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l REQUEST FOR COUNCIL ACTION Department Approval Item Description.- 2008 I't Quarter Financial Report 1 BACKGROUND Date.- 4/21/08 Item No..- 13.a City Manager Approval 2 In an effort to keep the Council informed on the City's fiscal condition, a comparison of the 2008 revenues 3 and expenditures for the period ending March 31, 2008 (unaudited) is shown below. This comparison is 4 presented in accordance with the City's Operating Budget Policy, which was adopted by Resolution 410503 5 on May 21, 2007. The applicable portion of the Policy reads as follows.- '7 The Finance Department will prepare regular reports comparing actual expenditures to budgeted amounts as part of the budgetary control system�. These reports shall be 9 distributed to the (.41v (7ouncil on a veriodic basis. The comparison shown below includes those programs and services that constitute the City's core functions 12 and for which changes in financial trends can have a near-term impact on the ability to maintain current 13 service levels. Programs such as debt service and tax increment financing which are governed by pre- '14 existing obligations and restricted revenues are not shown. In addition, expenditures in the City's vehicle and equipment replacement programs are not shown as these expenditures are specifically tied to pre- '16 established sinking funds. Unlike some of the City's operating budgets, these sinking funds are not '1 "7 susceptible to year-to-year fluctuations. In these instances, annual reviews are considered sufficient. 19 The information is presented strictly on a cash basis which measures only the actual revenues that have 2o been deposited and the actual expenditures that have been paid. This is in contrast with the City's audited 2 1 year-end financial report which attempts to measure revenues earned but not collected, as well as costs 22 incurred but not yet paid. 23 24 It should be noted that any of the City's revenue streams such as property taxes, are non-recurring or are 25 received intermittently throughout the year. This can result in wide revenue fluctuations from month to 26 month. In addition,, some of the City's expenditures such as capital replacements are also non-recurring and 27 subject to wide fluctuations. To accommodate these differences, a comparison is made to historical results 2, to identify whether any new trends exist. 29 Page I of 4