12/21/2021 - AGENDA ITEM 3 - CONSIDERATION OF APPROVAL OF THE FIRST QUARTER FINANCIAL REPORT FOR FISCAL YEAR 2021-22AGENDA ITEM NO.3
WEST" ON
DATE: December 21, 2021
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 APPROVAL OF THE FIRST QUARTER FINANCIAL REPORT
FOR FISCAL YEAR 2021-22
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Receive and file the First Quarter Financial Report for Fiscal Year 2021-22; and
2. Adopt the following resolution:
RESOLUTION NO.2021-118 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA, CALIFORNIA, ADOPTING A BUDGET AMENDMENT FOR THE FISCAL
YEAR COMMENCING JULY 1, 2021 AND ENDING JUNE 30, 2022 (FIRST QUARTER
FINANCIAL REPORT)
DISCUSSION:
The City of West Covina has completed the first quarter of Fiscal Year 2021-2 1. The attached Quarterly
Financial Report summarizes the City's overall financial position for the period of July 1, 2021 through
September 30, 2021, but it is not meant to be inclusive of all finance and accounting transactions. While the
focus of the report is the General Fund, summary financial information is also provided for the Enterprise
Fund (West Covina Service Group) and Special Revenue Funds (i.e. Measure R, Proposition A, etc.).
The City will make the Quarterly Financial Report available on the City's website for review by the City's
stakeholders.
LEGAL REVIEW:
The City Attorney's Office has reviewed the resolution and approved it as to form.
Prepared by: Stephanie Sikkema, Assistant Finance Director
Fiscal Impact
FISCAL IMPACT:
The overall net impact of these revenue and expenditure changes is a $1,336,476 increase to the General
Fund.
The original adopted General Fund budget for FY 2021-22 was $67,814,100 for revenues and expenditures.
Council added personnel and crossing guard services increasing expenditures to $69,859,100 and revenue to
$67,880,100. After adjusting revenues by $2,167,000 to $70,047,100 and expenditures by $830,524 to
$70,689,624, the revised General Fund budget is projected to be negative $642,524 by the end of this fiscal
year.
Proposed General Fund (Fund 110) changes are summarized as follows:
Re Venue
Charges for Services
5,336,000
5,336,000
110,000
5,446,000
Cost Recovery
330,000
330,000
460,000
790,000
Fnes & Forfeitures
608,000
608,000
97,000
705,000
Interdepartmental Charges
1,423,800
1,423,800
1,423,800
Licenses & Permits
1,964,100
1,%4,100
1,964,100
Other Revenues
82,800
82,800
82,800
Other Taxes
8,167,200
8,167,200
8,167,200
Property Tax
28,204,200
28,204,200
28,204,200
Revenue from Other Agencies
4,483,300
4,549,300
4,549,300
S ales Tax
15,900,000
15,900,000
1,500,000
17,400,000
Transfers In
131,100
131,100
131,100
Use of Money & Property
1,183,600
1,183,600
1,183,600
Expenditures
Administration
2,535,200
2,535,200
80,200
2,615,400
City Clerk
378,300
378,300
378,300
Community Development
1,862,900
2,252,900
114,000
2,366,900
Finance
1,996,600
1,9%,600
1,996,600
Fire
16,989,200
16,989,200
460,000
17,449,200
Human Resources
666,200
666,200
666,200
Police
24,010,300
25,665,300
(377,788)
25,287,512
Public Services
5,593,200
5,593,200
140,300
5,733,500
Transfers Out
13,782,200
13,782,200
413,812
14,196,012
Expenditures Total
00
DID
� .
