CC SR 20151201 10 - FY14-15 Year-End Financial ReportCITY OF RL\NCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
Staff Coordinator:
HONORABLE MAYOR & CITY COUNCIL MEMBERS
DEBORAH CULLEN, FINANCE DIRECTOR~
DECEMBER 1, 2015
FY14-15 YEAR-END FINANCIAL RE~QBT
DOUG WILLMORE, CITY MANAGER~
Allan Kaufman, Senior Administrative Analyst ~
RECOMMENDATION
Receive and file the Fiscal Year 2014-2015 year-end financial report.
FISCAL IMPACT
There is no fiscal impact.
BACKGROUND AND DISCUSSION
The City is currently undergoing a final independent audit of its financial statements
performed by Vavrinek, Trine, Day & Co., LLP (VTD). This report serves as a preview of
the information that will be presented along with the City's Comprehensive Annual
Financial Report (CAFR) to the City Council on January 19, 2016. The City ended Fiscal
Year 2014-2015 with a positive balance as revenues exceeded what was budgeted and
expenditures came in under budget.
General Fund
Total budgeted revenue and expenditure amounts as compared to actuals for Fiscal Year
2014-2015 are summarized below:
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FY14-15 Year-End Financial Report
December 1, 2015
Page 2of4
Final Budget Actual
Re1.enues $27,487, 128 $28,084 ,853
Expenditures 20,864,683 18,649,741
Revenues vs Expenditures $6,622,445 $9,435,112
Transfers In * 392,855 364,049
Transfers Out * -8,57 1,984 -8,574,613
Revenue Variance
Transfers In
Sheriff
Parks I Trails I Open Space Maintenance
Total
Transfers Out
CIP Fund
Transient Occupancy Tax (T01)
Fal.Qrable Expenditure Variance
Residential Street Rehabilitation project
Cal JPIA Retroacti1.e Refund
Subtotal
Other Governmental Funds
TOTAL
Act ua l
Amount
$100,000
$264,049
$364,049
Actual
Amount
-$4,812, 130
-973,078
-2,229,400
-231,306
-8,245,914
-328,700
-8,574,614
The General Fund favorable revenue variance to budget was $0.6· million (or 2.2%),
primarily attributable to increased permit revenue.
A summary of actual revenues to budget and their respective variance are as follows.
General Fund Revenues
Taxes
Licenses and Permits
Revenue from Other Agencies
Charges for Services
Fines and Forfeitures
Use of Money and Property
Other Revenues
Total General Fund Revenue Variance
Expenditure Variance
Budget
23,572,867
2,062,4001
18,000 1
415,5001
117,600
650,240 1
650,521 1
$27,487, 128
Actual Variance
23,760,687 187,820
2,514,572 452, 172
36,212 18 ,212
369,608 -45,892
135,056 17,456
585, 126 -65, 114
683,592 33,071
$28, 084, 853 $597,725
The favorable expenditure variance to budget was $2.2 million (or 10.5%), which is more
than normal or expected (discussed below); and will be transferred to the Capital
Improvement Projects (CIP) Fund during FY15-16, per the City Council's Reserve Policy.
Below is a summary of actual expenditures to budget and their respective variance.
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FY14-15 Year-End Financial Report
December 1, 2015
Page 3 of 4
Budget Program
Parks, Trails & Open Space Maintenance
Storm Water Qua I ity
Traffic Management
Lega I Services
Planning
Other (spread across 28 budget programs)
Administration (10 programs)
Public Safety (4 programs)
Public Works (3 Programs)
Community Development (5 programs)
Recreation and Parks (6 programs)
Total General Fund Expenditure Variance
Budget
$1,801,248
606,495
397,000
990,000
1,503,311
4,458,239
4,827,163
2,763,200
1,543,277
1,974,750
$20,864,683
Actual Variance
$988,184 $813,064
278,332 328,163
91,847 305,153
856,190 133,810
1,375,122 128,189
4,279,282 178,957
4,761,241 65,922
2,705,392 57,808
1,495,305 47,972
1,818,846 155,904
$18,649,741 $2,214,942
• The Parks, Trails & Open Space Maintenance program has historically been
budgeted conservatively; and includes more than 18 different activities such as
landscape maintenance, trails maintenance, play surface maintenance, and open
space fuel modification. With prior year carryovers, the FY14-15 budget included
$495,855 for weed abatement and open space fuel modification. Due to the dry
weather and reduced brush growth, only $150,462 was spent. There were also
three small projects that were not completed during FY14-15 or carried over to
FY15-16: Abalone Cove Beach Building Improvements of $50,000, Abalone Cove
Shoreline Park Northwest Corner Improvements (landscape and fence) for
$30,000, and other Fence Replacements for $40,000.
