HomeMy WebLinkAboutStaff Report 233-06City of Palo Alto
Manager’s
TO:HONORABLE CITY COUNCIL
ATTENTION:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:MAY 23, 2006 CMR: 233:06
SUB~CT:THIRD QUARTER FISCAL YEAR 2005-06 GENERAL FUND
FINANCIAL RESULTS
This is an informational report and no Council action is required. The purpose of this report is to
provide the Council with insight into the financial condition of the City’s General Fund as of the
third quarter of fiscal year 2005-06.
DISCUSSION
At third quarter, General Fund operating revenues and expenditures are at 70 and 74 percent of
budget respectively. Timing issues related to the collection of tax revenues and recognition of
contract encumbrances result in expenditures exceeding revenues. By year-end General Fund
revenues are expected to exceed expenses.
Revenue Highlights for Third Quarter Fiscal Year 2005-06 Financial Results
Attachment A shows third quarter year-to-date actual revenues as a percentage of the Adjusted
Budget.
Sales Tax. Receipts for the third quarter of fiscal year 2005-06 are at 68 percent of the budget.
This is a consequence of the timing of the State’s "triple flip" biannual payments which are made
in January and June. Staff expects that sales tax receipts will exceed the adjusted budget by year
end. Sales tax in the third and fourth quarters of calendar year 2005 improved over the prior year
quarters by 2.3 percent and 6.0 percent, respectively. Economic segments showing strength
within the City are apparel, department stores, food products, electronic equipment, and chemical
products. Those showing weakness included furniture and appliance and vehicle sales.
Property Taxes: Payments from the County for the second half of the fiscal year essentially
begin in March mad are fully paid by June. As a result, receipts of 64 percent as of the third
quarter are not indicative of the receipts for the year. Staff projects that property tax receipts will
be consistent with the adjusted budget.
Transient Occupancy Tccces ~OT): Revenues are expected to be close to budget at year end
despite the fact they are at 65 percent of budget. The strongest TOT months are in April, May,
and June, so staff is expecting the $6.2 million target for fiscal year 2005-06 will be met.
CMR:233:06 Page 1 of 3
Occupancy and per diem rates for the first three quarters of fiscal year 2005-06 have improved
over those in fiscal year 2004-05.
Expense Hi.~hlights for Third Quarter Fiscal Year 2005-06
Expenditures are often cyclical in nature and a department’s commitments could include items
for the entire fiscal year. Given these facts, departments are expected to conclude the year within
their adjusted budgets.
Excess Overtime Expenditures
Attachment B shows total overtime expenditures reaching 39 percent of the adjusted budget.
Although most of the General Fund departments are below their overtime budget, the Fire,
Planning and Police Departments exceed their budgets for the following reasons.
The Fire Department is at 122 percent of adopted budget for overtime. The main factors
contributing to overtime usage are disability leave, Katrina relief, and mandated training.
An average of seven to eight personnel have been on disability leave for fiscal year 2005-
06, so overtime will be partially offset with salary savings. The Fire Department
deployed two personnel for Katrina relief for over three weeks. The Federal Emergency
Management Agency (FEMA) has reimbursed the City for $50,000 or about 75 percent
of expenditures. In addition, a significant amount of time was spent for Homeland
Security training. A majority of the training will be reimbursable via grant funds and to
date, $65,000 has been received.
The Police Department is at 98 percent of the adopted budget for overtime. The main
factors contributing to overtime usage are staffing shortages due to vacancies, disability
leave, and newly hired officers and dispatchers assigned to the Police Academy and
training programs. These absences create additional overtime expense due to mandated
minimum staffing levels. Overtime usage will be partially offset with salary savings.
The Human Resources Department is at 133 percent of the adjusted budget for overtime.
The contributing factor is staffing shortages that will be offset by salary savings.
ENVIRONMENTAL REVIEW
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
PREPARED BY:
TRUDY EIKENBERRY v_.~
Accounting Manager, Administrative Services
TARUN NARAYAN J
Senior Financial Analyst, Administrative Services
CMR:233:06 Page 2 of 3
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
CARL
Director,Services
Assistant City Manager
ATTACHMENT
Attachment A: 2005-06, Third Quarter Financial Report, General Fund
Attachment B: 2005-06, Third Quarter General Fund Overtime
CMR:233:06 Page 3 of 3
Attachment A
CITY OF PALO ALTO
2005-08 Q3 FINANCIAL REPORT
GENERAL FUND
(in thousands of dollars)
Revenues & Other Sources
Sales Tax
Property Tax
Transient Occupancy Tax
Utility Users Tax
Other Taxes and Fines
Charges for Services
Permits & Licenses
Return on Investment
Rental Income
From Other Agencies
Charges To Other Funds
Other Revenues
Total Revenues
19,036 20,020
16,986 18,242
6,173 6,173
8,341 8,522
6,845 7,830
18,760 18,786
4,084 4,084
2,215 2,116
12,332 12,261
204 347
8,924 8,924
1,721 4,456
105,621 111,761
Operating Transfers-In 15,108 15,158
Encumbrances and Reappropriation 3,303
Total Sources of Funds 120,729 130,222
Expenditures & Other Uses
City Attorney 2,743 3,570
City Auditor 839 1,066
City Clerk 923 954
City Council 164 182
City Manager 1,751 1,979
Administrative Services 6,344 6,674
Community Services 19,635 24,306
Fire 20,160 20,552
Human Resources 2,355 2,691
Library 5,633 5,987
Planning and Community Environment 8,766 9,967
Police 24,314 24,697
Public Works ! 1,451 11,957
Non-Departmental 9,043 7,295
Total Expenditures 114,121 121,877
Operating Transfers-Out 6,572 6,852
Total Uses of Funds 120,693 128,729
Net Surplus (Deficit)36 (1,071)
Adjust intra-fund reserve transfer -
Net To (From) Reserves 36 (1,071)
Beginning Reserves 21,390 21,445
Projected Ending Reserves 21,426 20,374
ACTUALS (nine months ended 3-31.05)
-13,524 68%
-11,642 64%
-4,030 65%
-6,356 75%
-5,947 76%
13,659 73%
3,078 75%
-1,577 75%
-9,317 76%
-243 70%
-6,548 73%
-3,798 85%
79,719 71%
-11,331 75%
91,050 70%
117 630 1,820 72%
1 189 649 79%
15 737 79%
10 111 66%
34 1,157 60%
6 170 4,879 76%
76 2,040 17,280 80%
42 231 14,987 74%
66 100 1,786 73%
3 179 4,267 74%
165 855 6,453 75%
20 449 17,956 75%
330 520 8,221 76%
4,711 65%
8261 5,422 J. 85,0141 75%
4,533 66%
826 5,422 89,547 74%
* Excludes encumbrances, reappropriation and infrastructure reserve
**Adjusted Budget is primarily due to the purchase of the Bressler Property.
Attachment B
CITY OF PALO ALTO
2005-06 Q3 FINANCIAL REPORT
GENERAL FUND OVERTIME
(in thousands of dollars)
City Attorney
City Auditor
City Clerk
City Council
City Manager
Administrative Services
Community Services
Library
Fire
Human Resources
Planning and Community Environment
Police
Public Works
Total Overtime
3 3
45 45
185 185
58 58
959 959
3 3
66 66
982 1010
113 113
2,421 2,449
1
10
120
38
1,171
4
47
991
76
2,458
0%
0%
0%
0%
33%
22%
65%
66%
122%
133%
71%
98%
67%
100%