Prior General Fund Budget Amendments:
Resolution No. 2021-09, BA 004, New Employees 2,010,000
Resd LAiDn No. 2021-88, BA 011, Crossing Guards (31,000
Total OF Budget Amendments 1,979,606
Proposed changes to other funds are summarized below:
Original
Other
Revenue
Debt Semite - City
14,579,400
14,579,400
413,812
14,993,212
Measure R
1,341,700
1,341,700
1,341,700
Prop C
1,902,600
1,902,600
1,902,600
Public Safety Augmentation
825,800
825,800
825,800
5131 -Road Maint Rehab
2680,300
2,680,300
2,680,300
Waste Mgt Enforcement Grant
15,700
15,700
15,700
WC Corn munity Sws Foundation
-
3,528
3,528
Revenue Total
ii
21,349,028
i
Expenditures
Charter Peg Fund
-
-
15,000
15,000
Debt SeNce -City
14,524,300
14,524,300
413,812
14,938,112
Measure R
2,123,000
2,123,000
5,100
2,128,100
Prop G
1,943,600
1,943,600
206,000
2,149,600
Public Safety Augmentation
810,000
810,000
150,000
960,000
5131 -Road Maint Rehab
1,500,000
1,695,983
567,200
2,263,183
Waste Mgt Enforcement Grant
50,700
50,700
65,000
115,700
WC Corn munity Sws Foundation
-
3,528
176,380
179,908
Expenditures Total
00
Attachments
Attachment No. 1 — First Quarter Financial Report for Fiscal Year 2021-22
Attachment No. 2 - Resolution No. 2021-118
CITY Achieve Fiscal Sustainability and Financial Stability
COUNCIL
GOALS &
OBJECTIVES:
CITY OF
VY. WEST COVINA
Fiscal Year 2021-22
The City has completed the first quarter of Fiscal Year
2021-22. This report summarizes the overall financial
performance of the City for the period of July 1, 2021,
through September 30, 2021, but it is not meant to be
inclusive of all finance and accounting transactions.
While the focus of the report is the General Fund,
summary financial information is also provided for the
Enterprise Fund and Special Revenue Funds. The
information presented is unaudited. This report is
intended only to provide the City Council and the public
with an overview of the City's general fiscal condition.
The revenue and expenditure budgets per the Budget
to Actual comparisons include adjustments for
carryovers and any appropriations made as of
September 30, 2021. The information presented
reports revenues as they are received and
expenditures when paid. Revenues and expenditures
are only accrued at year end to account for such
activity in the correct fiscal year.
GENERALFUND
The General Fund is the general operating fund for the
City. It provides the resources to sustain the day-to-
day activities and services to the community. All nine
departments receive support, either directly or
indirectly, from the General Fund. The General Fund
original budget for FY 21-22 was $67,814,100 for
revenues and expenditures. With only 25% of the year
complete, General Fund revenues are at 8.3% of
budget and expenditures are at 29.5%.
General Fund
Original Budget vs. Year -to -Date Actual
100,000,000
67,880,100 69,859,100
20,595,63
50,000,000 6
.5,617,281 -
Revenue Expenditures
■Current Budget ■YTD Actual
ATTACHMENT NO. 1
General Fund Revenue
Current Budget
. Actual
Property Tax
28,204,200
308,256
1.1%
Sales Tax
15,900,000
1,755,992
11.0%
Other Taxes
8,167,200
338,422
4.1%
Charges for SerNces
5,336,000
1,578,558
29.6%
Revenue from Other Agencies
4,549,300
61,411
1.3%
Licenses & Permits
1,964,100
757,512
38.6%
Interdepartmental Charges
1,423,800
299,050
21.0%
Use of Money & Property
1,183,600
324,127
27.4%
Fines & Forfeitures
608,000
171,904
28.3%
Cost Recovery
330,000
17,760
5.4%
Transfers In
131,100
-
0.0%
Other Revenues
82,800
4,289
5.2%
:r rr
The City's two major General Fund revenue sources
are Property Tax and Sales Tax which make up 65%
of the General Fund revenues.
• Property Tax: The first major apportionment
distribution to the City for FY 2021-22 does not
occur until December 2021. Also, the revenues
received in July and August are for the prior
year and accrued as such. Included in this line
item are Secured Property Taxes, Property
Taxes In -Lieu of Vehicle License Fees (VLF),
and residual payments from the dissolution of
the former redevelopment agency.
