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Reduce Available Funding for Street Overlay/Rehab (987,962) Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (287,962) MEASURE B (ACTC) FUND Expenditure Budget Adjustments: Additional funding for Bicycle & Pedestrian Improvements $ (40,000) Fund Bancroft Avenue/136th Avenue Traffic Signal project (55,000) Annual Overlay -Use of Measure B Funds (57,761) Wicks Blvd Walkway -Additional Funds (12,537) Annual Overlay/Street Sealing Project 2007-08 -Project Closed 961 Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (164,337) RECOMMENDED YEAR-END BUDGET ADJUSTMENTS -DETAIL 2011-12 Attachment 2 RECOMMENDED YEAR-END BUDGET ADJUSTMENTS -DETAIL 2011-12 ASSET SEIZURE FUND Expenditure Budget Adjustments: Police Asset Seizure Funds for purchase of Police Radios EBRCSA $ (50,000) Computer Equipment (27,210) Police Supplies (3,795) Transfer funds to Equipment Maintenance Fund for Police Vehicle purchase (24,861) Vehicle Equipment/Installation (34,037) SWAT Audit (5,260) Construct Patrol Car Security Fence (9,604) Purchase Police SUV (28,867) Gun Range Repair (13,892) Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (197,526) SPECIAL GRANTS FUND Revenue Budget Adjustments: Department of Transportation -Downtown Streetscape $ 4,298,437 National Endowment of the Arts Grant 13,600 PGE Reimbursement for Energy Efficient Block Grant 20,925 Total Increase in Revenues $ 4,332,962 Expenditure Budget Adjustments: Police Grant Funds for purchase of Police Radios EBRCSA $ (178,200) Downtown Streetscape Construction Project (4,298,437) Police Equipment/Supply Purchases (9,182) Police Vehicle Emergency Equipment (5,292) Arts Grant -Library Big Read Program (13,600) Increase funding for Energy Efficient Block Grant Project -PGE Reimbursements (20,925) Energy Efficient Block Grant Project -Adjust Budget to match balance 147,187 Park Pathways -Project Completed 9,232 Toyon Park Play Equipment -Project Completed 281,208 BART Access & San Leandro Blvd Study -Project Completed 25,095 Bancroft Avenue Street Rehabilitation -Project Completed 5,104 E14th St. Medians -Project Completed 763 Springlake Drive Street Rehabilitation -Project Completed 4,672 Total Increase in Expenditures $ (4,052,375) Total Change in Projected Ending Fund Balance $ 280,587 COMMUNITY DEVELOPMENT BLOCK GRANT FUND (CDBG) Expenditure Budget Adjustments: Surf Apartments Acquisition & Rehabilitation Project $ (35,000) Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (35,000) HOME FUND Expenditure Budget Adjustments: Surf Apartments Acquisition & Rehabilitation Project $ (65,000) Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (65,000) Attachment 2 RECOMMENDED YEAR-END BUDGET ADJUSTMENTS -DETAIL 2011-12 CAPITAL IMPROVEMENT PROJECT FUND Revenue Budget Adjustments: Funding from General Fund for the Sound wall Repair Project $ 50,000 Port of Oakland Reimbursement for Airport Noise Abatement 3,428,934 Total Increase in Revenues $ 3,478,934 Expenditure Budget Adjustments: Sound wall Repair Project $ (50,000) Underground Utility Fees -Posted to incorrect fund (29,960) Sr. Center Design Schematics -Project Completed 7,525 HVAC and Roof Repair Projects Completed 991,727 Airport Noise Abatement -Phase II (3,428,934) Transfer Project Savings to General Fund (991,727) Total Increase in Expenditures $ (3,501,369) Total Change in Projected Ending Fund Balance $ (22,435) WATER POLLUTION CONTROL PLANT ENTERPRISE FUND Expenditure Budget Adjustments: 2660 Eden Road Grading & Remediation -Project Completed $ 894,534 Blue Dolphin