HomeMy WebLinkAboutAgenda Packet 07/08/1993 RRIC RDIEW C(lPY
P EASL DO NQUOME
F8�1.S�INTER
AGENDA
ATASCADERO CITY COUNCIL
ADJOURNED MEETING
CITY ADMINISTRATION 'BUILDING
6500 PALMA AVENUE, 4TH FLOOR ROTUNDA RC OM
.JULY-8, "1993
7:00 P.M.
This agenda is prepared and posted pursuant to the requirements of Go "ernment Code
Section 54954.2. By listing a topic on this agenda, the City Council ha4 expressed its
intent to discuss and act on each item. In addition to any action identified in the brief
general description of each item, the action that may be taken shall includo A referral to
staff with specific requests for information, continuance; specific direction to staff
concerning the policy or mission of the item;discontinuance of consideratioauthorization
to enter into negotiations and execute agreements pertaining to the ite adoption or
approval; and, disapproval.
Copies of the staff reports or other documentation relating to each iter of business
referred to on the agenda are on file in the office of the City Clerk (Room 08) and in the
Information Office (Room 103), available for public inspection during City Nall business
hours. The City Clerk will answer any questions regarding the agenda.
In compliance with the Americans with Disabilities Act if you need speciq assistance to
participate in a City meeting or other services offered by this City, please contact the City
Manager's Office ((805) 461-5010) or the City Clerk's Office ((805) 461- 0741. Notifica-
tion at least 48 hours prior to the meeting or time when services are neede will assist the
City staff in assuring that reasonable arrangements can be made to provide accessibility
to the meeting or service.
RULES OF PUBLIC PARTICIPATION:
* Members of the audience may speak on any item on the a ends.
* A person may speak for five (5) minutes.
* No one may speak for a second time until everyone wishing to speak has had
an opportunity to do so.
* No one may speak more than twice on any item.
* Council Members may question any speaker; the speaker!,may respond but,
after the allotted time has expired, may not initiate furtheriscussion.
* The floor will then be closed to public participation andlopen for Council
discussion.
Call to Order
Pledge of Allegiance
Roll Call
I'
1
s
A. BUSINESS:
1. RECEIVE'FISCAL YEAR 1991-92 FINANCIAL AUDIT
2. ADOPT FINAL BUDGET ADJUSTMENTS FOR 'FISCAL YEAR 1992-93
3. REVIEW AND ADOPT CITY'BUDGET FOR FISCAL YEAR 1993-94
* NOTICE: THE COUNCIL WILL ADJOURN TO A CLOSED SESSION FOR THE
PURPOSE OF DISCUSSION REGARDING PERSONNEL MATTERS,
PURSUANT TO GOVERNMENT CODE SECTION 54957.6, AND
DISCUSSION REGARDING LITIGATION, ENTITLED CITY v. FLUITT, et
al, PURSUANT TO GOVERNMENT CODE SECTION 54956.9.
2 i
P
REPORT TO CITY COUNCIL Agenda Stem: 1
CITY OF ATASCADERO
Through: Andy Takata, Assistant City Mgr. Meeting Date: 7/8/93
From: Mark Joseph, Administrative Services Direptor
:SUBJECT: Accepting FY 91-92 Financial Audit Results.
RECOIMNDATION: By motion, receive and file the Audited FY 91-92
Financial Statements for the City of Atascadero.
BACKGROUND:
Each year the City's financial statements are audited by
outside auditors. The results for the fiscal year ',Onding June
30, 1992 have already been sent to Council under separate cover
(due to the length of the document) . Additional copies for
public review are at the Information Office at City Hall.
Representatives from the audit firm of Glenn, Burdette,
Phillips and Bryson will be present to give an oral'! presentation
and answer questions.
ANALYSIS:
General Fund - Exhibit A presents the Income Statement for
the General Fund only, comparing Budget-to-Actual.
As can be seen, the Fund
Changes in Fund Balance, General Fund
Balance dropped
FY'1989- 93
dramatically, resulting
in a negative balance of
$45,518. Current ^-
projections indicate that
the balance will remain
unchanged at the end of p»
this fiscal year. Looked
at historically, as -
Figure One shows, the
fund balance climbed to
approximately $2.5 f1�1',Y�
million in FY 89-90, then
dropped in the last two Figure One
years and now has leveled
off.
