MEETING DATE: 02/09/09
AGENDA ITEM: Fiscal 2008-09 Mid-Year Budget Report and Adoption of Proposed
Budget Amendments
ATTACHMENTS
Pages
1. Fiscal 2008-09 City Mid-Year Financial Monitoring Report 1 - 18
2. Fiscal 2008-09 RDA Mid-Year Financial Monitoring Report 19 – 31
3. Culver City Sales Tax Update Newsletter 32 – 33
FINANCIAL
FINANCIAL
MONITORING
MONITORING
REPORT
REPORT
CURRENT MONTH YEAR TO DATE PAGE
GENERAL FUND
General Fund Combined Revenues & Expenditures Page 3
General Fund Expenditures NORMAL NORMAL Page 3
General Fund Department Analysis POSITIVE/NORMAL NORMAL Page 4
General Fund Revenues POSITIVE NORMAL Page 5
Other Revenues POSITIVE/NORMAL NORMAL Page 5
Sales Tax NEGATIVE NEGATIVE Page 6
Business License Tax POSITIVE NORMAL Page 6
Utility Users Tax POSITIVE POSITIVE Pages 7- 9
Property Tax Revenue NORMAL WARNING Page 9
Charges for Services POSITIVE POSITIVE Page 10
Transient Occupancy Tax NORMAL POSITIVE Page 11
One-time Revenue Receipts and GF Reserve % Page 11
MAIN ENTERPRISE FUNDS
EXPENDITURE / REVENUE EXPENDITURE / REVENUE
Refuse Fund BELOW/NORMAL NORMAL/NORMAL Page 12
Transit Operations Fund BELOW/NEGATIVE BELOW/NORMAL Page 13
Sewer Operating Fund NORMAL/NORMAL BELOW/NORMAL Page 14
MAIN INTERNAL SERVICE FUNDS
EXPENDITURE / REVENUE EXPENDITURE / REVENUE
Equipment Maint. & Fleet Svcs. NORMAL/NEGATIVE NORMAL/NEGATIVE Page 15
Self-Insurance Fund NORMAL/NORMAL NORMAL/NORMAL Page 16
CAPITAL IMPROVEMENT FUNDS Page 17
OTHER FUNDS Page 18
PERFORMANCE AT A GLANCE
Mid-Year 2008-09
BELOW BUDGET
OR POSITIVE
= > 4% compared with prior year for revenues, or below expenditure target
NORMAL = Positive variance or negative variance < 2% compared prior year
WARNING = Negative variance of 2— 4% compared with prior year.
NEGATIVE = Negative variance of > 4% compared with prior year.
ECONOMIC UPDATE
As each week passes, more bad news is revealed and the economy con-
tinues its downward spiral. In fact, the crisis has now spread to most major
countries in the world. Locally, the situation is especially dire, with unem-
ployment in Los Angeles County soaring to 9.5%, while just a year ago, it
stood at 5.1%.
The Federal government is attempting to calm the chaos with a proposed
$819 billion dollar stimulus package. On January, 28th, the package was
approved by the House, but it is still being debated in the Senate. A large
portion of the proposed stimulus package is aimed at funding infrastructure
projects, so the City could eventually be eligible to receive additional fund-
ing for some capital projects.
Meanwhile, the State of California is still attempting to grapple with the $41
billion deficit projected for the next 18 months. Up until this point, no pro-
posals have garnered the required 2/3 votes required for approval. Due to
competing political factions and the requirements of voter approved propo-
sitions, these budget problems will most likely continue until a structural
change is made to the State budget process. In a few weeks, the State is
projected to be out of cash and will begin issuing IOUs until their cash flow
situation improves. The City stands to lose at least $1 million in State
Transit Assistance (STA) funding, but the MTA has promised to fill the gap
for any STA funding loss. Also, the State may “borrow” from the Gas Tax
fund and delay sending local Gas Tax revenue of approximately $400,000
until next fiscal year. At this point it is unclear if other revenue sources will
be affected.
Through the mid-year, the City’s revenues and expenditures remain rela-
tively in-line with prior years. However, many revenue sources lag a few
months, so some of the City’s major revenue sources will begin to decline
in the last six months of the fiscal year. Sales Tax is expected to take the
biggest hit. The dismal holiday shopping season and the loss of two of the
top fifteen sales tax generators could result in Sales Tax revenues drop-
ping 10% from last fiscal year. Staff is proposing a budget amendment to
decrease budgeted Sales Tax revenue by $1.025 million. Additionally, the
City’s property tax consultant revised their estimate, so staff is recom-
mending a budget amendment to decrease the property tax revenue by a
net mount of $488,000. Together, these two revenues sources make up
25% of the General Fund’s annual revenue, so any decline in revenue has
a real impact on the health of the General Fund.
The budget for this fiscal year is tight, but next year will be very challenging
for the City’s General Fund. At this point, projections are showing a deficit
of almost $4 million. If this occurs, the General Fund’s unreserved fund
balance will drop from $34.2 million as of June 2008 to an estimated $29.4
million by the end of 2010. As a percentage of operating expenditures, this
represents a decline from 43.1% to 34.5%. An operating deficit of this
magnitude leaves the City on shaky financial ground as we approach what
could become a prolonged recession. So far the fiscal pullback measures
have been effective in curbing current year expenditures, but it is evident
that the City will need to take additional measures in order to protect the
City’s financial future.
2
A budget tells us what we can’t afford, but it doesn’t
keep us from buying it.
Author: William Feather
ECONOMIC INDICATORS
ECONOMY
Nat’l Consumer Price Index: Down
The CPI dropped 1.0% in December,
but increased 0.1% over the course of
2008. This is smallest annual increase
in over 50 years.
Interest Rates: Down
On December 16th, the Federal Funds
rate was cut to a target range of 0 to
0.25%. A rate this low is unprece-
dented in the history of the Fed.
National GDP: Down
The GDP dropped by an annualize rate
of 0.5% in the third quarter of 2008.
This follows an increase of 2.8% in the
2nd quarter. The decline is largely at-
tributed to a drop in consumer spend-
ing.
UNEMPLOYMENT RATES
National: November 2007 - 4.7%
November 2008 - 6.8%
December 2007 - 4.9%
December 2008 - 7.2%
State: November 2007 - 5.7%
November 2008 - 8.4%
December 2007 - 5.9%
December 2008 - 9.3%
LA County: November 2007 - 5.2%
November 2008 - 8.7%
December 2007 - 5.1%
December 2008 - 9.5%
LOCAL NOTEWORTHY
DEVELOPMENT
• The remodel of the Westfield
Mall continues. Expected com-
pletion is fall 2009/spring 2010.
• Construction of the mixed use
project at 9900 Culver Boulevard
began in summer 2008 and is ex-
pected to be completed by sum-
mer/fall 2009.
• A number of projects have been
delayed due to the tight credit
markets. Parcel B and the Bald-
win site have required extensions
to their DDAs in order to buy addi-
tional time until they can secure
financing.
GENERAL FUND
3
GENERAL FUND ANALYSIS:
GENERAL FUND EXPENDITURES THRU DECEMBER 2008 (Comparison of Fiscal Years 2006-07,
2007-08, and 2008-09) [Cumulative]
GENERAL FUND EXPENDITURES — Through December 2008, General Fund expenditures are at
44.6% of the adjusted budget. Last year at this point, expenditures were at 45.6% of the adjusted budget.
A major factor that contributes to this low percentage, which was also true last year, is the current number of vacancies throughout
the City. Budgeted personnel costs are over 80% of the General Fund adopted budget, and any vacancies in this category play a
large part in keeping the overall percentage low. In October 2008, the City Manager called for “pull-back” measures due to the de-
clining economy. These “pull-back” measures have been implemented, but current mid-year indications show the projected year-
end gap between recurring expenditures and recurring revenues at about $500,000.
REVENUES & EXPENDITURES THROUGH DECEMBER 2008 [Cumulative]:
General Fund revenues are accrued back to a prior fiscal
year for several of the larger categories such as Sales
Tax, TOT, and UUT. This causes the monthly amount
shown for July, and sometimes August, to look “low” when
compared to future months. When comparing revenues
and expenditures this early in a fiscal year it is important
to remember this accrual of revenues to the prior year
causes the large gap. In-lieu payments for Sales Tax and
Motor Vehicle License Fees are received in January and
May of each year. Property Tax and Business License
Tax are also seasonal and are recognized most signifi-
cantly in December/April and February/March respec-
tively.
2006-07 2007-08 2008-09
Expenditures Expenditures Expenditures
July 4,013,513 $ 4,177,856 $ 4,354,540 $
August 5,475,164 6,110,635 9,117,410
September 5,527,245 8,739,298 6,660,426
October 7,836,012 6,614,130 6,282,672
Novem ber 8,137,743 5,739,487 6,246,091
Decem ber 5,332,189 7,463,020 6,321,259
January 6,182,729 6,833,180
February 6,032,417 6,081,761
March 6,006,334 8,423,258
April 8,238,175 6,605,769
May 5,958,495 5,836,127
June 8,195,517 11,334,820
TOTAL 76,935,533 $ 83,959,341 $ 38,982,398 $
Adj Budget 77,920,361 $ 86,018,123 $ 87,388,814 $
2008-09 2008-09
Revenue Expenditures
July 124,986 $ 4,354,540 $
August 4,966,099 9,117,410
September 6,791,085 6,660,426
October 4,644,193 6,282,672
Novem ber 5,309,425 6,246,091
Decem ber 6,472,039 6,321,259
January - -
February - -
March - -
April - -
May - -
June - -
TOTAL 28,307,828 $ 38,982,398 $
BELOW BUDGET
$0
$20
$40
$60
$80
$100
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08 2008-09 2008- 09 Budget
$0
$20
$40
$60
$80
$100
Dollars in Millions
2007-08 Revenue 2007-08 Expenditures
$0
$20
$40
$60
$80
$100
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Revenue 2008-09 Expenditures
GENERAL FUND
Comparison of Adjusted Budget to Actual: Target = 48.25% through DECEMBER 2008
GENERAL FUND DEPARTMENT ANALYSIS:
EXPENDITURES: Over 80% of the General Fund adopted budget is personnel related expenditures. The adjusted budget
amount includes operating encumbrance carryover amounts from the prior fiscal year. Most Departments are in-line or slightly be-
low the target budget through December 2008. Below are notable variances for Departments above or below the target.
Departments significantly under Target (more than 8%):
City Council — The City Council budget’s primary operating expenses include the contract for video and broadcasting services for
Council meetings and audit services for items such as the City’s annual Comprehensive Annual Financial Report (CAFR). Even
though the amount actually expended is low, $85,000 in funds have been encumbered. As the fiscal year progresses, the expended
amount will increase.
Finance Department — The Finance Department has been operating with several vacancies during the first half of the fiscal
year, which has kept expenditures low. Also, a few professional service’s contracts have not yet been fulfilled, such as the business
tax audit currently in progress, which should increase the O & M category expenditures later in the fiscal year.
Community Development — Vacancies and non-expenditure of funds “Other Contractual Services” in Planning has kept the
overall expenditure percentage low for this department. Funds in the amount of $600,000 were budgeted in the Planning Division
for use in updating the General Plan and have not yet been expended. Also, additional funds have been transferred into this cate-
gory for professional/legal services contracts relating to PXP. These funds are expected to be expended during the next several
months.
Non-Departmental — One factor in Non-Departmental expenditures being behind target is the timing in utility billings. Through
December, five months of utility bills have been recorded as expended in fiscal 2008-09. The bills paid in July 2008 are “posted” to
the prior year (2007-08), and bills paid in July 2009 will be “posted” in fiscal 2008-09 making the year “whole.” Another factor is the
“contingency” amount budgeted in this Division that includes retirement payoffs that is not transferred to departments until the end of
the year. This will keep the expended percentage on the low side until the final year-end report.
Departments over Target:
At mid-year, no Department is currently over the target of 48.25%. Departments have been very cooperative with complying with
the City Manager’s “pull-back” measures (where feasible) that were introduced and implemented in October 2008.
NOTABLE EXPENDITURE VARIANCES THROUGH DECEMBER 2008:
4
GENERAL FUND DEPARTMENTS
GENERAL GOVERNMENT
CITY COUNCIL $ 223,548 $ 350,469 $ 117,386 33.5% $ 169,101
CITY MANAGER 1,298,741 1,381,325 659,715 47.8% 666,489
CITY CLERK 439,207 456,063 188,066 41.2% 220,050
FINANCE DEPT 4,565,821 4,873,972 1,936,476 39.7% 2,351,692
CITY ATTORNEY 1,863,834 2,217,821 905,298 40.8% 1,070,099
HUMAN RESOURCES 1,144,481 1,214,622 546,979 45.0% 586,055
INFORMATION TECH 3,118,663 3,348,135 1,430,238 42.7% 1,615,475
TOTAL GENERAL GOVERNMENT $ 12,654,295 $ 13,842,407 $ 5,784,158 41.8% $ 6,678,961
PARKS, REC. & COMMUNITY SVCS 6,917,782 7,441,550 3,234,122 43.5% 3,590,548
POLICE DEPARTMENT 28,172,220 29,425,476 13,052,333 44.4% 14,197,792
FIRE DEPARTMENT 14,919,943 15,757,093 7,549,926 47.9% 7,602,798
COMMUNITY DEVELOPMENT 7,743,761 8,509,019 3,227,760 37.9% 4,105,602
PUBLIC WORKS 9,719,359 10,122,678 4,572,019 45.2% 4,884,192
NON-DEPARTMENTAL 7,276,023 4,116,891 964,656 23.4% 1,986,400
Transfers 1,223,701 1,223,701 597,424 48.8% 590,436
Projected excess appropriations (3.5%) (3,050,000) (3,050,000) 0 0.0% -
TOTAL GENERAL FUND $ 85,577,084 $ 87,388,814 $ 38,982,398 44.6% -
TARGET
AMOUNT
ACTUAL
EXPENDED
AS OF 12/31/08
ADOPTED
BUDGET
2008-09
ADJUSTED
BUDGET
2008-09
PERCENT
EXPENDED
2008-09
GENERAL FUND
5
GENERAL FUND REVENUE ANALYSIS:
TOTAL GENERAL FUND REVENUES THROUGH DECEMBER 2008 (Comparison of Fiscal
Years 2006-07, 2007-08, and 2008-09) [Cumulative]
TOTAL GENERAL FUND REVENUES — Total General Fund revenues through December 2008 are $28,307,828, or
32.4% of adjusted budget projections. This lower percentage is normal at this point in the year and is attributable to
many of the major revenue categories such as sales tax, utility taxes, property tax, transient occupancy tax, and busi-
ness tax being accrued back to the prior fiscal year. (“Accrual” is when revenues are recognized in the fiscal year they
are earned.) Receipts through December 2008 are ahead of prior year totals at this same point, mainly due to Rede-
velopment Agency billings being recognized and posted in September versus November and December of prior years.
