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HomeMy WebLinkAbout1995-05-16; City Council; 13142; THIRD QUARTER FINANCIAL REPORT FOR FISCAL YEAR 1994-95I THIRD QUARTER FINANCIAL REPORT Accept and file report. ITEM EXPLANATION: This report summarizes the financial status of the General Fund, the Carlsbad Municipal Water District and Sewer Enterprise, and the Carlsbad Redevelopment Agency through third quarter of fiscal year 1994-95. A few significant items are highlighted below. Please see the report for more detailed information. GENERAL FUND Revenues in the General Fund are above budgeted levels and total $27.5 million, while $27.8 million has been expended or is committed to be spent. Based on current and projected revenues and expenditures, the General Fund is expected to end the year with slightly higher revenues than expenditures. Revenues remaining at year-end will increase the General Fund balance. +J k 0 a a k a, s +J a a a, c) rb !--I 2 Development related revenues from construction permits and planning, building and engineering fees are $1 .I million over budget estimates. While the forecast called for 130 residential building permits to be issued during 1994-95, building permits are expected to approach 650 by the end of the fiscal year. Interest accruals through March show earnings below estimates by $373,000 or 30%. The difference is attributed to low interest rates over the last few years and maturing of higher paying securities in the portfolio. Although market interest rates are increasing slightly, investment pool earnings will rise more slowly than market due to the City's "buy and hold" investment strategy. Expenditures and encumbrances (commitments to purchase) in the General Fund total $27.8 million through third quarter. About 29% of the available budget remains, which is 4% better than expected if funds were spent evenly throughout the year. Lower expenditures in several departments, especially Community Development and Community Services, lead to the current picture. WATER AND SEWER OPERATIONS The Carlsbad Municipal Water District received $9.7 million in revenues with operating expenses of $8.4 million. Both water sales and water purchases show increases from last year, the result of greater volumes of water used and higher rates charged to the District and to their customers. Water use is expected to increase as the year moves to the dryer a, +J 0 .rl 2 V .. z G e 6 $ z 3 0 0 e 0 PAGE TWO OF AGENDA BILL NO. J 3, / ‘i ’1 Sewer operating revenues total $3.5 million with operating expenses of $3.1 million. Sewer facilities depreciation and payments to Encina Wastewater Plant for sewage treatment account for over 66% of the Sewer budget. Because previously deposited funds with Encina Wastewater Plant were utilized in 1993-94, this year’s payments to Encina are $257,000 greater than last year. REDEVELOPMENT AGENCY Redevelopment revenues through third quarter total $765,000, with tax increment receipts 12% below 1993-94 levels. As in the General Fund, tax increment property tax payments are reflecting the decline in assessed value in the Redevelopment area. With revenues lower than budgeted and expenditures slightly under budget, the Agency’s planned $1 42,000 deficit is still expected. In 1994-95, this deficit can be absorbed by Redevelopment Agency reserves. EXHl BIT: 1. Financial Status Report - March 31 , 1995 - L 0 0 Financial Status Report March 31, 1995 INTRODUCTION Carlsbad’s revenues are continuing to show signs of economic recovery, with the most noticeable improvement in the development related areas. At the end of March, Carlsbad’s General Fund revenues total $27.5 million which is $2.3 million or 9% higher than originally estimated. Charges for Services show the largest increase at $986,000 or 52% ahead of budget. The increases are due mainly to planning, engineering and building department revenues reflecting the increase in development activity this year. State subventions and interest are the only categories in the General Fund which are continuing to come in below budget. Further detail about Carlsbad’s General Fund revenues can be found in this report as well as an overview of the General Fund expenditures for the fiscal year through March 1995. In addition, the financial status of the Water District, Sanitation Enterprise and Redevelopment Agency will be discussed. GENERAL FUND Taxes Property tax revenues continue to lag behind budget projections by $280,000 or 4% which reflects the decline in