CC - Item 7F - Quarterly Interim Financial Update for the Quarter Ended September 30, 2010ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: • JEFF ALLRED,
DATE: NOVEMBER 9,
CITY MANAGER ,#
2010 (/ yl
SUBJECT: QUARTERLY INTERIM FINANCIAL UPDATE FOR THE QUARTER
ENDED SEPTEMBER 30, 2010
SUMMARY
Attached is the City of Rosemead Quarterly Financial Update for the Quarter Ended
September 30, 2010 for City Council review. Also, attached are the Treasurer's Reports
of Cash and Investments for the City, Rosemead Community Development Commission
and the Rosemead Housing Development Corporation at September 30, 2010.
Staff Recommendation
Staff recommends that the City Council receive and file the Financial Update report
(Attachment A) and the Treasurer's Reports of Cash and Investments (Attachment B).
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
i
Steven Brisco
Director of Finance
Attachment A: Quarterly Financial Update for the Quarter Ended September 30, 2010
B: Treasurer's Report of Cash and Investments
APPROVED FOR CITY COUNCIL AGENDA: ITEM NUMBER:
Attachment A
Q1 City of Rosemead
Quarterly Interim Financial Update
2010 -11 For the Quarter Ended 9/30/10
With only the first quarter of the fiscal year
complete, it is too early to identify any major
financial trends. However, there do not appear
to be any significant deviations from revenue
and expenditure patterns for the first quarter of
the fiscal year. A more detailed analysis will be
presented in the mid -year review which will be
presented in February.
While the financial audit for the 2009 -10 fiscal
year is not yet complete, staff believes the
information presented in this report is
reasonable and not likely to change materially.
GENERAL FUND
General Fund Financial Condition: With 25% of
the year completed, 11% of revenues have been
earned and 22% of total appropriations have
been expended. The following tables provide
more detail:
Property Tax In -Lieu of VLF. Property Tax In-
lieu of Vehicle License Fees, the City's number 1
revenue source was the creation of the State's
2004 budget balancing Triple Flip scheme. In it
90% of the City's Vehicle License Fees (VLF) was
swapped for a like amount of revenue from the
State's portion of property tax. It is paid in two
equal payments, one in January and one in May.
There has been no indication that the amount
will vary from the revenue estimate.
(Thousands)
(Thousands)
Revenues
$16,185
$1,670 10%
.•
16,185
VLF Tax In -Lieu
$4,794
$-
-%
Sales & Use Tax
2,821
249
9%
Fin. Aid /Low & No
1,948
62
3%
Trans Occupncy Tax
1,350
311
23%
Building Permits
880
716
81%
Sales Tax In -Lieu
771
-
-%
Util Franchise Fees
480
-
-%
Interest Earnings
300
134
45%
Parking Citations
250
53
21%
Court Fines
225
34
15%
Total
$13,819
1,559
11%
Property Tax In -Lieu of VLF. Property Tax In-
lieu of Vehicle License Fees, the City's number 1
revenue source was the creation of the State's
2004 budget balancing Triple Flip scheme. In it
90% of the City's Vehicle License Fees (VLF) was
swapped for a like amount of revenue from the
State's portion of property tax. It is paid in two
equal payments, one in January and one in May.
There has been no indication that the amount
will vary from the revenue estimate.
(Thousands)
Top Ten Revenues. The top ten revenues
account for about 85% of total General Fund
Revenues. By focusing on these, we can get an
excellent understanding of our revenue
position.
Sales &Use Tax. At first glance Sales & Use tax
appears to be under - collected in the first
quarter, that's because the first two monthly
payments (July and August) in the fiscal year are
accrued (counted) in June, the fiscal year in
which it was earned. As this accounting
treatment progresses throughout the fiscal year
actual revenue will "catch up" with budgeted
revenues, when all 12 monthly payments have
been received.
Overall, these key revenues are performing as
expected for the first 'quarter of the fiscal year.
Some variances are expected for the first
quarter of the fiscal year due to year end
accruals and planned timing differences. These
variances will be discussed in greater detail
below.
Financial Aid /Low & No (Property Tax). This
revenue does not flow in 12 equal installments;
instead, about 85% of the revenue is collected
between December and May. Therefore, the
minimal collection in the first quarter of the
fiscal year is normal and does not create cause
for concern.
