Cotati City Council
Agenda Staff Report
Item type: PRESENTATIONS
To: City Council
Subject: October 2022 Financial Update - Report for Summary of Revenue Sources, Cash and Investments
Date: November 08, 2022
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive the presentation on the un-audited financial position for the City as of the First Quarter Fiscal Year 2022/23.
Background
City staff are committed to continued financial updates to report on actual receipts of key revenues as well as the overall City cash position.
Analysis/Discussion
General Fund:
Revenues:
The City of Cotati’s main revenue sources as a % of total General Fund Sources are Sales Taxes at
26.6%, Voter Approved Local Revenue (Measure S) at 27.75%, Property Taxes at 17% then other Taxes, Charges for Services, Permits and Licenses for a combined 27.1%.
Overall Revenues for the General Fund are $1,928,345 or 32% below the same period in Fiscal year 2021/22. The primary difference is related to the 2021 American Rescue Plan Act (ARPA) funds to the City which totaled $886,315. After adjusting for the one-time contribution from ARPA, revenues are essentially the same as the same period in the prior year.
Significant changes to the total revenues for the General Fund were:
- Sales Tax was approximately $65,000 or 4.1% less due to a combination of conservative projections for the last month of the quarter as well as decreased County Pool distributions due to the CDTFA tax ruling on the Amazon Fulfillment Centers. The total annual budget is in line with expectations and budget
- Other Taxes, primarily made up of cannabis business taxes, had increases of approximately
8.6% over prior year due to additional businesses operations. A secondary full retail operation is to be opening within the City and will start contributions to the quarterly sales tax starting in Q2 2022/23. As such we believe the budget to be in line with annual expectations.
- Property Taxes are received from the County in December and April. The annual budgeted balance is in line with the County’s projections.
- Public Works Charges revenues decreased by over $11,000 due to permits related to development projects, primarily Kessing Ranch.
Expenditures:
Overall, cumulative General Fund expenditures decreased from the previous year by approximately 15% or $402,000. This change was due to the reduction in transfers out required for capital projects due to timing of projects as well as availability of other funding sources including special revenue funds, grant funds, or street bond funds, which are utilized before General Fund.
By department, total dollar decreases were noted in police and public works, primarily due to staffing and timing for contract services. While all other departments were slightly higher than last year, but within expectations for budget with all departments under 25% of their total annual budget.
Enterprise Funds:
The Water and Wastewater Funds revenues include charges for services, connection fees other revenues, and development fees. Utility accounts are billed every two months. Therefore, within the first quarter of the fiscal year, only one billing cycle has been completed of the six in a year.
Revenues:
The revenues for the Water Funds and Wastewater Funds have decreased from the same period last year primarily due to increased connection charges related to development received in the prior year.
Other significant differences in revenues for Wastewater and related Water expenditures is due the additional interfund loan lump sum payment of $500,000 was completed between the Water and Wastewater funds in line with the enterprise rate study. This transfer impacts quarterly expenditures in water and revenue in wastewater, but is accounted for in the annual budget.
Expenditures:
For Fiscal Year 2022/23, most expenses are in line with budget at year-end. The Wastewater Treatment continues to be the single expenditure with the largest increase over the same period in prior year as well as proportion of annual budget used. The annual budget for expenditures is in line with expectations given the timing of capital projects. Staff will continue to review the expenditures for alignment and adjustment as of Mi-Year.
City-Wide Cash and Investments:
Cash and Investments remain stable at $19.3M, where most of the funds are held in the state Local Agency Investment Fund (LAIF) (81%) due to higher return in LAIF compared to other available investments under our City Investment Policy. The reminder of the City’s funds is held in the Sonoma County Investment Pool (SCIP), RBC, and the Exchange Bank operating account, with a combined total of $3.6M.
Financial Considerations
There is no immediate fiscal impact or budget action necessary. City Staff will continue to report out to Council and the community quarterly. Additionally, to continue to improve financial reporting, staff are working to generate a City-Wide long range financial projections to be used for strategic planning later this year.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
Attachments:
Presentation - Financial Update Q1 Fiscal Year 2022/23 (PPTX) FY2022-23 Q1 Un-Audited Financial Report - Cotati (DOCX)