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First Quarter Budget Review By Council

POSTED November 4, 2015 11:18 a.m.
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First Quarter Budget Review By Council

First Quarter Budget Review By Council


 

Among the topics on the agenda for the recent Riverbank City Council meeting, the council took a look at numbers for the first quarter review of the fiscal year 2015-16 budget.

The report submitted by Marisela H. Garcia, Director of Finance, included the first quarter activity for the city’s major funds which includes the General Fund, Water Fund, Sewer Fund and Gas Tax Fund for the 2015-16 fiscal year.

The following information was listed in the report that is available on the city’s website, www.riverbank.org.

The city’s fiscal condition as of the end of the first quarter has been historically precarious, officials said. General Fund revenue sources are currently on target to meet or exceed budget projections but timing differences in the receipt of certain revenue sources affect the quarter ending balances. In those cases where revenues will be anticipated to be less than budgeted, reduced expenditures will be required in order to result in positive reserve balances by year-end. Expenditures in all funds are currently less than the anticipated 25 percent that is to be expected after the end of the first quarter, Garcia noted in the report. The approved Sewer and Water Rate increases will have a positive impact on revenues. An updated projection will be provided during the preparation of the mid-year budget.

Figures provided to the council showed that the city’s General Fund is currently experiencing an operating deficit with actual revenues received of $430,459 or 5.1 percent of the budgeted revenues. Several General Fund Revenues have timing differences and are not recorded as revenues until they are received. Expenditures of $1,290,609 are at 14.9 percent of the budget, well below the expected 25 percent quarter-end level. The ending Reserve as of June 30, 2016 is projected to end at $668,716 or 7.93 percent, well below the required 10 percent established by the City Council. With this outlook, City Departments are asked to continue to be prudent in their spending in order to secure funds for the anticipated expenditure increases in FY 2016-17.

Enterprise funds are designed so that user fees will be sufficient to recoup the operating and capital expenditures required to provide services to customers.

Water Fund year-to-date revenues are near the anticipated budget with 19.9 percent of the budget having been received as of the end of the first quarter. Expense levels are at 15 percent of the budget. This is due to prudent spending practices of the Water Division. The Water Fund was anticipated to end the fiscal year with a 61 percent reserve as of the preparation of the final budget in June. After a successful Proposition 218 process, on Nov. 21 new water rates will become effective. Finance will re-evaluate the budget based on revised revenue and expenses, incorporated into the water rate forecast. Mid-year revisions will be proposed as appropriate.

Sewer Fund revenues to date are at 15 percent of the anticipated budget. Sewer fund expenditures are currently under budget with 13 percent expended as of the end of the quarter. The Sewer Fund will also experience an increase in rates on Nov. 21 as a result of the Proposition 218 process. Finance will re-evaluate the budget based on the revised revenue estimates and proposed projects for the fiscal year.

Gas Tax revenues for the current fiscal year will be lower than the prior fiscal year due to changes in the gas tax rate paid by customers. Also affecting revenues are the development of fuel efficient vehicles and an increase in the purchase of electric vehicles by consumers. Revenues will be closely monitored in order to ensure that operations and maintenance of our streets and roads is able to be accomplished with existing funds.

The Finance Department will continue to closely monitor all budgets within the City of Riverbank, Marisela indicated in her report, particularly the General Fund and the Gas Tax Fund. A thorough mid-year review will be undertaken in January and will be presented along with revisions to revenues and expenditures in February.

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