Budget: Council asks for more detailed information on enterprise funds

April 12, 2017
Santa Paula News

There was a split in the City Council when it came to an update on the Fiscal-Year 2016-2017 Estimate Report on funds other than the General Fund.

The council heard the report at the April 3 meeting; last month Finance Director Sandy Easley had given an update on the General Fund.

Vice Mayor Ginger Gherardi said the report was not what she had requested, a detailed look at the water and sewer enterprises.

Water and sewer are unique as they bring revenue to the city through services provided to residents.

According to Easley’s report, as of February 2017, the Sewer Fund was positive by $680,539 while the Water Fund was short by $3,385,101. The Fiscal-Year end forecast for 2016-2017 shows the Sewer Fund with a deficit of $1,782,600 while the Water Fund is projected to have a surplus $1,306,712, a reversal of standings.

Gherardi said she would like the budget portion related to water and sewer enterprises “To come back so we can understand it…this does not provide the level of clarity,” to closely examine the finances of the two enterprises.

In fact, Gherardi suggested the council hold off on adopting its Fiscal-Year 2017-2018 Budget by June 30.

“We don’t know what we’re going to do with the fire department yet,” as studies of annexing SPFD to the Ventura County Fire Protection District continue, or “what we might be doing with Measure T,” revenue.

Measure T, passed by voters in November,  added a 1-cent sales tax to benefit police, fire, youth programs and roads. Although not locked in legally to the expenditures, voters supported the General Tax for those funding purposes. It is expected Measure T may generate $2.1 million in sales taxes the first year.

“Rather than have staff run around putting a budget together that will be useless,” Gherardi said the council could delay adopting a new financial plan by adopting a resolution supporting same.

She said it is also “a time issue for our staff…right now it would be more prudent to see what was spent this year,” and have a full understanding of water and sewer — as well as other — finances. 

“The budget is not the simplest thing to put our head around,” said Councilman Martin Hernandez, “but I would be a little cautious about doing a continuing resolution,” to delay adopting the year’s financial roadmap.

Budgets, he added, “are also dynamic” and if needed to be readdressed in six months if the council “had a better grip” on it such a review would occur.

“But to not address it at all,” said Hernandez, “in my opinion is handicapping staff.”

Easley noted that department heads have already started working on their budgets and are almost done in preparing estimates for costs.

“They’re due back any time now,” she said.

Gherardi said she was not suggesting that staff “not work on the budget…truthfully it’s a huge effort on staff time. I would rather see the pieces than a huge document we will throw out.” 

After more discussion, including references to the rate study for sewer and water fees the council voted 3-1 to accept the report but to bring back a more detailed report of the enterprise funds. 

Hernandez was the lone nay vote; Councilman John Procter was absent from the meeting.

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