3.3 Staff Report

Analysis

Background

After the end of each quarter in a fiscal year, staff reports to the Budget Committee and the full Commission regarding the level of expenditures and revenues through that time period. This report discusses the expenditures and revenues through the end of the third quarter of Fiscal Year 2018-19. Reporting was delayed due to labor system reporting issues.

A spreadsheet is attached, for Commissioners’ information. A report and data were provided to members of the Budget Committee in June.

Overall

Expenditures through the third quarter of the fiscal year totaled $543,325, or about 68 percent of the Adopted Budget of $796,055. Just over $737,000 in revenues was received, almost 93 percent of the budgeted amount. Details are provided in the narrative below.

Expenditures: Salaries and Benefits

The end of the third quarter reflects completion of 18.1, or almost 70 percent, of the pay periods for Fiscal Year 2018-19. Salaries and Benefits expenditures totaled $388,381, or 65.7 percent, of the budgeted $590,835. The expenditure is a little less than the 70 percent because our new Commission Clerk began her work with LAFCO only in mid-December 2018; funds were included in the budget for a full year. Staff projects that year-end expenditures will be less than the budgeted amount, due to the lag time of hiring for that position.

Expenditures: Services and Supplies

Expenditures through the end of the third quarter - $154,944 – were a little more than 75 percent of the budgeted $205,220. Most accounts are on target or below that level, but some are higher. Information about several accounts where charges during the quarter increased expenditures is provided below.

Account 51211 (Legal Services) – The $21,477 expenditure, compared to the budgeted $15,000, reflects Legal Counsel’s substantial work associated with resolution of issues related to the Roseland Fire Protection District and the earlier annexation of the Roseland area to the City of Santa Rosa. Counsel was also closely involved with the complex reorganizations of fire districts: the Commission dissolved the Bennett Valley, Rincon Valley, and Roseland Fire Protection Districts and annexed all of their territory and territory from County Service Area No. 40 (Fire Services) to what is now known as the Sonoma County Fire District. This effort involved a number of different hearings, with the need for precise and consistent ordering of the hearings and resolutions for the Commission’s consideration. Another effort, still in process, has involved a reorganization consisting of annexation of territory to the Geyserville Fire Protection District. Staff anticipates that the expenditure in this account will increase further by year-end.

Account 51249 (Professional Services) –The expenditure of $10,000 through the third quarter reflects a variety of payments, with the major area representing fees paid by LAFCO to the California Department of Fee and Tax Administration, as a “pass through,” when territory is annexed to a city or district, thereby changing tax rate areas. Additionally, the cost of Spanish translation for a notice of protest hearing for the dissolution of the Roseland Fire Protection District, as directed by the Commission, was paid from this account. Staff anticipates that the expenditure by year-end will increase.

Account 51301 (Legal Notices) – The expenditure of $5,860, which is $2,860 beyond the budgeted $3,000, reflects expenditures for newspaper publication of the many legal notices this year when proposals have involved less than 100 percent consent of owners/voters, including reorganizations associated with Schell-Vista, Roseland, Rincon Valley, Bennett Valley, and Windsor FPDs. Staff anticipates an increase in the expenditure by year-end.

Account 51605 (Private Car Expense) – The expenditure in this account is slightly higher than the $1,000 budgeted to reflect reimbursement for mileage costs associated with attendance at LAFCO-related conferences or meetings. In April, several staff members attended the CALAFCO Staff Workshop in San Jose.

Account 51906 (Supplemental Website) – The $2,934 expenditure, almost $1,000 above the budgeted $2,000, reflects additional work needed as part of the “migration” of data to an update Sonoma LAFCO website. Additional costs are possible before year-end.

Account 51900 (Postage) – The $1,357 expenditure, about $350 beyond the budgeted $1,000, reflects the cost of large-scale mailings, such as for fire district reorganizations, in addition to more routine mailings. If there are fewer than 1,000 owners/voters or, for a protest hearing on a change of organization or reorganization in which that action would result in extension of a previously authorized tax or benefit assessment, individual notices of hearing must be mailed out, in accordance with state law.

 Revenues/Fund Balance

Revenues received through the third quarter of the fiscal year totaled $737,000, almost 93 percent of the budgeted figure. This includes revenues from fees, which are tracked during the year but not budgeted; fee revenue rolls into the Fund Balance at year end.

 There was no change in revenue from agency apportionments during the quarter, in that all agency funding had been received earlier in the fiscal year. Interest from cash invested by the County on LAFCO’s behalf increased by almost $5,000 to just over $14,000; this will increase by year end.

 No changes relating to the Fund Balance occurred from previous reports. Sufficient revenue was received to offset the level of expenditure.

 Staff continues to monitor revenues and expenditures to assure that expenditures do not exceed appropriations by year end, in accordance with County policy; LAFCO must adhere to this policy in that we use the County’s financial and accounting system. At this time, staff believes that a budget adjustment will not be needed and expenditures will not be greater than the Adopted Budget amount.

Recommendation 

Staff recommends that the Commission review, consider, and accept the report of expenditures and revenues through the third quarter of Fiscal Year 2018-19.

Alternatives to Recommendation 

None

Attachments 

1. Sonoma LAFCO Expenditures and Revenue through Quarter 3, Fiscal Year 2018-19