HomeMy WebLinkAboutOB 2 MID YR BUDG RVW 03-21-83AGENDA
DATE: March 16, 1983
OLD BUSINESS
NO. 2
3-21-83
Inter-Corn
FROM:
SUBJECT:
HONORABLE MAYOR AND CITY COUNCIL
BILL HUSTON, CITY MANAGER
MID YEAR BUDGET REVIEW
The City Council continued this item from its February 22, 1983 meeting in
order that staff could obtain additional information regarding sales tax
revenues.
The City has received the March notice of sales tax distribution which
shows a growth for the period of December, January and February of .2% over
last year.
This amount is consistent with the Finance Director's projections set forth
in the mid-year budget review and if that trend continues, results in a
$455,000 loss of sales tax revenue for fiscal year 1982-83.
Since at this point, staff can only rely upon the data and projections
provided by the State Board of Equalization, staff has no basis to question
the validity of the sales tax figures. The .Council has authorized a sales
tax aud{t, 'however, it will not be completed until early next fiscal year.
While there are signs that the econo~ is improving, staff will codtinue to
assume the $455,000 loss in sales tax revenue.
The loss in 'sales tax revenue and lower interest earnings is partially
offset by increased charges against the Redevelopment and Water Funds for
services provided by the General Fund and a credit against the City's share
of retirement costs. The net effect is projected General Fund resources
for 1982-83 are $316,000 less than projected expenses. The projected
General Fund June 30, 1983 balance, taking into account these factors is
approximately 2.5 million dollars.
The alternatives to utilizing General Fund unrestricted balances include
increasing resources and/or reducing expenditures. The Council has
considered the imposition of a trash collection fee and adjusting the
business license fee schedule, however it determined that it would be more
prudent to delay consideration of these fees until the Council reviews the
1983-84 budget. With regard to expenditure reductions, staff could develop
for the Council's consideration an expenditure reduction plan for the
balance of 1982-83. Such a plan would result in reducing City services
since there would be no other practical way to cut expenses $316,000 by
June 30, 1983 than substantial reductions in personnel.
It is my recommendation that:
The hiring freeze remain in effect. There currently is one
vacancy in the Water Department that will remain vacant
BH:dmt
pending a management review of the staffing of water
maintenance operations. This position has no impact on the
General Fund.
Staff provide the Council monthly status reports concerning
General Fund revenue.
If sales'tax revenue continues to decline (below budget
estimates) the necessity of reducing City services be
considered by the City Council when it begins its review of the
preliminary 1983-84 budget in May. This approach would afford
the Council the opportunity to thoroughly evaluate those City
services which could be reduced and the implications of any
reductions. Because the reduction in sales tax revenue is
reflective of a sluggish economy and a temporary situation, the
necessity of reducing City services should be viewed in a
longer range perspective.
General Fund unrestricted balances be utilized to cover the
difference between projected 1982-83 revenue and expenses,
which as indicated above is projected to be $316,000. Under
this approach,'the beginning General Fund balance for 1983-84
would be approximately 2.5 million dollars. One of the
intended purposes of maintaining adequate reserves is to draw
upon them when it is appropriate from a fiscal standpoint.
AGENDA
DATE:
FROH:
SUBJECT:
Feb. 16, 1983
REPORTS
No. 3
2-22-83
Inter-Corn
[%-~~~ ~ 3 -~- ?~
HONORABLE MAYOR AND CITY COUNCIL
BILL HUSTON, CITY MANAGER
MID YEAR BUDGET REVIEW
RECOMMENDATION:
That the City Council, following its review of the attached report from the
Finance Director, continue this item to its March 21, 1983 meeting.
As pointed out in the report, the key factor affecting the 1982-83 General
Fund budget is sales tax revenue. Sales tax revenue to be received from
the State next month will provide a more accurate measure of the City's
financial situation. At that time additional steps could be taken to
reduce expenditures if necessry.
DATE:
February 15, 1983
inter- Corn
TO:
FROM:
S UBd ECT:
Bill Huston, City~M~4)ager
Ron Nault, Financ~
Mid-Year Budget Revlew
Attached are various schedules that detail the revenue, expenditure, and fund
balance projections for fiscal year 1983, based on information available at
mid-year. In general, the City as a whole will fair well primarily due to the
sale of tax increment bonds in the Tustin Community Redevelopment Agency and the
rate restructure in the Water Fund. The General Fund, with its dependency on
State subventures and economically sensitive sales tax income, has the potential
to realize a significant loss in revenues during 1982-83. There are adequate
reserves available to compensate for this anticipated shortfall, but as discussed
in previous staff meetings, steps should be taken to correct this situation during
the 1984 fiscal year budget process.
