09-01-2020 - AGENDA ITEM 03 CONSIDERATION OF JULY FINANCIAL REPORT FOR FISCAL YEAR 2020-2112/1/2020
Print Staff Report
AGENDA ITEM NO. 3
DATE: September 1, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
SUBJECT: CONSIDERATION OF JULY FINANCIAL REPORT FOR FISCAL YEAR 2020-21
RECOMMENDATION:
It is recommended that the City Council receive and file the July Financial Report for Fiscal Year 2020-21.
BACKGROUND:
The City of West Covina adopts a budget annually for each fiscal year (FY) which starts on July 1 and ends on
June 30. The FY 2020-21 annual budget was adopted on June 23, 2020 by the City Council. Due to the
economic uncertainty mainly surrounding the revenue projections, staff assured the City Council that a
monthly report of revenues and expenditures would be presented and recommendations for any necessary
adjustments would be made.
DISCUSSION:
The City of West Covina has completed the first month (July) of the Fiscal Year 2020-21. The focus of this
report is the General Fund revenues and expenditures.
While the City received 3.71 % of the City's General Fund revenues during the first month of the fiscal year,
the General Fund revenues received in July are revenues that belong in the previous fiscal year, which reduces
that percentage to approximately 1.64%. This is expected, as the City's two largest General Fund revenues
(sales and property taxes) are not received on a consistent basis. In fact, most property tax revenues are
received in December/January and April/May. Similarly, sales tax received in July and August is for the
previous fiscal year. Adjustments for the revenues received in July and August are part of the year-end process
that continues through mid -September.
When compared to the 2019-20 Fiscal Year, revenues have declined about 2%. The main reason for this
decline is due to the Community Services programs being closed due to the COVID-19 pandemic. However,
this is also true on the expenditure side. Due to the closure of the Public Services facilities, there are very
minimal costs that would have otherwise been incurred had the pandemic not occurred.
Expenditures for the month of July 2020 were $3,203,947 or 4.98%. When compared to July 2019,
expenditures, excluding the unfunded pension liability, were $2,556,755 or 3.89%. The primary reason for the
increase in the current year was the fact that there were three payrolls in July this year. Almost entirely across
the board, each department's expenditures were less than the previous year, which partially offset the increase.
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Print Staff Report
The overtime budgets for the Police and Fire Departments are being reviewed monthly by City staff. Overtime
in the Police Department is $122,908 or 7.08% for the month of July. The Fire Department overtime is
$251,847 or 32.2% for the current year. The Fire Department has responded to eight (8) wildfires in the State
this year. Four have been completed and four are currently still in progress. To date, the reimbursement for this
mutual aid response is calculated at approximately $318,304 in revenues and the cost for overtime and
administrative costs is estimated at $217,898. The budgeted revenues and expenditures in the 2020-21 budget
for mutual aid were estimated at $330,000 and $214,500, respectively. A budget amendment for both revenues
and expenditures will be brought forward at a later date for both the revenue and expenditures. In addition,
staff is continuing to look at alternative solutions to provide superior fire and paramedic services to the
residents of West Covina for the most economical value to preserve the General Fund.
Prepared by: Robbeyn Bird, Finance Director
Fiscal Impact
FISCAL IMPACT:
At this time there is no fiscal impact to the City. Looking ahead in the year, there will almost certainly be
recommendations for budget adjustments on both the revenue and expenditure sides of the equation. The
uncertainty of the effects of the COVID-19 pandemic will continue to impact City finances and as we
progress through the year, recommendations will be made to the City Council for any necessary adjustments
that are deemed necessary.
CITY Achieve Fiscal Sustainability and Financial Stability
COUNCIL
GOALS &
OBJECTIVES:
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