CLEARLAKE, Calif. – The Clearlake City Council held its midyear budget review Thursday.
As part of the review, the council authorized adjustments reflecting a net decrease of $88,026 to the estimated general fund balance at the end of this fiscal year.
Adjustments addressed changes in projected revenues and expenditure increases primarily associated with the capital project fund.
In its action, the council also authorized a $1,000 donation to the Lake Family Resource Center's warming center, an action the council had previously indicated it would consider during the midyear budget review.
The budget estimates revenues and expenditures for the year as well as beginning and ending balances.
Financial Consultant Bruce Budman said the current budget was prepared prior to the end of the last fiscal year, requiring an estimation of final month figures to determine a beginning 2013-14 fund balance.
He said the lack of a 2011-12 audit complicated the process as well. He said the 2011-12 audit is complete and staff is “well along” with the 2012-13 audit, making the 2013-14 beginning balance easier to calculate and more accurate.
“This midyear process revisits the process with more current data (including) the completed 2011-12 audit, a completed 2012-13 fiscal year and six months of the current year complete,” Budman said. “A more accurate estimate of beginning and ending fund balance and revenues and expenditures can now be made.”
Budman's report showed general fund expenditures to be at 49.41 percent and all funds at 40.59 percent. He said the administrative support fund in the general fund is at 83.26 percent because insurance is budgeted through the account and was paid in full in July.
The capital projects fund is at 774.92 percent because projects that carried over from the prior year were not budgeted, which Budman said he proposed to adjust in his report.
“While some individual expenditure line budgets could be adjusted upwards, overall the various departmental budgets are in line with the adopted budget and overages can be absorbed by savings in other line items. I am not proposing to adjust individual expenditure line items up or down at this point as overall I believe they will balance out,” Budman said.
Budman's report showed a beginning fund balance higher than anticipated while the economic development fund shows to be lower.
Additionally, the Supplemental Law Enforcement Services Fund begins the year with $275,520 more than projected, he said.
Adjustments represented a net increase across all funds of $776,497 while the general fund showed a net decrease in its revenue budget of $301,172. The general fund showed receipt of budgeted revenues at 36.89 percent at midyear with a percentage of 42.9 for all funds combined.
Additional property and sales tax revenues are anticipated. Budman said five months of sales tax had been received as of Dec. 31.
“The bright spot in our general fund revenue budget is sales tax,” said Budman, noting that in speaking with the county and the city's sales tax consultant, he was informed that Clearlake should receive $78,000 over its budgeted amount.
Budman said the increase will be more than offset by shortages in property tax ($138,502), school resource officer ($36,722), Area Planning Council reimbursement ($24,357), vehicle license fees ($38,000) and transfers in from the economic development fund ($147,791).
Expenditure budget adjustments showed a net increase of $1,029,005 with the general fund showing an increase of $14,508. Adjustments reflect, in part, use and/or transfers of grant monies awarded the police department and others for capital improvement projects in the city.
Some additional expenses include $80,000 in gas tax funds for purchase of a dump truck in order to meet Cal/EPA Air Resource Board regulations. Public Works Director Doug Herren said noncompliance could result in daily fines of $300 to $10,000.
According to Budman's report, the revised estimated general fund balance at June 30, 2014, is projected to be $271,305. Compared to the projection in the original budget of $359,331 it is a net decrease of $88,026. He said this leaves a $150,000 reserve for risk management and $121,305 for reserve revenue.
In addition, the discussion included the proposal of an additional street project not reflected in the budget adjustments. The purpose of the project is to repair and overlay streets before they are restriped and reflectors installed through use of grant funds already budgeted.
The council's action did not include anything related to the additional project other than direction that the city engineer continue to pursue it.
Documents related to the midyear budget review are available to the public at Clearlake City Hall, 14050 Olympic Drive in Clearlake.
Email Denise Rockenstein at
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