2002 AGN MAR 05 I17 - Laserfiche WebLink

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Item #17 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MARCH 5, 2002 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: DILU DE ALWIS, FINANCE DIRECTOR SUBJECT: 2001/02 MID -YEAR FINANCIAL REPORT DATE: FEBRUARY 19, 2002 BACKGROUND The City of Colton operates under a two-year budget cycle. While the budget is both an authoritative document and an effective planning tool, it is subject to variations in actual fiscal results. Because of this, many local governments (including Colton) typically prepare a "mid -year" financial report along with recommended budget adjustments to be approved by the City Council. DISCUSSION/ANALYSIS The purpose of this report is to primarily focus upon the General Fund's financial progress through December 31, 2001. In addition, because some adjustments are needed for the City's Internal Service Fund activity and Enterprise Fund activity a discussion of those matters will also be included. General Fund Revenues and Expenses The General Fund revenues are expected to meet projections as adopted in the budget for the current fiscal year, with no major increases/decreases, and requires no changes at mid -year. It is often difficult to assess a local government's fiscal performance related to revenues, because they are extremely cyclical and do not follow a straight-line pattern. Revenues during the last one-half of the fiscal year are proportionately much greater than those received during the first one-half. Expenses also tend to follow a similar pattern, but the variations are not as great. As a result, local governments need to have adequate cash on hand during the first one-half of each year to help cover expenses until the revenues "catch-up" in the last one-half of the year. Colton's General Fund has maintained an adequate cash balance over the past few years.