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<br />REQUEST FOR COUNCIL ACTION <br /> Date: 8/26/13 <br /> Item No.: 7.d <br />Department Approval City Manager Approval <br /> <br />Item Description: Receive 201 3 2nd Quarter Financial Report <br /> <br />Page 1 of 13 <br />B ACKGROUND 1 <br />In an effort to keep the Council informed on th e City’s fiscal conditi on, a comparison of the 2013 2 <br />revenues and expenditures for the period ending June 30, 2013 (unaudited) is shown below. This 3 <br />comparison is presented in accordance with the City ’s Operating Budget Policy, which reads (in part) 4 <br />as follows: 5 <br /> 6 <br />The Finance Department will prepare regular reports comparing actual expenditures to 7 <br />budgeted amounts as part of the budgetary cont rol system. These reports shall be 8 <br />distributed to the City Council on a periodic basis. 9 <br /> 10 <br />The comparison shown below includes those programs a nd services that constitute the City’s core 11 <br />functions and for which changes in financial trends can have a ne ar-term impact on the ability to 12 <br />maintain current service levels. Programs such as debt service and tax increment financing which are 13 <br />governed by pre-existing obligations and restricted revenues are not shown. In addition, expenditures 14 <br />in the City’s vehicle and equipment replacement programs are not shown as these expenditures are 15 <br />specifically tied to pre-establishe d sinking funds. Unlike some of the City’s opera ting budgets, these 16 <br />sinking funds are not suscep tible to year-to-year fluctuations. In these instances, annual reviews are 17 <br />considered sufficient. 18 <br /> 19 <br />The information is presented strictly on a cash basis which measures only the actual revenues that have 20 <br />been deposited and the actual expenditures that have b een paid. This is in contrast with the City’s 21 <br />audited year-end financial report which attempts to measure revenues earned but not collected, as well 22 <br />as costs incurred but not yet paid. 23 <br /> 24 <br />It should be noted that many of the City’s revenue streams such as property taxes, are non-recurring or 25 <br />are received intermittently throughout the year. This can result in wide revenue fluctuations from 26 <br />month to month. In addition, some of the City’s expenditures such as capital replacements are also 27 <br />non-recurring and subject to wide fluctuations. To accommodate these differences, a comparison is 28 <br />made to historical results to iden tify whether any new trends exist. 29 <br /> 30 <br />31