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CALEXICO — The city of Calexico’s finances appear to be stable and the council will consider moving toward a biennial budget format following approval of its fiscal 2012-2013 mid-year budget report during its regular meeting tonight.
Council voted 4-1 for its approval with councilman Joong Kim dissenting.
The 2012-2013 annual operating budget was adopted Sept. 27 and most of the data used in the mid-year budget report is from July 1 through Dec. 31.
“The purpose and importance of this budget review is that it gives the council information it needs to develop or change policies that could move the city in a new direction,” Finance Director John Quinn wrote in the agenda backup.
City staff has been considering the pros and cons of moving toward a biennial budget format.
Proponents maintain that it would primarily assist in long-range planning and argue that a year is “not a significant amount of time to fully see and measure the results of program funding.”
Those against this move say that biennial budgeting reduces oversight “by decreasing the amount of time appropriations committees spend on budgetary issues,” and “don’t allow for quick change in legislative agenda.”
About 30 California cities and 17 or 18 counties use a biennial budget, according to the report.
The mid-year budget report was approved without the need to adjust revenue projections or change previous appropriations beyond what’s already been approved by council, as recommended by city staff, and staff is moving toward maintaining the original adopted budget as much as possible instead of detailed and frequent budget adjustments, the report writes.
On the revenue side, December saw the first installment of $787,605 in property tax, and the city anticipates property tax will end the year flat or with negligible increases. The second half of property tax will come in the next four months.
Sales and use tax should be a little bit more than $2 million for the six month period, and estimated December sales tax total $2,095,889. The second half is anticipated to be equal or better.
Other taxes category including the sales and use tax represents 42.7 percent of the total revenue collected.
Total revenue is 35.5 percent, “but the second half generally will out-perform the first half and make up for the 14.5 percent lag in revenue. Sales/property/VLF in-Lieu taxes along will provide about $2.9 million in the second half.”
On the expenditures side, about $1.5 million of disbursements are made monthly from the general fund, and if an estimated $800,000 encumbrance balance is added, total general fund expenditures are at 46.5 percent.
“The city is currently implementing an encumbrance system that will establish more spending controls and help management see all the expenditures on a current basis,” the report writes. “None of the departments are, overall, in excess of the 50 percent spending mark.”
The general fund operating cash balance as of Dec. 31 was $3,539,517.
Payroll and position information in the report assists council in future bargaining unit negotiation. About 79 percent of the budget goes toward personnel costs.
View a copy of the City of Calexico 2012-2013 Mid-Year Budget Report online at www.ivpressonline.com.
Staff Writer Chelcey Adami can be reached at 760-337-3452 or cadami@ivpressonline.com.
At a glance…
