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HomeMy WebLinkAbout1996-10-01; City Council; 13841; FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED JUNE 30, 19960 0 $j' e9 FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED JUNE 30,1996 RECOMMENDED ACTIONS: 1. Accept the Financial Status Report for the fiscal year ended June 30,1996. 2. Approve Resolution No. 74 '320 appropriating additional funds for Police and Fire. ITEM EXPLANATION: The financial results for the General fund, the Carlsbad Municipal Water District, the Sewei Enterprise fund, and the Redevelopment Agency are presented in the attached report for the fiscal year ended June 30, 1996 (Exhibit 2). The 1995-96 fiscal year books are closed and the audit is under way for the Comprehensive Annual Financial Report (CAFR) statements. Although the financial statements are subject tc audit adjustments, they are not expected to vary materially from the numbers presented here. The General fund ended the year with an available balance of $14.9 million, which is $1.E million greater than expected. The increase was due to higher than anticipated revenues anc slightly lower expenditures. Revenues totalled $42.4 million which was $2.7 million highei than projected. The increase in revenue is primarily attributable to the economic recovery with the most notable improvement in the development-related revenues. Expenditures, on i budgetary basis, were $39.1 million which was $351,000 less than projected. As of the end of June, the Public Safety departments incurred expenditures in excess of the budget. The Police department spent $151,010 more than budgeted in fiscal year 1995-96 primarily in overtime. Overtime expenditures were required to back-fill positions while recruit: were in the academy. Additionally, the Police department experienced an increase ir overtime hours for court appearances, mall detail, gang detail, and the Narcotics Task Force The Fire department spent $121,800 more than the budgeted, primarily in the areas o salaries and overtime. The salary budget for the Fire department was not sufficient to covei the salary increases for fiscal year 1995-96. Furthermore, the ongoing need to fill vacancies with the use of overtime was underestimated in the budget. It is requested that Counci appropriate additional funding from the contingency account in fiscal year 1995-96 for thesc The Water Enterprise had an operating income of $1.6 million for the year due to increase( water sales and lower than budgeted expenditures. An increase in the number of wate customers resulted in an increase in water use and sales. Expenses were lower that anticipated for materials and supplies, capital outlay, and depreciation. Sewer operations had annual operating income of $1.1 million for the fiscal year. The increase in the Sewer fund income is attributable to an increase in revenue and a decrease ii expenditures. During fiscal year 1995-96, the number of sewer connections increased w 0 PAGE TWO OF AGENDA BILL NO. ) 3 I gL\ I resulting in an increase in revenues. Expenses were lower than the previous fiscal year due to a budgeted decrease in the interdepartmental charges. Revenues to the Redevelopment Agency total $1.4 million for the year ended June 30, 1996, which is $66,000 more than the prior year. The Agency's primary source of revenues is property taxes which have not changed significantly from the previous year. The majority of the increase in revenues can be found in the category of