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Home My WebLink About04- Announcements Entered Into Rec, of MCCICX Mtg: `1' y i2 Agenda Hem No: by:-I -kd;�, -- CRY Clerk/CLY, Secretary City of San Bernardino CITY OF SAN BERNARDINO CITY MANAGER'S OFFICE INTEROFFICE MEMORANDUM TO: Mayor and Common Council / FROM: Andrea M. Travis-Miller, Interim City Marm f SUBJECT: Cash Flow Position—Report on Selected Analysis DATE: September 4, 2012 COPIES: James F. Penman, City Attorney; Jason Simpson,Director of Finance Attached is a report prepared by Director of Finance Jason Simpson which details the City's Cash Flow as of July 31, 2012, and August 29, 2012. Exhibit A of the Report details the cash balances of the various funds as of July 31, 2012 (unaudited). If you have any questions,please do not hesitate to contact me. Attachment x �- t � W N CITY OF SAN BERNARDINO, CALIFORNIA TRANSMITTAL MEMORANDUM San Belnt ilal TO: Andrea Travis-Miller, Acting City Manager FROM: Jason Simpson, Director of Finance P DATE: September 4, 2012 SUBJECT: City of San Bernardino's Cash Flow Position — Report on Selected Analysis 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. On July 31, 2012, the day before the City declared bankruptcy, the City had approximately $6 million in Cash in the City Books. This amount is deceptive, however, because it is the net amount of the four categories above, 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. The following table which is labeled Exhibit A illustrates the complex and challenging part of managing the City's cash flow. 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 713112012 General Fund $ (18,946,180) Discretionary Funds (3,741,023) Board Assigned/Committed 1,616,815 Restricted 27,077,679 Net Cash-Citywide(including restricted)@ 713112012 $ 6,007,291 City's Obligations: Due Date Obligation 712511012 Pension Obligation Bonds-Bond Payment (3,338,739) 713112012 Trade payables (5,054,206) 713112012 Citywide payroll-Payperiod ending 7/31 (4,806,325) 713112012 CaIPERS/PARS-Payperiod ending 7/31 (1,066,504) 713112011 Citywide health insurance for the month of August (750,000) 713112012 City lawsuits-litigation (1,461,000) 713112012 Debt service-State Infrastructure Bank (1,300,971) Amounts due through August 1,2012 (17,777,745) Estimated Net Cash Deficit(Citywide)on 8/1/2012 including City Obligations $ (11,770,454) As can be shown from Exhibit A, the City's cash balance was a negative $18,946,180 and overall positive cash citywide of$6,007,315, in the General Fund and All Funds Combined,respectively. • This chart shows that the $6 million on hand is not enough to fund all the current obligations due and payable immediately totaling approximately $17,777,745. • Please note this chart does not factor nor does it project new revenues or new expenditures, and as we are aware expenditures out pace revenues through a current $45.8 million deficit. • In short, the City was unable to pay all its debts as they become due and, in fact, the City was short $11.7 million. • The City has chosen to defer the Pension Obligation Bond Payments of$3.3 million; defer funding Ca1PERS Pension retirement payments; and cutting back by only payment for goods and services that are directly required to keep the basic level city functions operating. 2 1 P a g e CITY OF SAN BERNARDINO,CALIFORNIA SELECTED ANALYSIS OF CITY CASH (unaudited) Net Cash-Citywide(including restricted)@ 713112011 $ 6,007,291 Cash Activity-August 1 to August 29,2012 Cash inflows $ 11,989,023 Cash outflow (10,197,828) Net increase in cash(8/1 to 8/26) 1,791,195 Cash Available to Pay All Obligations as of August 26,2012 7,798.486 Unpaid City's Obligations from 7/31/12: Due Date Obligation 712512012 Pension Obligation Bonds-Bond Payment (3,338,739) 713112012 CaIPERS/PARS-Payperiod ending 7/31 (1,066,504) 713112012 City lawsuits-litigation (1,461,000) (4,405,243) New City Obligations 8/1/12-8/26/12: Due Date Obligation 811511011 CaIPERS/PARS-Payperiod ending 8/15 (1,068,065) 813112012 Trade payables (6,737,807) 813111011 Cashouts to Separated Employees(unpaid) (787,865) 813112011 Sell Back Time(unpaid) (185,994) 813112012 Payroll-Payperiod ending August 31,2012 (3,900,000) 813112012 CaIPERS/PARS-Payperiod ending 8/31 (1,066,000) 813111012 Citywide health insurance for the month of September (750,000) (14,495,731) Projected Net Cash Deficit(Citywide)-August 31,2012 $ (11,102,488) •Please note that the City's financial records have not been closed for FY 12;accordingly, there may be some adjustments to these amounts as we finalize reconciliations and adjustment to the accounting ledgers far FY2011-12. 