Lift Station -Project Completed 273,737 TOD Infrastructure Study -Project Completed 3,960 Underground Utility Fees -Posted to incorrect fund (50,562) San Leandro Blvd/Davis St. Sewer Capacity -Project Completed 88,382 2550 Davis St. Demolition -Project Completed 35,717 WPCP Acquisition -Project Completed 10,556 Waste Activated Sludge Thickening -Project Completed 7,694 2009 Sanitary Sewer Replacement -Project Completed 286,339 Total Decrease in Expenditures and Total Change in Projected Ending Fund Balance $ 1,550,357 INFORMATION TECHNOLOGY INTERNAL SERVICE FUND Expenditure Budget Adjustments: Purchase Police Radios EBRCSA $ (120,550) Total Increase in Expenditures and Total Change in Projected Ending Fund Balance $ (120,550) EQUIPMENT MAINTENANCE FUND Revenue Budget Adjustments: Asset Seizure Funds to purchase patrol vehicle $ 24,861 Total Increase in Revenues $ 24,861 Expenditure Budget Adjustments: Purchase patrol vehicle from Asset Seizure Funds $ (24,861) Total Increase in Expenditures $ (24,861) Total Change in Projected Ending Fund Balance $ -TOTAL NET BUDGET ADJUSTMENTS FOR ALL FUNDS $ 1,766,256 CITY OF SAN LEANDRO MEMORANDUM DATE: September 7, 2012 TO: Finance Committee FROM: Chris Zapata, City Manager BY: David Baum, Finance Director SUBJECT: Year-End Financial Report (Unaudited) as of June 30, 2012 for the 2011-12 General Fund, Special Revenue Funds, Enterprise Funds, and Internal Service Funds Budget SUMMARY AND RECOMMENDATION Staff recommends that the Finance Committee review and approve the unaudited Year-End Financial Report as of June 30, 2012 for the 2011-12 General Fund, Special Revenue Funds, Enterprise Funds, and Internal Service Funds Budget. BACKGROUND The City Council-approved 2011-12 General Fund, Special Revenue Funds, Enterprise Funds, and Internal Service Funds Budget in the annual plan and resource allocation that guides and ensures implementation of City Council policies and priorities. The budget implements the vision and direction for the broad range of services that meet the needs of the community in accordance with City Council policy. This financial review as of June 30, 2012 provides the year-end budget update to the City Council for the new fiscal year. Analysis of the revenues collected and all expenditures through June 30, 2012 measures the budget’s adherence to the established resource allocation plan. DISCUSSION The adopted budget incorporates the estimated revenues and planned expenditures for all funds. The attached unaudited Year-End Financial Report as of June 30, 2012 provides the revenue and expenditure summary for the General Fund, Enterprise Funds, and Internal Service Funds. The following discussion focuses on variances from the revenue and expenditure plans and allocations contemplated in the budgets. General Fund The General Fund finances the operations of the City that have no special or dedicated revenue sources and pays for basic municipal services. The Adopted General Fund 2011-12 Budget expenditures total $71,760,000 which matches the estimated revenues of $71,760,000. Year-End Financial Report as of June 30, 2012 September 7, 2012 2 Total unaudited year-end revenue in 2011-12 amounts to $101,420,000, 141% of the adopted budget. The 2011-12 unaudited expenditures at year-end amount to $96,626,000, 135% of the budget. The budget was approved with the operating revenues and expenditures in balance, without the use of reserves or one-time revenues, for the first time since 2007-08. Receipts from a number of revenue sources, including property tax, sales