B ri efl y:
Revenues
General Fund-
The primary area of concern in the General Fund is sales tax. At
this time ) em projecting a shortfall in this account of $455,000.
The State Board of Equalization has made several changes in the way
they estimate collections and thus their advances, as well as
changes in advance percentages. These changes make it extremely
difficult to show real trends in sales tax collections. The
mid-March balance payment will tell us whether or not the Christmas
sales helped or hindered projections through 6-30-83.
New construction tax projections have also contributed to the
Fund shortfall. The obvious state of the economy has impacted new
construction severely.
Interest income is also a contribution to the shortfall in
revenues. The decreased cash as a result of lower sales tax
collections, etc. impacts surplus cash available for investments.
Roughly $85,000 of the estimated $100,000 negative variance in
interest income can be tied to the $850,000 loss of sales tax and
construction tax income.
There is the potential that both sales tax and consequently
interest income will change positively before 6-30-83. There
simply is not enough information available at this time to change
my projections.
All other accounts in the General Fund are developing within
reasonable variances, but there remains the uncertainty of the
Bill Huston, City Manager
Mid-Year Budget Review
February 15, 1983
page 2.
motor vehicle in-lieu fees in light of the States' fiscal dilemma.
Revenue Sharing - It appears that we will receive approximately $61,000 more than
budgeted. Revenue sharing has been included in the President's new
budget at existing levels. There appears to be optimism that it
will be funded for at least another three or four years.
Gas Tax -
The only major variable in the gas tax fund would be from FAU
funding sources. It does not appear that any significant
construction will take place on Moulton Parkway which will preclude
some FAU funding for this year.
Park Development - No significant variance.
Sewer Trust - No significant variance.
Beautification - No significant variance.
Park Bonds - No Significant variance.
Civic Center Bonds - No significant variance.
Tustin Community Redevelopment Agency - The obvious change in RDA is the bond ale
which was not appropriated in the original budget.
Water Fund -
As.a result of the new rate structure that was ~dopted by Council
in January, there will be a positive variance in the Water Fund of
approximately $178,000. Prior to the restrucure we were projecting
a negative variance in the Water fund of roughly $250,000.
Expenditures
General Fund - Net General Fund expenses are projected to come in 5% under budget
for operations. Contributing to this savings is a $123,000 credit
from PERS for January through June 1983.
Capital improvements for the General Fund are all within reasonable
variances.
Revenue Sharing - No significant variance.
Gas Tax - It is anticipated at this time that the Moulton Parkway project will be
just beginning to impact expenses by 6-30-83. It will be carried
over to 1983-84. All other projects are within reasonable
variances.
Bill Huston, City Manager
Mid-Year Budget Review
February 15, 1983
page 3.
Park Development - No significant variance. All projects in the PD Fund are
carried over from previous years.
Beautification - No significant variance.
Tustin Community Redevelopment Agency - The major project of the RDA this year has
been the E1 camino Real reconstruction. There have been some over
runs, but other projects are within reasonable variances.
Water -
Operations is projecting a savings of approximately $100,000 in
purchased water and power. ! am projecting an over run of $66,000
to cover additional administrative expenses and interest payable to
the General Fund for cash advances. Over all, the Water Fund is
projected as having a slight positive variance for operating and
capital expenses.
In summary, the City as a whole has a good fiscal posture projected into the
1983-84 fiscal year. We will continue to monitor the General Fund in anticipation
of significant change in sales tax revenue. As is the case with most cities in
California, we should begin to seek out new revenuesources .that will minimize
large fluctuations in the annual revenue stream and offset reductions in
subventures subject to the whims of the State.
RN:mm
MID-YEAR 1982-83 REVIEW
PROJECTED FUND BALANCE ANALYSIS
FUND
AUDITED
BALANCE
7-1-82
PROJECTED
ESTIMATED ESTIMATED TRANSFERS BALANCE
REVENUE EXPENDITURES IN/(OUT) 6-30-83
General $2,790,088 $ 7,919,074 $ 8,616,996
Revenue Sharing 292,624 340,00 449,916
Gas Tax 621,512 1,173,005 1,096,714
Park Develop-
ment 61,750 -0- 121,458
Sewer Trust <25,344> 500 -O-
Beautification 87,432 30,000 38,000
Park Bond 279,381 97,120 110,700
Civic Center Bond 117,539 64,117 69,375
RDA 441,141 5,845,333 2,750,790
Water <253,568> 3,854,554 3,371,812
Subtotal
$4,412,575
$19,323,703
$16,625,761
$387,376
(157,376)
-0-
30,000
-0=
(lOO,OOO)
(lOO,OOO)
-0-
$2,479,542
182,708
540,427
<59,708>
<24,844>
49,452.
