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Home My WebLink AboutRPT 5 FINCL RPT 12-31-79 3-3-80DATE: February 26, 1980 REPORTS Inter-Cora TO: FROM: S UBJ ECT: Dan Blankenship, City Administrator Ed Bushong, Finance Director FINANCIAL REPORT AS OF DECEMBER 31, 1979 REVENUES Assessed valuation in Tustin grew from $174,340,430 in FY 78/79 to $210,277,040 in FY 79/80, or approximately 21%. The state bailout funds are being distributed this year by the County as a result of a permanent funding mechanism being created by AB8 implementing legislation. The Tustin allocation for FY 79/80 is approximately 83% of the FY 78/79 allocation. This results in the loss of $63,500 from our budget estimate of $285,000. Based on actual receipts to date, it appears we will receive an additional $500,000 from Sales Tax and $30,000 from Business License Tax. Interest revenue from investments is considerably higher than estimated due to the record high prime rate which is expected to top 17% shortly. OPZPcATING EXPENDITURES In total our operating expenditures are under budget, however, individual accounts and departments are already overspent and require additional appropriations to fund the operating expenses for the remainder of the fiscal year. The follow- ing department accounts and amounts should be appropriated at the next Council meeting: Department Account Description Amount 1-Legislation 2-Administration 3-Non-Departmental 4-Non-Departmental 5-Non-Departmental 6-Non-Departmental 7-Police 8-Fire 2116-City Attorney 5160-Printing 2110-Consulting Services 2119-Medical Services 7140-Personnel Recruitment 7150-Personnel Testing l120-Overtime 2236-County Contract $ 12,500 $ 1,500 $ 9,000 $ 2,200 $ 10,000 $ 3,500 $ 25,000 $ 66,946 $130,646 An analysis of the reasons for the above are as follows: February 26, 1980 Page two Financial Report as of December 31, 1979 1 - Legislation - City Attorney supplemental billings thru January, 1980 Dynachem $1,193 Tiller Days Parade $837 Tustin Water Works $2,036 Annexation $6,625 (FCA v. LAFCO, Tustin) 2 - Administration - Printing - Employment applications, job flyers, personnel action forms, etc. 3 - Non-Departmental - consulting services budget 79/80 Spent-to-date a - Chemical Consultant - $10,000 $ 9,370 b - Engineering Study - TWW $6,000 $ 9,000 c - Financial Consultant - TWW $5,000 $ 3,565 d - Attorney - Stradling, Yocca, Carlson -0- $ 2,620 e - Radiation Consultant $2,000 $ 1,758 4,5,6 - Non-Departmental - Medical Services, Personnel Recruitment & Testing Police Captain recruitment alone cost approximately $4,000 - high volume of turnover, recruitment for 85 positions for period July - December, 1979. 7 - Police - overtime - turnover, coverage for short staff, major investigation for 2 murders occurring in Tustin 8 - Fire County Contract - adjustment due to increased 79/80 assessed valuation. CAPITAL PROJECTS A capital improvement project status report from Bob Ledendecker is attached. SELF-INSURANCE FUNDS A recap of the major City programs is attached. The fund balances are inadequate to meet a major loss and must be increased or consideration given to lower deductible and retention limits or full insurance coverage purchased. You will receive a recommendation from me prior to the fiscal year end in this matter. For FY 80/'81 we will use the full 100% of Workers Compensation premium rather than the 60% used in FY 79/80, if within the City' appropriation limit. COMMENTS While some revenues are exceeding estimates, there is no cause for excessive optimism. The Gann initiative (Proposition 4) passed by the voters in November, 1979 limits appropriations and revenues and requires the City to match expenditures for providing services against revenues generated by or to provide February 26,1980 Page three Financial Report as of December 31, 1979 those services. Revenues in excess of the cost to provide services are considered taxes and if in excess of the allowed limit must be returned to the taxpayers using a predefined procedure. While the Gann initiative does not directly apply to a Water utility, enterprise