good afternoon we'll call to order this finance committee meeting on june th and staff what do we have in store for us today so good afternoon i'm jennifer  am the treasury manager with the finance department and with me today is mark sewell he's the accounting manager and today we will be presenting the third quarter financial review for fiscal year two thousand and nineteen so for the presentation first i will be presenting the general fund revenues and then mister sewell will take over and go through the general fund expenditures the enterprise funds and the proposed budget adjustments for the for the third quarter so first i'll start with the general fund revenues but before i do i just wanted to remind your committee that a couple weeks ago mister samar eo and i presented the general fund major revenues and multi year  forecast and as part of that we talked about the fiscal year nineteen revenues so i'm not going to go through those in as much detail to save you having to listen to the presentation twice but of course you can always ask questions so this first table is a summary of the general fund revenues and it's broken into three categories we have taxes other revenues and fees and charges so for the annual budget for the years about one hundred and fifty four million compared our year to date budget so at third quarter the budget would be about one hundred and eight million we've actually received about one hundred and five point seven which leaves us in a deficit of about two four now this is just a snapshot at third quarter and just to put a little context to this we don't anticipate that this will be in a deficit by year end so a year in we're anticipating in totality we will probably have a surplus of probably somewhere between one to two million dollars and then i just wanted to remind the committee that in comparing taxes to prior year the thirty percent increases due to the measure c revenues so this next slide if we were to look at this first line on on the summary taxes and we look at the variance of two hundred and eighty seven zero we break that out into a little bit more detail based on those revenues for on this slide so again same format sales tax measure see property tax and so on and these are the revenues that we presented in a lot more detail with your committee so i'm not going to go through these in a lot of detail other than i just wanted to point out that  measure c and sales tax we're anticipating those will be anywhere from one to two million over budget by year end and property tax i wanted to point out because at third quarter we've only received about fifty three percent but that's consistent with the it's it's based on how the county pays us so we've already received another fourteen million since these numbers and we're anticipating another three or four million by year end so we anticipate that we will be slightly above budget but your end you you t and t ot they're still coming in flat but i'm not going to go into a lot more detail other than to say that by year end we anticipate that negative three hundred thousand to be closer to a surplus of three or four million in tax revenues this next slide is the other revenues these are licenses and permits fines and forfeitures franchise fees and so on these rs are coming in about a little little over half a million below budget at third quarter and i just wanted to highlight a couple of those so our fines and forfeitures are down about four hundred and twenty seven thousand this is mostly due to parking violations so there's thirteen positions and i think of those thirteen four of those have been vacant at various times throughout the year and that that's the impacts when we don't have the officers out there  issuing parking citations this is the impacts to that revenue and then on the flipside of that we have intergovernmental revenues these are going to be our mute laid revenues which can vary from year to year and it's based on fire activity fire estimated or budgeted about a million and i think they're estimating about one eight million by year end so again i well i didn't highlight miscellaneous revenues we see there is a variance there as well those are mostly one time revenue so it's the timing issue those will be at budget by year end but to put a little bit of context to this of the half a million error five hundred and thirty four thousand deficit we're anticipating that'll be somewhere between eight and nine hundred thousand dollar deficit by year end did you have a question yes please use of money slash property yeah so that's mostly interest income so it's interest from our investments we had we project those or we we budget for those based on cash balances and then when the interest comes in from our our interest the pool of our interest income it's allocated out to departments based on their percentage of cash balances and the general fund had a couple loans to the other departments i think airport might have been one of them so it lowered the cash balances slightly so even though we're receiving more interest income as a city based on our investments a smaller portion of that went to the general fund great thank you and then i did want to just quickly point out so we're not talking about a large dollar amount but the licenses and permits we see about a forty percent drop from last year and that's based on because last year we had we received about a hundred and ten thousand hundred twelve thousand dollars in  one time money for cannabis application fees that were not programmed or expected this year so our last slide or my last slide for the revenues is the departmental fees and service charges and at third quarter those are about one and a half million below budget and i just wanted to highlight a couple of those so community development is down about four hundred and sixty five thousand at third quarter and this is mainly due to decreases in new development project applications and then public works we see about seven hundred zero deficit at third quarter and this is mostly due to the engineering division there were some vacancies there the engineers charge billable work orders when those positions are vacant there this is the impact to those revenues there is a corresponding salary savings as well and then i just wanted to run reimbursements i just wanted to point out this two hundred and eighty thousand again this is one time activity that will be at budget by year end when we're looking at this projecting out for your end stay around one and a half to two million dollar deficit by year end so when we're looking at that on the first slide there at third quarter about two point four million dollar deficit when you look at the three categories in total we're anticipating again about a one to two million dollar surplus by year end and that's it for my presentation unless you have any questions i'll okay thank you very much accounting manager i'll continue now with a review of the general fund expenditures after nine months of this fiscal year there are kind of three common threads when you look at the expenditures in the general fund and indeed the enterprise funds which we'll come on to  minute after nine months and really it's the weather that we had over the winter a lot of rain impacted a lot of that the enterprise funds in terms of their revenue in their trading and and we see that we also see salary savings from vacancies is a common theme across many of the firstly shows you all of the departments that reside within the general fund and those expenditures for a total annual budget of one hundred and six six million dollars what we do is we take a seasonal approach to try to carve that budget into what should it be likely after nine months by looking at the last three years average costs different times and then we compare our actuals at that time and you can see the general