HomeMy WebLinkAbout15- Finance CITY OF SAN BERNARDINO REQUEST FOR COUNCIL ACTION
From: BARBARA PACHON, Subject: Financial Report for Fiscal
DIRECTOR OF FINANCE Year 1994-95
Dept:
FINANCE 6
Date: 9G
MARCH 7, 1996
Synopsis of Previous Council action:
2/14/96 - The Ways and Means Committee recommended that the Financial Report
for Fiscal Year 94-95 be forwarded to the Mayor and Common Council
to be received and filed.
Recommended motion:
That the Financial Report for Fiscal Year 94-95 be received and filed.
Signature
Contact person: Barbara Pachon, Director of Finance Phone: ext. 5242
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
1
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
At the 2/14/96 Ways and Means Committee meeting, the Fiscal Year 1994-95
Financial Report was presented by the City's independent audit firm, Rogers,
Anderson, Malody & Scott. Copies of the Primary Government Financial
Statement have been distributed to the Mayor and Common Council. Additional
copies are located in the Finance Department.
Attached to this report is a copy of the transmittal letter, auditors report and
selected schedules. The selected schedules provide a survey overview of the
Primary Government. For a comprehensive financial overview of the Primary
Government, the entire statements should be consulted.
It is recommended that the Primary Government Financial Statement for the
Fiscal Year 1994-95 be received and filed.
Y
N R prMo
S� 9 C I T Y O F
O � O
Bernardino
G�DFD IN
F I N A N C E 0 E P A R T M E N T
B A R B A R A P A C H O N
D I R E C T O R O F F I N A N C E
January 29, 1996
Honorable Mayor, Members of the City
Council, and City Administrator:
Presented to you herewith, is the Primary Government Financial
Report of the City of San Bernardino for fiscal year ended June 30,
1995 . This document provides an overview of the City's financial
activities during the past fiscal year, and has been prepared by
management for the benefit of elected officials, citizens,
creditors, grantors, employees, and others who are interested in
the financial well-being of the City.
This Primary Government Financial Report provides the audited
financial statements for only the primary government entity of the
City of San Bernardino. This report does not include the financial
data for all the City of San Bernardino component units which are
the Economic Development Agency, Municipal Water Department, Joint
Powers Financing Authority, and the Municipal Water Department
portion of the Public Safety Authority. The financial data for the
component units of the City of San Bernardino can be found either
in the Component Unit Financial Reports or the Comprehensive Annual
Financial Report of the City of San Bernardino.
The Primary Government Financial Report is presented in two
sections: (1) introductory; (2) financial. The introductory '
section includes this transmittal letter, the City's organization
chart, and a list of principal officials. The financial section
includes the general purpose financial statements and the
supplemental combining and individual fund and account group
financial statements and schedules, as well as the auditor's report
on the financial statements and schedules.
Responsibility for the accuracy, completeness, and fairness of the
information presented in the report, including all disclosures,
rests with the City. Management believes that the data provided is
accurate in all material aspects, that it is presented in a manner
designed to fairly set forth the financial activity of its various
funds and account groups, and that all disclosures necessary to
enable the reader to gain the maximum understanding of the City's
financial activity have been included.
i
PRIDE
300 NORTH 0 STREET , SAN 8tRNAR01N0 . IN PROGRESS
C A L I F O R N I A 9 2 4 1 8 . 0 0 0 1 ( 8 0 9 ) 3 8 4 - S 2 4 2
Page
General Fund Analysis
The General Fund fund balance for fiscal year ended June 30, 1995,
totaled $3 , 521, 000, a decrease of $593 , 000 from the preceding
fiscal year. This is the third year in a row in which the General
Fund fund balance has decreased. The table presented below
demonstrates the changes in the General Fund fund balance over the
past five years:
Fund Balance - General Fund
Fund Balance Increase (Decrease) Fund Bal
Date Amount from Prior Year % Change
As of 6/30/91 $1, 760, 000 $ (1, 024 , 000) (36 . 8) 0
As of 6/30/92 8 , 232 , 000 6, 472 , 000 367. 7
As of 6/30/93 6, 116 , 000 (2 , 112 , 000) (25 . 6)
As of 6/30/94 4 , 114 , 000 (2 , 002 , 000) (32 . 7)
As of 6/30/95 3 , 521, 000 ( 593 , 000) (14 .4)
The $6, 472 , 000 increase in the General Fund fund balance on 6/30/92
was the result of a bond issue by the City and the Redevelopment
Agency to refinance City Hall. Since the FY 1991-92 City Hall
refinance, the General Fund fund balance has decreased each year.
