HomeMy WebLinkAboutMinutes - October 24, 2006 SSCITY OF LODI
INFORMAL INFORMATIONAL MEETING
"SHIRTSLEEVE" SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, OCTOBER 24, 2006
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
October 24, 2006, commencing at 7:01 a.m.
A. ROLL CALL
Present: Council Members — Beckman, Johnson, Mounce, and Mayor Hitchcock
Absent: Council Members — Hansen
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Johl
B. TOPIC(S)
B-1 Preliminary Year -End Financial Report (CM)
City Manager King provided a brief introduction of the preliminary year-end financial report
and budget process, stating the overall goal associated with the budget is to control costs
and expenditures while building reserves.
Deputy City Manager Krueger provided a presentation outlining the preliminary year-end
financial report. Mr. Krueger stated the purpose of the report is to provide preliminary budget
numbers in a format that brings informational data to individuals in a manner that is easy to
read and understand. He also recommended using a similar format in the future.
Mr. Krueger provided a brief description of each of the following: general fund, electric fund,
wastewater fund, water fund, library fund, capital outlay fund, community development fund,
Community Development Block Grant fund, employee benefit fund, vehicle and equipment
replacement fund, self-insurance fund, public safety special revenue fund, streets fund,
transit fund, transportation development act fund, trust and agency fund, debt service fund,
parks special grants fund, and the fleet services internal service fund. He also reviewed the
unaudited reserved, unreserved, cash balance and total fund balance numbers for these
funds as provided in the attachment to the agenda and made part of the record. Mr. Krueger
stated detailed reports are also provided on the Internet.
Council Member Mounce asked about the need to do cash adjustments. Mr. Krueger
stated the fund balances are listed on an accrual basis and the cash balance is used to
pay obligations as of June 30, 2006.
Council Member Mounce inquired about the opening balance. Mr. Krueger stated he
believed the rough number was between $12 million and $13 million. He stated he would
provide Council with follow-up information.
City Manager King stated staff will bring an electric reserve policy to the Council in the near
future. He stated a consultant will provide the City with specific information regarding the
policy itself, implementation, and the needs of the electric fund. A related action was
scheduled for the November 15, 2006, Council meeting.
Mayor Hitchcock asked if the general time frame is three to six months for the electric fund.
City Manager King stated there is approximately nineteen days of cash on hand. Deputy
City Manager Krueger stated he believes the time may be between fifteen and sixty days.
Electric Utility Director Morrow stated the time is usually thirty to sixty days; however, the
Agency tries to zero in on forty-five days.
Mayor Hitchcock asked how much the fire impact fees owe tie water fund. Mr. Krueger
replied $1.2 million.
Continued October 24, 2006
City Manager King, in reviewing the vehicle and equipment replacement fund, stated
standard business practices are being reviewed to determine a rolling stock, defined as
money specifically set aside for vehicle and equipment replacement on a regularly
scheduled basis, which is essential in maintaining fleet and equipment over an extended
period of time.
Mayor Hitchcock asked what projects were not completed in relation to the streets fund.
Public Works Director Prima stated the Stockton Street project was not completed.
Mr. Prima stated he would follow-up with the Council as to the other projects that were not
completed.
Mayor Hitchcock inquired about the overall process of anticipating numbers for the budget.
Mr. Krueger stated there is a mid -year budget adjustment. He also stated staff is very
conservative with revenues and, although expenditures are anticipated, the funds are not
always spent.
City Manager King stated the overall goal is to try to build reserves by being more
conservative with revenues while tightening down on expenditures. He stated as the City
becomes more fiscally sound and the reserves continue to build, optimism can grow.
Mayor Hitchcock asked how many years of debt service remain. Mr. Krueger stated there
are approximately 20 years. Mayor Hitchcock inquired about balloon payments.
Mr. Krueger stated the repayment program involves interest reduction and principal increase
while the general payment remains steady.
Mr. Krueger stated the audit is taking place, the Comprehensive Annual Financial Report
will be prepared, and the report to the State is due on November 1, 2006.
Mayor Pro Tempore Johnson inquired about the number of formats used for reporting. Mr.
Krueger stated he is not entirely comfortable with any specific format because it is
important to build a system that is useful to individuals. Mr. Krueger compared various
reporting formats including those prepared for consistency among government agencies,
rating agencies, and private industry. He also stated an analysis of performance measures
may be conducted.
City Manager King stated the format of the report often depends upon who is telling us what
to do, what information is needed, and when the information is needed. He stated
Government Code Section 40804 requires the City to use the Secretary of State's form for
the report that is submitted to the State. Mr. King also discussed the Governmental
Accounting Standards Board, the Government Finance Officers Association, standard
audits, audits without exception, Certificates of Excellence, and staff communications.
Mayor Hitchcock stated she appreciated the cash basis report, which is helpful to
determine where the City stands. She asked if it is safe to assume the City has turned a
corner financially. Mr. Krueger stated that while there are challenges in the future, the City
has turned a corner.
C. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
None
D. ADJOURNMENT
No action was taken by the City Council. The meeting was adjourned at 8:03 a.m.
ATTEST:
Randi Johl
City Clerk
2
AGENDA ITEM Ww
CITY OF LODI
COUNCIL COMMUNICATION
M
AGENDA TITLE: Preliminary year-end financial report
MEETING DATE: October 24,2006
PREPARED BY: Jim Krueger, Deputy City Manager
RECOMMENDED ACTION: Receive year-end financial report.
BACKGROUND INFORMATION: Finance Division staff recently posted preliminary financial reports
for June 30, 2006 on the internet. The attached reports are
intended solely for the purpose of providing information prior to
the release of the Comprehensive Annual Financial Report and prior to completion of financial reports
as stipulated by the State Controller in Government Code Section 40804.
Based on the preliminary information published on the internet, staff believes these reports substantially
represent year-end results for fiscal year 2005-06. This information will be audited soon by the firm of
Macias Gini & O'Connell, Certified Public Accountants and Management Consultants. Further
explanation of variances and additional analysis will be provided by staff at the City Council Shirtsleeve
Session on October 24, 2006.
The preliminary results are positive as indicated by the results for the General Fund. The General Fund
was anticipated to end fiscal year 2005-06 with approximately $1.5 million in unreserved funds; and as a
result of receiving some unanticipated revenues and savings in departmental budgets, the unreserved
fund balance is approximately $2.87 million. Although this is good news, this should be kept in
perspectivewith the ongoing need to replace City facilities and to provide needed capital maintenance on
facilities for which maintenance was deferred in previous years.
The Utility Funds (Electric, Water and Wastewater) were reviewed with City Council on October 10, 2006.
Therefore, staff will review the other funds (including General Fund, Capital Outlay, Streets, Transit,
Library and other funds at the Shirtsleeve meeting on October 24, 2006).
Attachment
es R. Krueger, Deputy City Manager
APPROVED:
i/ Blair King, i anager