1994 MIN DEC 6 - Laserfiche WebLink

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received from federal and state funds for specific purposes. RDA is a restricted fund. Other funds like sales taxes and property taxes to the City are non -restricted f unding sources and are in the general fund. Therefore, the audit report reports on the accuracy of financial data and compliance with funding services. If there are issues, they are reported. If there are problems with the control structure, they are reported. It is the auditor's opinion that the City's financial statements are prepared in conformity with general accounting principles; however, there is some doubt about the City's ability to continue in the current mode of operation because of the general nature of the City's finances. Mr. La Mond reviewed the specific statement which identified the overall general fund deficit in the amount of $6,700,000. He stated that the City's liabilities exceeds its assets. The General Fund has liability in excess of available resources as of June 30, 1994. He summarized the General Fund Deficit as Adjusted for General Fund Share of Long -Term Debt, such as the vested compensated absence obligation having to do with earned vacation, sick leave and compensation time. There was discussion on capital lease obligations and payment schedule of long-term debt. Mr. La Mond noted that the 1994-95 budget had a flaw. In addition to beginning with a deficit, it contained a one-time source of revenue in excess of $3 million that is "iffy." He identif ied budget variances such as significant declines in actual revenue, i. e., sales tax dropped off, service charges were off $1.2 million, greenwaste, plan check, and sale of mortgages. The City exceeded its public safety budget for the past three years. City Manager Martinez explained that with staff turnover, the 1994- 95 budget was not even ready until September/ October which was accomplished with revenue forecasting. Mr. La Mond concluded that financial woes were not unique to the City of Colton. Every City has suffered. Rialto and Fontana have taken extraordinary measures such as downsizing. Motion by Councilmember Beltran, seconded by Councilmember Sandoval to receive, accept and file the audit reports for 1993-94. Unanimous vote. City's Financial Standing Finance Director Chamberlain provided a history of the general fund. She explained that miscellaneous revenue is from none specific identified sources. Councilmember Sanders moved for a balanced budget and to create an ordinance for automatic triggers. Councilmember Beltran suggested that mid -year budget review would be opportune to instill controlling mechanisms to the budget. He further recommended to staff that mid -year budget review be scheduled in December. DEC 6 1994