• Sales Tax: The City received its allocations for
July sales tax in September 2021. As of
September 30, 2021, the allocation received
represents approximately 11% of the total
sales tax allocation for the year. The City will
continue to receive sales tax allocations with
the final quarter allocation distributed by the
California State Department of Taxes and Fees
Administration (CDTFA) in August 2022. Sales
Tax projections are proposed to be increased
based on the increase in sales over the past
few quarters. This adjustment has been
included in the proposed Quarterly Budget
Amendment.
• Other Taxes: This category includes
Franchise Fees, Business License Tax,
City of West Covina
First Quarter Financial Report FY 2021-2022
Transient Occupancy Tax (TOT), and Property
Transfer Tax. These revenues are not
received evenly throughout the year and with
the exception of Transient Occupancy Tax, are
expected to be on target by the close of the
fiscal year. Transient Occupancy Tax is up
56% from this quarter last fiscal year but
trending under budget for the fiscal year to -date
at 11 %.
• License & Permits: Revenues for licenses &
permits include building and engineering
permits, and animal licenses. Revenue
projections are trending higher than originally
projected mainly due to building activity
increases.
• Revenues from other Agencies: This
category includes Vehicle In -Lieu, State
Mandated Cost reimbursement revenue, the
exchange of Prop A funds, which are the
largest revenue source in this category, and
COVID-19 Relief Funds.
• Charges for Services: These revenues
include plan check and zoning related fees,
recreation fees, interfund charges, and police
and fire fees. These fees are at approximately
29.6% through the end of September 2021.
Revenue is proposed to be added under
Planning Filing Fees to accurately account for
the revenue that was previously accounted for
under a deposit account. The increase in
revenue for these programs is offset by an
increase in expenditures — therefore the net
impact to the General Fund is zero.
Revenue projections were revised with the Quarterly
Report based on revenue trends, and activity to date.
The total proposed adjustment is an increase of
$2,167,000.
Sales Tax
15,900,000
15,900,000
1,500,000
17,400,000
Other Taxes
8,167,200
8,167,200
8,167,200
Charges for Services
5,336,000
5,336,000
110,000
5,446,000
Revenue from Other Agencies
4,483,300
4,549,300
4,549,300
Licenses & Permits
1,964,100
1,964,100
1,964,100
Interdepartmental Charges
1,423,800
1,423,800
1,423,800
Use of Money & Property
1.183.600
1,183,600
1,183,600
Fines & Forfeitures
608.000
608,000
97.000
705.000
Cost Recovery
330,000
330,000
460.000
790,000
Transfers In
131.100
131,100
131.100
As of September 30, 2021, with only 25% of the year
complete, $20.59 million or 29.5% of the General Fund
budget has been expensed (refer to chart below). Most
departments are at or below 25% through the end of
the quarter with the exception Human Resources and
Fire.
City Clerk
378,300
77,875
20.6
Community Dewlopment
2,252,900
229,231
10.2
Finance
1,996,600
413,986
20.7
Fire
16,989,200
5,017,523
29.5
Human Resources
666,200
198,852
29.6
Police
25,665,300
5,986,025
23.3
Public Services
5,593,200
1,014,853
18.1
Transfers Out
13,782,200
7,172,703
52.0
At the end of the quarter, seven of the nine General
Fund department expenditures are at or below 25% of
budget. The Human Resources budget is at 29.8% of
the original budgeted amount through September 30,
2021. This is due to professional and legal services
trending over budget.
The Fire Department expense is at 29.5% of budget,
mainly due to overtime costs that were not budgeted in
the 2021-22 budget. Staff is still evaluating alternative
options for the provision of fire services to provide the
City Council with various options. Mutual Aid overtime
is also trending over, therefore, a budget amendment
has been included to increase these expenditures and
offsetting revenue.
Overtime expenditures should be 25 percent of budget
based on the number of payrolls for the end of this
quarter. The Police Department is trending over its
2 1 P a g e
City of West Covina
First Quarter Financial Report FY 2021-2022
General Fund overtime budget by 14 percent, the Fire
Department overtime expenditures are trending over
budget by approximately 15.9 percent, excluding
mutual aid overtime which is fully reimbursable. Public
Services is also over 127 percent or $5,000 in overtime
in the General Fund.