• The FY14-15 Storm Water Quality budget included $460,495 for MS4 permit
implementation, but only $169,694 was spent.
• The FY14-15 Traffic Management budget included $100,000 for a traffic sign
compliance survey that was not performed; and $180,000 for pavement striping,
of which only $3,277 was spent.
• The remaining $0.5 million General Fund expenditure variance was comprised of
immaterial amounts spread across 28 programs; which is consistent with prior
years.
CIP Fund
The June 30, 2015 CIP Fund Balance is expected to be $20,447,428; which includes
$7,193,720 of continuing appropriations, leaving a balance of $13,253,708 (the 2015
Five-Year Model estimated $11,363,500). The City Council's Reserve Policy requires a
minimum emergency project reserve of $3,000,000 in the fund. Therefore, the excess
fund balance available for projects is $10,253,708. Staff expects that with the work of the
Infrastructure Management Advisory Committee, much of the $10 million balance will be
programmed for infrastructure projects over the next several years.
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FY14-15 Year-End Financial Report
December 1, 2015
Page 4 of 4
City's Financial Position
A summary of unaudited fund balances at June 30, 2015 are as follows.
In millions
General Fund CIP Fund Other Funds Total
Beginning Fund Balance (6/30/2014) $15.6 $18.0 $13.1 $46.7
Add: Revenues 28.1 0.3 6.1 34.5
Add: Transfers In 0.4 11.7 1.4 13.5
Subtotal $44.1 $30.0 $20.6 $94.7
Less: Expenditures -18.8 -8.7 -4.0 -31.5
Less: Transfers Out -8.6 -1.0 -3.6 -13.2
Less: Restricted Amounts -1.1 0.0 -11.1 -12.2
Less: Continuing Appropriations -0.5 -7.2 0.0 -7.7
Less: Restricted and Reserved by
City Council -10.5 -3.0 -1.7 -15.2
Subtotal -39.5 -19.9 -20.4 -79.8
Unrestricted Ending Fund Balance
(6/30/2015) $4.6 $10.3 $0.1 $14.9
The City's General Fund Reserve (referred to as the Rainy Day Fund) is expected to be
$15, 133,238 at June 30, 2015, $4,605,663 in excess of the 50% policy reserve level of
$10,527,575. Favorable variances for both revenues and expenditures contributed to the
excess reserve balance.
The General Fund transferred $8,245,914 to the Capital Improvement Projects (CIP)
Fund. The transfer included $5,785,208 of funding for the CIP Reserve for future
infrastructure projects, as required by the City Council's Reserve Policy; an additional
$231,306 for future projects as directed by City Council; and $2,229,400 of funding for
the annual residential street rehabilitation program. Of the total amount transferred,
$4,812,130 comes from Transient Occupancy Tax (TOT) revenue, primarily generated
from the T erranea Resort.
City's Employee Pension Liability
For the FY14-15 financial statements, the City implemented new accounting reporting
standards that require adding the City's unfunded employee pension liability to the
Statement of Net Position. The unfunded pension liability of $5,714,320 is the accrued
liability at June 30, 2014 (one year behind the financial statements), less the market value
of assets. The City's pension plan fiduciary net position as a percentage of the total
pension liability is 83%.
FY14-15
Current Number of City Employee
Tier Formula Full-Time Employees Contribution Contribution
1 2.5% at 55 34 15.701% 8.000%
2 2.0% at 60 14 8.005% 7.000%
3 2.0% at 62 12 6.250% 6.250%
Vacancies 2*
64
Note: Employees hired after January 1, 2013 will either receive a Tier 2 or Tier 3 benefit.
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