There are three primary reasons for the drop. ' First, the
State' s budget problems have impacted the City,','s financial
condition. During the last three years (ending June 30,
1992) , the State has taken over $550, 000 in either direct
• revenues or in the form of "fees" that the County can charge
the City. Figure Two graphically portrays this trend.
Second, one-time Capital state Budget "Hits" on Atascadero
projects, particularly
the Pavilion, were
financed using the
General Fund's reserves.
Over $l million was
transferred out during g �
the last two years (FY `°
�a
90-91 and FY 91-92) .
Finally, the statewide
recession has hurt -
Atascadero just as bad as
-every other City, which WWo t, r.. ZMCth-ate«,
'� .
❑co.a..�..
has forced us to revise I — '"""
revenue estimates Figure Two
downward.
Other Funds - The table below presents changes in fund
balance for all funds, including the General Fund.
Beginning Ending
Balance Balance Dollar
Fund Name 7/1/91 6/30/92 Change
General Fund 1,604,473 (45,518) (1,649,991)
Gas Tax 437,925 347,977 (89,948)
Traffic Safety-1 42,281 0 (42,281)
Zoo Operating (14,871) (11,355) 3,516
Lake Pavilion 0 ( 19,568) (19,568)
Dial-A-Ride-2 130,411 (32,515) (162,926 )
WasteWater-2 8,949,618 8,895,844 (53,774 )
Park Concessions-2 18,030 16,171 (1, 859)
Developer Fees 948,083 679,104 (268,979)
St. Maint. Districts 12,684 36,456 23,772
TDA/Nan-Transit 524, 064 828,311 304,247
Capital Projects 178,827 591,715 (119, 112)
Other Capital Funds 235,652 174,429 (61,223)
Trust Funds 57,819 64,159 6,340
Debt Service Funds 199,751 205,217 5,466
TOTALS 13,324,747 11,198,427 (2, 126,320)
1. The Traffic Safety Fund was closed out to the
General Fund.
2. Totals for Enterprise Funds are Retained Earnings,
which includes Investment in Fixed Assets, in order to
tie into the Auditor's figures.
Auditor's Recommendations - Exhibit B is the listing of
findings and recommendations from the Auditors, including
the City' s responses. These issues can be discussed in more
detail at the meeting.
A:92AUDITRESULTS #36
EXHIBIT A
CITY OF ATASCADERO CALIFORNIA
COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
ALL BUDGETED GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED JUNE 30, 1992
General Fund
Variance
Favorable
Budget Ac al (Unfavorable)
Revenues
Taxes and special assessments $ 4,490,300 $ 41473,687 $ (16,613)
Licenses and permits 335,000 329,,435 (5,565)
Fines and forfeits 32,050 22,403 (9,647)
Intergovernmental revenues 875,700 879,526 3,826
Charges for services 755,000 665,136 (89,864)
Use of money and property 54,000 59',083 5,083
Other revenue 473.000 452,842 (20,158)
Total revenues 7.015.050 6.882,112 1,'132,938)
Expenditures
Administration 363,085 342;,538 20,547
Administrative services 668,635 635',,853 32,782
Community services 1,532,525 1,560,313 (27,788)
Community development 809,917 803,837 6,080
Police 2,169,300 2,182,295 (12,995)
Fire 1,202,500 1,15',770 47,730
Public works 348,205 36 ,379 (17,174)
Nondepartmental 554,820 537,400 17,420
Capital outlay 170,200 154,464 15,736
Debt service:
Principal 38,300 23,674 14,626
Interest and fiscal charges 12.500_ 1§.048 (3,548)
Total expenditures 7.869,987 7,77§.571 93,416
Excess (Deficiency) of Revenues Over
(854,937) (89 .459) (39.522)
Expenditures
Other Financing Sources (Uses)
Transfers from other funds - Note 5 234,800 240,641 5,841
Transfers to other funds - Note 5 (1,373,500) (1,091,890) 281,610
Proceeds from capital lease - Note 7 90,000 95,717 5,717
Proceeds from asset disposition
Total other financing sources
(uses) (1.048,700) (75$.532) 293,168
Excess (Deficiency) of Revenues and
Other Sources Over Expenditures
and Other Uses (1,903,637) (1,649,991) 253,646
Fund Balances - July 1 - Note 13 1.604.473_ 1,60.4,473
Fund Balances - June 30 - Note 12 $ (299,164) $ (42® y25�_
The accompanying notes are an integral part of this financial statement.
