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REQUEST FOR COUNCIL ACTION <br /> Date: 7/16/12 <br /> Item No.: 7.d <br />Department Approval City Manager Approval <br />Item Description: Receive 2012 2nd Quarter Financial Report <br />B <br />ACKGROUND <br />1 <br />In an effort to keep the Council informed on the City’s fiscal condition, a comparison of the 2012 revenues <br />2 <br />and expenditures for the period ending June 30, 2012 (unaudited) is shown below. This comparison is <br />3 <br />presented in accordance with the City’s Operating Budget Policy, which reads (in part) as follows: <br />4 <br />5 <br />The Finance Department will prepare regular reports comparing actual expenditures to <br />6 <br />budgeted amounts as part of the budgetary control system. These reports shall be <br />7 <br />distributed to the City Council on a periodic basis. <br />8 <br />9 <br />The comparison shown below includes those programs and services that constitute the City’s core functions <br />10 <br />and for which changes in financial trends can have a near-term impact on the ability to maintain current <br />11 <br />service levels. Programs such as debt service and tax increment financing which are governed by pre- <br />12 <br />existing obligations and restricted revenues are not shown. In addition, expenditures in the City’s vehicle <br />13 <br />and equipment replacement programs are not shown as these expenditures are specifically tied to pre- <br />14 <br />established sinking funds. Unlike some of the City’s operating budgets, these sinking funds are not <br />15 <br />susceptible to year-to-year fluctuations. In these instances, annual reviews are considered sufficient. <br />16 <br />17 <br />The information is presented strictly on a cash basis which measures only the actual revenues that have <br />18 <br />been deposited and the actual expenditures that have been paid. This is in contrast with the City’s audited <br />19 <br />year-end financial report which attempts to measure revenues earned but not collected, as well as costs <br />20 <br />incurred but not yet paid. <br />21 <br />22 <br />It should be noted that many of the City’s revenue streams such as property taxes, are non-recurring or are <br />23 <br />received intermittently throughout the year. This can result in wide revenue fluctuations from month to <br />24 <br />month. In addition, some of the City’s expenditures such as capital replacements are also non-recurring and <br />25 <br />subject to wide fluctuations. To accommodate these differences, a comparison is made to historical results <br />26 <br />to identify whether any new trends exist. <br />27 <br />28 <br />29 <br />Page 1 of 13 <br /> <br />