Transient Occupancy Tax. Accrued Transient
Page 1
Revenues
$16,185
$1,670 10%
Expenditures
16,185
3,624 22%
Other Sources (Uses)
-
- -
Balance,Start ofYear
19,891
19,891 -
Balance, Year -to -Date
$19,891
$17,937
Top Ten Revenues. The top ten revenues
account for about 85% of total General Fund
Revenues. By focusing on these, we can get an
excellent understanding of our revenue
position.
Sales &Use Tax. At first glance Sales & Use tax
appears to be under - collected in the first
quarter, that's because the first two monthly
payments (July and August) in the fiscal year are
accrued (counted) in June, the fiscal year in
which it was earned. As this accounting
treatment progresses throughout the fiscal year
actual revenue will "catch up" with budgeted
revenues, when all 12 monthly payments have
been received.
Overall, these key revenues are performing as
expected for the first 'quarter of the fiscal year.
Some variances are expected for the first
quarter of the fiscal year due to year end
accruals and planned timing differences. These
variances will be discussed in greater detail
below.
Financial Aid /Low & No (Property Tax). This
revenue does not flow in 12 equal installments;
instead, about 85% of the revenue is collected
between December and May. Therefore, the
minimal collection in the first quarter of the
fiscal year is normal and does not create cause
for concern.
Transient Occupancy Tax. Accrued Transient
Page 1
Attachment A
Occupancy Tax (TOT) revenues are being
collected at a rate slightly behind revenue
projections. Slower than expected collections
are a direct result of poor economic conditions.
If the economy doesn't tick up later this year
minor adjustments may need to be made to the
budget.
Building Permits. Building permit revenue is
significantly higher than projected due to major
construction projects on the Southern California
Edison property. All other building permit
activity is proceeding at the projected level; the
final revenue amount is expected to be greater
than projected.
Property Tax In -Lieu of Sales Tax. Property Tax
In -Lieu of Sales Tax is another piece of the
State's Triple Flip legislation. This revenue is
the same type of revenue swap as Property Tax
In -Lieu of VLF. Please refer to Property Tax In-
Lieu of VLF.
the payment of general liability and workers'
compensation annual premiums of $439,393.
That one -time payment represents about 20%
of the quarterly expenditures.
(Thousands)
SPECIAL REVENUE FUNDS
Often certain revenues are raised for a specific
purpose. When specific purpose revenues are
restricted as to use they are frequently
accounted for in special revenue funds such as
the ones below. The following tables
summarize the financial condition of the City's
major special revenue funds. They are all within
budget expectations:
Utility Franchise Fees. Utility Franchise Fees
are one of the top ten budgeted revenues but
they are paid annually in the third quarter of
the fiscal year.
Interest Earnings. Interest earnings include an
annual payment from the Community
Development Commission (CDC) for interest on
a loan made by the General Fund to the CDC.
The loan was repaid in September, using 2010
bond proceeds. With interest rates
exceptionally low it will be a challenge to meet
projected revenue targets this year.
Parking Citations /Court Fines. These fines are
collected at the Public Safety Center, through a
third party collection service and the courts.
These receipts, though not at exactly 25% of the
estimated revenue projection, are expected to
finish the fiscal year on budget.
Expenditures. At 22 %, General Fund
expenditures are well within budget parameters
for the first quarter. It is noteworthy to report
that included in the first quarter expenditures is
(Thousands)
, .
Revenues
Staffing
$5,249
$1,278
24%
Maint. & Operating
10,875
2,341
22%
Capital Outlay
61
5
9%
Other Sources (Uses)
-
-
-
Total
$16,185
$3,624
22%
SPECIAL REVENUE FUNDS
Often certain revenues are raised for a specific
purpose. When specific purpose revenues are
restricted as to use they are frequently
accounted for in special revenue funds such as
the ones below. The following tables
summarize the financial condition of the City's
major special revenue funds. They are all within
budget expectations:
Utility Franchise Fees. Utility Franchise Fees
are one of the top ten budgeted revenues but
they are paid annually in the third quarter of
the fiscal year.
Interest Earnings. Interest earnings include an
annual payment from the Community
Development Commission (CDC) for interest on
a loan made by the General Fund to the CDC.
The loan was repaid in September, using 2010
bond proceeds. With interest rates
exceptionally low it will be a challenge to meet
projected revenue targets this year.
Parking Citations /Court Fines. These fines are
collected at the Public Safety Center, through a
third party collection service and the courts.
