While revenues from property taxes and building permit fee revenues are projected to be higher than expected in the city of Menifee an additional $365,500 will be needed from the General Fund to cover the city’s bills.
The General Fund budgetarily unfunded expenditures to date this fiscal year, were explained by Menifee City Finance Director Bruce Foltz to the Menifee City Council during its March 1 regular meeting. The financial status of the city, to March 1, was provided in the Fiscal Year 2016-17 Mid-year Budget Review and Budget Adjustments with the approval of the new interim city manager Ron Bradley.
In that report the council heard, “Revenues for both sales tax and franchise fees appear to be in line with the original proposed budget while revenues for both building permitting fees and property taxes are projected to end the year higher than expected.”
This news was accompanied by the fact that most departments within the general fund are in line with their original budget projections with exceptions of a few departments. With that in mind Foltz noted the “General Fund net deficit for the current fiscal year are anticipated to be ($696,690) higher than originally budgeted.
The city adopted the current year General Fund with a planned deficit of $2,414,960 which was mostly contributed to the rising cost of public safety coupled with the slow growth in General Fund revenues and “the city’s inability to receive Vehicle License Fees.”
The report indicated that as of the end of January 2017, an additional $386,500 in appropriations are needed to support the current year General Fund operating budget. In the previous six months of the 2016/17 Fiscal year the city had unbudgeted costs of $360,190, according to the report.
There was an increase in appropriations from July 2016 to January 2017 that totaled $360,190. The mid-year increase in appropriations needed totaled the $386,500 yet $50,000 was lopped off that because of a slight increase in projected revenues of $50,000 leaving the estimated total General Fund Budgetary Deficit for Fiscal Year 2016/17 at $3,111,650. Foltz did say the deficit might be more like $2,800,000 at the end of June.
Where did the mid-year deficit come from? Foltz gave the following explanation of why the need for the additional appropriation. While the city gained $100,000 in revenues in Abandoned Vehicle Abatement Fees and a General Fund Revenue Adjustments the resignation of former City Manager Rob Johnson and the council’s approval of his early departure cost the city $216,000 in unpaid salary, vacations and other benefits. The cost of administrative services increased $34,000; non-department expenditures was $16,000; code enforcement, $50,000; Economic Development, $20,000; BPDES (water fees), $20,000; and community services, $20,000. The expenditures amounted to the $386,500.
The details of the additional expenditures and anticipated revenues were extensive and as a result the City Council agreed to continue reviewing the report and bring it back for further discussion at a later meeting.
The city of Menifee, according to Foltz for the past several years has been forced to use about $3 million of its approximately $8 million in reserves to continue all city operations, much of it due to the loss of Motor Vehicle License Fees and the recently ended Great Recession.