HomeMy WebLinkAbout12 2019-20 YEAR END FISCAL UPDATEDocuSign Envelope ID: 6DF2E785-1C36-43E4-8107-3423B3795F86
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Agenda Item 12
Reviewed:
AGENDA REPORT City Manager 5W
Finance Director I'
MEETING DATE: September 15, 2020
TO: MATTHEW S. WEST, CITY MANAGER
FROM: JASON AL -IMAM, FINANCE DIRECTOR/CITY TREASURER
SUBJECT: YEAR-END UPDATE FOR FISCAL YEAR 2019/20
SUMMARY:
On June 2, 2020, staff provided the City Council with a report on the estimated impacts associated
with COVID-19, which projected General Fund Reserves of $17.1 million at June 30, 2020. This
report provides an update on actual General Fund revenues and expenditures now that the books
have been closed for Fiscal Year 2019/20. General Fund revenues are approximately $4.3 million
better than projected whereas General Fund expenditures are approximately $146,000 higher
than expected yet within budgeted amounts. Consequently, General Fund Reserves are
approximately $4.2 million higher than expected at $21.3 million as of June 30, 2020 (or 29% of
General Fund expenditures), which exceeds the City Council's minimum reserve policy of 20%.
RECOMMENDATION:
Staff recommends that the City Council receive and file this report on Fiscal Year 2019/20.
CORRELATION TO THE STRATEGIC PLAN:
The recommendation correlates to the strategic plan by implementing Goal C, sustain long-term
financial strength with adequate reserves and enhanced capacity to provide a sustainable level of
City services.
DISCUSSION:
In June 2020, General Fund revenues were projected to be approximately $64.7 million for Fiscal
Year 2019/20, which included COVID-related revenue losses. However, now that the books have
been closed, revenues are approximately $4.3 million better than projected.
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Fiscal Year 2019/20 Year -End Update Page 2 of 3
*The majority of transfers and reimbursements in the General Fund are related to ongoing
program costs and/or services funded by restricted funds.
The better than expected revenues are largely due to the following:
Sales & Use Tax Revenue was projected to be approximately $22.7 million, based on the
projected impacts associated with the shelter in place restrictions and due to an anticipated
delay in sales tax receipts related to the Small Business Relief Payment Plan enacted by the
California Department of Tax and Fee Administration (CDTFA). However, the City's actual
sales tax receipts amounted to approximately $25.2 million.
The better than expected sales tax revenue for 2019/20 is largely associated with better than
expected sales from Autos & Transportation, Business & Industry and the State & County
Pools. For example, a decrease of 34% was projected for Autos & Transportation for the
second half of Fiscal Year 2019/20. However, actual sales from Autos & Transportation were
down 11 % for this period, which was better than expected considering the shelter in place
restrictions.
Other Revenues were higher than projected due to better than anticipated revenues from
federal grants, alarm permit fees, and other reimbursements.
Use of Money & Property was higher than projected largely due to investment income
earned on pooled cash and investments. In 2019/20, the average weighted yield on pool
cash and investments was 1.91%, which was higher than expected despite the declining
interest rate environment over the past year.
CARES Act Reimbursements related to funds received from the County of Orange were
used to cover city expenses such as payroll expenses for public safety and expenses for
Projected
Actual
(Unaudited)
Difference
Property Tax
$21,322,838
21,063,337
(259,501)
Sales & Use Tax
22,666,056
25,146,077
2,480,021
Franchise Fees
1,942,000
1,582,395
(359,605)
Transient Occupancy Tax
1,530,000
1,593,532
63,532
Other Tax Revenue
1,393,294
1,364,749
(28,545)
Other Revenues
3,749,950
4,638,187
888,237
Use of Money & Property
2,125,370
2,733,037
607,667
Transfers & Reimbursements*
9,974,231
10,195,351
221,120
CARES Act Reimbursements
-
681,758
681,758
Total General Fund Revenues
$64,703,739
68,998,423
4,294,684
*The majority of transfers and reimbursements in the General Fund are related to ongoing
program costs and/or services funded by restricted funds.
The better than expected revenues are largely due to the following:
Sales & Use Tax Revenue was projected to be approximately $22.7 million, based on the
projected impacts associated with the shelter in place restrictions and due to an anticipated
delay in sales tax receipts related to the Small Business Relief Payment Plan enacted by the
California Department of Tax and Fee Administration (CDTFA). However, the City's actual
sales tax receipts amounted to approximately $25.2 million.
The better than expected sales tax revenue for 2019/20 is largely associated with better than
expected sales from Autos & Transportation, Business & Industry and the State & County
Pools. For example, a decrease of 34% was projected for Autos & Transportation for the
second half of Fiscal Year 2019/20. However, actual sales from Autos & Transportation were
down 11 % for this period, which was better than expected considering the shelter in place
restrictions.
Other Revenues were higher than projected due to better than anticipated revenues from
federal grants, alarm permit fees, and other reimbursements.
Use of Money & Property was higher than projected largely due to investment income
earned on pooled cash and investments. In 2019/20, the average weighted yield on pool
cash and investments was 1.91%, which was higher than expected despite the declining
interest rate environment over the past year.
CARES Act Reimbursements related to funds received from the County of Orange were
used to cover city expenses such as payroll expenses for public safety and expenses for
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Fiscal Year 2019/20 Year -End Update
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care for homeless populations. These funds were received on June 29, 2020 and therefore
were not factored into the forecast provided to the City Council on June 2, 2020.
General Fund Transfers & Reimbursements
Restricted funds (such as Special Tax B, Measure M2, etc.) are required to be recorded in
separate funds. Costs incurred in the General Fund that are eligible for reimbursement from other
funds are recorded as transfers and reimbursements in accordance with governmental accounting
standards. The majority of transfers and reimbursements in the General Fund are related to
ongoing program costs and/or services funded by restricted funds.
COVID-Related Revenue Losses
While General Fund revenues are better than projected, it is important to note that approximately
$2 million in COVID-related revenue losses remain for 2019/20, which is largely attributable to
sales tax, property tax, transient occupancy tax, and departmental revenue.
General Fund Expenditures
General Fund expenditures were projected at $70.8 million for 2019/20. Actual expenditures incurred
through June 30, 2020 amounted to approximately $70.9 million, which was approximately $146,000
(0.2%) higher than expected. However, amounts expended were within budgeted amounts.
General Fund Reserves
General Fund Reserves were projected to be $17.1 million at June 30, 2020. However, actual
General Fund Reserves are approximately $4.2 million higher and amount to $21.3 million at June
30, 2020, which is 29% of General Fund expenditures and exceeds the City Council's minimum
reserve policy of 20% for the General Fund.
Jason AI -Imam
Finance Director/City Treasurer