Commercial Industrial Development Tax — Receipts through December for commercial/industrial development tax
are 23.2% of budgeted projections.
IMPORTANT NOTE: Given the current economic climate and the difficulty developments are having to secure financ-
ing, a mid-year budget amendment is being proposed to reduce this revenue category by $300,000 to $880,000.
Fines & Forfeitures — Through December, fines and forfeiture’s receipts were $1,719,072, or 37.6% of budgeted pro-
jections. This category falls under “accrual” rules, and had approximately $221,000 in receipts accrued back to the
prior fiscal year. Most likely as the year ends, receipts received in July and August of 2009 will accrue back to this year
and even it out. It is too early in the year to estimate if this category will meet projections. (Note: A Staff Report went
before the City Council on Monday, November 10, 2008 recommending Parking Citation Fees be increased. City
Council did approve this increase, which most likely will result in an increase for this revenue category.)
Real Property Transfer Tax — Through the mid-year, receipts were at 31.9% of end of year projections. In past
years this category has been very volatile and is dependent on high value real estate transactions.
IMPORTANT NOTE: Based on the current state of the real estate market, a mid-year budget amendment is proposed
to decrease this category from $1.54 million to $1.34 million.
Intergovernmental — The primary revenue in this category is the State Motor Vehicle License Fee (VLF) In-Lieu of
$3,050,000, which is received in January and May. The Administrative VLF revenue is not expected to meet the budg-
eted projections for fiscal 2008-09, which is $195,000. Through December, receipts for this category are at 18.8% of
budgeted projections. State-wide revenues in this category are dropping dramatically as expenses are rising, and the
amount of monies that need to go to the DMV, counties and other agencies are not enough to meet everyone’s re-
quirements.
OVERALL GENERAL FUND REVENUES — It is important to note that given the unprecedented circumstances occur-
ring within the national, state and local economies, it is difficult to forecast with certainty if a revenue category will meet
its projections or not. Information being presented in this report is based on Culver City’s actual receipts through De-
cember 31, 2008, and from information received from various sources—including governmental, financial and multiple
news sites. Staff monitors this information on a daily basis.
2006-07 2007-08 2008-09
Revenue Revenue Revenue
July (473,116) $ 341,121 $ 124,986 $
August 4,930,120 5,062,285 4,966,099
September 4,430,318 4,334,446 6,791,085
October 4,876,302 4,165,591 4,644,193
Novem ber 7,303,390 4,559,561 5,309,425
Decem ber 7,074,612 9,017,272 6,472,039
January 9,666,904 10,436,417
February 9,576,836 9,466,608
March 7,596,047 10,417,263
April 6,648,374 8,838,122
May 8,764,221 8,946,942
June 9,744,167 10,713,892
TOTAL 80,138,175 $ 86,299,520 $ 28,307,828 $
Adj Budget 75,054,576 $ 82,774,909 $ 87,392,067 $
-$10
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08 2008-09 2008- 09 BudgetBUSINESS TAX THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-08, and
2008-09) [Cumulative]
GENERAL FUND
6
GENERAL FUND REVENUE ANALYSIS (continued):
SALES TAX THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-08, and 2008-
09) [Cumulative]
SALES TAX—There is a lag of at least a quarter between the time a customer pays sales tax on a purchase
and the tax is remitted to the City. To make up for this delay, the Board of Equalization makes monthly ad-
vances based on the tax receipts in the previous year. Then in September, December, March, and June the actual receipts are rec-
onciled and a “true-up” adjustment is made. Also, because of the lag in payment time, the sales tax advances received in July and
August are accrued back to the previous fiscal year. The December “true-up” payment shows that the actual sales tax revenue from
July to September 2008 was 2.4% below the same period of the previous year. Sales during the holiday season were especially dis-
mal, but the final results for Culver City retailers won’t be available until the “true-up” in March.
IMPORTANT NOTE: A mid-year budget amendment is being proposed to decrease the budgeted sales tax revenue by $1,075,000.
This is due to the recent drastic decline in consumer spending, the recent announced closing of two major sales tax contributors in
the City, and the overpayment from the State to the City last year of $150,000 for Sale Tax In-Lieu (triple flip property tax shift), which
will be reduced from this year’s payment.
NEGATIVE
BUSINESS TAX — Last fiscal year, business tax revenues exceeded the adjusted budget projections by
11.2%, but this year the revenues are expected to remain relatively flat. The downturn of the economy will
likely lead to a drop in the gross receipts of many taxpaying businesses, and the City is hoping to make up for this decline with a
more in-depth business tax audit to identify non-compliant businesses. Through December of the current fiscal year, revenues are
approximately $84,00 higher than last year at this point. However, these revenues represent a small percentage of the annual re-
ceipts because the majority of the revenue is received in the months of January, February, and March.
2006-07 2007-08 2008-09
July 926,400 $ 912,800 $ 883,000 $
August 1,235,300 1,217,000 1,177,300
September 1,190,361 1,169,765 1,153,656
October 908,000 938,300 903,900
Novem ber 1,210,800 1,251,100 1,205,200
Decem ber 1,374,295 1,156,535 1,101,267
January 3,368,412 3,471,855
February 1,349,700 1,444,200
March 1,113,116 1,021,326
April 861,400 876,200
May 3,459,612 3,557,052
June 1,233,397 975,468
Prior Yr Acc (2,161,700) (2,129,800) (2,060,300)
Current Yr Acc 2,129,800 2,060,300
TOTAL 18,198,893 17,922,101 4,364,023
Adj Budget 17,650,000 18,300,000 17,793,000
NORMAL
2006-07 2007-08 2008-09
July 104,213 $ 166,407 $ 145,420 $
August 69,256 90,161 127,706
September 74,751 40,187 102,857
October 34,100 48,583 56,862
Novem ber 47,673 44,065 29,579
Decem ber 172,959 132,250 143,597
January 810,450 753,918
February 4,782,453 3,428,559
March 2,588,412 4,953,144
April 181,125 298,323
May 184,909 73,308
June 133,532 142,573
TOTAL 9,183,833 $ 10,171,478 $ 606,020 $
Adj Budget 8,804,100 $ 9,144,000 $ 10,150,000 $
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08 2008-09 08-09 Budget
$0
$4
$8
$12
$16
$20
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 08-09 Budget
GENERAL FUND
7
GENERAL FUND REVENUE ANALYSIS (continued):
UTILITY USER’S TAX THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-08,
and 2008-09) [Cumulative]
2006-07 2007-08 2008-09
July 434,336 $ 417,420 $ 433,414 $
August 564,075 500,334 524,237
September 764,134 669,748 636,710
October 624,333 556,764 611,030
Novem ber 647,433 621,597 637,669
Decem ber 458,805 513,303 464,135
January 461,345 454,472
February 503,612 485,773
March 431,502 426,921
April 444,525 441,445
May 392,786 425,935
June 418,835 432,822
Prior Yr Acc (434,336) (417,420) (433,414)
Current Yr Acc 417,420 433,414 446,416
TOTAL 6,128,805 $ 5,962,528 $ 3,320,196 $
Adj Budget 5,900,000 $ 5,800,000 $ 6,303,600 $
Electricity UUT
2006-07 2007-08 2008-09
July 9,820 $ 98,599 $ 121,396 $
August 158,535 88,810 114,570
September 63,196 76,452 90,419
October 61,384 66,079 79,765
Novem ber 62,396 62,463 86,173
Decem ber 65,435 68,182 72,379
January 82,772 88,358
February 122,155 132,893
March 158,192 171,072
April 151,472 180,198
May 125,441 168,955
June 108,347 155,111
Prior Yr Acc (9,820) (98,599) (121,983)
Current Yr Acc 98,599 121,983
TOTAL 1,257,924 $ 1,380,558 $ 442,719 $
Adj Budget 1,300,000 $ 1,346,000 $ 1,380,000 $
Natural Gas UUT
2006-07 2007-08 2008-09
July 85,439 $ 89,981 $ 100,185 $
August 72,286 74,166 84,040
September 94,063 95,276 102,020
October 76,471 75,300 85,397
Novem ber 98,875 90,181 99,505
Decem ber 68,052 70,436 79,947
January 79,388 86,457
February 66,546 66,376
March 86,040 82,704
April 60,647 69,891
May 83,561 87,329
June 66,406 77,785
Prior Yr Acc (85,439) (89,981) (100,185)
Current Yr Acc 89,981 100,185
TOTAL 942,316 $ 976,088 $ 450,909 $
Adj Budget 876,000 $ 902,000 $ 960,000 $
Water UUT
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
$0
$1
$2
$3
$4
$5
$6
$7
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
GENERAL FUND
8
GENERAL FUND REVENUE ANALYSIS (continued):
UTILITY USER’S TAX THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-08,
and 2008-09) [Cumulative]
2006-07 2007-08 2008-09
July 1,031,890 $ 1,033,366 $ 1,164,573 $
August 1,330,376 1,134,988 1,239,687
September 1,392,772 1,342,719 1,351,446
October 1,254,222 1,133,737 1,286,463
Novem ber 1,274,098 1,257,463 1,358,075
Decem ber 1,055,663 1,157,898 1,118,550
January 1,088,028 1,125,350 -
February 1,150,458 1,275,358 -
March 1,124,967 1,109,156 -
April 1,144,279 1,203,787 -
May 1,061,741 1,178,412 -
June 1,071,634 1,161,637 -
Prior Yr Acc (1,110,764) (1,033,366) (1,165,335)
Current Yr Acc 1,033,366 1,165,335 446,416
TOTAL 13,902,730 $ 14,245,839 $ 6,799,875 $
Adj Budget 13,872,000 $ 13,656,000 $ 14,468,600 $
Total All UUT
2006-07 2007-08 2008-09
July 50,737 $ 54,986 $ 56,845 $
August 52,121 55,554 57,528
September 50,222 58,837 58,157
October 50,395 55,463 58,536
Novem ber 49,885 52,377 59,464
Decem ber 50,782 52,320 59,680
January 64,240 52,274
February 52,444 173,354
March 51,900 52,976
April 52,880 55,901
May 53,052 55,521
June 54,848 55,343
Prior Yr Acc (50,737) (54,986) (56,845)
Current Yr Acc 54,986 56,845
TOTAL 637,755 $ 776,765 $ 293,365 $
Adj Budget 596,000 $ 608,000 $ 675,000 $
Cable UUT
2006-07 2007-08 2008-09
July 451,558 $ 372,380 $ 452,733 $
August 483,359 416,124 459,313
September 421,157 442,406 464,139
October 441,639 380,131 451,736
Novem ber 415,509 430,844 475,264
Decem ber 412,589 453,656 442,409
January 400,283 443,788
February 405,701 416,961
March 397,333 375,482
April 434,755 456,352
May 406,901 440,672
June 423,198 440,576
Prior Yr Acc (530,432) (372,380) (452,908)
Current Yr Acc 372,380 452,908
TOTAL 4,935,930 $ 5,149,900 $ 2,292,685 $
Adj Budget 5,200,000 $ 5,000,000 $ 5,150,000 $
Telephone UUT
$0
$2
$4
$6
$8
$10
$12
$14
$16
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
$0
$1
$2
$3
$4
$5
$6
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
$0.0
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
GENERAL FUND
9
GENERAL FUND REVENUE ANALYSIS (continued):
UTILITY USER’S TAX THROUGH DECEMBER 2008
The City usually receives UUT revenue the month after it is collected by the utility companies. Because of
this delay, all July receipts and some August receipts are accrued back to the previous fiscal year. The
budget projections are adjusting accordingly. UUT revenue is relatively stable and should not be drastically
affected by the current recession.
ELECTRICITY UUT — Electricity revenues exceed the straight line budget projections by ap-
proximately 9.4%; however, the winter months result in lower electricity usage, so revenues
will decline in the coming months. End of year revenues should exceed last year’s receipts, but may end up just un-
der the budgeted projections.
NATURAL GAS UUT — Natural gas revenues are 22.3% higher than receipts at this point
last year. Receipts the first six months of the year are historically lower than the last six
months of the fiscal year because of the increased usage of natural gas heaters during the colder months.
WATER UUT— Receipts are 11.2% higher than the receipts through December last year. In
November, Golden State Water altered their rate structure to encourage conservation. It is
yet to be seen how this initiative will affect Water UUT revenue.
