Posted on 06/18/2010 5:28:20 PM PDT by gunsequalfreedom
By Larry Caballero
La Palma City Manager Dominic Lazzaretto said he was pleased to submit to the City Council the city's Proposed Fiscal Year 2010-11 Budget and the La Palma Community Development Commission at the Jun. 15 meeting. Revenues for 2010-2011 are estimated to be $9,923,900 and Expenditures are estimated to be $10,159,800.
Lazzaretto said the City will need the use of reserves to achieve a balanced budget by the end of the 2010-11 and 2011-12 Fiscal Years.
Specifically, the Proposed Budget expects a $235,900 draw from fund balance while the estimated 2011-12 budget projects an $8,200 draw from fund balance. The current General Fund Reserves are projected to be roughly $15.1 million at the end of Fiscal Year 2010-11.
The Reserves, as a percentage of annual expenditures, is 139%.
The revenue Budget had been prepared using the projected revenues from Fiscal Year 2009-10 as a base for the new fiscal year beginning July 1. The base had been adjusted for known one-time events and then projected to increase and/or decrease based on known trends.
“Those same trends and one-time adjustments have also been used to arrive at the estimated Fiscal Year 2011-12 revenues,” said Lazzaretto.
The personnel services portion of the expenditure Budget had been prepared by projecting wages and salaries by position, taking into consideration expected contract and merit increases.
It should be noted that the available sum may be needed to offset any funding sources that are reduced by the State of California as it wrestles with its overwhelming deficit in the coming months,” Lazzaretto advised the Council.
When looking at the overall changes between Fiscal Years 2009-10 and 2010-11, the most significant change is a drop in revenue of over $1.4 million. This is due largely to the recent slowdown in the economy and the unpredictability of the City’s sales tax base.
Projected revenues are expected to be down significantly and overall expenditures were budgeted to increases slightly as a result of honoring previously negotiated labor agreements.
The City of La Palma’s overall revenue base continues to rely mostly on sales tax generated by the business community, property tax, and the Utility Users Tax (UUT), totaling 74%. Sales tax represents 34% of General Fund revenues, followed by property tax at 30%, and the UUT at 10%.
The revenue estimates for Fiscal Year 2010-11 anticipate only moderate growth due to the recent slowdown in the economy.
Public safety continues to be La Palma’s highest priority.
The Council has established a goal to have a General Fund reserve of at least 100% of operating expenditures. “The proposed Budget meets this goal,” said Lazzaretto.
“The large fund balance did not happen by accident,” said Lazzaretto, “but by prudent financial management, the use of long-term financial planning policies.
Question: how is the city of La Palma doing based on a read of the above?
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