CALIFORNIA CITY – The city will require another interim budget and a special meeting has been called for 5 p.m. on Tuesday, July 30 to address the issue. Council met Wednesday for a special budget workshop that was mainly a chance for consultant Andy Heath to present a preliminary budget outline.
New Councilmember Ron Smith was out of town but participated via a telephone call from Plano, Texas. Mayor Pro Tem Eugene Stump was stuck in Los Angeles area traffic and unable to participate - although he did listen in via cellphone.
“In order to put a budget together for the city in the future is important to understand exactly what the base is,” said Heath. “So for tonight's presentation, we'll be talking about an overview of the preliminary base budget development process and some of the assumptions that went into this budget.”
The budget was developed following a review of Fiscal Year 2017-18 activity as submitted to auditors and a review of FY 2018-19 financial activity to date. Discussions with department heads were held to determine financial needs and deliver a base and some supplemental service requirements.
“We did receive as I mentioned, fiscal 17-18 activity submitted to the auditors,” said Heath. “The audit for fiscal 17-18 is not yet complete. However, all of the information and the majority of the accruals, the majority of the accounting adjustments that need to be done are inherent in the information that's been given to the auditors for 17-18.”
He said the preliminary budget is focused on sustainability - the use of ongoing revenues to support ongoing expenditures - and financial forecasts and models for the main operating funds.
“We use conservative practices,” said Heath. “So one of the core tenets of putting a budget together is to be conservative, not to be overly conservative, but to be conservative for both revenues and expenditures. You never want to overestimate returns and you never want to underestimate expenditures.”
The preliminary budget currently projects total revenues for city operations and enterprise funds in FY 2019-20 at $24,841,263 and expenditures totaling $29,850,557.
“What what you see tonight is kind of a big challenge, said Heath. “But I What I showed you is what your budget looks like from a base perspective, from a high level funding, big picture.”
General Fund revenues are expected to be $4,108,769 with expenditures of $4,317,948. The bulk of the funding - some 52% - coming from property taxes.
“This preliminary budget is set up into different categories - there's four distinct categories,” said Heath. “First of all, you have personal services. Personal services represents the funding for all of the personnel service costs associated with employing positions throughout the city, accounts for all of the salary increases as stated in recently initiated contract increases. We also have non personal services, which accounts for necessary operating costs and production services and for things like insurance, for legal costs for utilities and things that really aren't attached specifically to the position.”
The other categories are capital costs and non salary transfers and debt service costs.
“This is just a very generic overview,” said Heath. “There are a couple funds that are actually not part of this workshop, that will be included in future presentations. Particularly the housing fund, successor agency plan, and the SDI, those funds area special funds, They have their own setup and framework.”
Heath noted that not all the numbers are accurate as council had just voted to reduce the parcel tax fee by $10 at Tuesday’s council meeting. He reviewed proposed budgets for each of the city departments projected out to FY 2024-25, reminding council that Measure C funds have a sunset clause in 2024 which will result in a significant drop in revenue.
Following his presentation and questions from council and the public, council began discussing the details of the next meeting - originally scheduled for Thursday. Some of the city’s department heads seemed caught off-guard when told they would need to present a list of budget priorities at the next meeting.
After some discussion, it was decided to give department heads until Aug. 10 to present their priority lists and then an additional meeting on Aug. 13 to finalize the budget.
Planning Commission Chairman Jim Creighton, who was in the audience, reminded council that their current interim budget resolution expires on July 31. Additional back and forth resulted in direction to City Clerk Denise Hilliker to post an agenda for a special meeting on July 30 to discuss and enact an additional interim budget resolution.
Council will meet at 5 p.m. on Tuesday in council chambers, 21000 Hacienda Blvd., to approve a resolution authorizing interim expenditures through Aug. 31. The meeting is open to the public.