On a positive note, the $593 , 000 fund balance decrease for fiscal
year 1994-95 is approximately one third of the decrease in the
prior two fiscal years. Through a comprehensive review and
monitoring program of the City's General Fund revenues and
expenditures during the year, it is anticipated that no further
decreases to the General Fund fund balance will occur.
The basic cause for the continued decrease in the General Fund fund
balance over the last three years is from an unbalance between
funds available and total deductions in prior years. In prior
fiscal years there was a decrease in funds available (revenues and
transfers into the General Fund) while deductions (expenditures and
transfers out of the General Fund) increased. The tables presented
below demonstrate the changes in the General Fund total available
funds and deductions over the pa!'t five years:
Page iii
Changes in Available Funds
General Fund
Total Amount Increase (Decrease) Avail Fds
Date Available from Prior Year % Chancre
As of 6/30/91 $68 , 738, 000 $ (1, 835 , 000) (2 . 6) 0
As of 6/30/92 75, 039 , 000 6, 301, 000 9 . 2
As of 6/30/93 72 , 789, 000 (2 , 250, 000) (3 . 0)
As of 6/30/94 71, 671, 000 (1, 118 , 000) (1. 5)
As of 6/30/95 72 , 898 , 000 1, 227 , 000 1. 7
Changes in Total Deductions
General Fund
Total
Total Amount Increase (Decrease) Deduction
Date Deductions from Prior Year % Chancre
As of 6/30/91 $69 , 762 , 000 $1, 179 , 000 1 . 70
As of 6/30/92 69 , 878, 000 116, 000 0 . 2
As of 6/30/93 74 , 905, 000 5, 027, 000 7 . 2
As of 6/30/94 73 , 673 , 000 (1, 232, 000) (1. 6)
As of 6/30/95 73 ,491, 000 ( 182, 000) (0. 2)
For the last two fiscal years the City has made positive progress
in assuring that the General Fund total deductions are in line with
funds available. For example in FY 1992-93 funds available
decreased 3% while total deductions increased 7 . 20. In the
following fiscal year, FY 1993-94, funds available decreased 1. 5%
and total deductions decreased a corresponding 1. 60. In FY 1994-
95, the City had a 1.7% increase in funds available for the General
Fund while total deductions decreased a slight . 2%. As long as the
City continues to hold or decrease deductions while funds available
increase, the General Fund fund balance will not experience any
further decreases.
Page iv
However, due to the decrease in the General Fund's fund balance
over the past three years, the General Fund cash position has also
decreased. At June 30, 1995, the General Fund had a cash overdraft
of $1, 193 , 000, an increase of $663 , 000 or 55 . 6% more than the
preceding fiscal year. The table presented below demonstrates the
changes in the General Fund cash balance over the past five years.
General Fund Cash Balance
Cash Balance Increase (Decrease)
Date Amount from Prior Year % Change
As of 6/30/91 416, 000 ( 815, 000) ( 66.2) %
As of 6/30/92 4, 534, 000 4, 118, 000 989 .9
As of 6/30/93 2, 570, 000 (1, 964, 000) ( 43 . 3)
As of 6/30/94 ( 530, 000) (3 , 100, 000) (120. 6)
As of 6/30/95 (1, 193 , 000) ( 663 , 000) (125. 1)
It is a concern that for the last two fiscal years the General Fund
cash ended in an overdraft position. What this signifies is that
the General Fund is spending funds faster than they are being
received and consequently the General Fund is borrowing cash from
other funds on a short term basis. Unrestricted funds such as the
Liability Fund and Trust Funds are used for this purpose. It must
be emphasized that the above comments are related to cash flow
only. On June 30, 1995, the City had approximately $5. 3 million in
outstanding receivables which when collected would increase the
General Fund cash position. It is recommended that the City's
cash position be continually monitored and improved in future
fiscal years.
SPECIAL REVENUE FUNDS
The Special Revenue Funds are in good standing with the exception
of the Cemetery and Professional Baseball Team Fund (Fiscalini
Field) . The Cemetery has a negative fund balance of $45, 000 and
Fiscalini Field has a negative fund balance of $85, 000.
L
It is expected the Cemetery fund balance will improve since the
fees were recently adjusted as part of the FY 1995-96 budget
process. The Fiscalini Field fund deficient will probably have to
be absorbed by the General Fund since it is no longer being used
for Professional Baseball.