-11-
EXHIBIT B
CITY OF ATASCADERO. CALIFORNIA
SUMMARY OF FINDINGS AND RECOMMENDATIONS
JUNE 30, 1992
I. Cash Disbursement Procedures
Finding
During our review of the cash disbursement system, we obtained an understanding of the
system and detected several weaknesses. It -appears that purchase orders are not always
prepared in -a timely manner (i.e. , before placing an order for goods or services) .
This may result in unauthorized requisitions, budgeting errors and problems detecting
possible invoice errors.
We also noted that none of the departments use receiving reports to document actual
goods received, and the date received is not always indicated on the invoice. Such a
report should be used to verify that all goods ordered are received and that invoices
reflect the proper quantities.
We also noted that invoices are not always cancelled adequately once paid, to avoid
duplicate payments. We noted instances where the statement or purchase order was
stamped but not the original invoice.
Recommendation
In order to strengthen the system of cash disbursements, we recommend that the City
implement the proper use of purchase orders and receiving reports and that it begin
cancelling all invoices with a "Paid" stamp or punch.
City's Response
The City has implemented procedures requiring personnel to prepare purchase orders
timely and to stamp all invoices and purchase orders "paid." The City will continue to
strive for full compliance with the established procedures. Additional training may be
provided, and departments that consistently fail to comply will be referred to the City
Manager's Office.
Finding
During our testwork on the cash disbursement system, we noted that an open purchase
order was written for a specific dollar limit, but invoices against that purchase order
exceeded the purchase order dollar limit.
Recommendation
We recommend that open purchase orders with specific dollar limits be reviewed by the
accounts payable department and, if dollar limits have been exceeded on invoices, the
appropriate department heads be notified and consideration be given to change approved
purchasers.
-92-
CITY OF ATASCADERO_s_CALI_F_ORNIA
SUMMARY OF FINDINGS AND RECO(�ENDATIONS
JUNE 30, 1992
PAGE 2
Citv's Response
The City already has an informal, but documented, system of adjusting open purchase
order amounts, but will implement a formal written '"purchase order -adjustment" form.
Finding
During our review of the cash disbursement system, we noted an equipment purchase with
an attached purchase order for less than the total purchase from:the equipment vendor.
Additional accessories had been purchased without a purchase order.
Recommendation
We recommend that add-on items on a purchase order require an additional purchase order
before the additional items are ordered.
City's Response
The City will utilize a "Purchase Order Adjustment" form to document the add-on
purchases and allow for prior approval and encumbering of funds. ,
II. Cash Receipts and Deposit Procedures
Finding
During our review of the cash receipts system, we observed that sequentially numbered
receipts are issued to payors and that duplicates are retained by the City but there is
no accounting of the numerical sequence of such receipts.
Recommendation
In order to ensure that all monies collected are remitted to the: central cashier and
deposited, we recommend that the City account for the numerical sequence of receipts by
entering the receipt numbers into the computer system and reviewing this periodically.
City's Response
The City's computer system assigns a "receipt number" to the batches entered daily;
therefore, it is not possible to enter the actual receipt number'' in the system. In
lieu of this, the City will review the daily cash deposit and reconciliation sheet to
assure all manual receipts are accounted for on the form, and a new form will be
created to document lost or voided receipts. Additionally, the City hopes to
centralize the cash receipting functions at City Hall.
-93-
CITY OF ATASCADERO.' CALIFORNIA
SUMMARY OF FINDINGS AND RECOMMENDATIONS
JUNE 30. 1992
PAGE 3
Finding
During our review of the cash receipts system, we also noted that no record is
maintained for the ,amount of currency received from each department and reconciled to
total cash deposited.
Recommendation
A summary worksheet should be prepared listing each department and amount of currency
from each department. The total on the worksheet should equal total cash entered on
the deposit slip. As the cash is counted, a portion of this worksheet should be
completed showing the breakdown of cash counted.
