CITY COUNCIL: FY 2007/08 Quarterly Financial Report ended December 31, 2007

CITY OF CARMEL-BY-THE-SEA
FY 2007-08 QUARTERLY FINANCIAL REPORT
SIX MONTHS ENDED DECEMBER 31, 2007
-------------------------------------------------------------------------------------The City has completed the first six months of the 2007-08 fiscal year. This report summarizes the activities of the City’s General Fund and is not meant to be inclusive of all finance and accounting transactions. It is intended to provide the City Council and the public with an overview of the state of the City’s general fiscal condition. The financial figures included in this report are not audited.

Revenue Trends
The City’s total revenues for the six months ended December 31, 2007 totaled $6,824,484 as compared to the year-to-date budget of $6,529,025. Below is a summary of the City’s revenues starting with the City’s “Big 3” revenue sources, which account for 77% of the total revenues budget.

Revenues:
Transient Occupancy Tax (TOT)
The receipts of $1,567,110 are for the TOT collected by the inns and hotels for the quarter ended September 30, 2007. The total received is favorable to budget by approximately $90,000 and is 8.7% higher than the same quarter last year.

Property Tax
Property tax revenues of $2,160,734 are very close to the year-to-date budget. The one source in this category that was significantly below the year-to-date budget was Property Transfer Taxes. The City expected to receive about $104,000 through December 31, 2007 but had received approximately $88,000. This decrease is likely due to the recent downturn in housing sales in the area.

Sales Tax
Sales tax receipts for the six month period are higher than budget by about $95,000. The year-to-date amount collected from the State Board of Equalization reflect sales receipts through the quarter ended June 30, 2007. Last year’s six month total was close to $1.1 million as compared to this year’s six month total of $1,269,645. Although the year-todate sales tax receipts are currently favorable to budget, there are indications that this revenue source may be affected if consumer spending decreases as a result of a weakening economy. Staff will continue to monitor this revenue source very closely.

Fees and Permits
The revenues from fees and permits came in under budget by $9,161. There have been some declines in this category due to lower building permit activity.

Business License Tax
Business license tax revenues show a positive variance of $20,420. Due to increased revenues from the new business license tax rate approved by a ballot initiative, this revenue line item was adjusted by $55,000 with the FY 2007-08 budget adjustments approved at last month’s City Council meeting.

Interest Income & Parking Lot Revenues
The majority of the $35,317 favorable variance in Interest Income & Parking Lot Revenues is due to increased interest income. Parking lot fee revenues from the Sunset Center north parking lot are down approximately 8% as compared to the same period last year.

Franchise Fees
The $149,932 collected in franchise fees includes payments from Comcast and Waste Management, which are paid on a quarterly basis. The franchise fees from PG&E and Cal-Am are paid just once a year.

Other Governmental Agencies
Revenues from Other Governmental Agencies came in under budget by approximately $10,000. The negative variance is primarily due to timing of payments from the State for POST training and booking and processing annual fees.

Traffic Safety
Traffic safety revenues show a year-to-date positive variance of $74,524. The main factors contributing to this revenue source are a fully-staffed traffic enforcement program and high collection rates maintained by the City’s contracted citation collector, Enforcement Technology.

Expenditures
The City’s total expenditures for the first six months totaled $6,386,449 as compared to the year-to-date budget of $6,66,867. The majority of the positive variances were with the Regional Ambulance subsidy paid to CRFA, Salaries and Wages (due to unfilled positions), and Property/Liability insurance. The City is expecting a revised projection from CRFA to determine if the $391,650 annual budget amount is close to the expected ambulance subsidy for this fiscal year.

Personnel Vacancies and Recruitments
PLANNING & BUILDING: 1) Community Planning & Bldg Director – Recruitment is being conducted by Ralph Andersen & Associates.
Resumes are currently under review.

POLICE: 1) Police Sergeant – Candidate interviews are scheduled for February 13, 2008.

Capital Projects and Equipment Acquisition
The Capital Outlays and Capital Improvement annual budgets total $1,121,621, including the mid-year budget adjustments. The chart below shows the expenditures for the first six months of the fiscal year as compared to the year-to-date budget. Below the chart is an update on the status of these projects.

Updates on Capital Projects/Outlays:
4th Avenue Riparian Habitat Project
The landscape architect is working on construction drawings. Plans will be reviewed by the City’s Community Planning & Building Department and the appropriate
Commissions.

Repaving Projects: a) Mission between 3rd & 4th, b) 5th Avenue between San Carlos & Dolores, c) Parking Lot across from Post Office The three repaving projects were completed by early December. For the Mission Street project, the City is expecting close to $72,000 from TAMC Fair Share Funds that was allocated to the City last October.

Autofind Mobile GPS System for Police Department
On January 28th, the Police Department started utilizing the new Autofind Mobile GPS system for traffic enforcement. Notices were mailed to City residents explaining the new system and the two week grace period in February.

