1993 CC ADJ MIN FEB 23 - Laserfiche WebLink

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Motion previously made to submit the nepotism policy for negotiation at meet and confer with Employees Associations carried. Unanimous vote. Mid -Year Budget Review City Manager Lewis related that a year ago the City started with a 2.5 million dollar deficit and after the City Council made some structural changes to the budget the year ended with approximately $800,000 in the black. This year we are going about as expected, with some modest exceptions and will end the fiscal year with a reserve of $300,000. Acknowledging that City Employees had sone 3 years without a cost -of - living increase, he pointed to the fact that even though the City .had to observe stringent Fiscal measures it averted lay-offs or furloughs. Fiscal Year 1993-94 does not present an optimistic picture as far as local government revenue, much depends on what the State does as far as takebacks from local governments. It is expected that current State plans will reduce property tax revenue by as much as $600,000 to the General Fund. By following the same budget plan, there are no plans for any lay-offs: or furloughs in next fiscal year; nor will there be any recommendations :for salary raises. While there may be some diminished services to the public as a result of State revenue reductions, it is expected the ability to provide the same basic service level will remain. Manager Lewis introduced Finance Director Richard Acevedo to review the Financial Condition of the city. Director Acevedo referred the City Council to the copy of the 1991-92 audit Financial Statement for the City prepared by the audit firm of McGladry & Pullen. He called attention to the two pages extracted from the audit report, saying they were the Combined Balance Sheets of all fund types. He reiterated Mr. Lewis' statement that the City was in greatly improved financial condition from last year. At the end of the 91-92 Fiscal Year, the City had an $849,000 surplus which. was used to reduce the 2.5 million deficit. A PEPS credit along with the proceeds from the lawsuit with Southern California Edison were also applied to the deficit. City Manager Lewis .informed, the City Council that the City's Audit Committee is comprised of the Mayor, RDA Chairperson, City Treasurer and the Finance Director. The Audit Committee's primary duties are to hire and fire the auditor and to review the annual audit. The auditors are .independent and they do a thorough audit on an annual basis. City Manager Lewis presented the Mid -Yeas Budget Book., specifically his brief memorandum which outlined the contents of the book and submitted the specific mid -year recommendations, to be considered by Council at the end of tonight's presentation. Director Acevedo reviewed Page 3, Fund Balance Analysis, saying the City set aside a prudent reserve of about 2.5%. City Manager Lewis 2