1996 AGN SEP 17 I18 - Laserfiche WebLink

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r Id TO: FROM: SUBJECT: DATE: City of Colton INTEROFFICE MEMORANDUM NABAR ENRIQUE MARTINEZ, CITY v ANNA A. VEGA, FINANCE DIRECTOR MAYOR FULP INQUIRY REGARDING ELECTRIC LOAN REPAYMENT AND SANITATION ENTERPRISE PURCHASE JULY 12, 1996 On Thursday July 11, 1996, Mayor Fulp asked Bonnie Johnson if we had made the general fund payment to the electric utility for the period ending June 30, 1996. The Mayor also asked if we had distributed to the appropriate funds the check we received from Taormina. The response to both of these questions was "no" and further explanation was not requested. However, I would like to address why Mrs. Johnson responded in this manner. The City of Colton operates on a modified accrual basis of accounting. What this means is that during the year the City operates on a cash basis (we record the money when received and payments on the date made). At fiscal year end, June 30, 1996, we record all monies due yet not received (accounts receivable), encumber pending purchases and record all invoiced received yet not paid (accounts payable). With all this said, we are now preparing reconciliations for June 30,1996, fiscal year end closings. The journal entry required to transfer the funds from the general fund to the electric utility has been prepared and is in the process of being posted. As for the distribution of the funds from the sale of the Sanitation, we have to wait until such time that staff feel we have received all the invoices and revenue due the sanitation. As you know, we bill for utility services in arrears. Therefore, some of June sanitation services were billed in July and payments will be made during July and August. We have to account for all these revenues in the month of June. Secondly, we utilized the landfill through the end of June and this invoice will be received by the City in July. Again, this need to be recorded in June. Due to the above necessary transactions staff cannot make.the proper fund distribution. We are in the Process of compiling all this information and recording it in the proper period. All interest earnings and appropriate fund distribution will be recorded as of June 30, 1996. 1 would like to stress the importance of proper accounting and all of the above is necessary prior to answering "yes' to a question posed by the Mayor or anyone else. I do not wish to have any misconceptions, therefore, if I can be of further assistance please let me know. Cc: Bonnie Johnson W