Wednesday, February 13, 2013

City Numbers Are Looking Good!

NUMBERS, NUMBERS, NUMBERS
Tuesday afternoon the Costa Mesa City Council held a study session at which two very important financial issues were discussed - the Comprehensive Annual Financial Report (CAFR), HERE, and the Mid-Year Budget Review, HERE.


CAFR SHOWS BUDGET SURPLUS
Bobby Young, Director of Finance and Information Technology, guided the discussion of both issues, covering the CAFR first.  This document, 143 pages of every number you'll want to know about how Costa Mesa did financially for the Fiscal Year ending June 30, 2012, can make for some ponderous reading.  The short version is, the City of Costa Mesa did much better than anticipated during the last fiscal year, ending up with a budget surplus of $2.5 million.  If you want to know all the details, go to that link above to read the entire document as posted on the city web site.

MID-YEAR NUMBERS ARE GOOD
The city continues to make good progress with the budget.  The Mid-Year Budget Review, Fiscal Year 2012/2013, presentation by Young included some very interesting graphics.  So, courtesy of Bobby Young, I'll share a few with you.  Click on each image to enlarge for easier reading.

REVENUE AND EXPENDITURES
These first two show recent historical numbers for both Revenues and Expenditures.  You can see how the economic downturn affected the city during the first couple of years shown on these charts.   That "ABLE" number mentioned in the footnote is a one-time event as a result of the dissolution of the A.B.L.E helicopter program.  That was $2.5 million.
REVENUE/EXPENDITURES TRENDS
This graphic shows the path Revenues and Expenditures took for the past 14 years.  You can see how we fell off the cliff in 2008.
USE OF FUND BALANCE
This chart shows very clearly how we had to use Fund Balance to balance our budget beginning at the FY 06-07 time frame.  Fund Balance is projected to be at the $48 million mark by the end of this fiscal year - a slight increase from the past year.
WATCHING THE CASH
Former Mayor Eric Bever - anybody remember him? -  was especially concerned about our cash problem.  Revenues come in spikes due primarily to property tax payments, so you can see how that works.  Our rules require us to have an emergency fund of $14.125 million on hand.  As you can see, there were a few recent years when that did not happen during parts of the year.  However, the trend is, once again, looking up.
CONTINGENCY FUND USE EXPLAINED
Some folks are concerned about how CEO Tom Hatch's Contingency Fund is being used so Young provided us with this detailed explanation of how the fund has been used so far this fiscal year.  Most of the notes are self-explanatory.  There are some "salary" items that will likely be separate budget items in the next fiscal year budget.  Most items, like the $125,000 for the 60th Anniversary celebration, are one-time events.
BUDGET ADJUSTMENT RECOMMENDED
As a result of the mid-year performance Young is recommending to the council that an adjustment be made to the 2012-2013 budget of $773,300 - another good sign.
PENSION STUDY SESSION COMING UP
Mark your calendar.  There will be another study session on February 26th at which Pensions will be discussed at length, guided by pension expert Joe Nation.  More on that in a couple weeks.

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