tax, interest earnings, and planning and building permit fees, historically correlate with changes in regional and state economic conditions. General Fund Revenue Overall General Fund unaudited revenues increased by 41% over the adopted budget primarily due to the sale of the Pension Obligation Bonds and the loan from the Water Pollution Control Plant totaling $24,305,000 to refinance the Public Safety Side Fund. Other major revenue categories are depicted below: Property Tax (101% of budget)—The current year’s budget for property tax revenue is $100,000 greater than budgeted in 2010-11. Payments of property tax from the secured, unsecured roll and property reassessments by Alameda County total $15,595,000. Sales Tax (106% of budget)— Total Sales tax received was $24,388,000 which includes $3,732,000 from the approval of Measure Z. Sales tax revenue reflects a total increase of $1,278,000 over the adopted budget. A combination of previous additions and strong demand boosted receipts from vehicle sales and contractor supplies. Higher fuel prices and a solid year for most categories were also a factor. Utility Users Tax (UUT) (102% of budget)—UUT revenues are comprised of taxes on energy, cable and telecom usage. Total receipts depict a moderate 2% increase over the adopted budget. Property Transfer Tax (122% of budget)—Property Transfer Tax revenue includes $630,400 as a result of the sale of the Lakeside Village apartment complex to a new investment firm in November 2011. This revenue represents a one-time payment. Charges for Services (125% of budget)—Charges for services reflects payments from Kaiser Hospital for fire review and inspection fees. Also, reimbursements for Police service fees by the Nike store for 2010-11 are received in 2011-12. Licenses & Permits (126% of budget)—License & Permits revenues reflect Kaiser Hospital permit fees of $500,000. Additional high value building permits were issued for the Water Pollution Control Plant project and for work at the transfer station by Waste Management. Other Revenue (328% of budget)—Revenue from other sources reflects a one-time $450,000 payment for the Administrative costs associated with the dissolution of the Redevelopment Agency. Year-End Financial Report as of June 30, 2012 September 7, 2012 3 General Fund Expenditures Overall General Fund unaudited expenditures increased by 35% over the adopted budget as discussed below: General Fund unaudited expenditures increased by $24,866,000 primarily due to the payment made to the Public Employees Retirement System for the refinancing of the Public Safety Side-Fund. The payment made totaled $23,972,000 and is supported by the issuance of Pension Obligation Bonds and a $6,000,000 loan from the Water Pollution Control Plant to the General Fund. Other expenditure increases include the transfer of Business Development and Housing activities to the General Fund due to the dissolution of the Redevelopment Agency and the transfer of funds for Public Education & Government into a Special Revenue Fund to better track the receipts and uses of the funds. Enterprise & Internal Service Fund Expenditures Four Enterprise Funds make up the City’s business type operations. The Water Pollution Control Plant Fund, Environmental Services Fund, Shoreline Enterprise Fund, and the Storm Water Fund are City municipal operations designed to fully recover costs through user fees. Internal Service Funds also operate as business activities, exclusively supporting the City’s internal operations. Facilities Maintenance, Information