accounting does. Simply stated enterprise accounting requires an operation that greatly resembles a private enterprise minus the income tax considerations. This means rates must be set to generate sufficient revenue to meet operating expenses, capital improvement and debt service obligations. Some bond issues require a percentage of profit for the life of the bond issue as well. CONCERNS The bond market in California is severely depressed and recent issues have been requiring 7 1/2% to 8 1/4% interest rates. The City has apparently not consulted professional bond counsel regarding the potential water revenue issue should the negotiations result in the City's purchase of the Tustin Water Works. The State Controllers office has still not finalized the audit of Tustin bailout funds for the fiscal year 1978/79. If the state disallows the claimed exclusions of the general f~%d, the City would have to repay approximately $175,000 to the state. The estimated future cost of all Workers Compensation claims as sho~ on the attached report dated 12/31/79 is $211,233, a figure about equal to our current Workers Compensation reserve balance. As previously mentioned the Workers Compensation fund reserve must be increased to provide adequate funding for routine and unforseen large claims that still must be paid with City funds prior to the insurance coverage which begins after the first $100,000 per occurrence. Labor negotiations are ~eady to begin and the Council must prepare to advise the negotiating team what areas of salary and/or benefits they intend to address this year. Also, consideration must be given as to how any increases will be funded, not only next year but in subsequent years assuming revenue and appropriation limitations. Ed Bushong '~3 Finance Director r' ~0 ~ dj · 0 ~ 0 ~ 0 < C Z Z o u3 co o o~oo o ~ olomo~lo ~ 0 4~ 0 0 0 0 4~ 4~ 0 o 0 D C~ Z 0 H m ~ ~ E3 0 "~ ~ 4-) d) ~ ~> CD 4J E~ E~ -,~ -~ ~ I -~ ~ -H ~ ~ 0 · ~ ~ 0 ~ ~ 0 0 0 -~ ~ ~ ~ ~ '~ ~ ~ 0 0 0 0 4J 0 -~1 -~i 4J 0 Q DATE: FEBRUARY 20, 1980 Inter-Corn TO: ATTN: FROH: FINANCE DEPARTMENT LONI HAMBLIN BOB LEDENDECKER, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER SUBJECT: CAPITAL IMPROVEMENT PROJECT STATUS (FILE #74A) The following is a recap of capital improvements that have been projected through June 30, 1980. Prior to the finalization of the 1980-81 Capital Improvement Budget, the projects that have been projected for completion or that are indicated to be under construction should be reviewed for their current status. PUBLIC FACILITIES #1030 - Civic Center Grounds This project will be either under construction or will be within the 10% retention or 30 day lien period as of June 30, 1980. #1028 - Old City Property This project will be completed and the account closed as of June 30, 1980. BEAUTIFICATION PROJECTS ~3015 - Newport Avenue Center Islands This project will be either under construction or will be within the 10% retention or 30 day lien period as of June 30, 1980. #3020 - Larwin Square Undergrounding ~This project has been completed, but there is legal action pending. The 10% re- tention ($8,300.00) should be encumbered, carried over or rebudgeted for 1980-81. #3021 o E1 Camino Real Undergrounding This project is still in progress. Any unexpended funds should either be encum- bered, carried over or rebudgeted for 1980-81. PARKS AND RECREATION FACILITIES #4035 - Columbus Tustin Parking Lot Project will be complete and the account closed as of June 30, 1980. #4012 - Columbus Tustin Park Phase II This project has been completed and the account closed. #4016 - Centennial Park Project will be complete and the account closed as of June 30, 1980. '#4017 - Pine Tree Park Lighting It will be recommended that this project be cancelled. #6021 - Newport Avenue, Irvine to McFadden #6052 - Newport Avenue, Phase IV These projects have been completed and the accounts should have been closed. LONI HAMBLIN February2Q, 1980 Page 2 #6055 - Major Maintenance Program (Supplemental) This project will either be under construction or wilt be within the 10% retention