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AUDITOR-CONTROLLER’S GENERAL FUND MID-YEAR FINANCIAL UPDATE. SIX MONTHS ENDED DECEMBER 31, 2011 February 28, 2012. 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

AUDITOR-CONTROLLER’S GENERAL FUNDMID-YEARFINANCIAL UPDATE

SIX MONTHS ENDED

DECEMBER 31, 2011

February 28, 2012

general fund mid year financial update
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
  • RDA Dissolution
general fund mid year financial update1
General Fund Mid-YearFinancial Update
  • NOT reviewing revenue or expenditure projections for this year or next year.
  • County budget process is underway by CAO.

NOTE:

  • Usually using adjusted budget rather than original budget.
  • Using actual revenues and expenditures in the historical trend data, except for the current year when I am using the adjusted budget.
general fund mid year financial update2
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.

slide11
Specific

Revenues

Property Tax

Sales and Use Tax

Interest Rates

Intergovernmental Aid

assessed value of real property the impact of the cal cpi
Assessed Value of Real Property – The Impact of the Cal CPI –
  • Prop 13 says assessed values on an individual property may increase by up to 2% annually, based on statewide Cal CPI.
  • Property transfers and assessment valuations also impact assessed values, both positively and negatively.
assessed value of real property the impact of the cal cpi1
Assessed Value of Real Property – The Impact of the Cal CPI –

(Continued)

2010-11 (last year)

  • 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%.

2011-12 (this year)

  • Cal CPI factor for FY 2011-12 is +.753%.
  • This was offset by assessed valuation reductions to bring us down to -0.28% decline.
assessed value of real property the impact of the cal cpi2
Assessed Value of Real Property – The Impact of the Cal CPI –

(Continued)

2011-12 (next year)

  • The State Board of Equalization has announced the Cal CPI for FY 2012-13 will be +2.0%.
  • Hopefully, we will be at least flat next year or maybe a slight increase in assessed valuations, and property tax revenue.
property tax revenue
Property Tax Revenue

Countywide Assessed Value $33,097,010,103

Property Taxes - 1% of AV 330,970,101

Special Levies, etc 70,028,328

Total Tax Roll $400,998,429

The County General Fund receives about 13% of the basic 1% property tax, about $44 million,

plus supplemental and other property taxes and penalties, for a total of about $50 million in property taxes.

property tax revenue projection fy 2012 13
Property Tax Revenue Projection?FY 2012-13
  • We won’t know final growth/decline % until July.
  • Regional variations – Watsonville and San Lorenzo Valley are traditionally lower growth.
slide25

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.

intergovernmental aid1
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.
fund balance levels
Fund Balance Levels
  • As of June 30, 2011, fund balance was $37.1 million.
    • $14.2 million of that is specifically dedicated for Health Services
    • $13.9 million reserved or designated for other needs.
    • The remaining $9 million was almost entirely used to fund the current year budget.
    • June 30, 2012 fund balance is projected to be $29 million, or 7% of expenditures.
fund balance levels1
Fund Balance Levels
  • Last June, your Board adopted a Fund Balance policy in compliance with GASB 54.
  • Included a policy of 7% minimum fund balance.
fund balance levels2
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 2010 that they were concerned about our low fund balance, implying they might downgrade us.
fund balance levels3
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 by that amount.
  • The funds are strictly designated for potential risks related to Health Services.
summary
Summary
  • General Fund revenues at 35.4% of budget.
  • General Fund expenditures at 44.9% of budget.
  • Similar to last year at the half way mark.
  • Property taxes may remain flat next fiscal year.
  • Property tax delinquencies hopefully will stabilize.
  • Interest rates low but stable.
  • Fund balance low but stable.
  • Realignment, the State budget and RDA dissolution will have an impact on the County, but too early to know.