Miscellaneous Revenues. Miscellaneous revenues include $35,000 in annual administrative fees from the Seascape Mortgage Revenue Bonds which was negotiated when the bonds were refunded last year. Expenditures for the Agency were essentially equal to the budget at $1.6 million. Additional information regarding the financial results for all of these funds is available in the attached report (Exhibit 2). FISCAL IMPACT Appropriations in the amount of $151,010 and $121,800 will be required for the Police and Fire departments, respectively, from the Council Contingency account for expenditures in excess of the budget for fiscal year 'I 995-96. EXHIBITS 1. Resolution No. ' 4&::32c appropriating funds for the Police and Fire departments in fiscal year 1995-96. 2. Financial Status Report for the Fiscal Year Ended June 30, 1996 1 2 3 4 5 6 7 8 9 lo 11 12 l3 I.4 15 16 17 I-8 19 20 21 22 23 24 25 26 27 28 e 0 RESOLUTION NO. 96-320 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROPRIATING FUNDS FOR THE POLICE AND FIRE DEPARTMENTS. WHEREAS, the financial results for the year ended June 30, 1996, indicate expenditures in excess of budget for the Public Safety departments; and WHEREAS, the Council’s Contingency fund is sufficient to appropriate additional funds, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carisbad, California, as follows: 1. That the above recitations are true and correct. 2. That additional appropriations in the amount of $151,010 are authorized from the Council Contingency account to pay for expenditures in excess of budget for the Police department in fiscal year 1995-96. 3. That additional appropriations in the amount of $121,800 are authorized from the Council Contingency account to pay for expenditures in excess of budget for the Fire department in fiscal year 1995-96. Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill - 1- 1 2 3 4 5 6 7 8 9 10 II 13 l2 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e 0 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 1st day of October , 1996, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Kulchin, Hall and Finnila NOES: None ABSENT: None ATTEST: (SEAL) h4R&+ ALETHA L. RAUTENKRANZ, City Clerk I - Financial Status Report Prepared by the Finance Department INTRODUCTION The City of Carlsbad’s fiscal year 1995-96 books are closed and the audit is under way for the Comprehensive Annual Financial Report (CAFR) statements. Although the financial statements are subject to audit adjustments, they are not expected to vary materially from the numbers presented in this report. OVERVl EW Carlsbad’s General fund revenues increased by $1.1 million, or 2.8%, compared to the previous fiscal year. During fiscal year 1995-96, General fund revenue projections were increased from the adopted budget of $38.9 million to $39.7 million. Despite this $800,000 increase in projections, actual revenues exceeded the projection by $2.7 million. The “Signs of the Times” summary highlights some specific revenue sources and their variance compared to the previous fiscal year. Much of the increase in General fund revenues was due to development-related activities and the economic recovery. As stated in the California Economic lndicafors publication, “this strong economic growth reflects a continuation of trends seen over the past year - a vigorous, diverse, broad-based economic recovery and expansion.. .I” 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 ended June 30,1996. In addition, the financial status of the Water and Sanitation Enterprise and the Redevelopment Agency will be discussed. 