265,801
112,281
3,435,684
128,174
$7,110,517
Equipment Replace-
ment
Health
Risk Management
Capital Improvement
Subtotal
223,983
99,995
230,651
76,529
631,158
(INTERNAL FUNDS).
$ 178,000 $ 88,000
350,210 320,000
478,693 330,000
20,000 -0-
$ 1,026,903
$ 738,000
-0-
-0-
$ 313,983
130,205
379,344
96,529°
$ 920,061
1982-83 REVENUE PROJECTIONS
FUND
General
Revenue Sharing
Gas Tax
Park Development
Sewer Trust
Beautification
Park Bonds
Civic Center Bonds
RDA
Water
TOTAL
1982-83
BUDGET
$ 8,587,967
279,000
1,633,876
-0-
3,000
30,000
8,500
55,500
1,250,000
3,676,640
$15,597,483
6-30-83
PROJECTION
$ 7,919,074
340,000
1,173,005
500
30,000
97,120
64,117
5,845,333
3,854,554
$19,323,703
VARIANCE
OVER/<UNDER>
$ <668,893>
61,000
<460,871>
<2,500>
15,620
8,617
4,595,333
177,914
$3,726,220
GOVERNMENTAL FUNDS:
CAPITAL IMPROVEMENT PROJECTIONS
BY PROJECT
1982-83
FUND BUDGET
10. Public Facilities
'1. Misc. City Hall Modi-
fications GF $ 3,150
2. Computer Room Air-
conditioning GF 3,900
3. Community Center Re-
habilitation B 14,200
4. Exterior Paint-City Hall B 19,000
Subtotal ~
30. Beautification Projects
'1. General Street Light Program
a) East side of Red Hill,
Valencia to North
boundary of MCAS B $ 8,350
b) Andrews St. Lighting B 650
Subtotal ~
40. Community Services Facility
'1. Master Plan PD $41,718
*2. Columbus Tustin Im-
provements PD 32,000
*3. Peppertree Park Im-
provements PD 12,900
*4. Centennial Park Improv-
merits PD 19,000
*5. Frontier Park Improvements PD 11,500
*6. Magnolia Park Improvements PD 12,600
*7. Pinetree Park Improvements PD 5000
8. Misc. Park Improvements GF 4,000
Subtotal $138,618
6-30-83
PROJECTED
$ 9,764
3,700
10,000
19,000
$ 8,350
65O
$41,718
17,367
6,230
21,314
-0-
27,854
6,975
-0-
$121,458
6-30-83
STATUS
Comp.
Comp.
Comp.
Comp.
Possible
re-budget
Poss. Rebudget
Comp.
Comp.
Comp.
Comp.
Deleted
Comp.
Comp.
Deleted
* Carryover from 81 82
** To be rebudgeted 83-84
GOVERNMENTAL FUNDS (Continued):
60.
1.
~2 o
1982-83
FUND BUDGET
6-30-83
P ROd ECTED
Transportation Facility
Major Maintenance Program RS $255,000 $255,000
Moulton Parkway Re-
alignment GT 568,300 37,000
*3. Newport Ave. Extension GT 30,000 30,000
4. Warner Ave. GT 8,100 -0-
6-30-83
STATUS
Comp.
Comp.
Rebudget
Comp.
Transportation Facility (Cont.)
*5. Irvine Blvd. Widening
Easterly of Ranchwood GT 150,000 150,000 Comp.
*6. Irvine Blvd., Prospect
to Newport GT 355,000 355,000 Comp.
7. Bus Bench, OCTD Routes RS 4,500 4,410 Comp.
8. Ramps for Handicapped GT 9,486 8,614 Comp.
Subtotal $1,380,386 $585,024
65. Traffic Controls
'1. Irvine Blvd., Yorba St.
to Red Hill Ave. GT 417,500 417,500 Comp.
*2. Irvine Blvd. at "B" St. GT 57,000 57,000 Comp.