or 30 day lien period as of June 30, 1980. This project was a supplemental appro- priation authorized by City Council on February 4, 1980. #6056 - Bus Benches This project will have to either be encumbered, carried over or rebudgeted for 1980-81. #6059 - Sixth Street Extension Project will be complete and the account closed as of June 30, 1980. #6060 #6061 These - Nission Road Sidewalk - Mitchell Avenue Sidewalk projects have been completed and the accounts should have been closed. #6073 #6074 These - Main Street Sidewalk - Prospect Avenue Sidewalk projects will be complete and the account closed as of June 30, 1980. #6062 - Browning-Bryan Intersection Any unexpended amounts will have to either be encumbered, carried over or rebudgeted. Additional funds may be required when the 1980-81 Budget is finalized. · #6063 - Red Hill Avenue Widening These funds in the amount of $14,500 should be transferred over to Capital Improve- ment Account #6528. Additional funds will be required in the 1980-81 Budget for this project. #6066 - Seventeenth Street Widening The 1975-79 encumbrance in the amount of $6,200.00 has been completed and the account should have been closed. The 1979-80 project with a budget amount of $34,500.00 will be under construction as ~f June 30, 1980. Any unexpended amounts should either be encumbered, carried over or rebudgeted. #6065 - Sycamore Avenue at RR Pedestrian Crossing This project will be complete and the account closed as of June 30, 1980. #6075 - Sycamore Avenue Street Reconstruction This project will be complete and the account closed as of June 30, 1980. #6076 - Yorba Street Widening This project was removed from the Capital Improvement Program by City Council at their January 21, 1980 meeting. Funds were transferred to the Supplemental Street Maintenance Program (Acct. #6055). LONI HAMBLIN February 20, 1980 Page 3 #6081 - Walnut Avenue Widening This project will be either under construction or will be within the 10% retention or 30 day lien period as of June 30, 1980, #6077 - Curbs and Gutter Town Center This project will be either under construction or will be within the 10% retention or 30 day lien period as of June 30, 1980. #6078 Moulton Parkway Realignment #6079 Newport Avenue Extension These projects will still be in progress as of June 30, 1980. should either be encumbered, carried over or rebudgeted. Any unexpended funds TRAFFIC CONTROLS #6533 17th Street at Prospect Avenue #65 Red Hill Avenue Interconnect #65 Red Hill Avenue at Warner Avenue These projects have been completed for 2-3 years, but the City has never received an invoice from the County. It is suggested that these three projects be deleted from the budget process and the funds returned to the Gas Tax Account. ~#6526 Main Street at E1 Camino Real #6538 First Street at Et Camino Real #6536 First Street at Centennial Way These projects will be complete and the account closed as of June 30, 1980. .?#6528 Red Hill at Valencia Avenue The progress of this project is uncertain. Existing funds in the amount of $16,800 and the transferred funds in the amount of $14,500 from account #6063 should either be encumbered, carried over or rebudgeted for 1980-81. '~6534 Newport Avenue Interconnect ~65 Seventeenth Street at Yorba These projects will be either under construction or will be within the 10% reten- tion or 30 day lien period as of June 30, 1980. The funds from each of these pro- jects ($56,000 and $17,000) will be transferred to Account #6055 and be replaced by matchin9 funds from the State. #6539 - Walnut at McFadden This project will be either under construction or will be within the 10% retention or 30 day lien period as of June 30, 1980. FLOOD CONTROL FACILITIES #7018 - Red Hill Drain No. 3 #7021 - Sycamore Drain These projects have been completed and the accounts should be closed as of June 30, LONI HAMBLIN February 20, 1980 Page 4 1980. WATER SUPPLY AND DISTRIBUTION #90 E1Camino Real Water Main This project has been completed and the account closed as of June 30, 1980. BOB LEDENDECKER Director of Public Works/ City Engineer BL:rvm