Administmtion
2,000
234
11.7%
Finance
2,000
-
0.0%
Fire
1,830,000
719,865
39.3°/n
Police
1,526,000
623,459
40.9%
Public services
9,700
14,822
152.8%
rr
:r
r
Overall, total General Fund Revenue ($5,617,281) less
expenditures ($20,594,636) for the quarter to date are
nearly 15 million (-$14,977,355). With the exception of
last year when the City had an inflex of revenue due to
the pension bonds, this revenue less expenditures are
up from prior years.
Comparison of Revenue Less Expenditures by FY
As of First Quarter
N
0
0
(5.00)
(10.00)
(15.00)
(20.00)
FYE2018 FYE2019 FYE2020 FYE2021 FYE2022
115) (17) (16) (15)
The original adopted General Fund budget for FY
2021-22 was $67,814,100 for revenues and
expenditures. Council added personnel and crossing
guard services increasing expenditures to
$69,859,100 and revenue to $67,880,100. After
adjusting revenues by $2,167,000 to $70,047,100 and
expenditures by $830,524 to $70,689,624, the revised
General Fund budget is projected to be negative
$642,524 by the end of this fiscal year.
City Clerk
378,300
378,300
378,300
Community Development
1,862,900
2,252,900
114,000
2,366,900
Finance
1,996,600
1,996,600
1,996,600
Fire
16,989,200
16,989,200
460,000
17,449,200
Human Resources
666,200
666,200
666,200
Police
24,010,300
25,665,300
(377,788)
25,287,512
Public SeNces
5,593,200
5,593,200
140,300
5,733,500
Transfers Out
13.782.200
13.782.200
413.812
14.196.012
The requested General Fund budget amendment to
balance the budget includes the following:
1) $80,200 under Administration to reallocate
funding for the Public Agency Retirement Services
(PARS) EPMC Replacement Plan that was previously
overlooked during the budget process.
2) Add $114,000 under Community Development
to budget for Professional Services ($80,000),
Advertising and Publications ($30,000) under Planning
that will be offset by revenue, and funding for new
Code Enforcement Officer Uniforms ($4,000) under
Community Enhancement.
3) Increase Mutual Aid Overtime by $460,000
based on actuals year-to-date which will be offset by
revenue.
4) Reduce $377,788 under Police to increase the
PERS UAL Payment to actuals ($12,212) and reduce
Salaries ($390,000) and fund it out of Special Revenue
Funds.
5) Add $140,300 under Public Services for annual
maintenance contracts that were reduced last year due
to COVID. Those contracts include janitorial services
($121,800), license and maintenance for vehicle
charging stations ($10,000), and alarm monitoring
service ($8,500).
6) Increase transfers to the Debt Service Fund by
$413,812 to pay ongoing bond costs ($5,000) and
Principal and Interest for the Energy and Solar projects
($408,812).
The overall net impact of these revenue and
expenditure changes is a $1,336,476 increase to the
General Fund.
3 1 P a g e
City of West Covina
First Quarter Financial Report FY 2021-2022
ENTERPRISE FUND
The Police Department's Computer Service Group is
trending over budget by nearly 100%. This is due to
additional services provided to other agencies that
were not included in the original budget. Therefore,
expenditures are proposed to be increased by
$199,202. The revenues for these expenses were
already included in the original budget. The net result
of this increase will leave a positive revenue less
expenditures of $25,498.