**3. Red Hill Ave. and Barranca
Road GT 31,000 -0-
**4. Walnut Ave. at Oxford Ave. GT
**5. Red Hill Ave. at Walnut Ave. GF
**6. Newport Ave. at Sycamore Ave. GF
Subtotal
52,000 41,600
29,000 23,200
52,000 '41,600
$638,500 $580,900
Possible
Carry over
80% Comp.
80% Comp.
80% Comp.
* Carry over from 81-82
** To be rebudgeted 83-84
GOVERNMENTAL FUNDS (Continued):
70.
Flood Control Facilities
Easement Drain, Northerly of
Main St. between Pasadena
and Costa Mesa Freeway
**2. Santa Fe and Industrial Way
at Red Hill Avenue
**3. Red Hill Ave. Drain #2
Walnut Ave. to Mitchell Ave.
Subtotal
1982-83 6-30-83 6-30-83
FUND BUDGET PROJECTED STATUS
RS $21,000 $6,300
RS 13,000 3,900
GF 6,000 1,800
GF 237,000 71,100
$277,000 $83,100
30% Comp.
30% Comp.
30% Comp.
TOTAL GOVERNMENTAL FUNDS
$2,433,754 $1,421,946
* Carry over from 81-82
** To be rebudgeted 83-84
30. Beautification Projects
40.
CAPITAL IMPROVEMENT PROJECTIONS
BY PROJECT
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
1982-83 6-30-83 6-30-83
FUND BUDGET PROJECTED STATUS
60.
*3. E1Camino Real ID signs RDA 10,000 $ -0-
*4. E1Camino Real Landscape/
Furniture RDA
40,000 -0-
*7. "C" Street Plaza RDA
8. Irvine Blvd. Center
Island Landscape RDA
Subtotal
Community Services Facilities
'1. Columbus Tustin Park.
Development - A&E RDA
*2. Columbus Tustin Rec.
Facility - A&E RDA
Subtotal
Transportation Facilities
*1. E1Camino Real Parking
Facility RDA
*2. Alley Reconstruction, east
of E1Camino Real RDA
*6. E1Camino Real Recon-
struction RDA
50,000 50,000
55,600 55,600
$155,600 $105,600
$ 12,450 $ 10,000
100,000 80,000
$112,450 $ 90,000
Included in
E1 Camino
Reconstruct
Included in
E1 Camino
Reconstruct
Comp.
Comp.
Comp.
Comp.
$684,000 $700,653 Comp.
1,200 1,197 Comp.
1,300,819 1,561,000 Comp.
* Carry over from 81-82
Tusti n Community Redevel opn,:nt Agency (continued)
FUND
Transportation Facilities (continued)
8. Prospect Ave. Road
Wi deni ng
*3. Alley Reconstruction, south
of First Street
*4. Alley Reconstruction, west
of E1 Camino Real
Subtotal
65. Traffic Control Facilities
'1. 1trine Blvd. at Fashion Ln.
2. E1 Camino Real at
Sixth Street
Subtotal
Land Acquisition
1982-83 6-30-83 6-30-83
BUDGET PROJECTED STATUS
RDA $ 14,000 $ 10,000 Comp.
RDA 6,040 6,039 Comp.
RDA 1,005 1,001 Comp.
$2,007,064 $2,279,890
RDA $ 33,600 $ 33,600
RDA 53,100 53,100
$ 86,700 $ 86,700
RDA 119,000 119,000
Comp.
Comp.
TOTAL RDA
$2,480,814 $2,681,190
* Carry over 81/82
90.
CAPITAL IMPROVEMENT PROJECTIONS
*4.
*5.
*7.
10.
11.
Water Supply and Distribution
Mitchell Ave. east of
Newport
Red Hill at Walnut,
Well Site
Red Hill/Main Replace-
ment
Vaj~no Way
Palomar Way/Olympia Way
Nisson Road east of
Red Hill Ave.
Misc. S~tem Expansion
for New Development
Subtotal
BY PROJECT
TUSTIN WATER SERVCICE
1982-83
FUND BUDGET
6-30-83 6-30-83
PROJECTED STATUS
WF $ 2,500 $ 2,500 Comp.
WF 22,045 20,456 Comp.
WF -0- 769 Comp.
WF 20,000 20,000 Comp.
WF 80,700 80,700 Comp.
WF 38,200 38,200 Comp.
WF -0- 17,706 Comp.
$ 163,445 $ 180,331
GRAND TOTAL ALL FUNDS
$5,128,013 $4,283,467