2005 AGN FEB 15 I16 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR THE COUNCIL, REDEVELOPMENT AGENCY BOARD AND COLTON UTILITY AUTHORITY MEETING OF FEBRUARY 15, 2005 Item #16 TO: HONORABLE MAYOR AND CITY COUNCIL HONORABLE CHAIR PERSON AND BOAD MEMBERS HONORABLE CHAIR PERSON AND UTILITY AUTHORITY MEMBERS FROM: DILU DE ALWIS, FINANCE DIRECTOR p—, SUBJECT: 2004-05 MID -YEAR FINANCIAL REPORT DATE: JANUARY 11, 2005 The City of Colton operates under an annual budget cycle with the current budget being approved by the City Council on June 28, 2004. 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 City of Colton's financial progress through December 31, 2004, and to discuss adjustments needed in various departments in the General Fund, Childcare Fund, Wastewater Fund and the Redevelopment Agency (RDA). In addition to the budget adjustments, there will also be a discussion relative to some staffing changes that staff is recommending for Council approval. 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. This fact is more evident this fiscal year with the implementation of the "Triple Flip" legislation. This legislation reduces sales tax by 25% and is back-filled by an in -lieu property tax payable in January and May, as well as reducing the Vehicle License Fee back -fill and replacing it with an in - lieu property tax payable likewise. 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. In order to adequately assess fiscal performance at mid -year, staff analyzed various data. Most notably, a comparison to prior year results, at the same point in time, is made to determine how we are "tracking" given historical cyclical norms. Another obvious analytical mechanism involves