Report to Mayor and City Council
Tuesday, March 19, 2019
Discussion
SUBJECT:
Title
FISCAL YEAR 2018-19 MIDYEAR FINANCIAL REPORT (CITY COUNCIL)
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I. SUMMARY
The purpose of this report is to provide a Mid-Year update of revenue estimates and expenditure variances. The report also includes mid-year funding requests from departments and the status of the City's General Fund for the Fiscal Year 2018-19 at the halfway point. The report includes new revenues received, and expenditures approved by the City Council after the adoption of the budget. It also includes budget savings and carry-forwards from prior Fiscal Year 2017-18.
The City began the Fiscal Year 2018-19 with a $27.4 million fund balance. This is $7.6 million higher than originally anticipated. In addition to salary savings, most of the increase is attributable to three major items: (1) a $1.6 million in stale deposits that the City moved to General Fund; (2) a one-time $2.5 million settlement payment from Tesoro; and (3) $1.2 million in Measure C revenues where staff only budgeted a projected $266,000.
Forecasting Revenues from the Oil Industry Tax (Measure C) remains a challenge as actuals have been significantly lower than previously anticipated. The Oil Industry Tax Accountability Audit process is still underway and Staff anticipates a final audit within the next month or so. The Oil Industry Tax has not solved the City's budget issues. Staff continues to recommend prudence as the City prepares the Fiscal Year 2019-20 budget. Without significant service reductions, new revenues or the combination of both, the City will maintain its structural General Fund budget deficit. The revised Five-Year Model predicts budget deficits for the next four years. The City has adopted nine deficit budgets in the last twelve years.
II. RECOMMENDATION
Recommendation
RECEIVE and FILE the Mid-year Budget Report, which includes the 2nd Quarter Update and Vacancy Report.
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III. ALTERNATIVES
TAKE ano...
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