Technology, Insurance Services, and Equipment Maintenance make up these funds. Variances in the funds as depicted in Attachment 2 are discussed below: Water Pollution Control Plant (130% of budget)—Unaudited expenditures at year-end are higher due to the Waste Water Treatment Plant expansion project. Storm Water Fund (95% of budget)—Unaudited expenditures at year-end are higher due to an increase of $51,000 in transfers to support Storm Water activities in the Environmental Services Fund and an overall increase in abatement services. Insurance Services (85% of budget)—Unaudited expenditures at year-end do not reflect the adjustment for the General Liability and Workers’ Compensation. The adjustment will be made after completion of the actuarial report in October. Special Revenue Funds Revenues and expenses for the City’s operating Special Revenue Funds for the Parking Fund, Gas Tax Fund, Heron Bay Maintenance Fund, Housing Services Funds, Business Improvement District Fund, and Public Education & Government Access Fund are provided in Attachment 2. CONCLUSION Staff recommends that the Finance Committee accept and approve the unaudited Year-End Financial Report as of June 30, 2012 for the 2011-12 General Fund, Special Revenue Funds, Enterprise Funds, and Internal Service Funds Budget for forwarding to the full City Council for review and approval City of San Leandro General Fund Attachment 1 2011-12 (Unaudited) Actual Variance Actual Actual YTD Adopted Positive 2009-10 2010-11 6/30/2012 2011-12 (Negative) Revenues: Property Tax $ 16,118 $ 15,615 $ 15,595 $ 15,400 $ 195 Sales Tax 17,826 21,185 2 0,656 1 9,310 1 ,346 Transaction & Use Tax -869 3,732 3,800 (68) Real Property Transfer Tax 2 ,297 2,529 2,982 2,444 538 Utility Users Tax 9 ,753 9,933 1 0,021 9,848 173 Franchise Fees 4 ,005 4,125 4,357 3,983 374 Business License Tax 4 ,149 4,361 4,557 4,225 332 911 Tax 2 ,712 2,694 2,685 2,700 (15) Other Taxes 366 520 389 277 112 Licenses & Permits 1 ,416 1,818 1,969 1,560 409 Fines/Fees/Forfeitures 1 ,149 1,377 1,111 1,190 (79) Revenue from Money/Property 1 ,231 1,069 964 1,025 (61) Intergovernmental 1 ,445 1,216 990 1,064 (74) Charges for current services 2 ,624 2,591 2,972 2,374 598 Interdepartmental Charges 2 ,273 2,295 2,275 2,295 (20) Other Revenue 3 ,354 351 868 265 603 Total Revenue 70,718 72,548 7 6,123 7 1,760 4 ,363 Expenditures: Salaries $ 25,088 $ 22,450 $ 23,605 $ 22,436 $ (1,169) Benefits 13,058 12,453 1 2,730 1 3,809 1 ,079 Public Safety Side-Fund --2 3,972 -(23,972) Sub-Total Salaries & Benefits $ 38,146 $ 34,903 $ 60,307 $ 36,245 $ (24,062) Consulting Services 767 853 841 729 ( 112) Other Services 4 ,406 4,401 4,455 4,152 ( 303) Fire Contract Services 17,494 17,141 1 7,563 1 7,821 258 Supplies 1 ,208 1,226 1,238 1,261 23 Capital Outlay 543 229 114 78 (36) Debt Service 2 ,977 2,981 3,249 2,981 ( 268) Internal Service Fund Charges 8 ,360 7,757 8,485 8,310 ( 175) Other 404 186 75 115 40 Total Expenditures $ 74,305 $ 69,677 $ 96,327 $ 71,692 $ (24,635) Net Operating Revenue/(Expenditure ) (3,587) 2,871 (20,204) 68 (20,272) Other Financing Sources (Uses): Transfers In from Self Insurance Fund 1 ,393 500 ---Transfers (Out)-Self Insurance Fund (550) (1,500) ---Transfers (Out) Gas Tax (1,000) (300) ---Transfers (Out) -Refuse Contract (68) (68) (68) (68) -Transfer In/(Out)-CIP 64 100 942 -942 Transfer (Out) -Street Improvements -(1,600) ---Transfer (Out) -Other Funds -(726) (181) -( 181) Debt Proceeds 462 -2 4,305 -24,305 Total Other Financing Sources (Uses) 301 (3,594) 2 4,998 (68) 25,066 Net Revenues/(Expenditures) $ (3,286) $ (723) $ 4 ,794 $ -$ 4,794 Beginning Designated Fund Balance 15,670 13,494 1 5,302 1 5,302 -Resources/(Requirements) 1 ,110 2,531 231 351 120 Ending Designated Fund Balance $ 13,494 $ 15,302 $ 20,327 $ 15,653 $ 4,914 (In Thousands) 8/31/2012 City of San Leandro Year-End Financial Report As of June 30, 2012 (Unaudited) GENERAL FUND Adopted Budget Unaudited Actual 6/30/2012 % of Budget Adjusted Budget Adopted Budget Actual 06/30/2011 YTD % of Budget Yr to Yr Change ($) Yr to Yr Change (%) GENERAL GOVERNMENT Property Tax 15,400 15,595 101% 15,780 15,300 15,616 102% (21) 0% Sales Tax 23,110 24,388 106% 23,110 17,850 22,051 124% 2,337 11% Utility Users Tax 9,848 10,021 102% 9,848 9,635 9,891 103% 130 1% Franchise Fees 3,983 4,357 109% 3,983 3,940 4,160 106% 197 5% Property Transfer Tax 2,444 2,982 122% 2,444 2,444 2,529 103% 453 18% Emergency Communication Access Fee (911) 2,700 2,685 99% 2,700 2,500 2,694 108% (9) 0% Business License Tax 4,225 4,557 108% 4,225 3,965 4,361 110% 196 4% Other Tax 277 389 140% 277 259 529 204% (140) -26% Sub Total Taxes 61,987 64,974 105% 62,367 55,893 61,831 111% 3,143 5% Charges for Services 2,381 2,972 125% 2,687 2,252 2,587 115% 385 15% Interest & Property Income 1,018 964 95% 1,018 1,219 1,073 88% (109) -10% Fines, Fees & Forfeitures 1,190 1,111 93% 1,190 1,300 1,377 106% (266) -19% Intergovernmental 1,064 990 93% 1,499 1,146 1,216 106% (226) -19% Licenses & Permits 1,560 1,969 126% 1,560 1,610 1,818 113% 151 8% Interdepartmental 2,295 2,275 99% 2,295 2,295 2,295 100% (20) -1% Other/Transfers 265 26,165 9874% 19,582 816 951 117% 25,214 2651% Sub Total Other 9,773 36,446 373% 29,831 10,638 11,317 106% 25,129 222% Total Revenues 71,760 101,420 141% 92,198 66,531 73,148 110% 28,272 39% Expenditures General Administration 3,342 3,553 106% 3,495 3,314 3,464 105% 89 3% Council, Clerk, City Attorney, City Manager and Human Resources Finance 2,184 2,215 101% 2,199 1,956 2,244 115% (29) -1% Police 26,085 25,765 99% 26,529 25,304 25,540 101% 225 1% Public Safety Side-Fund 0 23,972 N/A 23,972 0 0 N/A 23,972 N/A Fire 18,194 18,006 99% 18,238 17,880 17,741 99% 265 1% Recreation & Human Services 3,797 3,580 94% 3,801 3,435 3,391 99% 189 6% Engineering & Transportation 2,277 2,240 98% 2,277 2,171 2,100 97% 140 7% Library 4,464 4,528 101% 4,582 4,358 4,428 102% 100 2% Public Works 4,081 3,979 98% 4,109 3,937 3,767 96% 212 6% Community Development 2,812 3,387 120% 3,568 2,647 2,663 101% 724 27% Non-Departmental 1,475 2,121 144% 1,755 1,628 1,357 83% 764 56% Debt Service 2,981 2,981 100% 2,981 2,980 2,982 100% (1) 0% Transfers 68 299 440% 299 368 4,194 1140% (3,895) -93% Total Expenditures 71,760 96,626 135% 97,805 69,978 73,871 106% 22,755 31% June 30, 2012 Revenues Attachment 2 2011-12 v 2010-11 June 30, 2011 2011-12 2010-11 G:\Finance Committee\2012-13\9-7-12\FinancialByDeptJune2012 Page 1 of 3 City of San Leandro Year-End Financial Report As of June 30, 2012 ENTERPRISES & INTERNAL (Unaudited) SERVICE FUNDS Adopted Budget Unaudited Actual 6/30/2012 % of Budget Adjusted Budget Adopted Budget Actual 06/30/2011 % of Budget Yr to Yr Change ($) Yr to Yr Change (%) Water Pollution Control Plant Revenue 11,921 10,437 88% 11,921 10,794 10,634 99% (197) -2% Expenditure 7,535 9,801 130% 61,276 8,071 5,919 73% 3,882 66% Environmental Services Revenue 1,192 1,207 101% 1,192 1,124 1,307 116% (100) -8% Expenditures 1,397 1,223 88% 1,378 1,503 1,333 89% (110) -8% Shoreline Enterprise Revenue 2,114 2,293 108% 2,114 2,096 2,204 105% 89 4% Expenditure 2,231 2,100 94% 2,251 2,302 2,306 100% (206) -9% Storm