077 649,3 10 27,233
INTEREST 80,000 71,929 21,926 (50,003)
30,000 694 19,372 18,678 MISCELLANEOUS REVENUES
1,390,000 694,700 690,608 (4,092)
SAlARl ES/BENEFITS
INTERDEPARTMENTAL SERVICES
RENTALS & LEASES
OUTSIDE SERVlCES/MAINTENANCE
GENERAL OFFICE WENSE
DEBT WENSE
MISCELLANEOUS EXPENSES
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
unums
EXPENDITURES
(1) Total committed includes expenditures and encumbrances.
(2) Amount available would be 50% if funds were spent evenly throughout the year.
File:REDEMLP/MOSTATUI
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Financial Status Report Page Fifteen
CAPITAL IMPROVEMENT PROGRAM
The chart below summarizes the Capital Projects activity for the City as a whole.
Expenditures in the first six months total $9.4 million, nearly 50% of which has been spent on street projects. Encumbrances for two major street projects, El Camino Real and
Palomar Airport Road Widening at $3.2 million and Streetscape at $1 million account for
44% of the total $7.3 million encumbered. Pipelines for the El Camino Real and Palomar
Airport Road Widening project account for $500,000 and the Agricultural Reclaimed Water
and Pump Station Improvement project account for $700,000 which accounts for over
70% of all Water/Sewer encumbrances. The unencumbered available balance for ALL City projects exceeds $35 million.
TOTAL CAPITAL PROJECTS DOLLARS
DECEMBER 31 9 1993
Dollars in millions
..............................
..........
..................
............ **<.
Street WaterlSewer CividArt Park