TELECOMMUNICATIONS UUT— Through December, telecommunications revenue ex-
ceeded budget projections by over 6%.
CABLE TELEVISION UUT — Cable TV UUT receipts are 4.3% ahead of the budget projec-
tions. Revenues have been very stable and are expected to meet the end of year budget pro-
jections.
POSITIVE
PROPERTY TAX — The City receives the vast majority of the property tax revenues in the
months of December and April. Receipts through December are 15% higher than this point last
year. Home prices in Culver City have remained relatively steady compared to other areas of Southern California, but
the number of homes sold has dropped dramatically.
IMPORTANT NOTE: A budget adjustment is being proposed for this category. Based on an adjustment from HdL, our
property tax consultant, projections for fiscal 2008-09 should be $3,340,000, which is a reduction of $600,000 from the
initial projection we received from them.
WARNING
PROPERTY TAX THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-08, and
2008-09) [Cumulative]
2006-07 2007-08 2008-09
July 239,386 $ 105,671 $ 65,250 $
August - - 17,642
September - - -
October - - -
Novem ber 55,364 33,620 132,865
Decem ber 1,111,820 1,153,913 1,234,198
January 375,171 393,974
February 113,968 222,451
March 29,369 15,527
April 952,182 981,287
May 299,226 145,646
June (16,161) 23,924
Prior Yr Acc (239,386) (105,671) (82,892)
Current Yr Acc 105,671 82,892
TOTAL 3,026,610 $ 3,053,233 $ 1,367,063 $
Adj Budget 2,988,000 $ 3,147,000 $ 3,940,000 $
NORMAL
POSITIVE
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5|101010101010101010 10
10|11
12
Dollars in Millions
2006-07 2007-08
2008-09 08-09 Budget
POSITIVE
NORMAL CHARGES FOR SERVICES — Excluding Billings to RDA, Charges for Services are at 44.9% of the
adjusted budget. The low percentage can somewhat be attributed to a few revenue categories being
accrued back to the previous year. Most of the categories should meet the projections by the end of the fiscal year, but some
categories like Plan Check Fees are difficult to project. This is because a high percentage of these receipts in recent years
have been made up of “one-time” revenue from large development activity, such as the Westfield Shopping Mall remodel.
Continued construction on this development, though, is on track for fiscal 2008-09. The City has been very fortunate over the
past few years to have a significant amount of development activity, which has kept the General Fund fiscally healthy, but it is
evident that these revenues are declining. Although revenues continue to be relatively strong at the current time, many of the
planned developments for fiscal 2008-09 are being delayed, so projected revenue may be pushed to fiscal year 2009-10 or
further.
GENERAL FUND
10
GENERAL FUND REVENUE ANALYSIS (continued):
CHARGES FOR SERVICES THROUGH DECEMBER 2008 (Comparison of Fiscal Years 2006-07, 2007-
08, and 2008-09) [Cumulative]
Charges for Services — Individual Category Notables through December 2008
POSITIVE
Veterans Memorial Auditorium Fees — Through the month of December, fee receipts for the Veterans Audi-
torium Complex, which includes the Senior Center and Teen Center rentals, were at 41.2% of budgeted projections
for the fiscal year. Fees are 14% less than this point last year.
Public Safety Related Fees — Through December, Police Department charges for services were at 60.0% of
budgeted projections. These revenues are made up of records requests, live scan fingerprints, vehicle impounds,
and other miscellaneous fees.
Plan Check Fees — Year to date, plan check fees are at 45.5% of the projected budget. This is due in part to
large receipts for the Westfield Mall renovations, which is continuing on schedule. As mentioned previously in this
report, it is expected that activity from other major developments will slow down this year, so monthly revenue in this
fee category is expected to decline as the fiscal year progresses.
Various Recreation Fees — Recreation fees in the amount of $708,938 were collected through the month
of December. Revenue is at 47.8% of budgeted projections, which falls in line with revenue collected at this point last
fiscal year.
Ambulance Billings — Ambulance billings are at 45.2% of the adjusted budget. They are also 30% higher
than the receipts at this point last year. Fees are set by LA County and were increased 6% on July 1, 2008. Addi-
tionally, some fees increased again on January 1, 2009, so this category should meet the end of year budgeted pro-
jections.
2006-07 2007-08 2008-09
July 295,481 $ 492,823 $ 383,633 $
August 529,049 650,999 477,632
September 327,679 362,493 548,892
October 365,798 325,319 391,456
Novem ber 485,015 363,370 340,259
Decem ber 373,346 620,668 651,720
January 379,950 542,276 -
February 337,817 637,743 -
March 636,623 481,697 -
April 945,225 808,509 -
May 455,632 659,808 -
June 870,831 764,395 -
TOTAL 6,002,446 $ 6,710,100 $ 2,793,592 $
Adj Budget 5,297,857 $ 5,813,450 $ 5,864,350 $
*Do es no t include B illings to RDA
Charges for Services*
$0
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08
2008-09 2008-09 Budget
GENERAL FUND
ONE-TIME REVENUE AND GENERAL FUND RESERVE PERCENTAGE:
11
GENERAL FUND REVENUE ANALYSIS (continued):
The City recorded a significant amount of one-time revenue in the General Fund during fiscal 2007-08, both from audit activity on
various revenues and from significant development activities occurring within the City. Below is a list of one-time revenue receipts
previously received and recorded, fiscal 2007-08 receipts, and anticipated one-time receipts for fiscal 2008-09 and 2009-10. The
chart shows the percentage of the General Fund Reserve comprised of these one-time revenues. The high number of vacancies
during fiscal 2007-08 also contributed to the increase of the General Fund reserve due to the non-expending of funds for salary
and benefit related costs.
It is the policy of the City not to use revenues identified as
one-time funds to pay for recurring expenditures.
TRANSIENT OCCUPANCY TAX THRU DECEMBER 2008 (Comparison of Fiscal Years 2006-07,
2007-08, and 2008-09) [Cumulative]
TRANSIENT OCCUPANCY TAX — TOT revenues received in July are normally accrued back to the
prior year. This is the reason July revenue is so low and June revenue is much higher than an aver-
age month. So far the recession has yet to fully affect TOT revenues. Receipts through December are at 49.3% of the
budgeted projections. This is primarily due to summer travel and increased tax revenues from the Courtyard by Marriot and
Four Points hotels, which both completed renovations during the last year. The bad news is that Culver City hotels are infor-
mally reporting lower occupancy rates, so revenue is expected to decline in the coming months. Also, during the month of
December, passenger traffic at LAX was down 16.3% from the previous year and it appears this trend will continue. Even
though this category is off to a strong start, it is yet to be seen if it will reach the budgeted projections.
POSITIVE
2006-07 2007-08 2008-09
July 257,368 $ 264,908 $ 301,739 $
August 259,448 317,587 187,196
September 106,140 119,733 482,684
October 385,400 322,622 314,886
Novem ber 250,198 231,849 100,824
Decem ber 656,644 219,428 381,912
January 215,529 98,739
February 199,451 227,660
March 91,531 216,039
April 245,619 183,689
May 271,454 272,733
June 122,733 242,762
Prior Yr Acc (264,910) (267,833) (364,537)
Current Yr Acc 267,833 364,537
TOTAL 3,064,438 $ 2,814,453 $ 1,404,703 $
Adj Budget 2,250,000 $ 2,500,000 $ 2,850,000 $
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2006-07 2007-08 2008-09 08-09 Budget
1st payment to Warner Lot (05-06) 2,620,000 $
Documentary Tax Audit Receipts (05-06) 313,086 $
Receipts from TOT audit/other (06/07) 650,000 $
Loan Receivable from RDA (06-07) 505,818 $
Int. income from refunding Bonds (06-07) 500,000 $
Documentary Tax Audit Receipts (06-07) 762,400 $
Receipts from Cable UUT Audit (07-08) $ 106,788
Receipts in Com/Ind Dev Tax from
significant development activity (07-08) $ 1,757,275
Payment of Interest for Warner Parking Lot
Sale (07-08) $ 436,608
Building Permit Fee from significant
development activity (07-08) $ 533,000
Estimated One-time (08-09) [includes final
payment from Warner Parking Lot of
$2,947,104.] $ 3,947,000
Estimated One-time (09-10) $ 1,850,000
Total from Fiscal 2005-06 13,981,975 $
Major One-time Revenue Receipts
and Estimated One-Time Revenues
% of Unreserved Fund Balance to
Actual and Estimated Expenditures
38.7%
42.1%
43.1%
39.4%
34.5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2005-06 2006-07 2007-08 2008-09 est 2009-1 0 est
One-time Revenues per Fiscal Year
ENTERPRISE FUND
12
REFUSE FUND ANALYSIS:
REFUSE FUND THROUGH DECEMBER 2008 [Revenues vs. Expenditures — Cumulative]
REFUSE FUND REVENUES — Refuse Fund revenue through December 2008 is comparable
with the revenue at this point in prior years. Over 26% of the Refuse Fund’s revenue is comprised
of residential refuse disposal fees, which are billed with property taxes. The City receives the majority of these funds in De-
cember and April. Commercial and multi-family dwelling bin service is billed monthly, and through December revenues are
at 45.6% of the budgeted projections. Bin service comprises approximately 44% of the 2008-09 Refuse Fund’s budgeted
annual revenues amount. The City’s green waste revenues are also coming in strong, and are currently 72.2% of budgeted
projections. In January of 2008, the City went from a successful bi-weekly residential recycling program to weekly pickup,
which helps offset the amount of refuse taken to landfills.
Refuse disposal rates were increased by 4% for fiscal 2008-09 to help offset increased operating and maintenance costs,
which include fuels costs and repair and maintenance of equipment.
REFUSE FUND EXPENDITURES — Refuse expenditures through December 2008 are $4,698,988, or
39.7% of the adjusted budget. The low percentage is attributable to a few factors, which include no refuse
disposal charges to LA County Sanitation District being reflected in the first half of the fiscal year; little to no expending of capital out-
lay funding for capital projects, which includes patching the Transfer Station tipping floor and Transfer Station stairwell and locker
room rehab; and no expending of funds to date for new scales in the Transfer Station. These projects are moving forward, though,
and more information will be reported in the mid-year budget review and future monitoring reports.
Expenditures through December 2008 are less than 1.0% ahead of the prior year at this time and are in-line with anticipated MOU
increases and other normal operating expenditures. The outstanding loan amount for the Refuse Fund at the end of fiscal 2008-09
will be $1,066,082. Loan payments to the General Fund, Innovation Fund, and Equipment Replacement Fund continue to be made
on schedule.
2006-07 2007-08 2008-09
July 478,129 $ 556,391 $ 611,087 $
August 648,021 634,977 755,594
September 847,222 797,010 733,821
October 749,271 1,023,511 939,413
Novem ber 1,080,583 902,352 814,124
Decem ber 557,613 753,808 844,949
January 904,934 907,299
February 644,729 741,930
March 912,829 1,126,061
April 756,733 983,184
May 633,647 602,328
June 1,303,758 1,219,347
TOTAL EXP 9,517,464 $ 10,248,197 $ 4,698,988 $
Adj Budget 10,888,948 $ $11,524,493 $11,908,814
Refuse Expenditures
NORMAL
BELOW BUDGET
Note: Depreciation amounts not included.
2006-07 2007-08 2008-09
July 583,604 $ 696,899 $ 688,909 $
August 686,798 725,514 688,138
September 658,508 640,217 690,235
October 661,889 662,709 645,709
Novem ber 698,332 644,041 649,899
Decem ber 1,732,943 1,864,241 1,893,806
January 945,365 944,572
February 916,032 953,969
March 648,396 650,377
April 1,377,850 1,382,243
May 990,370 947,732
June 632,388 701,157
TOTAL REV 10,532,475 $ 10,813,671 $ 5,256,696 $
Adj Budget 10,410,618 $ 11,483,841 $ 11,541,718 $
Refuse Revenues
Refuse Revenues vs. Expenditures
Fiscal 2008-09
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Rev 2008-09 Exp
Refuse Revenues vs. Expenditures
Fiscal 2007-08
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08 Rev 2007-08 Exp
ENTERPRISE FUND
13
TRANSIT FUND ANALYSIS:
TRANSIT FUND THROUGH DECEMBER 2008 [Revenues vs. Expenditures — Cumulative]
TRANSPORTATION FUND EXPENDITURES – Overall Transportation Fund adjusted expenditures
through December 2008 are $7,218,329, or 30.5% of the adjusted budget. Personnel expenses are ap-
proximately 41.0% of adjusted budget, and O & M expenditures are approximately 44.9% of adjusted budgeted. The extremely low
actual capital outlay expenditures through December are what has driven the overall percentage down. Total capital outlay ad-
justed budget funding is approximately $6.3 million, and approximately $135,000 has actually been recorded as expended through
December 2008, which skews the percentage. Current projects earmarked for this funding are in process and funds have been
encumbered. Six CNG buses are currently in the process of being ordered, which has encumbered over $3 million of these funds
for this purchase. Future monitoring reports, will continue to address any progress of these capital projects and the bus purchase.
All other expenditure categories are within normal target percentages and are being closely monitored by Transportation and
Budget staff.
TRANSPORTATION FUND REVENUES – Transportation Fund revenues are comprised of many
sources, including funding from the State and Federal government. Through December 2008, Transpor-
tation receipts were 34.5% of budgeted projections. Culver City’s State Transit Assistance funding for fiscal 2008-09 is proposed
to be reduced by approximately $1 million for the current fiscal year and additional cuts to this funding source are being considered
by the state. Given the dire straits of the State’s situation, it is very possible that additional funding sources may be cut. A budget
adjustment is being proposed to reflect this reduction.
