HomeMy WebLinkAbout0208.094.-...
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March 31, 1994
THE HonORABLE CITY COlmCIL
Palo Alto, Califo~nia
Members of Council:
R@.oxt in Brief
This report is the first of ... ·hat aro intended to be pot-iudic
informational reports on the financial status of the General }'und
and utilities Funds. staff plans to prepare this report on n
periodic basis in the first half of the tiscal year and lToonthly In
the se.cond half of the year. No Council action is necessary.
This report providl;ls a brief summary of fiscal year 1993-94
financial results through the month of February tor the General
Fund and Utilities Funds, For analysis purposes I the adjusted
budget reflects the changes proposed in the midyeat:" report. Tho
General Fund summary is intended to highlight :roajor revenuo issuos,
expenditure trends, Council-approved Budget Amondment Ordinances,
and to provide infor-mation on the ov.orall health. of th'e G~neral
Fund. The utility Fund SUlOlnat'y is intended to provide an overview
of the utility Funds' operatinq perforn~ncc, use or fUhding ~f the
Rate stabilization Reserve (RSR) for each Utility Fund, 89 well as
a comparison of the month-end balance ih each fund'S RSR to the
target levels set by Council.
This report also includes the 1I1 nve stroent ActivIty Report", which
has been redesigned to improve· the prcsentation of nonthly
investment information and to bett~r emphasizo key items of
intert::!st in th~, portfolio. The new roport will include total
inv8stlnents in the, portfolio, interest earnings, current month
~nvestments, yield trends, and compliance with the targets d~fined
1n the City's Statement of Investment Policy.. Prior reports
consisted of deta,Us on all the port.folio holdings. Although staff
will continue to maintain this infol'n'.ation in the sarlI'!: nanne.r for
audit purposes. it will not be· included in Council monthly
investment reporting.
CMR:208:94
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).,~ ~ C1vv,v<.v~
MELISSA CAVALLO
Aseistant F nee Director
CMR:208:94
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General Fund PCl'formancc Summary
February 1994
REVENUES,
Revenues through February are Sl.2
million, or 3 pc(Cenl, (lver the year-to
date adjusted budget and 9 perccnt over
the amount received for (he \992-93
fiscal year. The variance is primarily
driven by an increase in property tax
revenues. The City is allocated property
tax re,'enut based on tne Count)".'i
prel iminary es( imate (If Palo A 1 to's share
of County receipts, which is $,9 million
higher than budget. In March, however,
lhe County will rcvi'ie its estimate,
rele-asing new infolT11ation on the Cilr's
ptopert)' tax allocation. Stan" believes
that the Cotlnt)' has ovcrallocated
R~\'enue By Source
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property tax revenue to the City, and the revised estimate wlll shl.)\\' property tax r(vcrnie more in line with
budgeted levels. 'The total year budget projc.cts a slight (2 percent) grm\.1h in sales ca. ... over the 1992-93 fiscal
year, with saleslfLX le·\'enues through FebnJary remaining dose to budget. Fnr the last two )'eat'S, exchlding
one· lime events, the. City has c:-'pl'rtenced a mvdest decline in sales tax revenues, This decline bas been
primarily dri\'co by the cloctronicequipment business segment, \",hie hgenerclles 19 per,;enl of the City's saJe:s.
lax revenue. Recently, there has been a turnaround in this segment Sales tax revenues for two of the other
major busine..'1.S segments, department stores and misccllaneou.c:: retail, have remained flat over the 1astlwo
years. Inc rcs~urant segment is the only major busi ness segment displaying grm .. th, Lnereasi ng by 7 perce nt
in the t .... "o·year lime frame.
EXPENDITURES,
Expendi lu)'es through FcbnJary are $2,5
million under the year-to·date adjusted
budget before encumbrances (commit
ments) are factored in, Typically, by
year-end, the Ctly realizes savirigs in
e.,<penditures as compared to budget
RESERVES,
TbeGencral Fund ended February witlta
net operating surplus of $.6 million.
Budget Amendment Ordinances
authori7.cd th!'Ough February total $.4
million. As discussed in the midyear
report, there cOlllimles to be a projected
increase in the Rudget Stabilization
Rescrvc of $.7 million for the 1993-94
ns~al >'car, resulting in a lotal reserve of
$12.3 milHon at year-I'~(L
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Cumulali\'c Expenditures B)' Monlh
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Utility Funds Performance Summary
/'ebruary 1994
AdJ~lat-dd
RBYEhVB:9l Budget
Ut.ility SalOOls SUE;. )
Interest IflC<":>",e 6.2
Other-Reveflue H.I
lSl\!:ctrk Rebate !J.6.1)
"Ph,s ~lcu~rancoBIReapp 18.::!
ro10\1.. SOURCE; OF nJHDS SUB.S
Uti) ity Pup.;nast.'s '36. ~
Opc-ratingo £Xpenses 41.7
Debt. ... e.· .... ic."): 12.
C-pet"at in-g Trans r -ere 11.2
C".apit.al ~xPenditure9 30.4
Chiln'Jl! .in EnC"u~br~'n<"e:s:/Re3pp 0.0
TOTAJ. 1)SE OP FUHDS .sJ...'La....l
Nt? 70 (FR~) R8~BRVBS $(19.9)
YTO
Actual
$ 92.4
3.9
1l.9
(36.3)
0."
