Calexico Council approves budget

CALEXICO — The Calexico City Council voted during a special meeting Tuesday to approve an amendment to its current general fund budget aimed at closing a $1 million budget gap.

The approved budget amendment will use unspent funds from a number of city programs such as the Police and Public Works departments to offset the additional expenditures that were identified during a recent nine-month budget review.

The budget amendment effectively revised the general fund budget to reflect total expenditures of $15.2 million, as opposed to the $14.8 million that was previously approved.

The recent budget review had also revised previous revenue projections for the coming 2017-2018 fiscal year, which should be at the forefront of city officials’ considerations, said Susan Mayer, the city’s financial consultant.

“$14.4 million is our best current projection of the (revenues) you will have next year,” Mayer said during her budget amendment presentation. “The art of the budget is for council to allocate those revenues and what services it will prioritize.”

The revised revenue projections for FY 2017-2018 will force city officials to develop strategies to prioritize spending and services in a manner that allows it to maintain a balanced budget, she aid.

Mayer also had a considerable amount of positive financial news to share with the council, including savings that were identified in FY 2016-2017 that limited the extent of the budget gap. One such notable trend included the relatively few number of claims that have been filed against the city over the past nine months, she said.

The city’s current general fund budget anticipated a greater number of claims and had allocated a greater amount of funds to go toward such possible expenditures.

“Half of the solutions in this budget gap are coming from favorable trends in the medical, workers comp and liability claims,” Mayer said. “It’s a bit of good news.”

The city will now turn its attention toward developing its FY 2017-2018 general fund budget in the coming weeks and months.

“We need to grow our revenue and the only way to do it is to have a very aggressive economic development approach,” City Manager Armando Villa said.

On Tuesday, the council also received news that a financial audit of FY 20152016 had been completed.

Although the audit comes more than a year behind schedule, its completion was also accompanied by positive news that suggested the city has made significant improvements to its accounting practices.

In comparison to audits done over the previous five years, the 2015-2016 audit did not have as many “journal entries,” said Ken Pun, with The Pun Group accounting firm that is contracted by the city.

Additionally, the total amount of hours spent on the ‘15-’16 audit was about 450 hours, as opposed to the 700 to 800 hours spent on previous audits, Pun said.

An audible sigh of relief could also be heard coming from some council members when Pun disclosed that the completed audit, which corresponded with expenditures that far exceeded revenues, found no indication of wrongdoing.

“We do not have any accounting issues, and no material fraudulent issues were discovered,” Pun said.

The audit also noted that for every dollar that the city made in revenue, it spent about $1.28. That latter figure should be in the 85 cents to 90 cents range, Pun said.

Throughout both Pun’s and Mayer’s presentations, council members peppered them with questions about the city’s perceived financial health.

While city officials are well aware of the cost-saving actions taken and the impact that they have had, the general public may not be aware of how they are being impacted, said Councilman Bill Hodge.

He stated that he is vehemently against any further staff cuts.

“I will just wince if I hear that we’re getting rid of more people,” Hodge said.

Mayor Armando Real also agreed with Hodge’s assessment about the general public possibly not being aware of city officials’ efforts to help address the city’s financial situation.

Yet, Real noted that their cost-saving actions to date are likely viewed by the public as normal actions and are not viewed as extraordinary measures.

“To the ordinary citizen we’re supposed to be doing that already,” Real said.

Council members had also thanked city staff for their sustained efforts in helping address the city’s financial shortfalls.

Tuesday’s meeting closed with a five-year Capital Improvement Program plan presentation by Public Works Department interim director Nick Fenley.

Nearly $54 million in projects are scheduled to take place sometime in the next five years, all of which are fully funded by wastewater enterprise funds, Fenley said.

“These projects will help stimulate the economy,” he said.