For the Commission’s August 7, 2019, meeting, staff provided a report of actual expenditures and revenues for Fiscal Year 2018-19, based on data available in mid-July around the time that accounts in that fiscal year were closed.
Subsequent to distribution of the August agenda packet, staff learned that two additional bills in Legal Notices and Printing accounts had been paid from 2018-19 funds right before the official close of the 2018-19 records. Staff further determined that a small amount of fee revenue intended for FY 2019-20 had inadvertently been credited to FY 2018-19. Although these amounts changed expenditure and revenue levels minimally, in the interest of accuracy, the financial report was withdrawn from the Consent Calendar for re-calculation.
The attached spreadsheet provides a correct report of the Commission’s expenditures and revenues for Fiscal Year 2018-19, through June 30, 2019. The narrative of the report discusses specific aspects of the level of expenditures and revenues, overall providing similar information to what was included in the staff report for the August 7, 2019, meeting.
Expenditures for Fiscal Year 2018-19 totaled $776,143, or 97.5 percent of the Adopted Budget of $796,055. Almost $766,000 in revenues were received, about 96 percent of the budgeted amount. Needed use of Fund Balance monies To balance expenditures and revenues, $10,274 was needed, substantially less than the $124,190 that had been projected when the Commission adopted the 2018-19 Final Budget. Details are provided in the narrative below.
Expenditures: Salaries and Benefits
Salaries and Benefits costs for Sonoma LAFCO’s 3.2 Full-Time Equivalent (FTE) staff (1.0 FTE Executive Officer;.80 FTE Assistant Executive Officer;.90 FTE Analyst; and.50FTE Clerk) as well as Commissioner stipends totaled $560,984, about 95 percent of the Adopted Budget of $590,835. The full amount was not expended because the Commission Clerk started her work with Sonoma LAFCO only in December 2018; additionally, the County made some adjustments in lowered costs for dental and vision insurance.
Expenditures: Services and Supplies
Expenditures in Services and Supplies accounts totaled $215,159 overall, about 4.8 percent above the budgeted $205,220. In previous reports to the Commission, staff had projected the overage, which was largely due to the high level of activity over this past year, especially with regard to fire district reorganizations. Also reflected in these accounts are expenditures associated with the relocation of the LAFCO office to downtown Santa Rosa, which occurred in July 2018, and upgrades to the Commission’s website. Staff has provided information about a number of specific accounts below.
Account 51207 (Auditor Account Services): The $8,004 expenditure, is $3,000 higher than the budgeted $5,000 due to the Auditor’s staff work with R.J. Ricciardi, Inc., the outside audit firm that is conducting a financial audit of the Commission’s operations for 2016-17 and 2017-18. This is beyond the typical work in support of LAFCO, which entails calculating apportionments, billing and collecting apportionments, and acting as a liaison for financial matters. The Commission directed initiation of the biennial audit at the May meeting.
Account 51211 (Legal Services) – The $24,800 expended was about 65 percent higher than the budgeted $15,000. As had been reported previously, the expenditure reflects Legal Counsel’s extensive 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 as well as the complex reorganizations of the Bennett Valley, Rincon Valley, Roseland, and Windsor Fire Protection Districts and portions of County Service Area No. 40 (Fire Services), which occurred earlier this fiscal year, and, separately, a reorganization involving the Geyserville Fire Protection District and areas within CSA 40.
Account 51249 (Professional Services) – Just over $23,000 was expended in this account, about $13,000 over the budgeted $10,000. Staff had projected the over-expenditure in previous reports. The amount largely reflects a variety of payments, with the major ones 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. Typically, the applicant pays LAFCO, and LAFCO pays the State. 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 as were other miscellaneous charges.
Account 51301 (Legal Notices) – The $7,293 expenditure was almost $4,300 greater than the budgeted $3,000. It reflects the costs for publication of notices of hearing for proposals submitted when there was less than 100 consent. State law requires notices of Commission proceedings and protest proceedings to be published in a newspaper of general circulation in those situations. The proposals during 2018-19 involved the fire district reorganizations, as referred to above, as well as an earlier reorganization involving the Schell-Vista Fire Protection District; a Town of Windsor reorganization (North of Arata Lane area); and the detachment of the Bodega Bay area from the Palm Drive Health Care District. Finally, the total reflects the cost for publication of notices of the Commission’s hearings on the Proposed and Final Budgets.
Account 51421 (Rents and Leases) – The expenditure of $44,159 reflects an additional payment for office rent that was made at the beginning of the Fiscal Year. This should not re-occur in 2019-20.
Account 51605 (Private Car Expense) – The expenditure of $1,479, $479 more than the budgeted $1,000, reflects reimbursement for mileage costs associated with attendance at LAFCO-related conferences or meetings. In 2018-19 these were held in Yosemite, San Diego, and San Jose.
Account 51801 (Other Services-Relocation) – The expenditure in this account was substantially less than had been budgeted: $3,956 compared to $20,000. The expenditure reflects the fact that most of the anticipated cost had been expended at the end of Fiscal Year 2017-18 but after the Commission had adopted the 2018-19 budget.
Account 51906 (Supplemental Website) – The expenditure of just over $6,000, compared to the budgeted $2,000, had been projected by staff previously. It reflects the additional work performed by Information Systems Department staff to “migrate” data from the Commission’s old website to the new one. Staff anticipates that further work will be required in 2019-20.
Account 51900 (Postage) – Just over $2,100 was expended in this account, double the budgeted $1,000. Also anticipated previously by staff, the expenditure reflects the cost of large-scale mailings, such as for the fire district reorganizations. For a number of these proposals, the applicant paid the costs, as part of the LAFCO processing fee, with the payment reflected as part of fee revenue.
Account 51915 (Printing) – The $1,440 expenditure, compared to the $1,000 budgeted, reflects the cost of outside printing of notices of public hearing for some fire district reorganizations for which it was more efficient to use outside vendors instead of in-house staff.
Account 52112 (Office Furniture) - $29,673 reflects the cost of furnishing the LAFCO office at the beginning of the Fiscal Year. Staff had reported on the overage ($4,673 over the budgeted $25,000) previously.
Account 57015 (Major Equipment Replacement) – This account is used as a “holding” area for funding for replacement of staff’s computers. $1,800 is budgeted annually so that at the end of five years, when computers are replaced in accordance with County policy, sufficient funds are available for purchasing new computers. The next replacement is projected for 2020-21.
In adopting the 2018-19 budget in June 2018, the Commission determined to limit the increase in agency apportionments by using Fund Balance monies to balance the level of projected expenditures. The needed amount was projected to be $124,190, with $666,865 budgeted for agency apportionments, and $5,000 for interest on invested cash, to equal the $796,055 expenditure budget.
Final figures for 2018-19 indicate that the actual apportionments from our funding agencies: the County, the cities, and the independent special districts matched the budgeted amount. Interest was substantially higher at $18,800 compared to the budgeted $5,000, reflecting, staff believes, the large Fund Balance.
Although fees for services are not budgeted, in 2018-19, fee revenue totaled near $80,000. Typically the fee amount received is added to other revenues to provide a total of revenue sources, as shown on the attached spreadsheet.
The addition of the fee revenue and the high interest yield coupled with the lower-than-budgeted level of expenditure substantially reduced the need for Fund Balance monies to balance expenditures and revenues. The amount that was needed was less than $10,300, compared to the projected $124,190.
As a result, the 2018-19 Fund Balance is almost $487,700. With consideration of the amount projected as needed to balance 2019-20 expenditures (anticipated to be $55,000) and projected costs associated with consultant work ($170,000), the available Fund Balance is projected at just less than $262,700.