S_1.l..2
36.1
22.6
7.'
11.5
10.3
0.6
$ (17.0)
• Of
Buo:lg4lt
,.,
63' ."
100\
·-h/a
63'
54\ ... ,,,
,4\
nla
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The net de...: rca se to Utili!}' Fund reserves through I RiV Stlll<llutlooo Rut,.,.. BI~r"I(.
Ftbmary lor~ts $17.0 rllillioJl, \\·hh S 15.1 million $Jo:.O,I C~~~~!l:,J~.~T;vro-~! .!~~_
of thC" reduction coming from the R<1lc 1<,..
SL.'lbiliw!ion Rcserws(RSR). T~ rt'"SClyc~ccn'a~ 1./':>'.1 , .. ,. . " .
is drin'n hy the Elccl!LC Fund rebate of S36.3 .".
mill k'm. 1k Water fund continued .10 exhibit strong 1\~\1 ." -.
finlincial ~(fOmlar1Ce through February. rcsuhing "":1.,1 .
inaRSRjus< bdowlhcrargellevel. :: ' ... iJI:I ..... llf.llt.~.
To1<From~ Rate StabH'z.ttloIlR&se ...... es
"" ~)Di.",.,c."!-''''''',:>:-:.-:::_·---j :~II' .. dI~ __ '_W I
·Si'"C·u i'"
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WJ'er
l11c Electric Fund RSR is halt\\'ay between the
larget and maximum levels. The Gas Fund RSR
rem a i ns c tose to (he maxi mum le\·el. Refuse Fund
reservcs are below the minimum levels, due to an
adjustmctllmadc in 199219310 establish a reo~erve
for landfill costs. Allhough the Wastewater
Tr,~a'ment reSCl\'e is currently above the maximum
level, it is projcctcd 10 end (he ),caron target. The
Stoml Drain Fund is {.~xpeded to deplete reserves
by year-end, and staff is pli rsu i ng fund ing oplions.
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Investment Activity
February 1994
CUl/lIBNr POl/rFOLlO,
The paT value of the City's ",,11foli6 is sIn
mijlion, which consists of$141 million, or 86
Jlfrcent. maturing wit.Jtin IWo years. Most or
the investments, SI37 million, or 80 percent,
are inlinited SUItes government ",'Uriti«. Tbe
cumOl market value oftb<: po11folio i. ,100.2
pccc<:o' of eo,t and the "wrage Ii fo is 1.3 )·ears.
M ....... ,~...-... ~... (O(.·~I;S[>,o,.-...--U
~ 1>" ... ~"'<'l .... ~r.-; ... f.nS l"'J~rf 1,000000);..;'H
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Y£ar·to-Dale luveslment lUC(1me
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FEBRUARY'S INVFSrMENrS AND
Yll:'LO TRENDS:
In February, slaff invested SJO million in
govenunent agencies, with a mahHity of rive
years and 2t a relurn of 5.S7 percent. rOlerest
rates increased sllghtly, due to the anticipated
increase in the federal Fund~ Rate b)' the
r'tderai Reserve. The graph shew,'S-inlcrcst ra1es
(US T-Notes) having ver), Ii 111< chAAge for the
last six monrhs, but the slight upward
movement has tonlinued into March. Slarrwill
continue to monitor the yield curve and take
advantage of investment opportunities.
INTl:l1FST III'CO,I/E ..
Imerest inc('llile on an aC4,':(\lal basis for the
month of FebfUlry was $110,266. For the
nrst eight monti" of !993·94, interest totaled
56:2 milH on I or 66 percent of Ihe annual targe'
of $9.4 rniHiUil. The effective rate of retilm
on an accrual bHis is 5.26 percent for the
fI~;:a1 YCM.
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Yield Trend
/ ,# of' ,J ~ ,,¢, #' .# ,f
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Investment Activity
February 1994
(In Millions)
Investments by Type
LAIF
Mutuel Fund
Certificate of Deposit
Bankers Acceptance
Commercial Paper
U.S. Treasury
1).S. Agency
Totl\l Par Value
Investments by Maturity
Within on~ month
2 months - 1 year
13 months -2 years
Over two years
Total Par Value
Portfolio Balance
Market
Value
$172. S
Purchase
fti~
$112.6
Par.
Ylilu>_
$ 15.0
.1
13.0
7.0
0.0
61. 0
_7~.,2
$l'I1.6
$ 25.1
66.0
56.0
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$171. 6
Unrealized
GaiILJJ·Q~'21
$ .3
Interest Inoome (Accrual Bisis)
Investment -Income
Rate of Return
To Date
1992-~
$6.9
6.6%
To Date
1993-:li
$6.2
5.3%
9l
o
8
4
o
35
_H
100%
15\
JB
33
.. tL
100\
Market
ValYU.<;QJrt
$100.2\
Increase
D~crease
ll2k2L
($.7)
(1.3%)
<$15
<30t
<15\
-} >$50
>95l
t of
Target
l:Q-1lill
66\
102%
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