Police Enterprise Current Budget YTD Actual %
Revenue 416,400 279,919 67.2%
Expenditures 191,700 238,541 124.4%
OTHER FUNDS
Special Revenue Funds are restricted in their use for
specified purposes. Budget versus actual comparisons
for both revenue and expenditures for Special
Revenue Funds are presented below:
avenue
59,050,862
4,306,732
71
Assessment Districts
4,676,700
12,382
02
CDBG
3,313,566
21,680
0.7
Gas Tax
2,745,100
720,826
26.2
Grants
14,521,518
90,179
01
Measure M
1,522,200
466,659
30.7
Measure R
1,341,700
412,613
30.E
Prop A
2,246,600
663,732
29:
Prop
1,902,600
550,564
28S
SB1
2,680,300
180,052
6.7
Sewer Maintenance
3,230,000
5,899
0.2
Sportsplex
-
36,408
100.0
Other Special Revenue
20,870,578
1,145,737
5.;
Kpenditures
77,001,082
9,280,616
12.1
Assessment Districts
4,597,900
723,147
15.7
CDBG
3,469,866
57,297
1.7
CIP
3,747,331
434,755
11.E
Gas Tax
2,959,000
437,466
14.E
Grants
24,226,518
182,192
01
Measure M
676,000
14,978
2.2,
Measure R
2,123,000
60,322
2.E
Prop A
2,130,900
37,968
1.E
Prop C
1,943,600
224,272
11
SB1
1,695,983
-
0.(
Sewer Maintenance
5,716,726
236,515
4.1
Sportsplex
1,498,929
21,295
1A
Other Special Revenue
22,215,330
6,850,409
301
In addition to the amendments being proposed under
the General Fund, the following amendments are
recommended for other funds:
1) $150,000 in Fund 153 (Public Safety
Augmentation) to increase salaries to fund some
of the new Police Officers recently authorized by
Council.
2) $413,812 in Fund 300 (Debt Service) to pay the
ongoing bond costs ($5,000) and Principal and Interest
for the Energy and Solar projects ($408,812).
3) $206,000 in Fund 122 (Prop C) to increase for
general engineering services per the Transtech
contract.
4) $65,000 in Fund 145 (Waste Mgt Enforcement
Grant) to increase the allocations for the Rincon and
Cole contracts.
5) $15,000 under Fund 205 (Charter PEG) to fund
microphone repairs in Council Chambers.
6) $249,917.42 under Fund 220 (West Covina
Community Services Foundation) to allocate funding
for the summer concerts and other community
programs.
7) $5,100 under Fund 224 (Measure R) for street
sweeping.
8) $567,200 under Fund 237 (SB1 - Road
Maintenance Rehab) to include the expenses to be
funded by the General Fund in FY 2021-22. The
Transfer Out/In was included in the original budget but
the expense was not added to the total project.
After the proposed adjustments, the revenues and
expenditures for all other funds will be trending within
budget.
FOR MORE INFORMATION
This summary report is derived from detailed financial
information generated by the City's Finance
Department. Additional financial information is
available online at www.westcovina.org.
4 1 P a g e
ATTACHMENT NO.2
RESOLUTION NO. 2021-118
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, ADOPTING A BUDGET
AMENDMENT FOR THE FISCAL YEAR COMMENCING
JULY 1, 2021 AND ENDING JUNE 30, 2022 (FIRST
QUARTER FINANCIAL REPORT)
WHEREAS, the City Manager, on or about June 15, 2021, submitted to the City Council
a proposed budget for the appropriation and expenditure of funds for the City for West Covina for
Fiscal Year 2021-22; and
WHEREAS, following duly given notice and prior to budget adoption, the City Council
held public meetings, considered and evaluated all comments, and adopted a budget for the fiscal
year commencing July 1, 2021 and ending June 30, 2022; and
WHEREAS, amendments must periodically be made to the budget to conform to changed
circumstances following adoption of the budget.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby approves Budget Amendment No. 028, attached
hereto as Exhibit A, for Fiscal Year 2021-22.
SECTION 2. The City Clerk shall certify to the adoption of this resolution and shall enter
the same in the book of original resolutions and it shall become effective immediately.
APPROVED AND ADOPTED this 21st day of December, 2021.
