Council: Slowed housing construction, PD overtime costs hits budget
March 15, 2017
By Peggy Kelly
Santa Paula News
The City Council learned that financial news is bad with the slowed Harvest at Limoneira development and other factors that is resulting in an anticipated $311,868 shortfall in budget revenue.
“I wish I had better news,” Finance Director Sandy Easley told the council at the March 6 meeting.
“Unfortunately with new construction,” not moving at the expected pace, a “deficit in overall revenues is expected,” she noted.
Based upon the revenues for the first half of Fiscal Year 2016/17 — the new fiscal year will start July 1 — and “best estimates” for the remainder of the year, the anticipated total revenues for the General Fund are $14,357,602, a figure of $311,868 below budgeted estimates.
Easley said property taxes are estimated to come in over budget with $273,297 but sales related taxes have dipped by about $12,790.
She told the council year-end operating expenses are anticipated at $14,589,757, a decrease of $407,949 or 97.3 percent from the original budget estimates.
Although salary — including Overtime and Benefits — expenses are anticipated to be under budget by approximately $140,002, due to staff vacancies the number will be offset in some cases by an increase in contractual services.
Easley said the General Fund’s fiscal position is not estimated to come in as expected due mainly to “development and construction related projects not progressing as quickly as anticipated,” as well as reimbursements for Police Department overtime grant funds ending.
Staff, she added, has reviewed their budgets and will make every effort to limit spending to necessary items only.
This means that the year-end General Fund balance is estimated to be shorted by approximately $232,155, an issue that Easley said would be closely monitored as the June 30 end of fiscal year approaches.
She requested $115,000 transfer for Police Department overtime, including the special patrol that had been assigned to Main Street. The overtime was prompted by merchant and public complaints “resulting,” according to Easley’s report, “from the impact of the homeless problem and illicit activities” in the Downtown.
Reserves, she told the council, hover around the $600,000 mark, well below the 10 percent to 15 percent cities strive to maintain to set aside.
The Utilities Bond Fund for Capital Improvement Projects, which had exceeded $36 million for water/sewer infrastructure and streets, has a $10 million balance.
The local unemployment rate said Easley is 6.3 percent, the lowest it’s been in a decade.
After council questions and comments, Councilman Martin Hernandez asked about the conversion to the new accounting software system.
“Permitting is moving along,” said Easley but the accounting function is not.
“Our representative, our manager with Tyler Technical took ill, we’re a little behind,” and the city’s former IT Manager Chris Thompson “did his part.”
But now the project is “slow-going” as finance department personnel, including her, are working on other projects.
Said Hernandez, “The reason I’m asking,” focuses on new growth such as the Harvest at Limoneira that will require the new software system to be functioning.
“It’s really important to me that it’s in place,” for efficiency sake for both the city and citizens.
“It’s been a couple of years in the making,” and noted Hernandez, he would like to hear the conversion is completed “sooner than later…”
The council voted to receive and file the report and to continue to be updated on finances.
