LAKEPORT, Calif. – The city's financial condition appears to be stable, based on a report to the Lakeport City Council on Tuesday night.

Finance Director Dan Buffalo presented the city's financial update – consisting of the quarterly report and the year-end financial report for the fiscal year ending June 30 – to the council, ahead of a full annual report scheduled for February.

His presentation can be viewed beginning on page 44 of the agenda packet posted below.

He went over numbers in the city's funds – both revenues and expenditures. Buffalo said the city's funds had a total of nearly $10.3 million, with $1.62 million in receivables within 60 days and $780,000 in payables, due in 30 days.

He said the Governmental Accounting Standards Board, or GASB, requires that all governments now have to report on obligations to cost pools or retirement plans. In Lakeport's case, its retirement plan is with CalPERS.

The city's obligations under CalPERS total $6.82 million, of which $4.12 million is for the miscellaneous employee classification and $2.7 million for safety, or police, he said.

Buffalo said the city recently closed a deal to restructure half of its retirement obligations, which will save it a couple hundred thousand dollars annually.

He said the city reported last year a net position citywide of $23 million, and by adding capital assets to its balance sheet that number has been reduced to $18 million.

In the 2014-15 fiscal year, the city spent $3.8 million on active employee salaries – there were 58 full-and part-time city employees as of June 30 – and $362,196 on retirees, for a total of $4,168,294, he said.

For operations, Buffalo said the city spent a total of $3,357,209. That included $609,000 in professional services, $385,000 for utilities such as heating/cooling and power, $373,000 for insurance liability, $61,000 for gas and $50,000 for permit costs.

It also issued $178,667 in loans and grants as part of its housing and economic development activities, had $1,133,350 in debt service and $4,438,405 in capital improvements.

Total expenditures was $13,275,925, he said.

There was $1,130,000 in debt service for water loans, sewer bonds, City of Lakeport Municipal Sewer District and the former redevelopment agency bonds.

Capital outlay totaled $4,438,000, including $2,182,000 for the United States Department of Agriculture water project and $272,000 for the USDA sewer work, as well as $222,000 for the new Library Park docs and $500,000 for vehicles and other heavy equipment.

Taking a closer look at the general fund, Buffalo said revenues are down. In particular, sales tax – driven in part by transportation and gas prices – has dropped. He said 14 percent of sales tax comes from the transportation stream in the form of sales of gasoline, the price of which has dropped.

Costs, however, continue to rise, driven by factors including pension obligations and health insurance premiums, he said.

Property taxes are relatively flat compared to a year ago but less than budget estimates, which Buffalo estimated was a result of reassessments. Anecdotally, he said he's aware that foreclosure sales are leveling off and property values are returning.

Health insurance costs, for the first time in the 2014-15 fiscal year, did not increase, thanks to staff efforts to get the city into a new health plan, he said.

Measure I, the city's half-center general tax, brought in just over $700,000, about $30,000 less than anticipated. Buffalo said the funds were used for roads, Public Works project, the new docks and needs at Westshore Pool, among other things.

In the city's enterprise funds, a 42-percent increase in revenues occurred in the last fiscal year on the water side, which Buffalo said was much stronger than anticipated and may be due to commercial usage.

At the same, expenditures increased by 45 percent and were driven by capital projects.

Buffalo calculated where the property tax collected in the city goes. Of the total $2,065,713 collected, $1,356,002 goes to the county, plus another $305,968 to the county for administering the funds; with $242,387 going to the city of Lakeport and $161,356 to the city of Clearlake.

In summary, Buffalo said while revenues are down, there was a $306,000 surplus in the general fund and reserves remain strong, while enterprise revenues are trending positively and have been impacted by conservation.

He called the city's economic outlook “steady,” and said staff is “beyond cautiously optimistic.” In a recent economic forecast event in the county, an economist said a recession wasn't forecast until 2018.

In other business, Buffalo introduced to the council Terry Rogers, his new financial specialist.

The council also unanimously approved and ordinance assigning the city's finance director fiscal reporting requirements that formerly had been carried out by the city clerk, and an ordinance that makes the city manager – not the council – responsible for hiring the city clerk.

The introduction of an ordinance for a zone change for the proposed Lakeport AutoZone project on Industrial Avenue and adoption of a mitigated negative declaration based on the environmental review and study was pulled from the agenda and will be rescheduled for a future meeting.

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