property values experienced since the beginning of the recession. It appears that at year end we will not meet original budget projections; however, we will be waiting for the April property tax returns to gauge the significance of the shortfall. Sales tax revenue is ahead of budget by $556,000 or 7%. Some of the increase is due to a conservative estimate made at the beginning of the fiscal year. Additionally, auto and truck sales posted gains in the early part of the fiscal year adding to sales tax receipts. Since that time, auto and truck sales have leveled off reflecting a dissipation of the pent up demand for vehicles as well as an increase in the use of leases for higher end auto acquisitions. Transient occupancy taxes are ahead of budget by more than $200,000 or 11%. It appears that travel to Carlsbad is experiencing a recovery which coincides with the increase in visitor revenues to the greater San Diego area. In April, the Economic Bulletin stated that visitor spending in San Diego in 1994 increased by 5.4% over 1993’s spending levels. The increase is attributed mainly to visitors from the western U.S. and other parts of California. According the Economic Bulletin, “San Diego’s visitor industry benefitted from other Western state’s thriving economies, as well as California’s recovering or improvement.” Prepared by Finance Department 0 0 Financial Status Report Page Two Franchise tax is ahead of budget by $1 13,000 or 24%. Revenues are higher than estimated due to the increased tax rate for Daniels Cablevision which was implemented in January 1994 as well as a conservative budget estimate. Licenses and Permits Leading this category are receipts from construction permits, up by $268,000 or 140%. Sixty permits for new dwelling units were issued during March, bringing the fiscal year total to 489. The annual total has been influenced by the La Terraza affordable housing project which accounts for 176 or 36% of the total building permits issued. Other developments pulling permits in March included Taylor Woodrow, Barrrett American and Warmington. The increase in other licenses and permits is also related to greater building activity, with revenues over budget estimates by $1 14,000 or 67%. Business licenses have exceeded budget projections by $1 97,000 or 25% reflecting the recovering economy and growth in retail sales. Additionally, an active letter writing procedure was implemented which has increased collections on delinquent accounts. State Subventions State subventions is one of the few revenue sources running behind budget at this time, down $44,000 or 2%. The shortfall is mainly in the "Other" category which consists of homeowner's exemptions on property taxes. This category is below budget by $35,000 or 23% and reflects the decline in property values over the last several years. Charges - for Services Leaders in the charges for services category are those associated with development related fees. Coming in ahead of budget are planning fees, up $331,000 or 123%, building department fees, up $215,000 or 167% and engineering fees, up $298,000 or 82%. As mentioned in prior monthly reports, the number of planning applications processed has increased over last year's. Engineering fees should be relatively flat for the remaining months of the fiscal year since the majority of activity is believed to have already occurred. Building department fees are reflecting the increase in building activity noted above for the year. Ambulance fees are also performing ahead of budget estimates, up $67,000 or 34%. The increase is due to the increase in rates approved by Council last June as well as active follow-up on billings. Other charges or fees are ahead of budget by $1 61,000 or 60%. This is due to the one time revenue from the bond refunding of the Seascape project, increased rentals of the Senior Center and increased collection of various other fees and charges. The one charge for service performing behind budget is recreation fees, down by $86,000 or 13%. Part of the decline is due to the expiration of the Marcario Canyon agricultural lease which brought in about $24,000 per year. The Community Services department is in the process of negotiating a new lease on this property. In addition, the c 0 e Financial Status Report Page Three lagoon revenues have decreased; however, there is some good news. SDG&E has contributed $5,400 towards the cost of maintaining the safety patrol program for the lagoon. These funds, together with the annual user