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Home My WebLink About03-Presentations a"WAR" G CITY OF SAN BERNARDINO, CALIFORNIA TRANSMITTAL MEMORANDUM h n,n TO: Mayor and Common Council FROM: Andrea Travis-Miller, Acting City Manager Jason Simpson, Director of Finance DATE: September 17, 2012 SUBJECT: City of San Bernardino's Cash Flow Position— Report on Selected Analysis BACKGROUND—CASH POSITION DAY BEFORE FILING BANKRUPTCY On July 31, 2012, the day before the City declared bankruptcy, the City had approximately a $6 million in Cash on the City's ledger. This amount is deceptive, however, because it is the net amount of the four categories below, as follows: General Fund $ (18,946,180) Discretionary Funds (3,741,023) Board Assigned/Committed 1,616,815 Restricted 27,077,679 $ 6,007,291 In essence, as of 7/31/12, the General Fund has borrowed $18.9 million from Restricted Funds and Board Assigned/Committed funds to pay for General Fund and Discretionary Fund expenditures. The main reason for this borrowing is the structural deficit that exists in the City, which put quite simply, is that expenditures exceed revenues. Absent immediate actions to reduce the structural deficit, the excess of expenses over revenues are projected to continue each month. CURRENT CASH POSITION—SEPTEMBER 13.2012 On September 13, 2012, the City's overall cash (including restricted funds) was $18,571,782 and the General Fund's negative cash balance was($17,430,272); representing an increase in cash from July 31, 2012. The increase in cash is primarily due to deferral of currently due obligations totaling ($18,594,518) including payments due to bond holders, CalPERS, trade payables, prior litigation costs, and employee leave bank cashouts. As shown on Exhibit A, the City's net cash deficit is a negative ($22,736) (See Exhibit A). The deferral of expenses has been necessary to continue to meet payroll obligations and other critical obligations necessary to provide basic level services. As estimated by staff in July, this would not have been possible without the deferral of the expenses listed above. The City would have run out of cash at the September 15th payroll. As implemented, the deferral of expenses is intended to be short-term in nature (i.e., through September). In order to continue to provide essential services, the City must complete implementation of the restructuring approved in the Pre-Pendency Plan and continue with certain deferrals until the next phase of the Pendency Plan can be developed and approved by the Mayor and Common Council. Continued reductions in expenses, including those approved in the Pre-Pendency Plan, are necessary to ensure the City can continue to provide services, pay its obligations for services and materials necessary for staff to perform assigned tasks, pay deferred obligations, balance the budget, and to build operating capital and reserves. CITYWIDE FUND STRUCTURE/CATEGORIES Funds, which are used to account for specific activities, fall into one of four categories: A. The General Fund. This fund accounts for the majority of activity of the City's general operations like Police, Fire, Public Works, and other services. In any City Government, there is