City's Response
The City has procedures in place to double check the accuracy of the total cash
received, deposited and posted to the general ledger, and will begin documenting the
source of cash receipts at the time cash is received.
III. Urban Mass Transportation Act (UMTA) Grants
Finding
During our testwork of Urban Mass Transportation Act (UMTA) grants received by the
City, we noted that the City is required to comply with the UMTA grant requirements.
One of these requirements is that the City have a system in place to "take all
necessary and reasonable steps to ensure that disadvantaged business enterprises (DBE)
have maximum opportunity to compete for and perform contracts for UMTA grants."
We noted that the City does not currently utilize a system to meet the UMTA requirement
above. Furthermore, there is not a person or department that is currently responsible
for reviewing grant documents for compliance requirements to ensure that the City is
satisfactorily complying with those requirements.
Recommendation
We recommend that the City implement a system to satisfy the UMTA grant requirement
above. We also recommend that the City assign responsibility of reviewing and
documenting compliance with grant requirements for all grants that the City has or will
receive in the future.
City's Response
The City has strengthened its procurement procedures to include Disadvantaged Business
Enterprises reporting requirements. Grant compliance will be assigned to someone in
the. Community Development/Public Works Department, with accounting support provided by
the Finance Department. •
-94-
CITY OF ATASCADERO, CALIFORNIA
SUMMARY OF FINDINGS AND RECOMMENDATIONS
JUNE 30, 1992
PAGE 4
IV. Effluent Water Service Charge Billings and Cash Receipts
Findine
During our testwork of accounts receivable, we noted that accounting procedures could
be improved for the effluent water service charge billings and subsequent cash receipts
associated with the golf course.
The City is a party to a contract whereby the City is to be reimbursed for all costs
associated with the delivery of effluent water to the golf course facility. The
agreement is silent as to the terms of the billing period and the repayment
requirements.
During our testwork we noted that the City did not request reimbursement for
approximately $13,500 in costs incurred for the period of July 1'', 1991 through
December 31, 1991, until May 7, 1992. Additionally, approximately $16,600 of costs
incurred between January 1, 1992 and June 30, 1992, were not requested from the
contractor for reimbursement until September 30, 1992. We also noted that as of
February 11, 1993, no request for reimbursement for costs incurrd by the City since
June 30, 1992, had been prepared.
We noted that the City has received reimbursements from the contractor for the amounts
billed, but that the contractor paid the amounts back to the City in four equal
installments rather than as lump sums. The delay in preparing what have been
essentially semi-annual bills and then receiving the reimbursements on an installment
basis places the City in the position of incurring costs that arie not properly
reimbursed for a minimum of six months.
Recommendation
We recommend that the City implement procedures to timely prepare billing statements
for periods in which the City incurs costs associated with the effluent water services.
Requesting reimbursement from the contractor on a timely basis should reduce the need
for the payments to be made on an installment basis since the amounts would be less.
The billing procedures should benefit the City by improving cash flaw related to this
contract.
City's Response
The City's Finance Department will work with the Public Works Department to explore
ways to facilitate collecting the data needed to invoice the golf course and implement
a quarterly or monthly billing arrangement. Once implemented, payment in full will be
required.
S
-95
CITY OF ATASCADERO. _CALIFORNIA
SUMMARY OF FINDINGS AND RECOMMENDATIONS
JUNE 30. 1992 is
PAGE 5
V. Peggy Cash and Cash Box Reconciliations
Findine
During our testwork of petty cash .and cash box reconciliations, we noted that the
balances of these accounts in the general ledger was a combined $300 more than what the
actual cash on hand amounts were.
Recommendation
We recommend that the petty cash and cash box amounts be reconciled to the general
ledger balance amounts and that any differences be investigated and adjusted.
City's Response
The City now reconciles the petty cash weekly, pursuant to new procurement procedures.
VI. Payroll
Finding
During our review of salary expense, we were unable to reconcile the payroll returns t
the general ledger.
Recommendation
In order to determine that salary expense or payroll taxes are being properly recorded
in the general ledger and properly reported to federal and state agencies, the payroll
returns should be reconciled to the general ledger on a quarterly basis.
City's Response
The City implemented procedures needed to facilitate the reconciliation process in May,
1993.