fees of approximately $1 5,000, will help to offset the $32,000 direct costs of the program. Other Interest revenues have been accrued through March and show earnings below estimates by approximately $373,000 or 30%. The difference is attributed to the low interest rate market over the last several years and the run-off of the higher paying securities in the portfolio. While market rates have risen slightly, the City's investment pool will be slower to react to market rate changes due to our "buy and hold" strategy for these funds. Other revenue sources are ahead of budget by $275,000 or 62%. The increase consists of a one time transfer of accumulated fees paid by property owners on Zones 6, 11, and 12 totaling $148,000, a dividend from our group life insurance carrier for $62,000 and a refund of $49,000 in sales tax. The refund was claimed from the State after the sales tax collected for the San Diego Justice Facility was found to be unconstitutional. Additionally, there are several smaller unanticipated receipts such as a reimbursement from the Federal government for flood damage expenses. ExDenditures To date, $27.8 million has been expended or is committed to be spent. This equals approximately 71% of the total $39.4 million budget leaving 29% available for the remainder of the year. If funds were spent evenly throughout the year, we would expect to have only 25% available as of the end of March. Summan/ Based on current and projected revenues and expenditures, the General Fund is expected to end the year with slightly higher revenues than expenditures. Any remaining revenues at year-end will tend to increase the General Fund balance. c e 0 Financial Status Report Page Four GENERAL FUND REVENUE COMPARISON THROUGH MARCH 31,1995 ESTIMATE ACTUAL THROUGH THROUGH DOLLAR PERCENT MARCH 1995 MARCH 1995 CHANGE CHANGE Taxes 16,899,000 17,570,000 671,000 4% State Subventions 1,776,000 1,732,000 (44,000) -2% Interdepartmental charges 1,500,000 1,657,000 1 57,000 10% Interest 1,260,000 887,000 (373,000) - 30% TOTAL REVENUES 25,149,000 27,449,000 2,300,000 9% Licenses and permits 1,204,000 1,805,000 601,000 50% Charges for services 1,896,000 2,882,000 986,000 52% Fines and forfeitures 1 72,000 199’000 27,000 16% 0 th er revenue sources 442,000 71 7,000 275,000 62% 0 0 Financial Status Report Page Five TAX REVENUE BUDGET TO ACTUAL 3RD QUARTER (IN MILLIONS) ................... ................... .............-..... mi DEVELOPMENT FEE REVENUE BUDGET TO ACTUAL 3RD QUARTER. .............. pl OTHERREVENUE BUDGET TO ACTUAL 3RD QUARTER (IN THOUSANDS) 2000 1500 1000 ......................................... UPl6% DOWN13% UPlllK UP=% 500 ....... - ..... PI' 0 CP &* ***" @ *P &+ &e+ @+& $* ./ & Q &ff #P & .co ** *** & 63 YEAR- TO- DATE ACTUAL CHANGE FROM EXPECTED REVENUE EXPECTED PERCENT BUDGET 3/31 /96 BUDGET CHANGE 6,731,000 $6,451,000 (280,000) -4% SALES TAX 7,704,000 8,260,000 556,000 7% 1,876,000 2,078,000 202,000 11% TRANSIENT TAX FRANCHISE TAX 479,000 592,000 113,000 24% 73% TRANSFER TAX 109,000 189,000 80,000 TOTAL TAXES 16,899,000 17,570,000 671,000 4% CONSTRUCTION PERMITS 192,000 460,000 268,000 140% LICENSE TAX-CONSTRUCTION 48,000 70,000 22,000 46% OTHER LICENSES & PERMITS 169,000 283,000 114,000 67% TOTAL LICENSES 8t PERMITS 1,204,000 1,805,000 601,000 50% BUSINESS LICENSES 795,000 992,000 197,000 25% 1,622,000 1,613,000 (9,000) -1% OTHER 154,000 119,000 (35,000) -23% TOTAL STATE SUBVENTIONS 1,776,000 1,732,000 (44,000) -2% 270,000 601,000 331,000 123% ENGINEERING FEES 365,000 663,000 298,000 82% AMBULANCE FEES 197,000 264,000 67,000 34% RECREATION FEES 666,000 580,000 (=,ooo) -13% OTHER CHARGES OR FEES 269,000 430,000 161,000 60% TOTAL CHARGES FOR SERVICE 1,896,000 2,882,000 986,000 52% 173,000 199,000 26,000 15% 1,260,000 887,000 (373,000) -30% BUILDING DEPT. FEES 129,000 344,000 215,000 167% 1,500,000 1,657,000 157,000 10% 442,000 71 7,000 275,000 62% 25.150.000 27,449,000 2.299.000 - 996 FISCAL YEAR ADOPTED BUDGET 1994-95 11,300,000 10,600,000 3,000,000 1,200,000 190,000 26,290,000 300,000 1,000,000 50,000 300,000 1,650,000 2,350,000 300,000 2,650,000 500,000 200,000 600,000 300,000 895,000 299,500 2,794,500 230,000 1,680,000 2,000,000 589,630 37.884.1 30 0 0 Financial Status Report Page Seven GENERAL FUND EXPENDITURESTATUS BY DEPARTMENT TOTAL AVAILABLE % BUDGET COMMITIED* BALANCE AVAILABLE** DEPT DESCRIPTION FY 1994-95 3/31 195 3/31 195 313 1 195 GENERAL GOVERNMENT CITY COU NClL 168,548 1 21,117 47,431 28.1% CITY MANAGER 779,245 563,822 21 