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AUDITOR-CONTROLLER’S GENERAL FUND MID-YEAR FINANCIAL UPDATE

AUDITOR-CONTROLLER’S GENERAL FUND MID-YEAR FINANCIAL UPDATE. SIX MONTHS ENDED DECEMBER 31, 2010 February 8, 2011. General Fund Mid-Year Financial Update . General Fund Revenues – Budget vs. Actual General Fund Expenditures – Budget vs. Actual Historical Trends Revenues and Expenditures

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AUDITOR-CONTROLLER’S GENERAL FUND MID-YEAR FINANCIAL UPDATE

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  1. AUDITOR-CONTROLLER’S GENERAL FUNDMID-YEARFINANCIAL UPDATE SIX MONTHS ENDED DECEMBER 31, 2010 February 8, 2011

  2. General Fund Mid-YearFinancial Update • General Fund Revenues – Budget vs. Actual • General Fund Expenditures – Budget vs. Actual • Historical Trends • Revenues and Expenditures • Population and Employees • GF Budget Adjusted for CPI and Population • Fund Balance

  3. General Fund Mid-YearFinancial Update • NOT reviewing revenue or expenditure projections for this year or next year. • County budget process is underway by CAO.

  4. General Fund Mid-YearFinancial Update Why focus on the General Fund? Adjusted Budget is the Adopted Budget plus mid-year changes adopted by the Board.

  5. Revenues

  6. General Fund Revenues- Taxes -

  7. General Fund Revenues- Total Revenues -

  8. General Fund Revenues- Total Revenues -

  9. General Fund Revenues- Total General PurposeRevenues -

  10. General Fund Revenues- Total General PurposeRevenues -

  11. Specific Revenues Property Tax Sales and Use Tax Interest Rates Intergovernmental Aid

  12. Property TaxesProperty Tax Pie Before RDA and ERAF

  13. Property TaxesProperty Tax Pie After RDA Before ERAF

  14. Property TaxesProperty Tax Pie After ERAF

  15. Assessed Value of Real Property20 Years Percent Growth -0.6% -3.0%

  16. Assessed Value of Real Property – The Impact of the Cal CPI – • Per Prop 13, assessed values on an individual property may increase by up to 2% annually, based on statewide Cal CPI. • Cal CPI factor for FY 2010-11 was –.237%, the first time it has been negative since Prop 13. • This contributed to the County’s overall drop in assessed value in FY 2010-11 of –0.61%. • The State Board of Equalization has announced the Cal CPI for FY 2011-12 will be +.753%. • Increase in CPI may be offset by other reductions.

  17. Property Tax Revenue Countywide Assessed Value $33,189,161,052 Property Taxes - 1% of AV 331,891,610 Special Levies, etc 66,645,900 Total Tax Roll $398,537,510 The County General Fund receives about 13% of the basic 1% property tax, or about $44 million, plus supplemental and other property taxes, for a total of about $49 million in property taxes.

  18. Property Tax Revenue Projection?FY 2011-12 • We won’t know final growth/decline % until July. • Assessor has advised that Countywide assessed value could remain flat for FY 2011-12. • Regional variations – Watsonville and San Lorenzo Valley are traditionally lower growth. • Reductions are occurring in the unsecured tax roll.

  19. Property Tax DelinquenciesFY 2004-05 through 2010-11 (projected)

  20. Sales and Use Tax Rates

  21. Breakdown of Sales and Use Tax Rates

  22. Sales and Use Tax Rates

  23. Sales Per Capita City of Capitola currently about $9,000 sales per capita each quarter. Dropped fast during recession. Cities of Watsonville, Santa Cruz, and Scotts Valley all currently about $2,700 in sales per capita each quarter. Unincorporated County about $1,300 sales per capita each quarter.

  24. Interest Rates on Treasury Pool

  25. Intergovernmental Aid

  26. Intergovernmental Aid • Tied to expenditures and paid on a reimbursement basis. • State and federal governments are historically slow in paying. • Most major categories of state and federal aid are lagging slightly behind last year receipts.

  27. Expenditures

  28. General Fund Adjusted Budget - By Expenditure Character –FY 2010-11

  29. General Fund Adjusted Budget - By Functional Area -FY 2010-11

  30. General Fund Expenditures - General Government -

  31. General Fund Expenditures - Public Protection -

  32. General Fund Expenditures - Other Departments -

  33. Net County Cost

  34. General Fund Net County Cost- General Government -

  35. General Fund Net County Cost- Public Protection -

  36. General Fund Net County Cost- Other Departments -

  37. Historical Trends

  38. 10 Year Historical TrendGeneral Fund Revenues - Taxes

  39. 10 Year Historical TrendGeneral Fund Revenues - Total

  40. 10 Year Historical TrendGeneral Fund Revenues - Total

  41. 10 Year Historical TrendGeneral Fund Expends by Department

  42. 10 Year Historical TrendGeneral Fund Expends by Category

  43. 10 Year Historical TrendGeneral Fund Expends by Category Expenditures Revenues

  44. General Fund Budget Adjusted for Consumer Price Index and Population

  45. County Population and Number of Employees

  46. Fund Balance

  47. Fund Balance Levels • As of June 30, 2010, fund balance was $14.5 million when we closed the books. • All of it was reserved or designated, leaving no unreserved/undesignated fund balance. • Unreserved / Undesignated Fund Balance is used to fund next year’s budget, or rebuild reserves or designations. • Fund Balance was initially projected to decline again to $12.1 million this coming June 30. It could be even lower than this.

  48. 10 Year Historical TrendGeneral Fund Total Fund Balance

  49. Fund Balance Levels • Fund balance is important to rating agencies when issuing bonds. Our small fund balance is a negative factor. • Moody’s notified us in November that they were concerned about our low fund balance, implying they might downgrade us.

  50. Fund Balance Levels • This prompted us to implement a “change in accounting practice” for $14.2 million of fund balance previously recorded as deferred revenue in a Health Trust. • The result of this change is that June 30 , 2010 General Fund fund balance increased from $14.5 million to $28.7 million. • The funds are designated strictly for potential risks related to health services.

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