"There's Good News Tonight!"
WHO REMEMBERS HIM?
That title, the catch phrase from long-time radio newsman Gabriel Heatter, seems appropriate this evening.
MID-YEAR BUDGET REVIEW REPORT
The agenda for Tuesday evening's City Council Study Session was distributed this afternoon and it includes the Fiscal Year End 2010-2011 Mid-Year Budget Report. You can read that report HERE.
THINGS ARE NOT AS BAD AS WE THOUGHT!
The short
version of this report is - we're not in as deep financial doo doo as we expected! This is good news, indeed.
ALL MAJOR REVENUE SOURCES ARE UP!
From a revenue standpoint, Sales Tax is up 9.07%; Transient Occupancy Tax is up 3.77% and Property Tax is up 13.33%.
SALES TAX
The city consults with an outfit called Hinderliter de Llamas - which probably translates to something like "Tail light of the Llamas" - to help with sales tax revenues analysis. Based on the analysis the staff recommends an adjustment to the budget of $4,456,000. Whew!
TOT
In the case of the Transient Occupancy Tax the staff is recommending an adjustment of $1,050,000.
PROPERTY TAX
Based on the Property Tax revenues and their analysis the staff recommends an adjustment of $550,000.
EXPENDITURES ARE DOWN
On the Expenditure side, significant savings have been realized in many areas.
Prior Year (FY09-10) Labor Negotiations resulted in savings of $260,000.
Current Year (FY 10-11) Labor Negotiations resulted in savings projected to be $1,167,000.
Attrition Savings is projected to be $900,000.
Recreation Program Reductions will amount to $239,450.
Adjustments for Salary Accounts, for several reasons, will result in an additional budget cost of $1,175,000.
USE OF FUND BALANCE SEVERELY DIMINISHED
When the budget was prepared in June last year it was projected that we would need to use Fund Balance of $9.4 million. Through many of the efforts listed above and the negotiations with the employee associations and the higher amounts from various revenue sources the staff is currently projecting the use of fund balance of $1,387,192.
ATTACHMENT "C" IS VERY INTERESTING
All of this will be hashed out at the Study Session on Tuesday. Please take a minute to follow the link I provided above and read through Budget and Research Officer Bobby Young's excellent report and the accompanying charts. I found Attachment C, Budget to Actual Analysis - General Fund Expenditures by Department/Division, to be very interesting. The column on the far right edge of that chart provides a percentage of the funds budgets remaining for the last half of the year. 50% would be anticipated. In most cases the number is higher, but there are some line entries that jump out at you.
SOME NUMBERS LOWER
For example, the "Salaries and Benefits" lines for Police Administration, Fire Administration, Fire Protection and Engineering are all below that 50% number, in some cases well below it.
HOW WILL GOOD NEWS BE VIEWED?
It's going to be very interesting to see how this good news plays with certain new council members who have previously indicated that severe changes must be made to our fiscal management practices - particularly when it comes to salaries and benefits. Tuesday's meeting will give us a pretty good idea of just what kind of direction this new council wants to take our city. Some of the urgency of compensation reform may have been reduced by this good news. We'll see...
That title, the catch phrase from long-time radio newsman Gabriel Heatter, seems appropriate this evening.MID-YEAR BUDGET REVIEW REPORT
The agenda for Tuesday evening's City Council Study Session was distributed this afternoon and it includes the Fiscal Year End 2010-2011 Mid-Year Budget Report. You can read that report HERE.
THINGS ARE NOT AS BAD AS WE THOUGHT!
The short
version of this report is - we're not in as deep financial doo doo as we expected! This is good news, indeed.ALL MAJOR REVENUE SOURCES ARE UP!
From a revenue standpoint, Sales Tax is up 9.07%; Transient Occupancy Tax is up 3.77% and Property Tax is up 13.33%.
SALES TAX
The city consults with an outfit called Hinderliter de Llamas - which probably translates to something like "Tail light of the Llamas" - to help with sales tax revenues analysis. Based on the analysis the staff recommends an adjustment to the budget of $4,456,000. Whew!
TOT
In the case of the Transient Occupancy Tax the staff is recommending an adjustment of $1,050,000.
PROPERTY TAX
Based on the Property Tax revenues and their analysis the staff recommends an adjustment of $550,000.
EXPENDITURES ARE DOWN
On the Expenditure side, significant savings have been realized in many areas.Prior Year (FY09-10) Labor Negotiations resulted in savings of $260,000.