1 “Review of Recent Economic Developments”, California Economic Indicators (July/August 1996):3. GENERAL FUND FISCAL YEAR 1995-96 UNRESERVED - UNDESIGNATED FUND BALANCE Actual on a Budgetary % Projected* Basis Difference Difference Unreserved, undesignated fund balance, 7/1/95 11,755,000 11,755,000 Adjust for prior year encumbrances and carryforwards: Prior year encumbrances 724,000 724,000 Prior year carryforwards 399,000 399,000 Adjusted balance 12,878,000 12,878,000 Revenues 39,663,000 42,401,000 2,738,000 6.9% Expenditures (39,432,000) (39,081,000) 351,000 -0.9% Other adjustments & transfers 0 (1,308,000) (1,308,000) Unreserved, undesignated fund balance, 7/1/96 13,109,000 14,890,000 1,781,000 * As estimated in the 96-97 Operating Budget document. Taxes Property tax revenues essentially equalled the previous year at $10.9 million. Sales taxes, of $11.5 million, increased by $143,000 over the previous fiscal year. A taxes received under Proposition 172. $359,000 in fiscal year 1994-95 to $382,000 in 1995-96) and are used to support public portion of the increase was due to the sales These taxes have grown by 6% (from safety programs. Transient occupancy tax (hotel tax) receipts were $155,000, or 5%, higher than the Tax Revenue Fiscal Year Comparison TRANSIENT TAX SALES TAX PROPERTY TAX In millions 0 PI 94-95 FY 95-96 Bullefin, “Growth not only continued in 1995, but accelerated as the region emerged from the recession and once again established production and employmenrt.”2 Construction activity in Carlsbad increased and led to development-related revenues. Construction permits displayed revenues exceeding the record levels of economic significant increases in the most notable change with previous year by $274,000 or 42%. During the 1995-96 fiscal year, the City issued permits for 494 dwelling units and 860,222 square feet of Development Fee Revenue Fiscal Year Comparison CONSTRUCTION PERMITS ENGINEER ING BUILDING PLANNING 0 200 400 600 800 1,000 1,200 In Thousands 0 FY 94-95 FY 95-96 Other gains in revenue for fiscal year 1995-96 can be found in ambulance fees, business license revenues, recreation fees, fines and forfeitures, and vehicle license fees. Ambulance fee revenues totalled $422,000, which was $69,000 or 20% higher than last fiscal year. Collection efforts by the Finance department resulted in the increase in revenues for the year. Business license revenues, at $1.5 million, have been increasing for the by $245,000, or 20%, compared to increase in business license City. These revenues have grown fiscal year 1994-95. Most of the Other Revenue Fiscal Year Comparison AMBULANCEFEES BUSINESSLICENSE RECREATIONFEES FINE& FORFEITURES VEHICLE LICENSE FEE 0 500 1000 1500 2000 2500 InThousands 0 FY 94-95 m FY 95-96 i e 0 Financial Status Report Page Five Recreation fees of $788,000 were 11 % higher than last year. Recreational classes, aquatics programs, special events, and sports programs make up the majority of the recreation fees. Property rental fees of $1 70,000 were 3% higher than the previous year. Fines and forfeitures revenue, at $335,000, was 27% or $72,000 higher than the previous year. Revenue from parking citations has doubled from the previous year and accounts for $61,000 of the increase in revenue. Much of the increase in revenue was due to the enforcement of two-hour parking limits and the addition of the Coaster station. The Coaster