Water Revenue 1,101 1,075 98% 1,101 1,070 1,099 103% (24) -2% Expenditure 1,113 1,053 95% 1,113 1,070 927 87% 126 14% Facilities Maintenance Revenue 2,731 2,730 100% 2,731 2,695 2,743 102% (13) 0% Expenditure 2,730 2,655 97% 3,127 2,685 2,589 96% 66 3% Information Technology Revenue 3,461 3,449 100% 3,461 3,592 3,617 101% (168) -5% Expenditure 3,564 3,879 109% 3,750 3,589 3,769 105% 110 3% Insurance Services Revenue 2,752 2,930 106% 2,752 2,316 3,884 168% (954) -25% Expenditure 2,752 2,345 85% 2,752 3,316 5,839 176% (3,494) -60% Equipment Maintenance Revenue 1,494 1,569 105% 1,573 1,435 1,518 106% 51 3% Expenditure 1,600 2,103 131% 1,789 1,601 1,952 122% 151 8% 2011-12 2010-11 2011-12 v 2010-11 June 30, 2012 June 30, 2011 G:\Finance Committee\2012-13\9-7-12\FinancialByDeptJune 2012 Page 2 of 3 City of San Leandro Year-End Financial Report As of June 30, 2012 SPECIAL REVENUE FUNDS (Unaudited) OPERATING Budget Unaudited Actual 6/30/2012 % of Budget Adjusted Budget Budget Actual 06/30/2011 % of Budget Yr to Yr Change ($) Yr to Yr Change (%) Parking Revenue 195 201 103% 195 149 224 150% (23) -10% Expenditure 239 216 90% 239 241 221 92% (5) -2% Gas Tax -Street Maintenance Revenue 1,318 1,771 134% 1,318 1,602 1,688 105% 83 5% Expenditures 1,785 1,778 100% 2,081 1,860 1,513 81% 265 18% Heron Bay Maintenance Revenue 323 383 119% 323 323 367 114% 16 4% Expenditure 474 321 68% 587 322 242 75% 79 33% Housing Services Revenue 1,120 727 65% 1,120 1,060 1,113 105% (386) -35% Expenditure 1,117 539 48% 1,648 1,060 856 81% (317) -37% Business Improvement District Revenue 341 374 110% 341 353 270 76% 104 39% Expenditure 365 280 77% 365 365 321 88% (41) -13% Public Education & Government Access Revenue 150 341 227% 331 0 40 N/A 301 N/A Expenditure 150 46 31% 150 0 0 N/A 46 N/A 2011-12 2011-12 v 2010-11 June 30, 2012 2010-11 June 30, 2011 G:\Finance Committee\2012-13\9-7-12\FinancialByDeptJune2012 Page 3 of 3 CITY OF SAN LEANDRO MEMORANDUM DATE: September 7, 2012 TO: Finance Committee FROM: Chris Zapata, City Manager BY: David Baum, Finance Director Mary Ann Perini, Budget and Compliance Manager SUBJECT: Two-Year Budget Calendar for Fiscal Years 2013-14 and 2014-15 RECOMMENDATION Staff recommends that the Finance Committee review and accept the biennial budget calendar for fiscal years 2013-14 and 2014-15. OVERVIEW On January 14, 2011 a biennial budget process was discussed with the Finance Committee, and staff considered starting this process for fiscal years 2012-13 and 2013-14. Subsequently, the Director of Finance position was vacated and the Finance Committee agreed that the biennial budget process be delayed until a permanent Director was hired. Consequently, staff now proposes a biennial budget process for fiscal years 2013-14 and 2014-15. A key advantage of a biennial budget is it is a good planning tool for City Council, especially when a City is not experiencing economic hardship and budget reductions when a multiyear budget becomes difficult with numerous modifications. Below is a proposed biennial budget calendar for the Finance Committee’s review which contains key tasks and dates, such as Council work sessions, public hearings and adoption of the biennial budget. Staff included an estimated time for City Council’s “Winter Planning Session” subject to Council’s availability in January/February 2013 for a Saturday event. Finance Committee September 7, 2012 Page 2 of 2 CONCLUSION Staff recommends that the Finance Committee review and accept the biennial budget calendar for fiscal years 2013-14 and 2014-15. Date Responsibility