Through December, farebox revenue totaled $1,330,536, while at this point last year farebox revenue was at $1,233,823. The
significant increase in fuel prices during the year contributed to this increase as people took alternative forms of transportation
other than driving their own vehicles. With the current drop in fuel prices, though, this may not continue.
Note: Depreciation amounts not included.
BELOW BUDGET
NORMAL
2006-07 2007-08 2008-09
July (104,779) $ (2,648,573) $ 192,803 $
August 451,274 2,791,003 438,785
September 469,059 684,306 4,021,856
October 321,688 2,541,066 23,882
Novem ber 1,568,083 224,560 1,407,257
Decem ber 3,103,121 2,209,509 1,029,098
January 1,203,113 583,705
February 1,668,132 791,200
March 1,492,049 3,965,543
April 974,720 1,336,502
May 915,711 1,186,439
June 6,448,454 2,430,000
TOTAL REV 18,510,625 $ 16,095,260 $ 7,113,681 $
Adj Budget 16,025,724 $ 17,279,756 $ 20,591,546 $
Transit Revenues
Transit Revenues vs. Expenditures
Fiscal 2007-08
-$5
$0
$5
$10
$15
$20
$25
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08 Rev
2007-08 Exp
Transit Revenues vs. Expenditures
Fiscal 2008-09
$0
$5
$10
$15
$20
$25
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Rev
2008-09 Exp
2006-07 2007-08 2008-09
July 1,006,149 $ 1,091,374 $ 838,311 $
August 1,121,526 1,317,488 1,696,863
September 978,263 2,080,034 1,198,154
October 1,468,394 2,363,603 1,097,475
Novem ber 1,352,794 1,357,701 1,177,406
Decem ber 1,748,130 2,070,860 1,210,119
January 1,307,425 1,499,769
February 1,241,397 1,092,555
March 1,157,427 1,849,352
April 1,472,299 1,391,409
May 1,696,891 1,728,972
June 1,943,836 4,514,773
TOTAL EXP 16,494,533 $ 22,357,892 $ 7,218,329 $
Adj Budget $21,977,438 $22,892,622 $23,681,510
Transit Expenditures
ENTERPRISE FUND
14
SEWER FUND ANALYSIS:
SEWER OPERATING FUND THRU DECEMBER 2008 [Revenues vs. Expenditures — Cumulative]
SEWER OPERATING EXPENDITURES – Sewer Operating expenditures through December
2008 are approximately 25.3% of adjusted budget. This does not include capital improvement
expenditures for sewer projects. (Further information on sewer CIP projects can be found on page 17.) Personnel
expenditures were approximately 35.5% and are low due to prior vacancies, which have now been filled. Operating
and Maintenance expenditures are approximately 25.9% of adjusted budget, and are low because of a credit received
from the City of LA for usage billings to the City for the Hyperion Wastewater Treatment Plant from prior fiscal years
that have been applied to the current fiscal year. The credit was approximately $1.7 million, and charges for fiscal
2008-09 were approximately $1.8 million. Bond principal payments for the Hyperion Wastewater Plan Debt Service
through December have been recognized. Interest payments for the bonds will be recorded on a regular basis
throughout the fiscal year. All other sewer operating expenditures are within normal target percentages for this time
period.
SEWER OPERATING REVENUES – Sewer operating revenues through December 2008 are
40.7% of budgeted projections. The first major receipt of Sewer Operating Charges was re-
ceived by the City with property tax receipts in December. Sewer Operating Charges comprise approximately 89% of
the adjusted budgeted sewer operating revenue projections.
The Sewer Fund has increased Sewer Operating Charges annually for the last several fiscal years. For fiscal 2008-
09 it was decided an increase was not needed, and no increase was recommended.
2006-07 2007-08 2008-09
July 106,920 $ 62,020 $ (248,863) $
August 150,815 135,999 1,355,165
September 1,692,987 1,667,451 249,451
October 230,750 196,867 324,357
Novem ber 618,758 505,602 209,264
Decem ber 167,035 217,876 246,201
January 588,777 575,351
February 179,922 259,361
March 1,242,065 1,293,387
April 207,059 206,841
May 1,041,978 579,381
June 289,258 384,863
TOTAL EXP 6,516,328 $ 6,084,996 $ 2,135,574 $
Adj Budget $7,823,626 $7,534,793 $8,438,444
Sewer Op Expenditures
Sewer Operating Rev vs. Exp
Fiscal 2008-09
-$2
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Rev
2008-09 Exp
Note: Depreciation amounts not included.
BELOW BUDGET
2006-07 2007-08 2008-09
July (137,711) $ (143,668) $ (176,400) $
August 433,205 191,068 225,683
September 76,075 194,194 80,197
October 89,552 125,966 115,369
Novem ber 105,509 163,135 157,384
Decem ber 3,090,237 3,478,540 3,626,697
January 815,473 1,075,632
February 916,067 1,248,540
March 201,449 270,581
April 1,980,074 2,191,521
May 924,327 1,027,938
June 398,008 590,758
TOTAL REV 8,892,265 $ 10,414,205 $ 4,028,930 $
Adj Budget 8,598,900 $ 9,121,750 $ 9,897,337 $
Sewer Op Revenues
Sewer Operating Rev vs. Exp
Fiscal 2007-08
-$2
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08 Rev
2007-08 Exp
NORMAL
INTERNAL SVCS FUNDS
15
INTERNAL SERVICE FUND ANALYSIS:
EQUIPMENT MAINTENANCE & FLEET SERVICES FUND THROUGH DECEMBER 2008 [Revenues vs.
Expenditures — Cumulative]
EQUIPMENT MAINTENANCE FUND EXPENDITURES — Overall Equipment Maintenance & Fleet
Services (EM&FS) expenditures through December 2008 are $3,423,875, or 47.3% of the adjusted
budget. Personnel related expenditures are approximately 47.4%, and operating and maintenance are also approximately
47.6% of the adjusted budget amount. Petroleum Products (fuel), which makes up approximately 50% of the operating and
maintenance budget, is 50.8% expended through December 2008. This is a major factor in the overall, and category, per-
centage remaining relatively high.
EM&FS continues to maintain the City’s entire fleet of vehicles and equipment, which includes public safety (police cars and
fire trucks), buses, sanitation vehicles, regular passenger vehicles and many other miscellaneous types of equipment. Al-
most all expenses (labor, equipment, fuel, etc.) are charged back to the user departments. Staff has been monitoring the
charge-backs closely, and will continue to do so throughout the fiscal year to ensure all expenses are recognized.
EQUIPMENT MAINTENANCE FUND REVENUES — Equipment Maintenance & Fleet Services reve-
nues through December 2008 are $3,234,599, or 42.6% of adjusted budget projections. Billings
and collections between funds during the year often do not match exactly between months. Future monitoring reports
should show the gap between expenditures and revenues much closer, though, since the goal of an Internal Service Fund is
to break even at the end of a fiscal year. As mentioned above, charge-outs for this fund will be closely monitored to ensure
entries between expenditures and revenues are closely matched on an on-going basis through the fiscal year so that the
fund recognizes all receipts due it.
2006-07 2007-08 2008-09
July 300,132 $ 291,739 $ 426,475 $
August 498,491 491,369 819,663
September 467,973 729,168 572,292
October 685,297 578,562 580,038
Novem ber 614,390 484,018 505,847
Decem ber 398,523 516,927 519,560
January 570,253 537,330
February 537,146 599,590
March 524,185 688,197
April 633,352 594,281
May 467,048 541,520
June 830,527 844,455
TOTAL EXP 6,527,317 $ 6,897,156 $ 3,423,875 $
Adj Budget 6,369,462 $ 6,870,800 $ 7,233,839 $
EM&FS EXPENDITURES
2006-07 2007-08 2008-09
July 487,742 $ 509,682 $ 577,353 $
August 569,053 681,772 555,946
September 446,997 515,434 565,109
October 578,766 613,361 564,228
Novem ber 470,644 500,468 454,692
Decem ber 481,954 708,215 517,271
January 506,898 601,120
February 534,025 415,889
March 575,564 673,935
April 558,400 551,152
May 570,660 419,811
June 629,066 697,581
TOTAL REV 6,409,769 $ 6,888,420 $ 3,234,599 $
Adj Budget 6,212,059 $ 6,966,954 $ 7,585,747 $
EM&FS REVENUES
Equipment Maintenance & Fleet Services
Revenue vs. Expenditure - Fiscal 2008-09
$0
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09-Rev
2008-09-Exp
NORMAL
NEGATIVE
Equipment Maintenance & Fleet Services
Revenue vs. Expenditure - Fiscal 2007-08
$0
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08-Rev
2007-08-ExpSELF-INSURANCE FUND REVENUES — Internal service charges for the Self Insurance
Fund are developed annually based on the projected expenses for the fiscal year and are allo-
cated to each operating division based on a five-year experience rating. The amount is charged monthly at relatively
equal increments throughout the fiscal year. Receipts for fiscal 2008-09 through December are approximately 51.9%
of adjusted budget projections. The large transfer of cash, as mentioned above, has left the fund at a very low re-
serve level. It is anticipated that the expenditures will not be 100% expended at the end of the fiscal year, which will
assist in helping build back the fund. Further analysis continues to be done on this fund, and any significant changes
will be reportedly immediately.
INTERNAL SVCS FUNDS
16
INTERNAL SERVICE FUND ANALYSIS:
SELF-INSURANCE FUND THROUGH DECEMBER 2008 [Revenues vs. Expenditures — Cumulative]
SELF-INSURANCE FUND EXPENDITURES — The primary function of the Self Insurance
Fund is to pay insurance and claims costs for the City’s General Liability, Workers’ Compensa-
tion, and Property programs. In any given year, there are often spikes in expenditures that result from a judgment or
settlement of a particular claim. Through December 2008, Self Insurance Fund expenditures are 47.3% of adjusted
budget, which is normal for this time of year. Expenditures through December for the Premiums/Claims Division of the
Self Insurance fund are 49.7%. Insurance premiums are due early in the fiscal year, which causes the year to date
expenditures to be high. All other expenditures within the Fund are relatively normal for this time of the year. A large
transfer of approximately $3.6 million was made from this fund last fiscal year to help pay for work to repair the Cranks
Road hillside. This fund continues to be monitored closely to ensure it is still able to appropriately cover the City.
2006-07 2007-08 2008-09
July 153,900 $ 58,341 $ 1,405,609 $
August 375,951 1,916,546 557,547
September 1,583,018 470,758 294,637
October 437,052 366,042 469,756
Novem ber 514,261 559,913 436,980
Decem ber 262,380 199,417 357,415
January 438,291 977,875
February 1,877,544 127,968
March 391,740 686,842
April 382,803 457,858
May 529,753 581,710
June (1,271,459) 4,338,515
TOTAL EXP 5,675,234 $ 10,741,785 $ 3,521,944 $
Adj Budget 7,442,927 $ 11,072,650 $ 7,449,812 $
SIF Expenditures
SIF Revenues vs. Expenditures
Fiscal 2007-08
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08 Rev
2007-08 Exp
2006-07 2007-08 2008-09
July 639,813 $ 582,737 $ 547,878 $
August 643,878 623,861 687,329
September 690,930 622,582 720,886
October 735,469 626,233 642,585
Novem ber 633,941 624,557 643,281
Decem ber 635,328 648,313 663,575
January 632,191 630,713
February 640,449 616,418
March 682,001 655,223
April 655,314 589,086
May 659,847 613,407
June 627,433 840,446
TOTAL REV 7,876,594 $ 7,673,576 $ 3,905,534 $
Adj Budget 7,515,002 $ 7,274,613 $ 7,530,015 $
SIF Revenues
NORMAL
NORMAL
SIF Revenues vs. Expenditures
Fiscal 2008-09
$0
$2
$4
$6
$8
$10
$12
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Rev
2008-09 ExpAsset
Seizure
4%
Art Fund
6%
Other
1%
Gen Fund
Capital
57%
Grants
Capital
26%
Special Gas
Tax
6%
Adjusted
Budget
Expended
to Date
Major Projects:
Street & Alley Improvements $2,584,610 $616,485 Residential Paving, Carson St, Sepulveda Blvd
Traffic Signal & Lighting Improvements $2,883,445 $375,964 Fox Hills ATSS
Bridge Improvements n/a n/a No projects at this time
Parking Improvements $34,639 $0 Parking Meter Repair/Replacement
Community Improvements $1,803,156 $341,562 Art Fund Projects
Parks & Park Facility Improvements $1,322,705 $181,784 Skate park, Dog park, Culver West park
Police & Fire Improvements $5,343,786 $803,612 Fire Station #3, CAD/RMS/MDT, Firing Range
Sewer & Storm Drain Improvements $6,394,158 $115,535 Blackwelder/Smiley, Cranks Rd, Drakewood Ave
Other Facility & Equipment Improvements $4,056,274 $853,673 Cranks Slope Repair, Other City Bldg Repairs
Total Budget
Funding Source
Expended
to Date
Expected
Completion
1. Fire Station #3 $6,527,000 54% - Gen Fund Capital
46% - RDA Bond
$3,772,762 Dec. 2008
(delayed)
2. Cranks/Tellefson Hill Slide Repair $3,695,580 100% - Self Insurance Fund
($$ trsfrd to Gen Fund Cap)
$3,670,852 Complete
3. Stormwater Discharge Program/NPDES $2,102,000 59% - Grants Capital
41% - Gen Fund Capital
$222,497 On-going project
to establish funds
for state mandate
4. Fox Hills Area Traffic Signal Synch Project $2,033,500 73% - Grants Capital
11% - Special Gas Tax
9% - Developer Mitigation
7% - Gen Fund Capital
$853,035 June 2009
5. Public Safety CAD RMS MDT Project $1,642,098 100% - Gen Fund Capital $979,301 Currently Training
on System
CAPITAL PROJECTS
17
CAPITAL PROJECTS:
TOP 5 CAPITAL PROJECTS (by total budget)
CAPITAL IMPROVEMENT EXPENDITURES BY CATEGORY
NOTABLE ACTIVITY:
Many significant capital projects are continuing to move forward, including Fire
Station #3, the Public Safety CAD/RMS/MDT project, and the Fox Hills Area
Traffic Signal Synchronization Project. The Cranks/Tellefson Hill Side repair
has been completed and Phase I of the Residential Overlay Program has been
completed. Due to the state’s budget problems, some Public Works projects,
such as Phase II of the Residential Overlay Program and Gas Tax funded pro-
jects, may be delayed due to the state withholding funding. The Governor pre-
viously indicated he will fast track additional Prop 1B funds in an attempt to
stimulate some economic growth. However, due to the state’s inability to sell
bonds to fund these project, it is doubtful that the City will get another allocation
in the near future. In fact, the state has stopped work on thousands of current
state run public works projects, including the Ballona Creek Trail and Bike
Path Enhancement and some work on Washington Blvd, due to lack of funds
and is considering delaying remittance of Gas Tax funds to cities in order to
improve their cash flow position. Staff will continue to track the budget situation
and adjust CIP project schedules accordingly.