fund as a whole after nine months is showing a three million dollar favorable variance highly lower expenses what i after nine months and then what i'll do is i'll i'll go into a little more detail and i wanted to highlight the police department first that's our largest operating department within the general fund just over one quarter of the general fund expenditure is in the police department and after nine months that department is reporting savings against that seasonal eyes budget of just under six hundred thousand dollars why is that well as so much se already has mentioned in terms of the revenue impact there have been a number of vacancies all year and  quarter there were ten sworn vacancies but i can share the the good news is that most recently when i when i checked in a lot of those vacancies are now been filled and there are actually a much smaller number of vacancies across sworn dispatch and parking enforcement so i think there's been some good strides made there to try to get towards full recruitment following from that we see the fire department which again a very large department and that's actually after nine months reporting more expenditure than jurisdiction and that comes at a cost in terms of overtime and and vehicles and all that kind of thing and so a while that's showing an adverse variance to budget it is more than offset by the revenue that is generated in the mutual aid and then finally go and then and finally in terms of public works again we are seeing salary savings from the engine division we've seen the impact on the revenue there and those vacancies of course lead to salary and benefit savings across the year two charts for enterprise funds where we've picked out seven of them for you the most material ones and i'd like to talk about three in more detail this chart is very similar to the last one except what you see here is revenues and expenditures and therefore the net for that fiscal yea r and of course enterprise funds are required to fund all of their operations from revenues that they generate so if i start first with the solid waste fund you can see there that both the revenues and the expenditures are actually  moving on to the water fund we can see here that while the revenue is shown half a million dollars higher than the year to date budget and again this is based on the seasonality of when revenues tend to come in across the months that is higher yet water sales actually have been lower than budget so that's been contributed by a couple of not supposed one off but they are kind of annual revenues not volume driven revenues well we're by the above at twenty one thousand dollars but i did want to just make a reminder that's representing fifteen percent growth from last fiscal year so although it was budgeted it still has been achieved so i still i think a worthy recognition and again you see that there are favorable rates and parking contract was renegotiated down our lower cost and was budgeted so the airport fund is doing pretty well financially and that's the end of my presentation for our enterprise funds and then we have a few budget funds if you'd like me to continue any questions please continue okay so within the report and and within the the accounts agenda packet there are twenty five or thirty different budget adjustments and i didn't feel that perhaps would need to go through every single one of those so i've just taken some of the more material ones out for for discussion for now but i'm happy to answer any questions on any of the others and we have representatives from the apartments here should you have any specific questions so the first one i'd like to just share with you and we both of both jennifer and myself talked about this in our presentations this is the impact of the mutual aid activity being higher than budget and so therefore to be able to ultimately have the budget  paid the firefighters we're requesting an appropriation of new revenue that relates to the mutual aid activity of four hundred and six thousand five hundred sixty dollars that would be within the general fund fire department we also have a one time tidy up i suppose you would want to call this whereby we have within our miscellaneous grants funds let me start again a couple of years ago we had one miscellaneous grant fund that dealt with all of the miscellaneous grants for every single department and it was decided there would be more transparent and clear to generate and create funds for each of the different departments so now pd has a fun parks and recreation has a fund fire has a fund and at that time all of those projects that were easily identifiable were then appropriated into those funds and there was a small balance of one hundred twenty nine thousand dollars which remained and was very very likely to have bill and built up over a large number of years and we believe in doing some investigation that this this money really was inadvertently charged to the general fund over years and so therefore we were recommending an adjustment here to clear the miscellaneous grants final balance and and transfer that into the general fund  underway and hoping to be completed this year the two million dollars here represents a loan from the fleet replacement fund which has a significant cash balance and available funds to be able to support this  whereby it's going to be loaned to the major sea fund which will ultimately pay the construction costs for the building and then be paid back at a two percent interest rate to the fleet fund so the fleet fund generates a small return and the construction  here we have an adjustment to tidy up the delay to the fiscal year two thousand and eighteen sales tax that was reported from the state in previous meetings we've mentioned that there were some issues with some new software that the state implemented which meant that we didn't receive sales tax in a timely manner for fiscal year eighteen and of course with the new measure that was passed for the one percent measure see we're very careful to make sure that we portion what is main line breaks and apologies and some also some favorable bidding results recently and so they feel that it's a good time in the market to continue that program and to use those reserves and and continue to repair our water main lines and then allows for a greater transparency with regards to the accounting for the joint powers agreement because there are certain costs which are shared across a number of other agencies and so therefore they want to just make that a little cleaner in their in their capital books funds a couple of years ago a decision was approved by council to set up an energy efficiency portion of the facilities fund for investments in projects that ultimately yield energy savings and so this is a request to appropriate one hundred and fifty two zero for that purpose this is savings that what the fund had from prior year which they'd like to put to good work and then you see on on adjustment ac that's the other side of the two million dollar loan to measure c fund for the cabrillo pavillion of course we need to then require an appropriation for that fleet fund to be able to transfer that to measure  appropriations and estimated revenues as detailed in the presentation and the attached schedule of proposed third quarter adjustments thank you thank you for that report there's no public comment at this time no one in the public is making a comment so we'll move into committee questions or recommendations at this point mister friedman just want to thank you for the report seems like everything is balancing out at the end so i'll move the staff recommendations  this to council thank you for the motion and it does seem like everything is looking good and that's good news it's always difficult to balance the level of service and revenues and expenditures but uh looks like we're on on a