APPROVED AS TO FORM
Thomas P. Duarte
City Attorney
Dario Castellanos
Mayor
ATTEST
Lisa Sherrick
Assistant City Clerk
I, LISA SHERRICK, Assistant City Clerk of the City of West Covina, California, do hereby
certify that the foregoing Resolution No. 2021-118 was duly adopted by the City Council of the City
of West Covina, California, at a regular meeting thereof held on the 21st day of December, 2021, by
the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk
EXHIBIT A
BUDGET AMENDMENT
CITY OF WEST COVINA
BUDGET AMENDMENT
Date: 12/21/2021
Requested by: S. Sikkema
Dept/Div: Finance
EXPENDITURES
BA # 028
Posted By:
Date Posted:
Fiscal Year: 2021-2022
Amount: 2,701,755.42
Description: First Quarter Budget Amendment
Account Number
Dept/Account Description
Current Budget
Proposed Amendment
Amended
Budget
110.11.1120.5169
EPMC Replacement Plan
80
200.00
80
200.00
110.31.3110.5182
PERS UAL PMT - Miscellanous
38
300.00
12
212.00
50
512.00
110.31.3120.5110
Sworn Full Time Salaries
61797,100.00
240
000.00
6,557,100.00
110.31.3120.5111
Full Time Salaries
353
700.00
150
000.00
203
700.00
153.31.3120.5110
Sworn Full Time Salaries
398
700.00
150
000.00
548
700.00
110.32.3210.5129
Mutual Aid Overtime
214
500.00
460
000.00
674
500.00
110.61.4144.6130
Service Contracts
273
500.00
140
300.00
413
800.00
110.71.3125.6011
Uniform
-
4,000.00
4
000.00
110.71.2110.6170
Advertising & Publications
-
30
000.00
30
000.00
110.71.2110.6110
Professional Services
80
000.00
80
000.00
110.95.9500.9300
Transfer Out
13 135
000.00
413
812.00
13 548
812.00
300.13.9000.6426
Ongoing Bond Costs
-
5,000.00
5,000.00
300.13.9000.6438
Capitalized Lease Principal
190
381.00
190
381.00
300.13.9000.6439
Capitalized Lease Interest
-
218
431.00
218
431.00
122.71.4132.6130
Service Contracts
300
000.00
206
000.00
506
000.00
145.71.4182.6120
Other Contractual Services
50
700.00
65
000.00
115
700.00
205.11.1340.6330
Equipment M&R
1500000
1500000
220.13.1310.6530
Taxes
-
100.00
100.00
220.31.3110.6476
Misc. Police Ex
70
215.00
70
215.00
220.31.3110.6547
Wall of Honor
-
3,322.00
3,322.00
220.61.5110.6490
Misc. Expenses
2
522.58
117
285.42
119
808.00
220.61.5150.6166
Summer Concerts
800.00
29
200.00
30
000.00
220.61.5150.6490
Misc. Expenses
-
10
000.00
10
000.00
220.61.5180.6270
Other Supplies
205.00
19
795.00
20
000.00
224.61.4153.6130
Service Contracts
583
200.00
5,100.00
588
300.00
237.80.7005.7200
Street
-
22004.80.7200
Residential Street Rehab FY21-22
1,500,000.00
567
200.00
2,067,200.00
375.31.3119.8519
Purchases- Hemet
121
514.00
121
514.00
375.31.3119.8525
Purchases - Montclair
-
77
688.00
77
688.00
23,648,227.58
1 2,701,755.42
1 26,349,983.00
REVENUES
Account Number
Account Description
Current Budget
Proposed Amendment
Amended
Budget
110.71.4611
Planning Filing Fees
350 000.00
110
000.00
460
000.00
110.00.4110
Sales Tax
15 900 000.00
1,500,000.00
17 400
000.00
110.00.4301
Late Payment Penalty
68
000.00
68
000.00
110.00.4302
Collection Agency Fee
-
29
000.00
29
000.00
110.32.4901
Mutual Aid Cost Reimbursement
330 000.00
460
000.00
790
000.00
300.00.9110
Transfer In
13 135 000.00
413
812.00
13 548
812.00
29,715,000.00
2,580,812.00
32,295,812.00
REASON/JUSTIFICATION (Please be specific)
First Quarter Budget Amendment
APPROVALS
City Council Approval Date (if required, attach minutes):
Dept Head Approval:
Date:
Finance Director: Date:
Funds Available? o Yes riNo
❑ Approval Not Required
City Manager: Date:
(if over $100,000)
o Approved o Denied