MAJOR CIP FUNDING SOURCES
Total = $24,422,773
OTHER FUNDS
18
OTHER FUND ANALYSIS:
FUND ANALYSIS FOR OTHER FUNDS THROUGH DECEMBER 2008:
PARKING MAINTENANCE FUND — Receipts through December 2008 are 41.9% of budg-
eted projections. Street filming receipts are currently behind projections, but other parking
meter areas are close to projected revenue. The primary reason the fund is behind projections is because a major
customer switched from monthly parking placards to parking meter keys, which resulted in monthly revenue drop-
ping $10,000. Approximately $780,000 of Parking Maintenance revenues are transferred to the General Fund each
year to pay for street related general maintenance work. This fund has continued to meet or exceed budgeted pro-
jections for the last several years. Expenditures (other than transfers) can be found in the CIP section on Page 17.
OPERATING GRANTS FUND — Through December 2008, Operating Grants revenues are
below expenditures. It is normal for reimbursements not to line up on a month-to-month basis
during the fiscal year due to timing issues of reimbursements. Each grant is analyzed separately and final match-
ups between revenues and expenditures will be reported at the end of the fiscal year. This fund is made up of
grants that include Senior Nutrition, RSVP, and DUI Enforcement grants, among others.
CAPITAL GRANTS FUND — Through December, Capital Grants fund revenue is at 24.5%
of the annual budget projection, but this is due to the fact that many of these grants are ex-
pected to be received later in the fiscal year. The City does not appropriate any Capital Grant funds unless a signed
letter authorizing the receipt of the grant funds from the authorizing agency has been received. This has helped
keep this fund in good shape, and ensures the City is reimbursed in a timely manner.
EQUIPMENT REPLACEMENT FUND (ERF) — The ERF continues to maintain a healthy
balance and is able to fund emergency replacements when needed. For fiscal year 2008-09,
$1.3 million is budgeted for the replacement of vehicles, including 15 vehicles for public safety. Funding is reim-
bursed monthly by Departments through an amortization schedule that ensures adequate replacement funding is
available for vehicles at the end of their useful lives.
SPECIAL GAS TAX (HIGHWAY USERS TAX) — For the current fiscal year, the Gas Tax
fund is at 68.7% of budgeted projections through December 2008. This is primarily due to the
State remitting taxes withheld from April through September, which are recorded in this fiscal year. The Gas Tax
Fund is comprised of a tax on every gallon of gas sold in the City. When the price of gasoline goes up, this amount
stays constant and can only be changed per legislative action. The tax has remained unchanged since 1994, but
may change as the State attempts to deal with the budget crisis. One proposal being considered is to eliminate the
gas tax and institute a higher gas “fee.” If this passes, it is unknown how it will effect payments to cities. Page 17
identifies some CIP projects funded with Gas Tax funds.
ARTS IN PUBLIC PLACES — Through December, Art Fund receipts are 35.8%. A refund
was issued in December for a fiscal 2005-06 deposit. Deducting this refund would place the
Fund at 60.0% of projections. The Art Fund is increased when a developer elects not to fulfill the City’s public art
requirement and instead pays a fee of 1% of the total building cost. This funding is a special revenue source and
can only be used for Public Art purposes and no funding is ever appropriated above the amount available.
PARKS FACILITY FUND (QUIMBY FEES) — This is a special revenue that can only be
used for parks related projects. Through December, $51,170 or 102.3% of the base budgeted
revenue was collected. The revenue in this fund is erratic because it is dependent on new residential development
of four or more units and each year only a handful of developments fall into this category. Previously, this fund’s
annual revenue has ranged from $4,200 to $112,000. Due to developments currently in progress, this fund has ex-
ceeded the annual base budget projection of $50,000.
NORMAL
NORMAL
NORMAL
NEGATIVE
POSITIVE
NEGATIVE
POSITIVE FINANCIAL
FINANCIAL
MONITORING
MONITORING
REPORT
REPORT
CURRENT MONTH YEAR TO DATE PAGE
Notable News and Activity Page 2
Fund Balances Available for Projects and
Programs
Page 3
Unrestricted Funds
Revenues and Expenditures Summary NORMAL NORMAL Page 3
Expenditure Overview NORMAL NORMAL Page 4
Expenditures by Category
NORMAL
BELOW BUDGET
NORMAL
BELOW BUDGET
Page 4-6
Revenue Overview NORMAL NORMAL Page 7
Assessed Valuations NORMAL NORMAL Page 8
Tax Increment Revenue Overview NORMAL NORMAL Page 8
Tax Increment by Project Area NORMAL NORMAL Pages 8-9
Other Revenues
POSITIVE
NEGATIVE
POSITIVE
NEGATIVE
Page 10-11
Housing Funds
Housing Fund (Expenditures/Revenues) NORMAL NORMAL Page 12
Tax Exempt Bond Fund
Tax Exempt Bond Fund (Expenditures/Revenues) NORMAL NORMAL Page 13
PERFORMANCE AT A GLANCE
Mid-Year FY 2008-09
POSITIVE or
BELOW BUDGET
= Revenues greater than 5% ABOVE Adjusted Budget; or
Expenditures greater than 5% BELOW Adjusted Budget
NORMAL
= Actual within 5% of Adjusted Budget
NEGATIVE or
EXCEED BUDGET
= Revenues greater than 5% BELOW Adjusted Budget; or
Expenditures greater than 5% ABOVE Adjusted Budget
MIXED or
WARNING
= Category contains both positive and negative financial results; or
Financial activity currently normal; however, there are potential factor(s) that may impact future financial activity
REDEVELOPMENT
AGENCY
2008-09 MID-YEAR
AT-A-GLANCE
Economic Overview
The economic contraction continued to worsen through the first half of
the fiscal year with no end in sight. The commercial and residential real
estate markets continue to be very soft, unemployment continues to
climb, and the new presidential administration is scrambling to put to-
gether an economic stimulus package that will encourage job growth
and stop the bleeding. The credit markets are still very tight despite the
$700 billion federal bailout package unveiled a few months ago. This is
effecting many businesses’ (including the State of California) ability to
make payroll and meet other obligations. It is also effecting many de-
velopers’ ability to secure construction financing. As a result, many pro-
jects that were originally slated to be well underway by now have been
delayed. To date, there are no significant signs that the current eco-
nomic conditions will improve any time soon. In fact, most signs point
to the economy getting worse before it gets better.
Revenue & Expenditure Summary
In August, an updated Assessed Value report was received from the
County Assessor’s Office that indicated an increase in 2008-09 Tax
Increment receipts of approximately $2.4 million despite the slumping
economy. Receipts through the first half of the fiscal year support this
report. The increase is the result of property turnover and development
projects that were significantly underway or completed prior to the onset
of the heavy economic troubles earlier this fiscal year. It is expected
that tax increment growth will begin to slow over the next two fiscal
years to reflect the slowing of development projects and property turn-
over in the redevelopment project area. The Agency did not close
escrow on any land sales in the first quarter.
Other than Tax Increment and Land Sale Proceeds, there are only a
few other small revenue sources (i.e. account for less than 10% of total
revenue), such as Pacific Theaters, parking revenue, and the Farmer’s
Market. Pacific Theater has significantly outperformed budget projec-
tions, however parking revenues are below budget projections and the
Farmers’ Market is basically on target.
In November, the Agency made its annual debt service payment of
approx $14 million. Other mid-year expenditures are primarily related
to routine operating costs, program costs, and administrative reim-
bursements to the City. The most significant expenditure adjustment
that needs to be made at mid year is appropriating the state required
$2.25 million ERAF payment to relieve some of the state’s obligation
to fund public schools. This report provides more detail on revenues
and expenditures through mid-year.
2
Notable Economic News
State Budget Update
In November, the governor called a special
legislative session to address the $14+ bil-
lion deficit in the current budget year. The
governor’s initial proposal included a combi-
nation of spending cuts and revenue in-
creases. His proposal did not include any
increase or extension of the ERAF payment
from California Redevelopment Agencies
beyond the $350 million already approved
(CCRA share is $2.25 million). However,
the Legislative Analysts Office released
their own recommendations on how to close
the budget gap, which included making
the ERAF shift permanent. Legislators
will be working with the Governor over the
next few weeks to try to hammer out a real-
istic budget; however, to date, no agree-
ments have been reached.
CRA ERAF Lawsuit
The California Redevelopment Associa-
tion (CRA) has filed a lawsuit against the
state alleging that taking local redevelop-
ment agency funds is illegal under Proposi-
tion 1A approved by voters in November
2004. It is likely that the lawsuit will still be
pending on May 1
st
(when the ERAF pay-
ment is due), so the CRA has recom-
mended that agencies make the required
payment to avoid any penalties. If the CRA
is successful, current, and potentially fu-
ture, ERAF payments will be invalidated
under the California constitution. This will
most likely be a long court battle that could
take months, even years, to resolve. Staff
will keep the Agency Board apprised of any
new developments.
Notable Development News
• 9900 Culver Blvd is under construc-
tion and is expected to be completed
by summer/fall 2009.
• Westfield Fox Hills Mall is on schedule
to be completed by October 2009.
• Sony Studios construction of an addi-
tional studio is also underway and
moving along as scheduled.
• The credit crunch continues to impact
project financing as projects such as
Parcel B, Baldwin Motel Site, and
Wasington/Centinela continue to have
difficulty securing project financing.
RDA BUDGET REPORT
3
CASH AVAILABLE for CAPITAL INVESTMENT
FUND BALANCE AVAILABLE FOR PROJECTS/PROGRAMS:
UNRESTRICTED REVENUE and EXPENDITURE SUMMARY: ( graphs are cumulative)
REVENUE: To date, the RDA has received 38% of the total esti-
mated revenue. If the recommended budget amendments are
adopted, there will be a net decrease of $3,174,000 in estimated
revenue, which will increase the receipts to 41% of total estimated
revenue.
EXPENDITURE: To date, the RDA has expended 57% of the ad-
justed budget. If the recommended budget amendments are
adopted, there will be a net increase in expenditures of $3,430,520,
which will decrease the expenditures to 52% of the adjusted budget.
The net result of the recommended budget amendments is total
estimated revenues of $42,950,775 and total adjusted expendi-
tures of $41,252,061.
More detail on revenues and expenditures can be found in the follow-
ing sections of this report.
Actual Actual Estimated Estimated
Ending Ending Ending Ending
2006-07 2007-08 2008-09* 2009-10*
Unrestricted Funds $13,700,000 10,770,000 2,500,000 8,800,000
Housing Set Aside $15,141,000 19,000,000 14,000,000 12,500,000
Tax Exempt Bonds $24,895,000 21,850,000 8,750,000 3,400,000
The estimated ending balance for each fund represents the approximate amount of cash capital available for investment
in new projects or programs. The estimated balances include the recommended mid-year budget adjustments.
The audited beginning balance for unrestricted funds as of June 30, 2008 (i.e. tax increment, parking revenues, theatre revenues,
etc.) is approximately $10.8 million.
Assumptions: The estimated ending balances above assume that an interest only payment on the $9 million loan from the City was made in FY 2007-
08 and the entire $9 million principal balance is repaid in FY 2008-09 from RDA fund balance. It also assumes that 100% of the adjusted budget is
expended and $5.9 million in land sale proceeds is received in FY 2008-09. The estimated ending balance in FY 2009-10 assumes that 100% of the
approved budget is expended and $10.4 million in land sale proceeds are received (i.e. Washington/Centinela and Baldwin Motel). Based on the cur-
rent economic conditions, the land sale proceeds and, consequently, the RDA’s ability to repay the City loan, may need to be reevaluated.