Historic Context Statement
Consultant Architectural Resources Group is preparing an update to the Historic Context Statement. The update will cover the 1940-1965 period. The contract with ARG also includes revisions for the pre-1940 period.

General Plan-EIR
At the November 6, 2007, the City Council approved a resolution amending the contract with RBF Consulting to include a city-wide survey. The survey will be sent to residents, property owners and business owners. Staff is currently working with RBF on the questions and format of the survey. The first draft of the updates to specific elements of the General Plan will then begin.

Fire Department Generator
Staff is in the process of obtaining bids and cost estimates for the new generator.

Del Mar Restroom Improvements
This project is completed.

Forest Study Implementation
At the January 8, 2008 City Council Meeting, Council adopted staff’s recommendations on how to use the $50,000 that was allocated to this project. Implementation of the plans will proceed this spring.

Sewer Replacement Project
This project is complete.

Police Department Firearms Range Ricochet Protective Device
The materials for the ricochet protective device have been ordered and are expected to arrive at the Police Department in early February. By the end of February, the new device should be fully installed.

Sunset Center Theater: a) Sound System, b) Theater Monitor System Speakers, c) Fall
Arrest System, d) Walkway Lights
The new walkway lights on the East side of the building have been installed. SCC, Inc. staff is currently in the process of gathering estimates for the other projects noted above.

Del Mar & North Dunes Master Plan
The Del Mar and North Dunes Master Plan Committee has now been formed and will soon have its first meeting. The committee will review the policies in the City's Local Coastal Program, define boundaries for the plan area and get background information from the Public Works Department and the City Forester. An engineering survey will then be obtained and a landscape architect will be hired to assist the committee in project design. Throughout the entire process staff will be coordinating with the California Coastal Commission.

Fire Department Compressor
This capital outlay project was carried forward from FY 2006-07. The compressor has been purchased and is operational. A grant reimbursement of $26,315 was received in August.

Police Department Network/Telephone System & Computer Upgrades
This project is complete. Total expenditures were approximately $20,000 under budget.
A mid-year budget adjustment was made to apply the positive budget variance towards funding other capital projects.

Vehicle Purchases/Major Repairs
The $10,000 amount spent year-to-date was to update the power train, suspension, and brakes on the Police Department 1951 Chevy. The total project cost is estimated at $15,000. The work on the vehicle is still in progress.

City Hall Carpeting
The new carpeting in the City Hall Council Chambers was installed in late October.
Carpeting for the Administration area is planned for the quarter ended March 31, 2008.

Mission Trails Pedestrian Footbridge Grant Project
At the January 8, 2008 City Council Meeting, Council accepted the $10,000 grant that was awarded by the Monterey Peninsula Regional Park District. At the same Council meeting, Council also approved FY 2007-08 mid-year budget adjustments which included $5,000 City matching funds for this project to cover environmental review and permit fees. This project is scheduled for the spring of 2008.
-------------------------------------------------------------------------------------Summary of Financial Results for the Six Months Ended
December 31, 2007
The results for the first six months of FY 2007-08 show a net deficit of $(135,119) as compared to an expected deficit of $(878,818). Deficits are projected for the first six months of the year due to the timing of the transient occupancy taxes. By December 31st each year, the City receives just one quarter of TOT revenues. Revenues in total show a positive budget variance of $295,459 and expenditures (including capital expenditures) show a positive variance of $448,240. It is important to note that the majority of the positive variance in the capital expenditures is due to projects not yet completed. It is expected that expenditures for these projects will occur as the projects are completed during the fiscal year.

City Administrator Goals and Objectives
1) Update General Plan and Del Mar Specific Plan.
See notes above under “Updates on Capital Projects/Outlays.”

2) Update Historic Context Statement and clarify/revise the Historic Preservation Ordinance.
See notes above under “Updates on Capital Projects/Outlays.”

3) Implement storm water run-off program and plan to address ASBS requirements.
As directed by the State Water Resources Control Board, staff with the assistance from a consultant has filed for an exception to the ASBS effluent requirements. The exception will allow the City to discharge storm water into Carmel Bay while an effluent standard is being developed by the State.

4) Promote City’s revenue growth through implementation of the strategic plan being developed by Economic Revitalization Committee, an enhanced website, etc.
Staff has made a presentation of the draft Economic Revitalization (ER) Plan to both the Carmel Innkeepers Association and the Carmel Chamber of Commerce Board. The City Council will set a date for the ER Plan Town Hall meeting at their February 5, 2008 meeting.

5) Work with Forest Theater Foundation to establish phases for implementation of the Master Plan.
The City Council should expect a presentation in the near future by the architect for the Master Plan project.

6) Address the Court’s requirements and resume the disposition of the Flanders property.
The City received a court ruling in the Flanders property case and is working towards compliance with the court orders.