Current Year (FY 10-11) Labor Negotiations resulted in savings projected to be $1,167,000.
Attrition Savings is projected to be $900,000.
Recreation Program Reductions will amount to $239,450.
Adjustments for Salary Accounts, for several reasons, will result in an additional budget cost of $1,175,000.
USE OF FUND BALANCE SEVERELY DIMINISHED
When the budget was prepared in June last year it was projected that we would need to use Fund Balance of $9.4 million. Through many of the efforts listed above and the negotiations with the employee associations and the higher amounts from various revenue sources the staff is currently projecting the use of fund balance of $1,387,192.
ATTACHMENT "C" IS VERY INTERESTING
All of this will be hashed out at the Study Session on Tuesday. Please take a minute to follow the link I provided above and read through Budget and Research Officer Bobby Young's excellent report and the accompanying charts. I found Attachment C, Budget to Actual Analysis - General Fund Expenditures by Department/Division, to be very interesting. The column on the far right edge of that chart provides a percentage of the funds budgets remaining for the last half of the year. 50% would be anticipated. In most cases the number is higher, but there are some line entries that jump out at you.
SOME NUMBERS LOWER
For example, the "Salaries and Benefits" lines for Police Administration, Fire Administration, Fire Protection and Engineering are all below that 50% number, in some cases well below it.
HOW WILL GOOD NEWS BE VIEWED?
It's going to be very interesting to see how this good news plays with certain new council members who have previously indicated that severe changes must be made to our fiscal management practices - particularly when it comes to salaries and benefits. Tuesday's meeting will give us a pretty good idea of just what kind of direction this new council wants to take our city. Some of the urgency of compensation reform may have been reduced by this good news. We'll see...Labels: Budget Woes
posted by The Pot Stirrer at 1/07/2011 11:52:00 PM
8 Comments:
Thanks for the bottom line!
I imagine there is still going to be an urgency for some reforms. While this is good news, I am certain continued expenditure reductions will be the order of the day. I am sure that council will want to lay out a path that is sustainable into the forseeable future.
That said, let's not throw out the baby with the bath water. We have to balance sustainability with vibility.
That is good news. It also makes Righeimer look like a fool.
Sorry, Max, but on the contrary, it makes Righeimer look like a hero. Did you not see Mr. West's entry: "For example, the "Salaries and Benefits" lines for Police Administration, Fire Administration, Fire Protection and Engineering are all below that 50% number, in some cases well below it." They caved in before Righeimer took office and saved us a lot of money. You should thank him for working to provide the same level of police coverage at a lower cost. Reminds me of when the Iranians released the hostages the day Reagan was sworn in.
Min, Didn't Righeimer just say that the revenues aren't going to be there any time soon? That's what I was referring to. I read an article that stated Monahan, Leece, and Foley saved a great deal of money by signing that particular contract by the way. Maybe fool was too strong of a word but his dire straits prediction for Costa Mesa isn't very accurate. Righeimer is so at odds with police and fire unions that it seems plausible he would try to declare bankruptcy to get out of them. That wouldn't be so bad because they are getting paid too much it seems but there would be an outrageous amount of litigation involved and the money saved wouldn't cover the overall costs.
Min and Max (I love it), Vallejo has learned the very hard way that bankruptcy isn't a quick or good solution. It's been 2.5 years since they filed and they're still bogged down, with no relief in sight.
I hope that ALL the council members will actually listen to the report and explanations on Tuesday and not try to tilt the actual numbers to favor a political agenda. I think there is enough attention being paid to this issue by the residents that they'll have to make a rock-solid case before moving forward.
I also think the public employee unions can see the handwriting on the wall and will be willing to discuss things. They've already taken the initiative in a couple cases, so I'm encouraged. We'll see...
Max: There is no bankruptcy in CM's near future. For one, no councilmember wants to be associated with such a catastrophe on their watch. It's one of the reasons that that incompetent Mansoor led his crew through a massive draw down of the city's rainy day fund. For another, a BK has a HUGE impact on the filer's ability to borrow and as everyone knows, you can't live without credit. I suggest you stop guessing and give this team a chance. (Thanks for taking back your "fool" comment, too - that was the right thing to do)
Min, Righeimer hasn't done anything about police coverage one way or the other. Had he voted against the way Monahan, Leece, and Foley voted, the city would have lost out on even more money by not having a contract. Definitely a tough situation for any council person to be in but giving credit to Righeimer for not doing anything doesn't seem right. If anything, give credit to Mansoor and Bever for voting the way you would have wanted Righeimer to vote.
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