NORMAL
2008-09
Revenue
2008-09
Expenditure
Jul 29,131 $ (61,504) $
Aug 782,065 229,232
Sep 399,899 1,799,684
Oct 356,216 2,559,747
Nov 4,841,495 12,656,746
Dec 11,133,208 4,245,202
Jan - -
Feb - -
Mar - -
Apr - -
May - -
Jun - -
TOT Y-T-D 17,542,014 21,429,107
Adj Budget 46,124,775 37,821,541
($0)
$10
$20
$30
$40
$50
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2008-09 Revenue 2008-09 Expenditure
($5)
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Dollars in Millions
2007-08 Revenue 2007-08 Expenditure
RDA BUDGET REPORT
4
UNRESTRICTED FUND EXPENDITURES:
TOTAL UNRESTRICTED FUNDS EXPENDITURES: (graph is cumulative)
ADMINISTRATIVE EXPENSES: (graph is cumulative)
EXPENDITURE ANALYSIS BY CATEGORY:
Through the first half of 2008-09, the RDA has expended approx. 57% of the adjusted
budget compared to 56% in 2007-08 and 78% in 2006-07. The first two quarters of the previous
two fiscal years included land acquisition related costs, which is not the case in FY 2008-09. Debt Service payments for
the RDA’s current bond issues were made in November.
RDA expenditures are relatively sporadic on a monthly basis as there are often spikes in expenditures due to land ac-
quisition costs or other one-time development related costs. Generally, the month of November has the most cash go-
ing out the door as that is when the annual debt service payments for RDA bonds are due (i.e. principal and interest
payments to bond holders). The following sections will provide more detail on RDA expenditures by category.
Due to salary savings from vacant positions , Admin Expenses are 39% of the total budget
through the first quarter of the fiscal year (Target = 48%). The Redevelopment Agency reim-
burses the City for all City staff whose position is impacted by RDA activities (i.e. Redevelopment Division staff and par-
tial reimbursement for positions in Planning, Building Safety, Code Enforcement, City Attorney, Police, Fire, PRCS, Pub-
lic Works, etc.). Admin expenditures also include operating expenses and contract costs for RDA activities. Reimburse-
ment expenses for staff positions are prorated and transferred from the Agency to the City on a monthly basis, therefore,
these expenditures are relatively stable.
Administrative Expenses
$(1)
$-
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
Jul (329,591) $ (118,918) $ 100 $
Aug 136,261 23,471 54,109
Sep 19,104 87,185 1,187,627
Oct 123,136 153,831 410,334
Nov 31,666 14,318 451,089
Dec 1,872,801 2,248,339 485,523
Jan 81,371 596,748 -
Feb 73,893 461,430 -
Mar 120,521 456,443 -
Apr 41,418 438,066 -
May 157,485 439,925 -
Jun 2,563,801 553,815 -
TOT Y-T-D 4,891,866 5,354,653 2,588,782
Adj Budget 5,993,953 6,126,231 6,744,265
2006-07 2007-08 2008-09
Jul (500,262) $ (49,291) $ (61,504) $
Aug 6,215,095 (22,671) 229,232
Sep 441,704 4,950,808 1,799,685
Oct 7,136,304 282,921 2,559,746
Nov 16,966,460 13,049,104 12,656,746
Dec 6,551,911 5,526,036 4,245,202
Jan 1,524,960 1,602,987 -
Feb 1,551,627 1,441,268 -
Mar 2,681,795 1,279,876 -
Apr 2,123,695 2,277,211 -
May 5,550,786 5,313,400 -
Jun 5,665,612 3,545,668 -
TOT Y-T-D 55,909,687 39,197,317 21,429,107
Adj Budget 47,108,917 $ 42,726,758 $ 37,827,540 $
Total RDA Expenditures
$(10)
$-
$10
$20
$30
$40
$50
$60
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
NORMAL
NORMAL
RDA BUDGET REPORT
GENERAL OBLIGATION EXPENSES: (graph is cumulative)
UNRESTRICTED FUNDS EXPENDITURE ANALYSIS:
Through mid-year, Economic Development and Cultural Affairs programs have ex-
pended approx. 19% of the adjusted budget compared to 20% in 2007-08 and 31% in
2006-07. The dip in expenditures in FY 2007-08 is primarily the result of the vacant Econ Dev Administrator position
and the continued low FY 2008-09 expenditures are due uncertainty in the economy making local businesses hesitant
to participate in Econ Dev programs.
Economic Development expenditures typically run below the adopted budget due to the system for recording manage-
ment costs for the three downtown parking structures (Cardiff, Ince, and Watseka). Basically, the full cost of the con-
tract is budgeted, however, the revenues from transient parking that is collected by Modern Parking each month is de-
ducted from their monthly fee and the RDA pays the difference. This system is being reviewed and a change will be
proposed by staff when the current contract with Modern Parking expires in June 2009.
NOTE: Economic Development/Cultural Affairs programs include expenses for economic development projects, real property management, and
Cultural Affairs programs such as the Culver City Music Festival, Farmers’ Market, Music in the Chambers, and the Art of… Speaker Series.
ECOMONIC DEVELOPMENT/CULTURAL AFFAIRS PROGRAMS: (graph is cumulative)
5
Through mid-year, the RDA has expended 64% of the adjusted budget, compared to 59% in
2007-08 and 65% in 2006-07. GO expenses are payments that the Agency is legally required to
make, such as debt service on RDA bond issues (paid each year in November), statutory pass through payments, transfers to
the Housing fund for the 20% statutory housing set aside, and ERAF payments (when applicable). As noted, the State has
required a one-time ERAF payment for FY 2008-09 of $2.25 million. Since the state budget was adopted well after the
RDA’s budget was adopted, a budget amendment will be needed to account for the ERAF payment.
NORMAL
BELOW BUDGET
2006-07 2007-08 2008-09
Jul (177,364) $ 81,994 $ (65,252) $
Aug 177,364 (81,994) 76,724
Sep 625 1,334,270 -
Oct 1,218,471 - 1,449,487
Nov 10,394,293 10,648,686 12,093,795
Dec 2,280,387 2,937,420 3,560,587
Jan 401,505 393,052 -
Feb 912,231 873,941 -
Mar 244,576 738,546 -
Apr 1,160,872 1,611,638 -
May 5,208,021 4,712,379 -
Jun 863,673 1,280,618 -
TOT Y-T-D 22,684,654 24,530,550 17,115,341
Adj Budget 21,278,143 25,131,668 24,301,839
General Obligation Expenses
$(5)
$-
$5
$10
$15
$20
$25
$30
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
Jul 44,193 $ (12,367) $ 1,959 $
Aug 82,985 30,581 69,921
Sep 231,941 107,866 252,049
Oct 85,756 111,624 143,262
Nov 35,593 74,236 104,898
Dec 470,849 296,671 151,627
Jan 108,342 171,609 -
Feb 79,161 82,655 -
Mar 84,301 78,485 -
Apr 33,085 120,448 -
May 150,852 134,492 -
Jun 815,831 496,806 -
TOT Y-T-D 2,222,889 1,693,106 723,716
Adj Budget 3,048,870 3,118,088 3,792,606
Ecomomic Development
Cultural Affairs
$(500)
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Thousands
2006-07 2007-08
2008-09 2008-09 Budget
RDA BUDGET REPORT
CURRENT PROJECTS: (graph is cumulative)
UNRESTRICTED FUNDS EXPENDITURE ANALYSIS:
Potential Projects include expenses for opportunity sites as they arise in various parts of the
City, such as potential sites on Mid-Washington, Selmaraine/Sepulveda, Jefferson Blvd
and the Hayden Tract. A majority of the expenses are on appraisals, exploratory studies, and other expenses related
to evaluating a potential redevelopment site. The primary expenditures through mid-year were related to studies
in the Hayden Tract area.
Note: The spike in expenditures in June 2008 is related to the Tapp option exercised by the Agency to purchase land
related to the Pleasantview project.
POTENTIAL PROJECTS: (graph is cumulative)
6
Current Projects are projects that are currently underway, such as Washington/Centinela,
Washington/National, and the Baldwin Motel. Property acquisition costs are also included in
the Current Projects category and makes up the primary expenditure. Current Project expenditures are not consistent
throughout the year, therefore, a year to date comparison to prior years is not as relevant. Mid year expenditures are
primarily related to relocation services for the Washington/National project and a payment to the developer of
9900 Culver Blvd pursuant to a development agreement.
NORMAL
2006-07 2007-08 2008-09
Jul (37,500) $ - $ 1,689 $
Aug 5,818,485 4,846 27,400
Sep 189,964 3,421,487 352,673
Oct 5,708,941 16,296 554,328
Nov 6,504,908 2,311,864 6,376
Dec 1,919,324 37,880 47,428
Jan 929,874 376,231 -
Feb 481,692 23,242 -
Mar 2,231,702 6,402 -
Apr 880,326 107,059 -
May 28,978 26,604 -
Jun 1,411,892 83,325 -
TOT Y-T-D 26,068,586 6,415,236 989,894
Adj Budget 16,547,177 7,086,497 2,474,056
Current Programs/Projects
$(5)
$-
$5
$10
$15
$20
$25
$30
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
Jul - $ - $ - $
Aug - 425 1,078
Sep 70 - 7,336
Oct - 1,170 2,335
Nov - - 588
Dec 8,550 5,726 37
Jan 3,868 65,347 -
Feb 4,650 - -
Mar 695 - -
Apr 7,994 - -
May 5,450 - -
Jun 10,415 1,131,104 -
TOT Y-T-D 41,692 1,203,772 11,374
Adj Budget 240,774 1,264,274 514,774
Potential Projects
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Thousands
2006-07 2007-08
2008-09 2008-09 Budget
NORMAL
RDA BUDGET REPORT
7
UNRESTRICTED FUNDS REVENUE ANALYSIS
TOTAL UNRESTRICTED FUNDS REVENUE THROUGH DECEMBER 2008:
Fiscal 2006-07, 2007-08, and 2008-09 (graph is cumulative)
UNRESTRICTED REVENUES — The Redevelopment Agency received an updated Assessed Valuation Re-
port from the County Assessor in August indicating an increase in assessed values higher than what was originally pro-
jected for the budget. Based on this updated AV report, and supported by TI receipts through mid-year, estimated tax
increment revenues for FY 2008-09 are recommended to be increased by approximately $2.4 million. There are also a
few smaller revenue sources, such as the Pacific Theaters, film parking, and the Farmer’s Market, which outperformed
budget projections through mid-year. More detail on each of these revenue sources is provided in the following sec-
tions.
LAND SALE PROCEEDS — The FY 2008-09 adopted budget included approximately $11.5 million in land sale
proceeds in anticipation of the sale of Baldwin Motel and Washington/Centinela sites. Due to the current credit mar-
kets, both of those projects are having trouble with securing financing and are not expected to close escrow prior to the
end of the fiscal year. Therefore, those revenues will need to be deferred to future years. Additionally, Parcel B land
sale proceeds were originally anticipated to be received prior to June 2008. However, due to the aforementioned credit
crunch, the receipt of these funds is not anticipated until the end of FY 2009. Consequently, a budget amendment is
being recommended to defer the projected land sale proceeds for Baldwin Motel site and Washington/Centinela to next
fiscal year and include the Parcel B land sale proceeds in this fiscal year, for a net decrease in Land Sale proceeds of
$5.6 million. If the credit markets continue to slump and Parcel B is unable to secure project financing in the next few
months, the $5.9 million land sale proceeds may also need to be deferred until FY 2009-10, which will impact the Rede-
velopment Agency’s ability to meet some current obligations, such as the remaining balance on the loan to the City.
City Loan to the Agency — As mentioned above, delaying the receipt of approximately $5.6 million in land sale pro-
ceeds may impact the Agency’s ability to repay the outstanding balance of the $9 million loan. Staff will continue to
monitor the Agency’s cash flow position throughout the fiscal year to determine the Agency’s ability to repay at least a
portion of the outstanding principal.
SUMMARY — Overall, the Redevelopment Agency’s revenues, especially tax increment receipts, remain solid. To
date, some smaller revenue sources have outperformed budget projections, such as Pacific Theaters, film parking, and
the Farmers’ Market, while others have fallen below budget projections, such as long term parking at the parking struc-
tures. At this point, the biggest variable is the state credit market and developers’ ability to secure financing and pur-
chase Agency owned land. Staff will continue to monitor the state of the economy and the impacts to the Agency fi-
nancial position.
2006-07 2007-08 2008-09
Jul 7,104 $ (395,530) $ 29,131 $
Aug 612,417 656,599 782,065
Sep 386,765 368,304 399,899
Oct 2,755,046 415,202 356,216
Nov 9,158,540 3,676,946 4,841,495
Dec 8,717,465 9,651,356 11,133,208
Jan 2,007,880 1,965,506 -
Feb 7,308,540 3,912,079 -
Mar 1,460,304 1,378,423 -
Apr 5,198,605 6,434,458 -
May 5,185,795 4,831,876 -
Jun 5,536,717 3,042,264 -
TOT Y-T-D 48,335,178 35,937,483 17,542,014
Adj Budget 28,192,644 33,006,077 46,124,775
RDA Total Revenues
$(5)
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
RDA BUDGET REPORT
8
UNRESTRICTED FUNDS REVENUE ANALYSIS (continued):
TAX INCREMENT:
Fiscal 2006-07, 2007-08, and 2008-09 (graph is cumulative)
ASSESSED VALUATIONS: Fiscal 2006-07, 2007-08, and 2008-09
The first Tax Increment revenues are received in November of each fiscal year. Through mid-
year, Tax Increment revenues are approximately 11% above the projected budget. An updated
Assessed Valuation Report was received from the County Assessor in August. Based on this updated AV report
and the revenues received through mid-year, a budget amendment is recommended to increase tax increment
revenues for FY 2008-09 by approximately $2.4 million to $32.9 million.