Task Description 9/7/12 Finance Committee Proposed biennial budget calendar 10/1/12 City Council Finance Committee report on proposed biennial budget calendar 10/24/12 CIP/E&T Capital planning meeting 11/29/12 All Budget Kick-Off Meeting 12/21/12 All Department Request Budgets/Eden Updated DUE to Finance (all funds, expenditures and revenues) TBD City Council Winter Planning Session (Budget update, assumptions and State budget update) 3/4/13 City Manager Budget Narrative Guidelines distributed to Departments 3/11/13 City Council WORK SESSION -1st budget session -General Fund update and projections, CIP 4/5/13 Finance Committee Master fee schedule and 911, EMT and Business License Taxes 4/8/13 City Council WORK SESSION -2nd budget session -general fund follow-up and all other funds 4/26/13 Finance Complete initial draft of biennial budget 2013-14 and 2014-15 5/6/13 City Council Public Hearing Master Fee Schedule and 911, EMT and Business License Taxes 5/10/13 Finance Proposed biennial budget binders delivered to City Council and City Manager 5/20/13 City Council Proposed 2013-14 and 2014-15 Biennial Budget presentation 5/24/13 Finance Place proposed biennial budget on the City's website 5/27/13 Finance Statutory deadline to deliver City Manager's Proposed Budget to City Council (35 days prior to June 30) 5/30/13 All All Employee Briefing -Proposed Biennial Budget 6/3/13 City Council Meeting -Public Hearing 2013-14 & 2014-15 Proposed Biennial Budget and Appropriation Limit 6/17/13 City Council Meeting -Biennial Budget Adoption (alternate date if needed) 7/19/13 Finance Provide Budget in Brief copies to City Council and post to City's website 8/1/13 Finance Place adopted biennial budget on City's website 8/26/13 Finance Submit Operating and Capital Biennial Budgets to GFOA for award consideration (deadline 8/31/13) 1/15-5/15/14 All Update biennial budget for fiscal year 2014-15 Biennial Budget Calendar 2013-14 and 2014-15 CITY OF SAN LEANDRO CITY OF SAN LEANDRO MEMORANDUM DATE: August 7, 2012 TO: Finance Committee FROM: Chris Zapata, City Manager BY: David Baum, Finance Director Mary Ann Perini, Budget and Compliance Manager SUBJECT: Investment Report, Quarter Ended June 30, 2012 RECOMMENDATION Staff recommends that the Finance Committee review and accept the attached investment report for the quarter ended June 30, 2012. OVERVIEW At June 30, 2012, the City’s investment portfolio had a market value of $89 million. Of the total $89 million, $60.6 million was placed with the Local Agency Investment Fund (LAIF) and bank accounts and $28.4 million was placed in the Chandler Asset Management portfolio. On January 31, 2012 the Redevelopment Agency LAIF accounts were closed as a result of the dissolution of the San Leandro Redevelopment Agency. These funds were transferred to the City’s Economic Development Agency LAIF account in the amount of $9.3 million. Subsequently, the Economic Development Agency LAIF account has been transferred to a new Successor Agency LAIF account established during the quarter ended June 30, 2012. The balance in this new account is $6.4 million and has been decreasing since January due to debt repayments. The rate of return for LAIF for the quarter was 0.36%, while the average book yield for the Chandler managed funds was 1.03%. The City’s investment policy establishes three bases for the performance standard: the LAIF rate of return and the rate of return on 2-year and 5-year U.S. Treasury securities. Amounts invested in LAIF meet this performance standard. The Chandler managed funds