These receipts, though not at exactly 25% of the
estimated revenue projection, are expected to
finish the fiscal year on budget.
Expenditures. At 22 %, General Fund
expenditures are well within budget parameters
for the first quarter. It is noteworthy to report
that included in the first quarter expenditures is
(Thousands(
(Thousands)
, .
Revenues
$1,490
$43 3%
Revenues
$3,217
$130 4%
Expenditures
2,571
430 17%
Other Sources (Uses)
-
- -
Balance, Start of Year
2,330
2,330
Balance, Year-to-Date
$2,976
$2,030 -
(Thousands(
(Thousands)
r...
, .
Revenues
$1,490
$43 3%
Expenditures
869
97 11%
Other Sources (Uses)
-
- -
Balance,StartofYear
2,494
2,494
Balance, Year-to-Date
$3,115
$2,440
(Thousands)
(Thousands)
- r
r...
, .
Revenues
$1,566
$364 23%
Expenditures
1,497
258 17%
Other Sources (Uses)
-
- -
Balance, Start of Year
3,527
3,527
Balance, Year-to-Date
$3,596
$3,633 -
(Thousands)
- r
r...
, .
Revenues
$504
$116 23%
Expenditures
118
16 14%
Other Sources (Uses)
-
- -
Balance,StartofYear
296
296 -
Balance, Year -to -Date
$682
$396 -
ROSEMEAD COMMUNITY
DEVELOPMENT
Page 2
Attachment A
COMMISSION (RCDC)
Nearly all of RCDC's revenue is received from
November through August. Revenue received
in July and August is accrued in June so for the
first quarter of the fiscal year there is usually
very little revenue to report. However, this year
the 2010 bond issue closed in July and the YTD
Actual is almost exclusively bond proceeds.
or no growth in almost all of its revenue
sources. To make matters worse the State, in
struggling to manage its budget problems is
turning to local governments for relief. They
are delaying payments of gas tax revenues and
property taxes, they have increased
administrative fees charged to cities and last
but not least is the $1.4 million grab of RCDC
funds.
Debt service, a significant expenditure in the
RCDC funds is due in the second and fourth
quarters of the fiscal year and is not reported in
this first quarter. All other expenditures are
routine and well within appropriation limits.
(Thousands)
r
(Thousands)
Revenues
$6,132
$11,254 -
Expenditures
6,437
221 3%
Other Sources (Uses)
(250)
- -
Balance, Start of Year
14,643
14,643
Balance, Year -to -Date
$14,088
$25,676 -
ROSEMEAD HOUSING DEVELOPMENT
CORPORATION (RHDC)
As has been discussed in previous Quarterly
Financial Updates, the RHDC funds are
operating at non - sustainable levels without
some form of management intervention. As
can be seen in the following table, daily
operations for the first quarter are almost
neutral but for the full year further deficits are
expected.
OUTLOOK FOR THE FUTURE
It is stating the obvious to say that the economy
is hurting operations of the City. Like so many
other cities Rosemead is experiencing declines
In spite of all these challenges the City has
much to be glad about: The City started this
new year with a balanced budget and at the
end of the first quarter expenditures have
remained in check. The City's bond rating was
increased which leads to more favorable bond
financing rates and there was a successful bond
sale. Construction bids for the new state -of-
the -art aquatic center were substantially below
the engineer's estimates and thus far staff has
managed the budget within expectations. Staff
will remain vigilant to ensure that the finances
remain within budget constraints.
There is cause for optimism and the outlook for
the City's financial future is promising.
Page 3
(Thousands)
r
r $417
Revenues
$103 10%
Expenditures
798
104 21%
Other Sources (Uses)
250
- -
Balance, Start of Year
(149)
(149) -
Balance, Year-to-Date
$(280)
$(150) -
OUTLOOK FOR THE FUTURE
It is stating the obvious to say that the economy
is hurting operations of the City. Like so many
other cities Rosemead is experiencing declines
In spite of all these challenges the City has
much to be glad about: The City started this
new year with a balanced budget and at the
end of the first quarter expenditures have
remained in check. The City's bond rating was
increased which leads to more favorable bond
financing rates and there was a successful bond
sale. Construction bids for the new state -of-
the -art aquatic center were substantially below
the engineer's estimates and thus far staff has
managed the budget within expectations. Staff
will remain vigilant to ensure that the finances
remain within budget constraints.
There is cause for optimism and the outlook for
the City's financial future is promising.
Page 3
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