only one General Fund. B. Discretionary Funds represent funds that are Special Revenue Funds or Internal Service Funds that do not have legal or Board restrictions. They are simply utilized to track and also spread costs to the overall organization. C. Board Assigned/Committed Funds represent funds that the Board has made a formal or informal action to assign or commit to specific purposes. D. Restricted Funds are funds restricted by external entities such as grantors, assessment districts, Measure I sales tax proceeds, and other legal restrictions such as Proposition 218 restrictions. 21Page Exhibit A CITY OF SAN BERNARDINO,CALIFORNIA SELECTED ANALYSIS OF CITY CASH(unaudited) CASH PER CITY CALCUATION OF BOOKS' CASH SHORTAGE Cash per City's books as of 911312012 General Fund $ (17,430,272) Discretionary Funds (2,337,337) Board Assigned/Committed 5,355,907 Restricted 32,983,484 Net Cash-Citywide(including restricted)@ 911312012 $ 18,571,782 City's Obligations: Unpaid City's Obligations from 7/31/12: Due Date QbllQatlon 711512012 Pension Obligation Bonds-Bond Payment (3,338,739) 713111012 CaIPERS/PARS-Payperiod ending 7/31 (1,066,504) 713112012 City lawsuits-litigation (1,461,100) (4,405,243) Unpaid City's Obligations from 8/31/12: Due Date Obligation 811512012 CaIPERS/PARS-Payperiod ending 8/15 (1,068,065) 813112012 CaIPERS/PARS-Payperiod ending 8/31 (1,040,500) (2,108,565) New City Obligations 9/1/12-9/15/12 Due Date Obligation 911512011 Cashouts to Separated Employees(unpaid) (820,528) 911512012 Sell Back Time(unpaid) (157,725) 911512012 Payroll (3,953,404) 911511012 CaIPERS/PARS-Payperiod ending 9/15 (1,042,950) 911312012 Trade payables (6,106,103) (12,080,710) Estimated Net Cash Deficit(Citywide)on 9/15/2012 including City Obligations $ (22,736) Please note that the City's financial records have not been closed for FY 11;accordingly,there may be some adjustments to these amounts as we finalize reconciliations and adjustment to the amounting ledgers for FY2011-12. CITY OF SAN BERNARDINO Estimated Cash balances as of 9/13/12(unaudited) A B C D OTHER GENERAL DISCRETION ASSIGNED FUND 411312012 FUND ARY COMMITTED RESTRICTED A General Fund available B Other Discretionary Funds C AssignedlCommined by Council D Legally Restricted(External or Charter) CATEGORY SPREAD 001 GENERAL FUND A $ (16,970,868) (16,970,868) 0 0 0 004 OLD FIRE D (202,559) 0 0 0 (202,559) 105 LIBRARY FUND D (156,577) 0 0 0 (156,577) 106 CEMETERY FUND D 17,888 0 0 0 17,888 108 ASSET FORFEITURE FUND D 1,189,618 0 0 0 1,189,618 111 AB2744 AIR QUALITY-ALT TRANS D 50,039 0 0 0 50,039 116 EMERGENCY SOLUTIONS GRANT D 0 0 0 0 0 117 HOME IMPROVEMENT PART PROGRAM D (343,102) 0 0 0 (343,102) 118 GANG&DRUG ASSET FORFETURE D 115,905 0 0 0 115,905 119 CDBG A (459,403) (459,403) 0 0 0 120 NEIGHBORHOOD STABILIZATION PROGRAM D (491,576) 0 0 0 (491,576) 121 SBETA D 2,158,050 0 0 0 2,158,050 123 FEDERAL&STATE PROGRAM D (2,457,415) 0 0 0 (2,457,415) 124 ANIMAL CONTROL FUND C 125,212 0 0 125,212 0 126 GAS TAX FUND D 54,717 0 0 0 54,717 128 TRAFFIC SAFETY FUND D (826,048) 0 0 0 (826,048) 129 112 CENT SALES&ROAD D 4,329,044 0 0 0 4,329,044 132 SEWER LINE MAINTENANCE D 1,670,103 0 0 0 1,670,103 133 BASEBALL STADIUM C (55,792) 