average book yield was 1.03%, which exceeded both the benchmark rate of return on the 2-year U.S. Treasury securities of 0.21% and the 5-year U.S. Treasury security benchmark of 0.72%. Amounts invested with LAIF are essentially liquid and funds can be withdrawn with minimal notice as City operations require. The rate of return earned by LAIF generally follows fixed income security rates. For example, a year ago the LAIF rate was 0.48% and it was 0.38% as of March 31, 2012. The balance of the City’s portfolio is with Chandler Asset Management. These investments range from one to four years in maturity. The attached report notes that the City is in compliance with all provisions of the City’s Investment Policy. The basic strategy recommended by Chandler is to gradually lengthen the average maturity of the portfolio in order to gain higher interest rates. Staff is in agreement with this approach, but carefully monitors maturity dates to ensure that both short and long-term liquidity needs are met. CONCLUSION Staff recommends that the Finance Committee review and accept the attached investment report for the quarter ended June 30, 2012. 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Mar-09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar-12 Jun-12 City of San Leandro Summary of Yields LAIF Chandler 2-Yr Treasury 5-Yr Treasury 6225 Lusk Boulevard | San Diego, CA 92121-3039 | Phone 800.317.4747 | Fax 858.546.3741 | www.chandlerasset.com City of San Leandro June 30, 2012 Quarter Ending City Council Investment Report City of San Leandro The investment goals of the City of San Leandro are to preserve principal, to provide liquidity, and to attain a rate of return commensurate with the City's investment risk constraints and cash flow needs. In order to achieve these objectives, the City of San Leandro invests in US Treasury securities, federal agency securities, high quality money market instruments and high quality corporate medium term notes in accordance with the City's investment policy and California Government Code Section 53600 et seq. Strategy Investment Report Performance Objectives The performance objective for the City of San Leandro’s portfolio managed by Chandler is to attain a rate of return greater than the benchmark 1-3 Year Treasury/Agency securities over a market cycle. 1 Category Standard Comment Treasury Issues No limitations Complies Agency Issues No limitations Complies Banker’s Acceptances 40% maximum; 30% per issuer; A-rated; 180-day max. maturity Complies Commercial Paper 25% maximum; 10% per issuer; 270-day max. maturity; A1/P1 and AA-rated if LT debt Complies Negotiable Certificates of Deposit 30% maximum; 10% per issuer; AA-rated Complies Medium Terms Notes 30% maximum; A-rated Complies Money Market Funds AAA/Aaa rated; assets greater than $500MM; 20% maximum Complies LAIF Currently not used by adviser Complies Maximum Maturity 5 years Complies COMPLIANCE WITH INVESTMENT POLICY City of San Leandro June 30, 2012 Assets managed by Chandler Asset Management are in full compliance with State law and with the City’s investment policy. Portfolio Activity During the second quarter of 2012, activity in the portfolio managed by Chandler Asset Management consisted of the reinvestment of $5.1 million in several Treasuries and Agency securities with maturities ranging from October 2012 to August 2015. The portfolio structure and maturity strategy has been directed by the City. Currently, the portfolio’s average maturity is 1.80 years and is about equal to that of the 1-3 Year Government benchmark.