REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for March 2019 and Approve Various Budget Amendments
Report
BACKGROUND
In compliance with the Charter of the City of Santa Clara and the adopted Investment Policy, the following reports for March 2019 are submitted for your information. The financial review as of March 31, 2019 provides a year-to-date financial update to the City Council for the current fiscal year. Analysis of the revenues collected and all expenditures through March 31, 2019 measures the level of adherence to the established resource allocation plan and allows the City to monitor and project revenues and expenditures throughout the year.
The Adopted Budget incorporates the estimated revenues and planned expenditures for all funds. The attached Financial Status Report provides the budget to actual revenue and expenditure summaries for the General Fund, Special Revenue Funds and Enterprise Operating Funds, as well as expenditure summary for Capital Improvement Funds and Fund Reserve Balances. Any significant variances are explained in the report.
In accordance with City Council Policy 051 - Donations to the City, included in this report is a monthly activity and annual summary of donations received by department. Although the requirement of the policy is to report quarterly, in its ongoing effort to streamline reporting, the City will include this information monthly in the financial status report.
DISCUSSION
Monthly Financial Status Report (Attachment 1)
The attached report summarizes the City’s financial performances as of March 31, 2019. Financial analysis for the report is provided for the General Fund, select Special Revenue Funds, Enterprise Operating Funds, and Capital Improvement Funds.
With nine months or 75% of the fiscal year complete, General Fund revenues are trending higher than budget at 77%, largely due to an increase in building permit and planning fees received from a large commercial development (not discretionary General Fund dollars), and General Fund expenditures are at 70% of budget which is within budgeted expectations. Total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) are at 74% while total expenses are at 71%.
In the month of March, the City received $25 in donations increasing the amount for the fiscal year to $159,322.
Monthly Investment Report (Attachment 2)
All securities held by the City of Santa Clara as of March 31, 2019 were in compliance with the City’s Investment Policy Statement regarding current market strategy and long-term goals and objectives. All securities held are rated “A” or higher by two nationally recognized rating agencies. There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.
The City’s investment strategy for March 2019 was to invest funds not required to meet current obligations, in securities listed in the prevailing Investment Policy Statement, with maturities not to exceed five years form the date of purchase. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs, and earns a reasonable portfolio return of 1.99%.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
Approval of the FY 2018/19 Budget Amendments included in Attachment 3 is recommended in this report. From time to time, adjustments to the FY 2018/19 Adopted Budget are required to correct for budgets based on actual tracking, more appropriately align budgets with actual charges and correct for inadvertent errors.
The actions in the recommended budget amendment include the close out of capital projects and returning savings to the original funding source; transferring funding to funds that were determined to have insufficient ending fund balance as part of the development of the FY 2019/20 Proposed Budget; allocating funding based on prior City Council direction; augmenting budget allocations where insufficient funding is available or are legally more appropriate in another fund; and correcting inadvertent errors.
A total net budget change of $8.8 million is recommended in the FY 2018/19 Budget Amendment. The table below summarizes recommended budget actions by fund.
|
Net Budget Change - FY 2018/19 Budget Amendments |
|
Fund |
Source of Funds |
Use of Funds |
|
General |
$ 1,122,682 |
$ 1,122,682 |
|
Vehicle Replacement |
49,326 |
49,326 |
|
Public Donations |
5,000 |
5,000 |
|
Special Liability Insurance |
176,870 |
176,870 |
|
Electric Utility |
3,387,529 |
3,387,529 |
|
Cemetery |
(611,281) |
(611,281) |
|
Solid Waste |
200 |
200 |
|
Traffic Mitigation |
327,381 |
327,381 |
|
Streets and Highways Capital |
3,876 |
3,876 |
|
Storm Drain Capital |
1,447,000 |
1,447,000 |
|
Electric Utility Capital |
1,840,875 |
1,840,875 |
|
Solid Waste Capital |
600,000 |
600,000 |
|
Santa Clara Golf and Tennis Club |
466,266 |
466,266 |
|
|
|
Total Net Budget Change |
$ 8,815,724 |
$ 8,815,724 |
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the Monthly Financial Status and Investment Reports for March 2019 as presented and approve various Budget Amendments.
Staff
Reviewed by: Angela Kraetsch, Director of Finance
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Monthly Financial Status Report March 2019
2. Monthly Investment Report March 2019
3. FY 2018/19 Budget Amendments