Despite the current economic conditions, Tax Increment growth is expected to remain healthy through FY 2009-10 due
to development currently being constructed (e.g. Westfield Mall renovation, Sony parking lot, and 9900 Culver Blvd) as
well as development currently in the pipeline, such as Parcel B, and Washington/Centinela. However, due to the cur-
rent state of the credit markets, which is now beginning to have a significant impact on construction financing (including
the previously mentioned projects in the pipeline), and the potential for assessed value appeals, TI receipts are ex-
pected to slow in FY 2010-11.
Per Proposition 13 passed by California voters in 1978, a property’s value is assessed when it is purchased or sig-
nificantly remodeled. Once the assessed value is established, it cannot increase by more than 2% per year until the
property is sold or remodeled, at which time it is re-assessed. The property owners’ annual property tax is calcu-
lated as 1% of the assessed value. The Redevelopment Agency receives tax increment based on the increase in
assessed value over a base year (base year = the year that a particular project area was established). The table
below shows the total assessed values and % change from the prior year for each project area for the three most
recent years.
NORMAL
2006-07
% change
prior year 2007-08
% change
prior year 2008-09
% change
prior year
Project Area 1 $741,987,037 6.51% $899,729,335 21.26% $991,903,331 10.24%
Project Area 2 $576,349,621 9.07% $636,801,158 10.49% $696,384,724 9.36%
Project Area 3 $1,284,738,339 5.25% $1,375,974,122 7.10% $1,516,215,389 10.19%
Project Area 4 $513,029,124 6.67% $590,320,656 15.07% $635,175,732 7.60%
$3,116,104,121 6.47% $3,502,825,271 12.41% $3,839,679,176 9.62%
Tax Increment - All Project Areas
$-
$5
$10
$15
$20
$25
$30
$35
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
M illio n s
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
July - $ - $ - $
August - - -
September - - -
October - - -
November 2,471,416 3,084,339 4,709,440
December 10,886,956 12,665,357 15,514,991
January 12,417,929 14,215,606 -
February 16,035,595 17,853,213 -
March 17,003,194 18,975,948 -
April 22,029,031 25,022,879 -
May 26,927,057 29,707,362 -
June 28,460,085 31,387,713 -
TOTAL 28,460,085 $ 31,387,713 $ 15,514,991 $
Adj Budget 24,220,000 $ 29,593,000 $ 30,535,000 $
RDA BUDGET REPORT
9
UNRESTRICTED FUNDS REVENUE ANALYSIS (continued):
TAX INCREMENT by COMPONENT AREA:
Fiscal Years 2006-07, 2007-08, and 2008-09 (graphs are cumulative)
The above graphs illustrate the magni-
tude of tax increment generated from
each of the four project areas. Project
Areas 1 and 3 generate the most tax
increment, generating approximately
70% of the total TI revenues (30% and
40% respectively). Project Area 1 is
comprised primarily of the Fox Hills
area (seen here in blue). Project Area
3 is comprised primarily of the Hayden
Tract and Downtown areas (seen in
red). Project Area 2 is comprised pri-
marily of the Jefferson/Overland in-
tersection (seen in yellow) and Pro-
ject Area 4 is comprised primarily of
West Washington Blvd and Sepul-
veda Blvd.
Project Area Expiration Dates:
Project Area 1: 07/26/2014
Project Area 2: 12/28/2014
Project Area 3: 11/25/2018
Project Area 4: 11/23/2029
Project Area 1
$-
$2
$4
$6
$8
$10
$12
$14
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
Project Area 2
$-
$2
$4
$6
$8
$10
$12
$14
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
Project Area 3
$-
$2
$4
$6
$8
$10
$12
$14
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
Project Area 4
$-
$2
$4
$6
$8
$10
$12
$14
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
RDA BUDGET REPORT
10
UNRESTRICTED FUNDS REVENUE ANALYSIS (continued):
REVENUE SOURCES:
Fiscal Years 2006-07, 2007-08, and 2008-09 (graphs are cumulative)
Despite falling short of budget projections in FY 2007-08 (due to a number of factors, including
lack of quality product and increased property tax assessment), Pacific Theater has ex-
ceeded budget projections through the first half of FY 2008-09 (74% actual vs. 40% expected). The theaters
were aided by a number of blockbuster movies (e.g. Batman, Iron Man, Indiana Jones, Hulk, etc.). Although the
Theaters did very well in through mid-year, there is a lag in receipts of a few months. The continually weakening
economy may have a negative impact on theater receipts through the remainder of the fiscal year. Staff will continue
to monitor the performance of the theater and provide that information to the Agency Board. No budget amendments
are recommended at this time.
POSITIVE
Through mid year, Farmers’ Market receipts have slightly outperformed budget projections (52%
actual vs. 50% expected). No budget amendments are recommended at this time.
POSITIVE
2006-07 2007-08 2008-09
Jul 91,770 - 209,487
Aug 128,562 - 323,733
Sep 163,466 248,471 201,622
Oct 94,202 125,539 57,298
Nov 20,343 1,786 35,174
Dec 128,939 1,786 138,366
Jan 137,587 112,184 -
Feb 153,384 182,126 -
Mar 147,478 1,786 -
Apr 47,719 - -
May 66,962 3,572 -
Jun 506,545 196,961 -
TOTAL 1,686,957 874,211 965,680
Adj. Budget 800,000 1,200,000 1,300,000
Pacific Theatre
$0.0
$0.3
$0.5
$0.8
$1.0
$1.3
$1.5
$1.8
$2.0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
Jul 7,896 $ 11,234 $ 15,220 $
Aug 13,160 14,155 12,581
Sep 10,087 10,426 8,843
Oct 9,773 10,461 12,817
Nov 10,806 11,378 9,787
Dec 3,918 4,522 466
Jan 7,713 5,118 -
Feb 7,894 10,472 -
Mar 8,694 9,330 -
Apr 9,755 12,579 -
May 13,139 10,919 -
Jun 11,573 11,100 -
TOTAL 114,408 $ 121,694 $ 59,714 $
Adj Budget 100,000 105,000 115,000
$0
$20
$40
$60
$80
$100
$120
$140
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Thousands
2006-07 2007-08
2008-09 2008-09 Budget
Farmers Market Income
RDA BUDGET REPORT
11
Unrestricted Funds Revenue Analysis (continued):
OTHER REVENUE SOURCES (cont.):
Fiscal 2006-07, 2007-08, and 2008-09 (graph is cumulative)
Through mid year, parking revenues have fallen below budget projections by more than 30%
(28% actual vs. 50% expected) due primarily to weakening monthly parking revenues, espe-
cially at the Ince parking structure (also 28% actual vs. 50% expected). Conversely, film parking receipts have sig-
nificantly outperformed budget projections as they have already exceeded the budget projection for the year
($115,361 actual vs. $50,000 budget). Barring any significant strikes (e.g. SAG), film parking revenues are expected
to remain strong. However, due to weak parking revenues as a whole, no budget amendments are recommended at
this time.
NEGATIVE
OTHER NOTES:
2006-07 2007-08 2008-09
Jul 75,728 $ 101,177 $ 105,496 $
Aug 78,021 121,649 139,479
Sep 127,398 76,377 32,109
Oct 101,623 92,723 58,150
Nov 101,395 116,765 15,649
Dec 124,093 67,513 70,436
Jan 90,620 108,650 -
Feb 93,334 46,103 -
Mar 127,719 129,622 -
Apr 82,842 43,353 -
May 104,235 80,256 -
Jun 77,747 106,047 -
TOTAL 1,184,755 $ 1,090,235 $ 421,319 $
Adj Budget 832,000 943,120 977,620
RDA Parking
(Structures and Lots)
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
Jul
A ug
Sep
O ct
N ov
De c
Jan
Feb
Ma r
Ap r
M ay
Jun
Tho us a n d s
2006-07 2007-08 2008-09
RDA BUDGET REPORT
12
LOW/MODERATE INCOME HOUSING FUND ANALYSIS:
HOUSING FUND:
Revenues and Expenditures (graphs are cumulative)
REVENUES — The Low/moderate Income Housing funds primary revenue source is tax increment housing set
aside funds, which is calculated as 20% of the gross tax increment received. As discussed in the TI section of this
report, a budget amendment increasing TI receipts by $2.4 million is being recommended. Consequently, a budget
amendment increasing housing set aside funds by $524,000 is also recommended.
EXPENDITURES — There was not much activity in the housing fund in the first quarter. The primary expenditures
were on Rental Assistant Program Grants (about $20,000 per month) and administrative charges. The Housing
Division is working toward identifying development opportunities for low/moderate income housing projects. Ap-
proximately $6 million is budgeted in 2008-09 for implementation/construction of low/moderate income housing
projects.
2006-07 2007-08 2008-09
Jul 52,839 $ 6,332 $ (6,882) $
Aug 71,101 33,466 19,162
Sep 18,974 21,952 41,097
Oct 27,025 87,573 38,840
Nov 514,441 705,449 969,393
Dec 1,707,662 1,939,384 2,408,680
Jan 344,616 422,836 -
Feb 802,183 747,414 -
Mar 212,713 338,554 -
Apr 1,011,680 1,194,032 -
May 1,049,063 960,582 -
Jun (170,393) 478,963 -
TOT Y-T-D 5,641,904 6,936,537 3,470,290
Adj Budget 5,166,000 $ 6,865,000 $ 6,943,000 $
Low/Moderate Income Housing
Revenues
$(1)
$-
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
2006-07 2007-08 2008-09
Jul 25,943 $ (52,060) $ 31,277 $
Aug 136,033 114,800 37,276
Sep 57,686 87,763 609,316
Oct (15,895) 82,561 239,685
Nov 90,339 52,196 236,242
Dec 791,918 1,114,943 268,073
Jan 279,861 234,455 -
Feb 112,394 290,272 -
Mar 266,838 238,400 -
Apr 153,937 284,597 -
May 250,670 280,090 -
Jun 1,930,740 915,689 -
TOT Y-T-D 4,080,464 3,643,706 1,421,869
Adj Budget 13,813,454 $ 12,330,046 $ 11,481,422 $
Low/Moderate Income Housing
Expenditures
$(2)
$-
$2
$4
$6
$8
$10
$12
$14
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budget
Total Budget
Total Bond Funding
Bond Funds
Expended to Date
Estimated
Completion
1. Fire Station #3* (93700) $6,527,000 $3,000,000 $2,997,310 Delayed
2. Town Plaza (93400) $3,100,000 $3,100,000 $300,000 FY 2009-10
RDA BUDGET REPORT
13
TAX EXEMPT BOND FUNDS
FISCAL YEAR TO DATE: (graph is cumulative)
CURRENT BOND FUNDED PROJECTS
REVENUES — Tax exempt bond fund revenue is primarily interest income earned on the fund balance. $800,000 in
interest income is budgeted in FY 2008-09; $227,000 has been earned to date. As investments mature at different times
throughout the year, interest income is recognized.
EXPENDITURES — The Tax Exempt Bond expenditures through mid-year were primarily related to demolition ex-
penses in the Washington/National triangle ($114,000), continuing construction costs for Fire Station #3 ($888,000), and
closing out completed projects such as the realignment of Washington Blvd and plunge locker room improvements.
NOTE: Tax exempt bond funds are restricted and can only be used for public improvements and public infrastructure. Bond funded projects are often
similar to Capital Improvement Projects as they are typically larger projects that may take more than one fiscal year to complete. Typically, the entire
project budget is allocated in the first year and any unspent bond funds are typically carried over to the following year.
All of the current bond funded projects have been completed or are scheduled for completion in FY 2008-09. In the
FY 2008-09 and FY 2009-10 budget process, most of the remaining $20 million in bond funds has been allocated for
various public improvement projects, including the General Plan update, parking improvements, area improvement
plans on Washington Blvd and Sepulveda Blvd, and contributions toward the EXPO light rail project. Through mid-
year, there have been no expenditures related to newly allocated money. As those projects become active, they will
be added to the current bond funded projects table above.
*The total budget for Fire Station #3 includes $3 million in Agency Bond funding and $3.5 million in City funding.
2006-07 2007-08 2008-09
Jul 1,048,465$ - $ - $
Aug 655,910 - 37,323
Sep 57,845 40,031 182,198
Oct 12,076 397,032 518,843
Nov 57,834 161,740 294,138
Dec 548,342 642,128 322,106
Jan 110,054 639,181 -
Feb 27,131 237,320 -
Mar (1,697,158) 356,464 -
Apr 94,006 574,914 -
May 94,341 462,252 -
Jun 307,535 600,315 -
TOT Y-T-D 1,316,381 4,111,377 1,354,608
Adj Budget 9,885,012 $ 8,019,086 $ 7,416,529 $
Tax Exempt Bonds
Expenditures
$-
$1
$2
$3
$4
$5
$6
$7
$8
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Millions
2006-07 2007-08
2008-09 2008-09 Budgetwww.hdlcompanies.com | 888.861.0220
In Brief
Sales Tax Update
The allocation from Culver City’s
July through September sales tax
was 2.4% less than the same quar-
ter one year ago.
Decreased sales from new auto
dealers, department stores, grocery
stores with liquor and electronics/ap-
pliance stores were partially respon-
sible for the decrease. Recent close-
outs reduced revenues from restau-
rants with no alcohol and home fur-
nishings. Onetime accounting ad-
justments temporarily decreased re-
ceipts from health/medical and busi-
ness services.
The losses were offset by high-
er fuel prices plus increased sales
from motion picture/equipment and
some categories of General Con-
sumer Goods. Recent additions
helped boost revenues from family
apparel and restaurants with liquor.
