Staff Report 3.2

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 first quarter of Fiscal Year 2019-20.

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

Overall

Expenditures through the first quarter of the fiscal year totaled $156,622, or about 20.5 percent of the Adopted Budget of $762,295. Revenues of $721,074 were received during the quarter. Details are provided in the narrative below.

Expenditures: Salaries and Benefits

The first quarter covered 5.1 pay periods, or 19 percent, of the total 26.2 pay periods in the fiscal year. The expenditure of $118,256 is 19.3 percent of the total Adopted Budget amount of $612,630, putting the Salaries/Benefits expenditures on target for the year. Incremental salary step increases for two staff during the year may increase the expenditure somewhat.

Staff will continue to monitor salary and benefits expenditures throughout the year and report any unexpected changes to the Budget Committee and the Commission, should they occur.

Expenditures: Services and Supplies

Almost 21 percent of the Services and Supplies Adopted Budget of $149,665 was expended in the first quarter. Several accounts were expended at a level greater than 25 percent of the fiscal year. These are discussed below:

Account 51206 (Auditing Services) - $6,570 was expended in the first quarter to cover the majority of costs related to an outside audit of the Commission’s financial operations. $10,000 had been budgeted in Fiscal Year 2018-19. However, since the audit started in the fourth quarter, only $1,830 was expended.

With the 2019-20 first quarter expenditure, the total cost of $8,400 is substantially less than the overall budget amount. It should be noted that unspent funds in 2018-19 rolled over to the Commission’s Fund Balance at year-end, so as to be available.

• Account 51207 (Auditor Accounting Services) – Through the first quarter, just over $2,100 was expended. Although this is almost 43 percent of the budgeted amount, it reflects one of the two busiest periods of the year, in that the Auditor’s Office receives apportionment monies and must log and process all payments from the County, the cities, and the independent special districts. (In the fourth quarter of a fiscal year, Auditor’s Office staff calculate agency apportionments based on the upcoming LAFCO budget and revenues reported to the State Controller’s Office.)
• Account 51602 (Travel Expense) – The expenditure of $3,050 reflects the cost of registration for the CALAFCO Annual Conference for three Commissioners and three staff members. The Conference, in Sacramento, is October 30 – November 1.
• Account 52091 (Memberships) – The $4,965 reflects current-year membership with CALAFCO, which is typically paid at the beginning of the fiscal year

Revenues

Revenues received through the end of the first quarter totaled $721,074, about 94 percent of what will be needed to match the projected expenditure budget of $762,295.  Agency apportionments of $692.368 were the primary revenue source. $5,826 was received as interest on invested cash, an amount greater than anticipated. Additionally, $22,880 in processing fees were received; fee revenue is tracked but not budgeted due to the difficulty of projecting the number and types of applications that will be submitted.

Fund Balance

The 2018-19 budget projected a need to use $124,190 in Fund Balance monies to balance the expenditure budget. However, the combination of less-than-expected expenditures and more-than-anticipated revenues resulted in a substantial reduction in that amount: only $10,274 was used from the Fund Balance.

As indicated on the attached spreadsheet, this left over $480,000 in the Fund Balance. Deducting $55,000 projected to be needed to balance the current-year budget as well as funds committed for consultant work and studies, just over $260,000 is projected as available Fund Balance.

It should be noted that payment for outside work by consultants will be reflected in the expenditure budget. If, near year end, staff projects that the actual overall expenditure will exceed the Adopted Budget, staff will request that the Commission consider a budget adjustment to move funds from the Fund Balance to be available within the Adjusted Budget.

Recommendation 

Staff recommends that the Commission review, consider, and accept the report of expenditures and revenues for the first quarter of Fiscal Year 2019-20.

Alternatives to Recommendation 

None

Attachments 

1. Sonoma LAFCO Expenditures and Revenue through Quarter 1, Fiscal Year 2019-20.