Page V
CAPITAL PROJECTS FUNDS
The Capital Projects Funds are currently in good standing. The
Street Construction Fund and the Storm Drain Construction Fund must
be closely monitored as there are currently more projects
designated than current funds available. The Special Assessment
Fund continues to have a negative fund balance. Finance and Public
Works staff are working to reconcile this problem.
INTERNAL SERVICE FUNDS
The Workers Compensation Fund and the Liability Insurance Fund are
the two Internal Service Funds that are of continued concern. As
of June 30, 1995, the Workers Compensation Fund has a fund balance
deficit of $5, 795, 000, which is a $1, 109, 000 improvement over the
preceding year. The $1, 109, 000 improvement to the Workers
Compensation fund deficit is due to the Judgements and Claims
payable being reduced for the Workers Compensation Fund. The
auditors, along with City Staff, did an extensive review of the
Workers Compensation claims and determined some claims could be
reduced or eliminated.
The Liability Fund has a fund balance deficit of $861, 000 at June
30, 1995. This is an increase deficit of $437, 000 over the
preceding year. The major reason for this deficit increase is an
increase to the Judgement and Claims payable for the Liability
Fund. The Judgement and Claims payable for the Liability Fund are
based on the City Attorney's audit letter.
ACKNOWLEDGEMENTS
The preparation of this report could not have been accomplished
without the efficient and dedicated services of the City's Finance
Department. I would like to express my appreciation to all members
of the Department and to Rogers, Anderson, Melody, and Scott, our
independent auditors, who assisted and contributed to its
preparation.
I would also like to thank the Mayor, City Council and City
Administrator for their interest and support in planning and
conducting the financial operations of the City in a progressive
and professional manner.
L�
Respectfully submitted,
Barbara S. Pachon
Director of Finance
DONALDL ROGER S.C.P.A.
DENNIS H.MALO DV II C.P.q
JAY H ZERCHER.C.P.A.
ROBERT B MEMORY C P
THOMAS V HESS C P A
PHILLIP H WALLER C P A
ROGERS, ANDERSON, MALODY & SCOTT BRENDA L ODLE C P A
CERTIFIED PUBLIC ACCOUNTANTS
TERRY P SHEA.C P.A.
NANCY 0 RAFFERTY.C.P.A.
CYNTHIA L SAKS C PA
BRIAN W TOMPKINS.C.P.A.
LINDA M HERNANDEZ.C.P.A.
LEENA SHANBHAG,C.P.A.
LORI ANN KUNTZ.C.P.A.
KATHLEEN L DEVALK,C.P.A.
CHARLES E.PALODICHUK.C.P.A.
LAURIE K.MARSCHER.C.P.A.
KIRK A FRANKS,C.P_A.
The Honorable Thomas Minor, Mayor
City of San Bernardino, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying primary government financial statements of the City
of San Bernardino, California, as of and for the year ended June 30, 1995, as listed
in the table of contents. These financial statements are the responsibility of the
City' s management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
A primary government is a legal entity or body politic and includes all funds,
organizations, institutions , agencies, departments and offices that are not legally
separate. Such legally separate entities are referred to as component units. In our
opinion, the primary government financial statements present fairly, in all material
respects , the financial position of the primary government of the City of San
Bernardino, California, as of June 30, 1995, and the results of its operations and
the cash flows of its proprietary fund types for the year then ended in conformity
with generally accepted accounting principles.
However, the primary government financial statements, because they do not include the
financial data of component units of the City of San Bernardino, California, do not
purport to, and do not, present fairly the financial position of the City of San
Bernardino, California, as of June 30, 1995, and the results of its operations and
the cash flows of its proprietary fund types for the year then ended in conformity
with generally accepted accounting principles.
MEMBERS
4MERICAN INSTITUTE OF
-ERTIFIED PUBLIC ACCOUNTANTS
PRIVATE COMPANIES PRACTICE SECTION
OF THE DIVISION FOR CPA FIRMS
VANIR TOWER • 290 NORTH'O'STREET • SUITE 300
4_ICoRwA SOCIF TY OF q<'dn+
Our audit was made for the purpose of forming an opinion on the primary government
financial statements taken as a whole. The combining and account group financial
statements listed in the table of contents are presented for purposes of additional
analysis and are not a required part of the financial statements of the City of San
Bernardino, California. Such information has been subjected to the auditing
procedures applied in our audit of the primary government financial statements and,
in our opinion, based on our audit, is fairly presented, in all material respects,
in relation to the primary government financial statements taken as a whole.
December 14, 1995
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