Santa Paula Year End Forecast: Positive with Creative Accounting

By Sheryl Hamlin

The last item on the three hour March 19, 2018 Santa Paula council meeting was a presentation of the year-end forecast comparing budgeted versus expected line items to arrive at an expected year-end result.

To understand the state of the city’s budget, which was City Manager Rock’s first Santa Paula budget, please read this report to understand the “creative” use of the Enterprise Funds.

In the chart below, it is clear that there is an expected year-end surplus of $322,154.

Year End General Fnd Forecast

However, this revenue is deceptive because the $2,781,787 labeled ‘Other Citywide’ includes $2,286,098 transferred from the Enterprise Funds (Water and Sewer) per the scheme described in the above linked article. How does a large transfer affect the Enterprise Funds?

Enterprise Funds Year-End Projected Decline

The year-end projection for the two enterprises (Water and Sewer) is shown below:

Enterprise Fund Projections

There are several unanswered questions about the enterprise funds:

1. If the city transfers $2,286,098 from the Enterprise Funds to the General Fund, how do the enterprises make up for these transfers in order to maintain the 1.2 debt service ratio for the bonds without a large rate increase?

2. How much of the $5,424,686 deficit is an operational loss versus a draw-down on the bond funds?

3. And what is the remaining balance of the water and sewer bond funds?

Clearly there was not enough information given to understand the operational characteristics of the enterprises, a point noted by Council Member Crosswhite. City Manager Rock vowed to rectify.

Measure T to the Rescue

The Measure T monies are kept in a separate fund for tracking purposes. Expenses from the General Fund which are to be funded by Measure T are coded accordingly so there can be an understanding of how the Measure T monies are spent.

Measure T Year-end Projections

The chart shows that the city expects to receive $2,197,705 from Measure T sales taxes and plans to spend $1,676,218 of those monies on these items. Unspent monies are carried over to the following fiscal year.

What should be clear from this chart is how reliant the city is on the Measure T funds. With expected General Fund revenues of $15,839,768 without Measure T, the Measure T monies increase the budget by another $2,197,705, which is not insignificant.

Missing from Report

No mention was made of forecast year-end payment to CalPERS or any attempt to update the long term pension liability, a complicated calculation requiring a specialist for the audited financial report.

This is the first of several articles on this council meeting. To watch the presentation, click here.

For more information on author click sherylhamlin dot com

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Dotty Pringle

The voters of Ventura County in OXNARD have questioned Lyn Krieger about the Channel Islands Harbor Enterprise Fund as well, no answer from County. Audit is now necessary!

We need to investigate Krieger, Powers, and Zaragoza and recoup the funds that were not used as intended to maintain this harbor. Where is that $ ?

There is property in COUNTY INVENTORY that has not been accounted for either…a 19 foot Boston Whaler!