0 0 (55,792) 0 134 SOCCER FIELD C 385,638 0 0 385,638 0 135 AB 2928 TRAFFIC CONGESTION D (33,996) 0 0 0 (33,996) 137 CFD 1033-FIRE STATION D 333,300 0 0 0 333,300 208 VERDEMONT CAPITAL PROJECT C 248,608 0 0 248,608 0 211 FIRE EQUIP ACQUISITION C 97,471 0 0 97,471 0 240 CIEDB STREET CONSTRUCTION C (9,049) 0 0 (9,049) 0 241 PARK EXTENSION FUND C 4,519 0 0 4,519 0 242 STREET CONSTRUCTION FUND C (2,355,307) 0 0 (2,355,307) 0 243 PARK CONSTRUCTION FUND C 268,825 0 0 268,825 0 249 CEMETERY CONSTRUCTION D 52,519 0 0 0 52,519 245 SEWER LINE CONSTRUCTION C 2,320,758 0 0 2,320,758 0 246 PUBLIC IMPROVEMENT FUND C 1,079,024 0 0 1,079,024 0 247 CULTURAL DEVELOPMENT CONSTRUCTION C 475,996 0 0 475,996 0 248 STORM DRAIN CONSTRUCTION C 2,770,004 0 0 2,770,004 0 250 TRAFFIC SYSTEMS CONSTRUCTION B (10,750) 0 (10,750) 0 0 251 SPECIAL ASSESSMENTS FUND D (2,025,723) 0 0 0 (2,025,723) 254 ASSESSMENT DISTRICT FUND D 2,071,030 0 0 0 2,071,030 256 ASSESSMENT DISTRICT 1015 D 33,779 0 0 0 33,779 257 STREET LIGHTING/SWEEPING D 226 0 0 0 226 258 PROP IB-LOCAL STREET D 2,359,033 0 0 0 2,359,033 261 LAW ENFORCEMENT FACILITY D 86,611 0 0 0 86,611 262 FIRE SUPRESSION/MEDIC D 149,927 0 0 0 149,927 263 LOCAL REGIONAL CIRCULA D 521,874 0 0 0 521,874 264 REGIONAL CIRCULATION 5 D 6,092,612 0 0 0 6,092,612 265 LIBRARY FACILITIES D (10,636) 0 0 0 (10,636) 266 PUBLIC USE FACILITIES D 378,207 0 0 0 378,207 267 AQUATICS FACILITIES D 114,977 0 0 0 114,977 268 AB 1600 PARKLAND D 1,521,853 0 0 0 1,521,853 269 QUIMBY ACT PARKLAND D 241,344 0 0 0 241,349 305 AD#985 DEBT SERVICE FUND D 68,457 0 0 0 68,457 306 AD#987 DEBT SERVICE FUND D 19,020 0 0 0 19,020 356 AD939 NEW PINE DEBT D 47,704 0 0 0 47,704 527 INTEGRATED WASTE MANAGEMENT B 1,141,578 0 1,141,578 0 0 621 CENTRAL SERVICES FUND B (92,003) 0 (92,003) 0 0 629 LIABILITY INSURANCE FUND B 488,629 0 488,629 0 0 630 TELEPHONE SUPPORT FUND B 5,515 0 5,515 0 0 631 UTILITY FUND B (714,061) 0 (714,061) 0 0 635 FLEET SERVICES FUND B (1,692,667) 0 (1,692,667) 0 0 677 UNEMPLOYMENT INSURANCE B (80,121) 0 (80,121) 0 0 678 WORKERS COMPENSATION FUND B (1,708,421) 0 (1,708,421) 0 0 679 INFORMATION TECHNOLOGY B 324,965 0 324,965 0 0 701 AD 961 TRUST AND AGENCY D 369,598 0 0 0 369,598 703 AD977A TRUST&AGENCY D 62,145 0 0 0 62,145 704 AD977B TRUST&AGENCY D 26,718 0 0 0 26,718 1 OTHER GENERAL DISCRETION ASSIGNED FUND 9/1312012 FUND ARY COMMITTED RESTRICTED A General Fund available B Other Discretionary Funds C AssignedlCemmitted by Council D Legally Restricted(External or Charter) CATEGORY SPREAD 758 AD906 TRUST&AGENCY D 57,687 0 0 0 57,687 772 SPECIAL DEPOSITS FUND D 4,190,553 0 0 0 4,190,553 775 CEMETERY PERPETUAL CARE D 206,386 0 0 0 206,386 784 PAYROLL TRUST FUND D 10,940,191 0 0 0 10,940,191 TOTAL $ 18,571,782 • (17,430,272) (2,337,337) 5,355,907 32,983,484 SUMMARY General Fund A $ (17,430,272) Discretionary Funds(General Fund eligible)B (2,337,337) Board assigned/committed C 5,355,907 Restricted-Prop 218 Funds D 1,063,941 Restricted D 31.919.542 TOTAL 18,S71,782 F/ease note that the City's fimwal records have not been dosed for FY12,accordingly,there may be some adjustments to these amounts as we finalize reroncil/adons and adjustment to the accounhbg ledgers for FY 2011-12. 2