station is a new parking area for the traffic division to manage which has increased the number of parked cars in the City. Vehicle license fees totalled $2.5 million which is an increase of $106,000 or 5% over the prior year. The amount received in fiscal year 1995-96 reflects an increase in the numbers and/or values of automobiles within the State. "Other revenue sources'' include reimbursements from Northwestern National Life insurance and credits which offset the City's PERS expense. Following is a comparison of General fund revenue for fiscal years 1995 and 1996. GENERAL FUND REVENUE COMPARISON FISCAL YEAR FISCAL YEAR DOLLAR PERCENT 1994-95 1995-96 CHANGE CHANGE Taxes $27,175,812 $27,586,049 $410,237 2% State Subventions 2,619,900 2,675,660 55,760 2% Licenses and Permits 2,392,270 2,994,343 602,073 25% Charges for Services 3,978,665 4,442,418 463,753 12% Fines and Forfeitures 263,411 335,395 71,984 27% Interest 1,311,791 1,401,592 89,801 7% Interdepartmental Charges 2,303,335 2,054,319 (249,016) -1 1% Other Revenue Sources 1,210,585 91 1,708 (298,877) -25% TOTAL REVENUES $41,255,769 $42,401,483 $1,145,714 3% The next page provides a detailed revenue comparison by fiscal year and versus the estimate. FISCAL YEAR ACTUAL REVENUE REVENUE ESTIMATE REVENUE SOURCE 1994-95 1995-96 - TAXES PROPERTY TAX $10,889,368 $10,900,000 SALES TAX 11,399,568 11,300,000 TRANSIENT TAX 3,252,270 3,200,000 FRANCHISE TAX 1,399,151 1,430,000 TRANSFER TAX 235,455 250,000 TOTAL TAXES 27,175,812 27,080,000 LICENSES AND PERMITS CONSTRUCTION PERMITS 644,131 700,000 BUSINESS LICENSES 1,245,830 1,400,000 LICENSE TAX-CONSTRUCTION 1 13,118 50,000 OTHER LICENSES & PERMITS 389,191 390,000 TOTAL LICENSES & PERMITS 2,392,270 2,540,000 STATE SUBVENTIONS VEHICLE IN-LIEU 2,385,855 2,400,000 TOTAL STATE SUBVENTIONS 2,619,900 2,600,000 OTHER 234,045 200,000 - CHARGES FOR SERVICES PLANNING FEES 803,352 550,000 BUILDING DEPT. FEES 482,904 460,000 ENGINEERING FEES 936,072 800,000 AMBULANCE FEES 353,016 310,000 RECREATION FEES 706,559 700,000 PROPERTY RENTALS 164,076 175,000 TOTAL CHARGES FOR SERVICES 3,978,665 3,475,000 OTHER CHARGES OR FEES 532,686 480,000 263,411 240,000 - FINES AND FORFEITURES 1,311,791 1,200,000 - INTEREST INTERDEPARTMENTAL CHARGES 2,303,335 1,800,000 OTHER REVENUE SOURCES 1,210,585 728,000 TOTAL GENERAL FUND 41,255,769 39,663,000 1995-96 ACTUAL ACTUAL COMPARED ACTUAL COMPARE1 REVENUE TO ESTIMATE TO ACTUAL 1995-96 DIFFERENCE AS % DIFFERENCE AS $10,895,405 ($4,595) -0.04% $6,037 0.06 11,542,970 242,970 2.15% 143,402 1.26 3,406,917 206,917 6.47% 154,647 4.76 1,447,378 17,378 1.22% 48,227 3.45 293,378 43,378 17.35% 57,923 24.60 27,586,049 506,049 1.87% 410,237 1.51 917,789 21 7,789 31 .I 1 % 273,658 42.48 1,491,159 91,159 6.51% 245,329 19.69 67,440 17,440 34.88% (45,678) -40.38 517,956 127,956 32.81 % 128,765 33.09 2,994,343 454,343 17.89% 602,073 25.17 2,492,251 92,251 3.84% 106,396 4.46 55,760 2.13 2,675,660 75,660 2.91% 183,409 (16,591) -8.30% (50,636) -21.64 890,897 340,897 61.98% 87,545 10.90 558,621 98,621 21.44% 75,717 15.68 1,101,618 301,618 37.70% 165,546 17.69 422,302 1 12,302 36.23% 69,286 19.63 787,654 87,654 12.52% 81,095 11.48 169,578 (5,422) -3.10% 5,502 3.35 4,442,418 967,418 27.84% 463,753 11.6E 51 1,749 31,749 6.61% (20,937) -3.92 335,395 95,395 39.75% 71,984 27.32 1,401,592 201,592 16.80% 89,801 6.85 2,054,319 254,319 14.13% (249,016) -10.81 ------ 91 1,708 183,708 25.23% (298,877) -24.6: 42,401,483 2,738,483 6.90% 1,145,714 2.7.2 GENERAL FUND EXPENDITURE