5,423 27.6% CITY CLERK 40,900 33,705 7,195 17.6% ATTORNEY 473,619 323,743 149,876 31.6% TREASURER 101,959 54,138 47,821 46.9% FINANCE 1,041,287 736,708 304,579 29.3% PURCHASING 358,057 253,584 104,473 29.2% HUMAN RESOURCES 862,690 524,801 337,889 39.2?? OTHE WNON-DEPT/CONTIffiENCY 2,188,529 1,701,788 486,741 22.2% INFORMATION SYSTEMS 391,023 291,874 99,149 25.4% TOTAL GENERAL GOVERNMENT 6,405,857 4,605,280 1,800,577 28.1% PUBLIC SAFETY POLICE 8,898,557 6,399,817 2,498,740 28.1% FIRE 6,855,812 4,953,433 1,902,379 27.7% TOTAL PUBLIC SAFETY 15,754,369 1 1,353,250 4,401,119 27.9% COMMUNITY DMLOPMENT COMMUNITY DEVELOPMENT 909,129 583,636 325,493 35.8% ENGINEERING 3,218,984 2,261,837 957,147 29.7% PIAN N ING 2,114,639 1,313,016 801,623 37.9% BUILDING 781,950 553,886 228,064 29.2% TOTAL COMMUNIlY DEVELOPMENT 7,024,702 4,712,375 2,312,327 32.9% LIBRARY AND THE ARTS LIBRARY 2,480,284 1,759,737 720,547 29.1% CULTURAL ARTS 259,801 197,829 61,972 23.9% TOTAL LIBRARY 8 ARTS 2,740,085 1,957,566 782,519 28.6% COMMUNITY SERVICES COMMUNITY SEWICES ADMIN. 645,652 456,123 189,529 29.4% PARKS & RECREATION 3,451,030 2,469,287 981,743 28.4% STREETS & FACILITIES 3,355,162 2,197,345 1,157,817 34.5% TOTAL COMMUNITY SERVICES 7,451,844 5,122,755 2,329,089 31 -3% TOTAL GENERAL FUND 39,376,857 27,751,226 11,625,631 29.5% * Total committed includes expenditures & encumbrances. ** Amount available would be 25% if funds were spent evenly throughout the year. 0 e Financial Status Report Page Eight WATER DISTRICT Revenues To date, revenues total $9.7 million which is $818,000 or 9% greater than collections last year at this time. Water sales receipts total $7.1 million and are ahead of last year’s by $1 13,000 or 1.6%. Charges for current services total $1.9 million, ahead by $432,000 or 30%. Both of these revenue categories exceed last year’s income due to the higher rates charged in 1994-95. Expenses Expenses total $8.4 million, an increase of $272,000 or 3.3% over last year’s expenses. A large portion of the increase can be attributed to purchased water, the largest expense category, which totals $4.8 million and is ahead of last year’s expenses by $92,000 or 2%. Through March, the Water Enterprise shows an operating income of $1.3 million. REVENUES: WATER SALES 6,986,186 7,099,356 113,170 1.6 FINES, FORFEITURES & PENALTIES INTEEST OTHER REVENUES TOTAL OPERATING REVENUE EXPENSES: SALARIES/BENEFITS 1,399,119 1,478,325 79,206 5.7 INTERDEPARTMENTAL SERVlCES PURCHASED WATER UTILITIES OUTSIDE SERVICES/MAINTENANCE GENERAL OFFICE EXPENSE MATERIALS AND SUPPLIES DEPRECIATION CAPITAL OUTLAY MISCELLANEOUS EXPENSES TOTAL OPERATING EXPENSES OPERATING INCOME/LOSS 713,767 1,260,545 546,778 76.6 0 e Financial Status Report Page Nine SANITATION ENTERPRISE Revenues Income to the Sanitation Enterprise totals $3.5 million, a decrease of less than 1% from last year. Expenses Expenses total $3.1 million, an increase of $328,000 or 12% over last year. The largest portion of the increase is in the Encina Plant Services, up $257,000 or 24%. The apparent increase is due to an unusually low expense in 1993-94 as an adjustment to prior period payments was made in that year by the Encina Waste Water Facility. Through March, the Sanitation Enterprise fund shows an operating income of $472,000. REVENUES: CHARGES FOR CURRENT SERVICES INTEREST OTHER REVENUES TOTAL OPERATING REVENUE EXPENSES: SALARIES/BENEFITS INTERDEPARTMENTAL SERVICES UTILlllES/RENTALS AND LEASES 0 UTSl DE SERVl CES/M AI NTENANCE MATERIALS AND SUPPLIES DEPRECIATION ENCINA PLANT SERVICES 1,347,512 256,699 2: CAPITAL OUTLAY MISCELLANEOUS EXPENSES TOTAL OPERATING EXPENSES OPERATING INCOME/LOSS .) 0 e Financial Status Report Page Ten I REDEVELOPMENT AGENCY Revenues Revenues total $765,000 and are $64,000 below those received last year at this time. Property tax receipts are the reason for the decline, down $94,000, as assessed valuations within the redevelopment area have fallen by 14%. ExDenditures A total of $925,000 has been spent or is committed to be spent which leaves 41% of the funds available for use. All expense accounts reflect expected spending patterns. PROPERTY TAXES INTEREST MISCELLANEOUS REVENUES SALARIES/BENEFITS INTERDEPARTMENTAL SERVICES UTILITIES RENTALS & LEASES OUTSIDE SERVl CES/MAI NTENANCE DEBT EXPENSE GENERAL OFFICE EXPENSE TOTAL EXPENDITURES EXCESS OF REVENUES OVER EXPENDITURES (1) Total committed includes expenditures and encumbrances. (2) Amount available would be 25% if funds were spent evenly throughout the year.