3 1 P a g e NARO�NO SP �9 p twf O z DI Exhibit A-Detailed Detail Cash By Fund As of July 31, 2012 CITY OF SAN BERNARDINO,CALIFORNIA Estimated Cash balance as of 7/31/12(unaudited) A B ( 0 GENERAL DISCRETIO ASSIGNED FUND 7/3112012 FUND NARY COMMITTED RESTRICTED A General Fund available B Other Discretionary Funds C AssignedlCommilted by Council D Legally Restricted(External or Charter( ® CATEGORY SPREAD 001 GENERAL FUND A $ (18,570,509) $ (18,570,509) $ $ - $ - 004 OLD FIRE B (490,561) 0 (490,561) 0 0 105 LIBRARY FUND D (46,299) 0 0 0 (46,299) 106 CEMETERY FUND D 35,519 0 0 0 35,519 108 ASSET FORFEITURE FUND C 1,042,617 0 0 1,042,617 0 111 AB2744 AIR QUALITY-ALT TRANS D (8,236) 0 0 0 (8,236) 116 EMERGENCY SOLUTIONS GRANT D 0 0 0 0 0 117 HOME IMPROVEMENT PART PROGRAM D (222,960) 0 0 0 (222,960) 118 GANG&DRUG ASSET FORFETURE C 115,680 0 0 115,680 0 119 CDBG D (375,671) (375,671) 0 0 0 120 NEIGHBORHOOD STABILIZATION PROGRAM D (491,576) 0 0 0 (491,576) 121 SBETA D 1,941,756 0 0 0 1,941,756 123 FEDERAL&STATE PROGRAM D (2,851,921) 0 0 0 (2,851,921) 124 ANIMAL CONTROL FUND D 37,511 0 0 37,511 0 126 GAS TAX FUND D 135,184 0 0 0 135,184 128 TRAFFIC SAFETY FUND B (905,426) 0 (905,426) 0 0 129 112 CENT SALES&ROAD D 4,081,673 0 0 0 4,081,673 132 SEWER LINE MAINTENANCE D 1,494,060 0 0 0 1,494,060 133 BASEBALL STADIUM C (40,751) 0 0 (40,751) 0 134 SOCCER FIELD C 359,767 0 0 359,767 0 135 AB 2928 TRAFFIC CONGESTION B (33,847) 0 (33,847) 0 0 137 CFD 1033-FIRE STATION D 333,300 0 0 0 333,300 208 VERDEMONT CAPITAL PROJECT D 248,608 0 0 0 248,608 211 FIRE EQUIP ACQUISITION C 97,471 0 0 97,471 0 240 CIEDB STREET CONSTRUCTION B (9,049) 0 (9,049) 0 0 241 PARK EXTENSION FUND C 4,519 0 0 4,519 0 242 STREET CONSTRUCTION FUND D (2,342,320) 0 0 0 (2,342,320) 243 PARK CONSTRUCTION FUND D 268,822 0 0 0 268,822 244 CEMETERY CONSTRUCTION D 52,519 0 0 0 52,519 245 SEWER LINE CONSTRUCTION D 2,593,059 0 0 0 2,593,059 246 PUBLIC IMPROVEMENT FUND D 1,079,021 0 0 0 1,079,021 247 CULTURAL DEVELOPMENT CONSTRUCTION B 446,483 0 446,483 0 0 248 STORM DRAIN CONSTRUCTION D 2,845,971 0 0 0 2,845,971 250 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 2,161,386 0 0 0 2,161,388 256 ASSESSMENT DISTRICT 1015 D 33,779 0 0 0 33,779 257 STREET LIGHTING/SWEEPING D 226 0 0 0 226 258 PROP 16-LOCAL STREET D 2,371,458 0 0 0 2,371,458 261 LAW ENFORCEMENT FACILITY D 185,702 0 0 0 185,702 262 FIRE SUPRESSION/MEDIC D 275,226 0 0 0 275,226 263 LOCAL REGIONAL CIRCULA D 523,529 0 0 0 523,529 264 REGIONAL CIRCULATION S D 6,098,297 0 0 0 6,098,297 265 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 1,461,193 0 0 0 1,461,193 269 QUIMBY ACT PARKLAND D 241,344 0 0 0 241,344 305 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 (633,477) 0 (633,477) 0 0 621 CENTRAL SERVICES FUND B (84,924) 0 (84,924) 0 0 629 LIABILITY INSURANCE FUND B 306,720 0 306,720 0 0 630 TELEPHONE SUPPORT FUND B 108,690 0 108,690 0 0 631 UTILITY FUND B 20,034 0 20,034 0 0 635 FLEET SERVICES FUND B (1,463,044) 0 (1,463,044) 0 0 677 UNEMPLOYMENTINSURANCE B (101,416) 0 (101,416) 0 0 678 WORKERS COMPENSATION FUND B (1,404,153) 0 (1,404,153) 0 0 679 INFORMATION TECHNOLOGY 8 513,697 0 513,697 0 0 1 GENERAL DISCRETIcl ASSIGNED FUND 7/31/2012 FUND NARY COMMITTED RESTRICTED A General Fund available 8 Other Discretionary Funds C AssignedlCommitled by Council D Legally Restricted(External or Charter) CATEGORY SPREAD 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 26,718 758 AD906 TRUST&AGENCY D 57,687 0 0 0 57,687 772 SPECIAL DEPOSITS FUND D 4,098,195 0 0 0 4,098,195 775 CEMETERY PERPETUAL CARE D 206,366 0 0 0 206,366 784 PAYROLL TRUST FUND D 1,166,641 0 0 0 1,166,641 TOTAL $ 6,007,291 ' (18,946,180) (3,741,023) 1,616,815 27,077,679 SUMMARY General Fund A $ (18,946,180) Discretionary Funds(General Fund eligible (3,741,023) Board assigned/committed C 1,616,815 Restricted-Prop 218 Funds D 1,154,299 Restricted D 2S.923.379 TOTAL $ 6,007,291 x G lease note that the 0"financial records have not been closed for FY12;accordingly,there maybe some adjustments to Mese amounts as we finalize reconciliations and adiustment to the accounting ledgers for FY1011-11. 2