STATUS BY DEPARTMENT FOR THE YEAR ENDING JUNE 30,1996 ACTUAL ON A (OVER)/ % (OVER)/ BUDGET B U DG ETARY UNDER UNDER DEPT DESCRIPTION FY 1995-96 BASIS BUDGET BUDGET GENERAL GOVERNMENT CITY COUNCIL 176,889 176,214 675 0.4% CITY MANAGER 81 1,819 81 1,762 57 0.0% CITY CLERK 443,862 425,392 18,470 4.2% ATTORNEY 519,341 51 1,010 8,331 1.6% FINANCE 1,157,566 1,069,020 88,546 7.6% TREASURER 115,134 78,982 36,152 31.4% PURCHASING 369,119 362,861 6,258 1.7% HUMAN RESOURCES 984,738 937,218 47,520 4.8% CONTINGENCY 575,768 0 575,768 100.0% NON-DEPARTMENTAL 1,624,604 769,367 855,237 52.6% TOTAL GENERAL GOVERNMENT 6,778,840 5,141,826 1,637,014 24.1% PUBLIC SAFETY POLICE 9,320,985 9,471,992 (151,007) -1.6% FIRE 6,983,948 7,105,676 (1 21,728) -1.7% TOTAL PUBLIC SAFETY 16,304,933 16,577,668 (272,735) -1.7% COMMUNITY DEVELOPMENT COMMUNITY DEVELOPMENT 1,019,840 891,838 128,002 12.6% ENGINEERING 3,386,239 3,385,709 530 0.0% PLANNING 2,173,931 1,948,732 225,199 10.4% BUILDING 887,038 851,969 35,069 4.0% TOTAL COMMUNITY DEVEiLOPMENT 7,467,048 7,078,248 388,800 5.2% LIBRARY AND THE ARTS 2,824,287 2,769,113 55,174 2.0% COMMUNITY SERVICES 7,522,271 7,514,087 8,184 0.1 % TOTAL GENERAL FUND 40,897,379 39,080,942 1,816,437 4.4% e 0 Financial Status Report Page Eight Expenditures in Excess of Budget Through the month of May, all departments were under budget by at least 8.3%. If funds were spent evenly throughout the year, 8.3% of the budget should be adequate for one month’s expenditures. However, as of the end of June, the Public Safety departments incurred expenditures in excess of thle budget. Police The Police department spent $151,000 more than budgeted in fiscal year 1995-96, primarily in overtime . Overtime expenses for the department are variable and depend upon the need for special detail, personnel coverage, court appearances, and extended duty. Overtime expenditures were required for personnel coverage while recruits were in the academy. During the fiscal year, five recruits attended the academy. On top of paying a salary to recruits, overtime expenditures were incurred by existing staff to cover the positions while the recruits were in the academy. The Police department also experienced an increase in overtime for court appearances. It is believed that the new “three strikes” law is resulting in a greater number of cases going to court. Defendants are less likely to plea bargain under the new law. Additionally, the department realized an increase in special detail hours. Special detail for patrol officers occurs on overtime. The hours spent for mall detail, gang detail andl the Narcotics Task Force detail increased compared to the previous year. The Finance department reviewed the 1996-97 overtime budget for the Police department and is comfortable with the amount for overtime. While it is always difficult to predict the need for overtime, the 1996-97 budget includes a $100,000 increase in overtime compared to 1995-96. Actual expenditures will be monitored throughout the year to determine if additional funding will be required. Fire The Fire department spent $122,000 more than the budgeted amount in fiscal year 1995-96, primarily in the areas of salaries and overtime. The salary budget for the Fire department was not sufficient to cover the salary increases for fiscal year 1995-96. This oversight in the budget calculations accounts for approximately $74,000 of the Fire department’s variance. Additionally, the ongoing need in 1995-96 to fill vacancies with the use