Santa Paula Council: More Bad Financial News

By Sheryl Hamlin

The following discussion items are presented in order of appearance at the March 6, 2017 Santa Paula City Council meeting. To watch the video and see the reports, click here.

Citizen Questions Undocumented Reclassification of Expenses in Audited Financial Statements

Without a note in the Audited Financial Statements or a reconciliation of the new methodology to the old, the City of Santa Paula has reclassified almost $1 million in pro rata estimated expenses as regular, direct expenses for the city’s Enterprise Funds. To read the full report, click here.

Park Renovation “Borrows” from Playground Fund without Authorization

The council learned that staff had “borrowed $229,000” from the Playground Fund to finish the renovation of Veterans Park, which was approved under the assumption that the Veterans Park upgrade would be grant funded. According to Ed Mount, Community Services Director, the Veterans plan included only partial grant funding. Vice Mayor Gherardi expressed dismay about insufficient staff reporting and asked how the Playground Fund would be repaid, to which Director Mount said “development impact funds”. No one asked the most important question: who authorized the transfer from the Playground Fund to the Park Fund?

Maintenance of East Area One 37 Acre Park Proposes Funding Challenge

Director Mount reported on the 37 acre park to be built in East Area 1 by Limoneira/Lewis under the terms of the Development Agreement where they are required to spend $6,000,000 to construct, but not to maintain. There were 207 respondants to the survey with the pool, soccer, walking paths and amphitheatre as the top four. However, the pool is the most expensive, so there was extensive debate about costs. The staff asked for more details about annual maintenance, which the city must pay, to which Director Mount estimated a figure of $500,000. To a discussion about “sustainability funding”, Tim Jones of Limoneira/Lewis said that a citywide Park Assessment District was under consideration. Note that this district would levy a new fee on the property tax for all property owners in Santa Paula and in addition to the Mello-Roos fees to be paid by the East Area One homeowners already reported here. The parking issue has not been solved because the plans are only preliminary, said Mount. A previous report on the parks can be read here.

Mid-Year Financial Report Projects Deficit

Mid-year General Fund revenues (actually it is month 8 out of 12) are $311,868 below budget and expenses are over budget by $407,949. Unfortunately the city used the reserves to balance the FY 15/16 year-end, so this option is not available for FY 16/17. Vice Mayor asked if there were more funds which can be transferred via the overhead approximation formula. Read citizen comment on this approach. According to the Finance Director, the revenue misses came from development project delays (Limoneira, Williams Homes, Sparkul) where the city was anticipating revenue from permits and a slight sales tax miss. Director Easley noted that the year-end estimates include the new fee structure. Read report here on new fees and expected revenue. This staff report only included the General Fund but Enterprise Funds are coming, according to Director Easeley. The city has expended or committed $20 million out of $30 million of the bond money. There was no discussion about future bonding and if the city can sustain more debt.

Council Member Hernandez asked about the upgrade of the accounting software, to which Director Easley said the Intergov permitting software is “moving along”, but the accounting software has slowed due to vendor representative issues and her own schedule. Council Member Hernandez feels that the accounting software will help the staff improve efficiencies.

The council voted to receive and file, continue monitor the finances and return with information about the possibility of using more overhead.

Future Agenda Items

Park Assessment District and Workshop

Invite the General Manager of VRSD (Ventura Regional Sanitation District) for plans about Toland Land Fill

The meeting was adjourned with a reminder of a special, closed meeting about the City Manager position.

To watch the video, click here.

To read more about the author, click sherylhamlin dot com.

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