VII. Budgetary Controls Over Expenditures
Finding
During our testwork of expenditures in excess of appropriations, we noted that several
departments had an excess of expenditures over appropriations for the year ended
June 30, 1992.
-96-
CITY OF ATASCADERO. CALIFORNIA
SUMMARY OF FINDINGS AND RECOMMENDATIONS
JUNE 30, 1992
PAGE 6
Recommendation
We recommend that budgetary controls be utilized to monitor departmental budget limits
for expenditures. These controls could provide timely information to management in
order to evaluate the year to date expenditure amounts and the remaining budget amounts
available for additional expenditures. In addition, we recommend that the use of cost
accounting controls be utilized in order to more closely monitor ',budget versus actual
expenditures on a timely basis.
City's Response
The City intends to revise budget control procedures to require council approval when-
ever total departmental appropriations are revised. The City also plans to develop an
"accrual policy" to clarify which revenues and expenditures will',be accrued on a
monthly or quarterly basis. Departments will be encouraged to monitor their open
purchase order balances, and departments that continually exceed their budget will be
referred to the City Manager.
VIII. General Ledler/Revenue
Finding
During our review of revenue, we noted that the City's general ledger balances did not
agree with the general ledger received from the County. Although the differences were
minor, we were unable to reconcile the county general ledger to the City's general
ledger.
Recommendations
In order to ascertain that all activity is properly posted to the general ledger, the
books and records should be reviewed and adjusted as necessary on a monthly or
quarterly basis.
City's Response
The City has developed a spreadsheet to facilitate the reconciliation process on a
monthly basis.
-97-
CITY OF ATASCADERO, CALIFORNIA
STATUS OF PRIOR YEAR FINDINGS AND RECOKKENDATIONS
JUNE 30, 1992
Status If
Not Fully
Findine Recommendation Status Implemented
1. Internal con- Reconcile cash Partially See current year findings
trols could be received to cash implemented and recommendations
improved for register or regarding continued need
cash receipts receipt totals; for improvements over
and deposit record and monitor cash receipts and
procedures. the preprinted deposits.
numbers on cash
receipts; forward
all cash receipt
items to cashier
timely.
2. Internal Complete and Partially See current year findings
controls approve purchase implemented and recommendations
could be orders prior to regarding continued need
improved ordering goods or for improvements over
for services; monitor purchase orders and cash
purchase open purchase disbursements.
orders and orders for dollar
cash dis- limits; require
bursements proper purchase
orders prior to
payment of in-
voices; cancel
original invoices
and purchase
order/receiving
reports upon
payment; charge
invoices against
proper purchase
order upon
payment.
Utilize budgetary Partially The City has implemented
controls to moni- implemented new procedures to ensure
for department greater control over
3. Noted limits. appropriations.
expendi-
tures in
excess of
appro-
priations.
-98-
Status If
Not Fully
Finding Recommendation Status Imvlemented
4. Public works Develop cost Partially The City is continuing
projects were accounting implemented its efforts to develop
not supported procedures for cost accounting proce-
by competitive projects subject dures and to seek com-
bids in accor- to competitive petitive bids on
dance with the bidding procedures projects.
City's Munici- to comply with the
pal Code, and City's Municipal
the City had Code.
allowed its
uniform public
construction
cost account-
ing procedures
to lapse.
5. No written Develop a written Partially The City is currently
accounting procedures manual. implemented developing a manual,
procedures
manual for
City.
6. Outstanding Review outstanding Implemented
balances due interfund receiv-
to/from other able/payable
funds remained balances and
on balance consider trans-
sheet at year ferring cash
end. amounts to eli-
minate these
amounts at year
end.
i
-99-
d
REPORT TO CITY COUNCIL Agenda Item: 2
CIXY OF ATASCADERO
Through: Andy Takata, Ass't City Mgr. Meeting Datil: 6/29/93
From: Mark Joseph, Administrative Services Direotor14/_/)
SUBJECT: Adopting Final Budget Adjustments for Fiscal Year
1992-93
AECONXENDATION: Council -approve Resolution No. 74-93, adopting
year end budget figures.