of overtime, was underestimated in the budget. The Fire department had a higher number of vacancies than anticipated during budget preparation which required the use of overtime to maintain the minimum staffing requirements. This accounts for approximately $48,000 of the variance. Salaries in the 1996-97 budget were analyzed and the Finance department is comfortable with the budget. The need for coverage to fill vacancies is difficult to predict. Overtime expenditures will be monitored throughout the fiscal year to determine if additional funding will be required. CARLSBAD MUNICIPAL WATER DISTRICT WATER OPERATIONS FUND JUNE 30,1996 FY 1995-96 Y-T-D Y-T-D % BUDGET 6/30/95 6/30/96 DIFFERENCE DIFFEREb REVENUES: WATER SALES 10,067,000 9,854,107 10,616,729 762,622 CHARGES FOR CURRENT SERVICES 2,562,800 2,650,227 2,790,184 139,957 FINES, FORFEITURES & PENALTIES 283,000 247,536 181,962 (65,574) ( INTEREST 200,000 379,152 437,186 58,034 OTHERREVENUES 63,400 286,909 414,783 127,874 TOTAL OPERATING REVENUE 13,176,200 13,417,931 14,440,844 1,022,913 EXPENSES: SALAR I ES/B EN EFlTS 2,302,453 2,052,240 1,941,056 (1 11,184) INTERDEPARTMENTAL SERVICES 954,180 959,660 950,920 (8,740) PURCHASED WATER 7,337,000 6,726,612 7,671 ,I 52 944,540 MWD/CWA READY-TO-SERVE 240,000 0 235,836 235,836 OUTSIDE SERV/MAINT/UTILITIES 446,227 400,634 421,896 21,262 (19,278) ( GENERAL OFFICE EXPENSE 136,942 128,169 108,891 MATERIALS/SUPPLIES/MISC. 370,764 419,936 296,655 (1 23,28 1 ) ( DEPRECIATION 1,300,000 1,100,551 1 ,I 50,000 49,449 CAPITAL OUTLAY 117,879 37,157 50,598 13,441 TOTAL OPERATING EXPENSES 13,205,445 11,824,959 12,827,004 1,002,045 OPERATING INCOME/LOSS (29,245) 1,592,972 1,613,840 20,868 FY 1995-96 BUDGET REVENUES: CHARGES FOR CURRENT SERVICES 4,463,000 INTEREST 200,000 OTHER REVENUES 9,500 TOTAL OPERATING REVENUE 4,672,500 EXPENSES: SALARIES/BENEFITS 614,684 INTERDEPARTMENTAL SERVICES 255,930 UTILITIES/RENTALS AND LEASES 62,000 OUTS1 DE SERVICES/MAI NTENANCE 270,747 MATERIALS AND SUPPLIES 90,225 DEPRECIATION 1,100,000 ENCINA PLANT SERVICES 2,000,000 CAPITAL OUTLAY 101,700 MISCELLANEOUS EXPENSES 42,840 TOTAL OPERATING EXPENSES 4,538,126 OPERATING I NCOME/LOSS 134,374 JUNE 30,1996 Y-T-D Y-T-D % 6/30/96 DIFFERENCE DIFFERENC 6/30/95 4,666,816 4,923,441 256,625 5 254,266 342,737 88,471 34 61,528 14,779 (46,749) (76.1 4,982,610 5,280,957 298,347 6 489,449 505,431 15,982 3 466,478 251,950 (214,528) (46. 62,398 55,792 (6,606) (10.1 89,052 1 10,330 21,278 23 57,967 58,871 904 1 1,223,605 1,225,000 1,395 0 1,828,730 1,897,466 68,736 3 18,081 36,091 18,010 99 27,166 24,180 (2,986) (11. 4,262,926 4,1651 11 (97,815) (2. 71 9,684 1, I1 5,846 CARLSBAD REDEVELOPMENT AGENCY OPERATIONS AND DEBT SERVICE FUNDS JUNE 30,1996 FY 1995-96 REVENUE BUDGET Y-T-D Y-T-D REVENUES 6130195 6130196 DIFFERENCE PROPERTY TAXES 1,200,000 1,158,957 1,170,153 11,196 INTEREST 75,000 108,257 122,460 14,203 MISCELLANEOUS REVENUES 78,100 79,452 120,076 40,624 TOTAL REVENUES 1,353,100 1,346,666 1,412,689 66,023 TOTAL AVAILABLE % EXPENDITURES FY 1995-96 COMMITTED BALANCE AVAILABLE BUDGET 6130196 (I) 6130196 6130196 SALARIES/BENEFITS 154,310 182,789 (28,479) (1 8.5) INTERDEPARTMENTAL SERVICES 204,860 204,691 169 0.1 RENTALS & LEASES 103,100 95,866 7,234 7.0 DEBT EXPENSE 1,049,100 1,078,840 (29,740) (2.8) OUTS1 DE SERV/MAINT./MISC. 130,901 86,818 44,083 33.7 TOTAL EXPENDITURES 1,642,271 1,649,004 (6,733) (0.4) EXCESSOFREVENUESOVER EXPEN DlTU RES (289,171) (I) Total committed includes expenditures and encumbrances.