12-01-2020 - AGENDA ITEM 09 CONSIDERATION OF SEPTEMBER FINANCIAL REPORT FOR FISCAL YEAR 2020-21AGENDA ITEM NO.9
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: December 1, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF SEPTEMBER FINANCIAL REPORT FOR FISCAL YEAR 2020-
21
RECOMMENDATION:
It is recommended that the City Council receive and file the September 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 third month (September) of the Fiscal Year 2020-21. The focus of
this report is the General Fund revenues and expenditures.
For the first quarter of the 2020-21 Fiscal Year, the City has collected 7.5% of the General Fund revenues
compared to the 2019-20 Fiscal Year in which the City had collected 10.5% of its General Fund revenues.
Therefore, revenues have decreased in the current fiscal year by approximately 3.1 %. The decline is due to
reductions in Sales Tax revenue of approximately $354,393, Transient Occupancy Tax of $92,054, and Prop A
Exchange funds of $1.3 million that were collected in the previous year and have not been collected at the date
of this report. The exchange of Prop A money is expected to be complete by the beginning of December.
General Fund expenditures for the month of September 2020 were $4,437,821. The cumulative total of
expenditures for the General Fund on September 30, 2020 is $11,936,159 or 17.6% of total budgeted
expenditures. When compared to September 30, 2019, expenditures were $13,903,779 or 21.2%. The
expenditures for the current fiscal year are almost $2 million less than the previous fiscal year. This is due to
reductions in benefits that 8 of the 9 unions agreed to for specific periods of time recognizing that the City's
finances have been impacted detrimentally due to the COVIDI9 pandemic as well as various other cost saving
measures to ensure the fiscal viability of the City.
The overtime budgets for the Police and Fire Departments are reviewed monthly by City staff and are briefly
discussed below
General Fund overtime in the Police Department is $172,200 for the month of September. The cumulative total
for Police Department overtime for the first quarter of the fiscal year is $455,813 or 26.3% of the budgeted
amount, which is about 1.3% higher than expected for the first quarter. However, overtime varies from month
to month and the Police Department is expected to be on track and within budget for the current fiscal year.
The Fire Department regular overtime is $239,413 for the month of September. The cumulative total for Fire
Department overtime is $758,898 or 133.5%. City staffis continuing to look at alternative solutions to the costs
that are borne by the City's General Fund for the Fire Department. If the Fire Department overtime continues
at this pace, the cost for Fiscal Year 2020-21 will be close to $3 million. It should be noted that the request for
the 2020-21 budget was $1.3 million and the adopted budget was only $567,448.
The overtime costs listed above do not include mutual aide overtime. The cumulative cost for mutual aide
overtime through the end of September are $469,217. Although the budget to actual costs appear high, these
costs are fully reimbursable by the entities affected by the fire. A budget amendment will be prepared for City
Council approval when the mid -year budget report is presented.
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 COUNCIL GOALS & OBJECTIVES: Achieve Fiscal Sustainability and Financial Stability