BACKGROUND:
Since the budget adjustments in May, staff has ',',been able to
monitor both revenues and expenditures, particularly for the
General Fund. With the advantage of the fiscal year virtually
complete, several accounts need to be adjusted. In !,addition,
staff is proposing a means whereby the General Fund' s ending
balance for FY 92-93 should be in the black.
ANALYSIS•
Staff noted in May that property tax revenues were lagging
behind estimates. This is caused by delays in prop*rty owners
paying current year taxes. As a result, we expect property taxes
to fall below estimate by $65,000. In addition, Staff ' s estimate
for construction permits in May assumed the Carlton' Project would
be in before June 30. Permits will actually be pulled after this
date. Thus, the estimated revenue needs to be redueed.
Offsetting these declines is sales tax, up $20x500, and
Motor Vehicle In-Lieu, up by $10,000. The net effect, then, is a
$50, 000 drop in revenue.
On the appropriation side, some departments will go over
budget and some should have ample reserves. As a result,
adjustments between departments will be sufficient to assure
"bottom line" expenditures are within budget.
However, even though no net additional appropriations are
required, the General Fund's fund balance would go into the hole
$50, 000, resulting in a deficit of approximately $1p0, 000 (which
includes the FY 91-92 deficit) . Therefore, staff is recommending
the General Fund reduce its support for street maintenance by
$100, 000 and transfer that cost to the Gas Tax fund'. By doing
this, it is anticipated that the FY 92-93 fund balance will show
a modest surplus.
Exhibit A of Resolution No. 74-93 shows the specific
adjustments, including amendments for Dial-A-Ride and the Tree
Planting Fund.
a
RESOLUTION NO. 74-93
A ::RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ATASCADERO ADJUSTING
APPROPRIATIONS FOR :SELECTED FUNDS FOR
FISCAL YEAR 1992-93
Section 1. Appropriations are adjusted by the amounts shown in
Exhibit A, made a part of this resolution.
Section 2. These changes are effective upon adoption of this
resolution.
On motion by Councilperson seconded by
Councilperson , the foregoing resolution is
hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ADOPTED:
CITY OF ATASCADERO
By:
MARTY KUDLAC, Mayor
ATTEST:
LEE PRICE, City Clerk
APPROVED AS TO CONTENT:
MARK JOSEPH
Administrative Services Director
a:final-adjust
#36
a
FINAL BUDGET ADJUSTMENTS, FY 1992-93 EXHIBIT A
CURRENT REVISED
REVENUES/APPROPRIATIONS 'BUDGET ADJUSTMENT BUDGET
GENERAL FUND
Revenues
Property Taxes 2,200,000 (65,000) 2,135,000
Sales Tax 1,825,000 20,00!0 1,845, 000
Construction Permits 231,400 (15,00,0) 216,400
Motor Veh. In-Lieu 812,300 10,000 822,300
All Other Revenues/Transfers 1,407,485 0 1,407,485
TOTALS 6,476, 185 (50,060) 6,426, 185
Appropriations
City Clerk 44,650 1,500 46, 150
Treasurer 3,516 600 4, 116
City Attorney 75,000 3, 000 78, 000
City Manager 134,450 1,000 135,450
Police 2,141, 100 ( 15,600) 2, 125,500
Engineering 202,600 12, 000 214,600
Community Development 566,385 1,000 567,385
Comm'y Sery/Admin 31,505 (2, 000) 29,505
Parks 323,700 (10, 00N',0) 313,700
Streets 371,225 ( 100,060) 271,225
Personnel 60,305 50.0 60,805
Non-Department 513,525 8, 000 521,525
All Other Appropriations 2, 006,266 0 2, 006,266
----------------------Y--------------
TOTAL ADJUSTMENT 6,474,227 ( 100,0010) 6,374,227
SURPLUS (DEFICIT) 1,958 50, 000 51,958
BEGINNING BALANCE, 7/1/92 (45,518) (45,518)
ENDING BALANCE, 6/30/93 (43,560) 6,440
GAS TAX FUND
Appropriations
Street Maint./Gas Tax 238,000 100,000 338,000
DIAL-A-RIDE
Appropriations
Dial-A-Ride Operations 325,950 13,000 338,950
TREE TRUST FUND
Appropriations
Tree Planting 4,000 1, 000 5, 000