The comparison of plumbing/electri-
cal supplies was in? ated by onetime
accounting adjustments.
Adjusted for reporting aberrations,
taxable sales for all of Los Ange-
les County decreased 3.1% over
the comparable time period while
Southern California as a whole was
down 5.1%.
TOP 25 PRODUCERS
Advantage Fitness
Products
Arco AM PM Mini
Mart
Best Buy
Bidz Com
Centinela Chevron
Circuit City
Columbia Pictures
Costco
Culver City Volvo
Discus Dental
Howard Industries
JC Penney
Karl Storz
Endoscopy
Keenan Supply
Macys
Miller Honda
Miller Toyota
Miller Scion
Rite Aid
Ross
Samys Camera
Scottel Voice &
Data
Shop on Stage
Target
Tesoro Re? ning &
Marketing
Vons
Fourth Quarter Receipts for Third Quarter Sales (Jul-Sep 2008)
Q3
2008
Culver City
Culver City
Published by The HdL Companies in Winter 2009
In Alphabetical OrderNOTES
Sales Tax Update
REVENUE BY BUSINESS GROUP
Bell This Quarter
Q3 2008
SALES PER CAPITA
BELL T OP 15 BUSINESS CATEGORIES
Culver City
Current Quarter - Statewide
Third quarter sales and use tax receipts
declined 4.1% from the same period
of 2007 once accounting aberrations
were factored out.
Revenues from new car sales dropped
25.7% compared to July through Sep-
tember of 2007. Receipts from build-
ing materials declined 12.4%, business
purchases 6.3% and general consumer
goods 4.2%. Receipts from grocers,
drug stores, and some categories of
restaurants continued to post modest
gains.
The statewide decrease was partially
cushioned by one last quarter of re-
cord fuel prices. Tax receipts from
petroleum related sales gained 25.3%
over the third quarter of 2007 and ac-
counted for 14% of California’s total
sales and use tax collections.
Continuing Declines Projected
This was the ? fth consecutive quarter
of decreasing statewide sales and use
tax revenues. Given that the depth,
length, and solution to this recession
remain uncertain, local government
budgeting will be the most challenging
it has been in decades. Adding to the
dif? culty will be an expected rash of
business closures as the existing glut
of too much debt and too many stores
and auto dealerships is sorted out.
The current consensus is that drasti-
cally lower fuel prices and the weak-
est holiday spending since the 1980’s
will make the drop in March’s sales tax
receipts (October through December
sales) the most severe of the cycle to
date. Lesser declines are likely for at
least two quarters thereafter with over-
all revenues “bottoming out” at the
end of 2009 or ? rst quarter of 2010.
Agencies Will Fare Differently
Each jurisdiction’s experience will vary
with the speci? c makeup and character
of its local tax base. The timing and
bene? ts of an additional federal stimu-
lus package remains unknown but can-
not be expected to produce immediate
or complete recovery. As of January
1, prognostications for key segments
of the state’s sales tax revenues were:
Consumer Goods – With Califor-
nians already debt burdened, loos-
ening of credit is not expected to
stimulate spending to previous highs
until jobs and retirement investments
revive. Further declines are projected
for the remainder of 2008/2009 with
minimal growth in 2009/2010.
Auto Related - Credit will help but
real recovery is not anticipated until
2010/2011. Severe declines are ex-
pected to continue through at least the
remainder of 2008/2009.
Fuel – Even production cutbacks
and Middle East unrest will not bring
back last summer’s peak prices. A
30% decline is expected in the last two
quarters of 2008/2009 with continu-
ing revenue reductions through mid
2009/2010.
Business Spending - This usually
falls and recovers later in the cycle
than other segments. Declines of 5%
to 10% are expected for some indus-
trial categories during the remainder
of the ? scal year continuing through
2009/2010.
Building/Construction - Public
spending is expected to boost speci? c
tax categories by 2009/2010 but fewer
housing, industrial and commercial
startups make major gains unlikely.
Restaurant/Entertainment - Fast
food sales should hold up but cutbacks
in revenues from tourism and casual
and high end restaurants are expected
over the next few quarters.
City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council and Redevelopment Agency receive a
presentation on the Fiscal 2008-09 Mid-Year Budget and adopt proposed budget
amendments.
Budget amendments require a 4/5
ths
vote.
BACKGROUND / DISCUSSION:
The Finance Department prepares monthly, quarterly, mid-year, and year-end
Financial Monitoring Reports for the City Council and the Redevelopment Agency
once the accounting periods have been closed for the respective reporting cycle.
This mid-year Financial Monitoring Report presents the City Council and Agency
Board with a snapshot of expenditures and revenues through the first half of Fiscal
Year 2008-09 as well as any upcoming significant financial issues.
City of Culver City
General Fund
Through the first six months of Fiscal Year 2008-09, total General Fund actual
expenditures are $38,982,398, or 44.6% of the adjusted budget. General Fund
actual revenues are $28,307,828, or 32.4% of the adjusted budget. As a point of
Meeting Date: 02/09/09 Item Number: J-2
AGENDA ITEM: JOINT ITEM - Fiscal 2008-09 Mid-Year Budget Report and
Adoption of Proposed Budget Amendments
Contact Person/Dept.:
Jeff Muir, Chief Financial Officer
Phone Number: (310) 253-6016
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:
Master E-Mail Notification List (02/04/09); Culver City Observer and Culver City News
01/29/09 and 02/05/09; Culver City Employees Association, Culver City Management
Group, Culver City Fire Management Group, Culver City Firefighters Local 1927, AFL-
CIO, Culver City Police Officers Association, and Culver City Police Management Group
on 02/04/09.
Department Approval:
Jeff Muir (02/04/09)
City Attorney Approval:
Carol Schwab (by H. Baker) (02/03/09)
Chief Financial Officer Approval:
Jeff Muir (02/04/09)
City Manager Approval:
Jerry B. Fulwood (02/04/09) City of Culver City, California
City Council Agenda Item Report
reference, over the last three prior fiscal years (2005-06 through 2007-08), the
average expenditures at mid-year are 46.0% and the average revenue receipts at
mid-year are 34.8%. Note: A majority of General Fund revenues are received
AFTER mid-year, including Business Tax (beginning in February), Sales Tax In-Lieu
(January and May), and State Motor Vehicle In-Lieu Fee (January and May).
General Fund expenditures are below target, and are expected to come in well
below the 96.5% spending assumption. In October 2008, the City Manager called
for and implemented “pull-back” measures due to the accelerating declining
economic activity being experienced at all levels. These measures included:
o Implementation of an immediate hiring freeze, excluding Public
Safety positions. All vacant positions will be reviewed on a case-
by-case basis with the City Manager.
o Cessation of overtime, excluding Public Safety or emergency
situations. All exceptions to be reviewed and approved by the City
Manager.
o All Departments shall achieve a 25% budgetary savings in Training
& Education, Conferences & Conventions, and Special Events &
Meetings line items during the current fiscal year. Any exceptions
must be discussed with and approved by the City Manager.
o Assessment of current usage of part-time and contract employees.
o Assessment of current usage of consultants.
o Review opportunities for increased efficiency in procurement and
contracting.
Before the mid-year figures were known, it was hopeful that fiscal 2008-09 would
end the year with a balanced budget. This is no longer the case given recent news
received over the last couple of weeks. Even with the above mentioned “pull-back”
measures, it is now expected there will be an operating deficit of at least $500,000
for fiscal 2008-09 due to the continued poor performance in retail sales and the
general economy, and the very recent news of the closing of a major sales tax
generator in the City. The City recently received news that one of its remaining new
car dealers (Hooman Automotive Group) closed its doors, although there are
rumblings that it may not be closed permanently. (For forecast purposes, though,
we are making projections based on it being permanently closed.) Another business
may be closing its doors soon, but the affect from its closing will not be felt until fiscal
2009-10. The Finance Department recommends the following actions to close the
projected operating deficit for 2008/09:
1. Implement a strict no exceptions, hiring freeze on all positions that vacate
between now and the end of the fiscal year. This would be a more aggressive
freeze than is currently in place. City of Culver City, California
City Council Agenda Item Report
2. The Finance Department will work with all City Departments to achieve an overall
savings equal to a 10% reduction of remaining unexpended, unencumbered
O&M budget as of January 31, 2009. This would create an approximate savings
of $270,000.
It is anticipated these actions would allow the City to finish the current year without a
deficit.
Circuit City had previously announced the closure of 155 stores in December, of
which Culver City was not one, to help ward off bankruptcy, but was forced to re-
evaluate this decision and will now liquidate all inventory and close all stores most
likely within the next few months. This is in addition to the Hooman Automotive
Group closing its doors this past week. Both of these businesses were within the top
15 sales tax generators for the City. These closings are a major hit to sales tax for
the City, and will be heavily felt in fiscal 2009-10 and coming years if additional retail
generators are not found to fill the void. Franchise Tax Board rules make sales tax
information for individual retailers confidential.
Current Sales Tax receipts through mid-year lag behind last year at this same time
by approximately 3.4%. The January receipts and estimated February receipts are
known, and the negative gap continues to grow. This information coupled with the
recent news of the above business closures is a devastating blow to the City’s
overall General Fund revenues as sales tax is the City’s number one revenue
source. These business losses combined with previous ones, mainly due to the
types of businesses, are more than can be offset with recent additions of businesses
such as restaurants. Even though several of the new restaurants and smaller
businesses are doing extremely well, they are not enough, even combined, to offset
such large revenue generating business closings.
The renovation of the Westfield Shopping Mall has also contributed to keeping sales
tax receipts low during the fiscal year, and hopefully will bounce back to an
acceptable level once work is completed in the Fall. The anticipated addition of a
Target in Westfield should help in building sales tax receipts back up; although,
there is the uncertainty of both Targets in the City remaining open concurrently.
Current reports regarding an actors strike are still unclear. The previous strike by
the Writer’s Guild a year ago, while not absolutely quantifiable, did result in
noticeable revenue losses to the City and the surrounding area. An actor’s strike
can only lead to more harm in an already damaged and unstable economy.
New development activity in recent years has brought the City a much needed
boost. Beginning this fiscal year, many developments have stalled mainly due to the
inability to find financing. This most likely will equate to a reduction in one-time City of Culver City, California
City Council Agenda Item Report
revenues for fiscal 2008-09 unless these developments can find some financial
backing in the next few months before the end of the fiscal year. These
developments will add to the City’s coffers in upcoming fiscal years with increased
sales tax, utility tax, and business tax revenues. However, these revenues are not
expected to be realized until the projects are finished, and most likely will not be fully
on-line until fiscal 2009-10 or later.
Many cities throughout California are experiencing significant drops in Property Tax
receipts. Culver City, being a low Property Tax rate city, is fortunate not to feel such
dramatic drops. Also, since Property Tax makes up approximately 3.5% to 4.5% of
the City’s General Fund revenues on average, it does not cause such drastic harm
as other larger sources. Included in this report, though, is a proposed mid-year
reduction to the budgeted Property Tax amount based on an adjustment from our
Property Tax consultants. The reduction is $600,000, and is necessary to correctly
reflect the proper amount expected to be received. Property Tax estimates are in
line with last year, and with the reported “assessed valuation” from the County, it is
anticipated to meet projections with the proposed adjustment.
Most other major General Fund revenues are on-track or slightly behind mid-year
projections. These include Utility Users Tax, Transient Occupancy Tax (TOT), and
Real Property Transfer Tax. Utility Users Tax is on-track and shows little negative
effect from the current decline in the economy. Gas UUT, which looks low at mid-
year, historically comes in higher (approximately 67% of budget) during the second
half of the fiscal year. TOT revenues are healthy at mid-year, but reports indicate a
decline in receipts through the next few months due to low reported occupancy
rates. Real Property Transfer Tax will be tight due to the real estate market, mainly
commercial, virtually coming to a standstill. Staff is proposing a mid-year budget
reduction adjustment to the Real Property Transfer Tax revenue category of
$200,000. Sale of property is down from last year given the current market, but
prices have remained relatively stable. A discussion and analysis regarding the
various revenues is included in the mid-year Financial Monitoring Report
(Attachment 1).
The General Fund beginning balance for fiscal 2008-09 is $34.2 million, or 40.7% of
fiscal 2007-08 General Fund operating expenditures. The adjusted 2008-09 budget
includes approximately $1.3 million in appropriations for capital projects. The fund
balance at the end of fiscal 2008-09 is currently estimated at $33.15 million. This
includes the proposed mid-year adjustments discussed in this report, and the noted
potential loss of the entire $1 million Lehman Brothers bond. The City is being
tremendously diligent in following all of the associated proceedings surrounding the
Lehman Brothers issue, and is working with other agencies that are in a similar
situation as ours to try and get back some dollars on our initial investment. Until we
receive more solid information, we are taking a very conservative approach and City of Culver City, California
City Council Agenda Item Report
removing the entire $1 million amount from the fund balance in the extreme chance
the City loses the entire investment. The ending fund balance also includes the
repayment of the remaining $7 million of the $9 million loan to the Redevelopment
Agency|1010|. Per the language in the General Fund Reserve Policy, the loan is
considered a part of the reserve calculation.
At the direction of the City Manager, the Chief Financial Officer will be performing a
thorough review of capital improvement projects. During the upcoming Capital
Improvement Project budget process for fiscal 2009-10, available funds in Fund 420
for projects that have not yet been initiated, or for projects where little or no activity
has been done for a long period of time will be removed and re-evaluated to see if
the need is still there to fund the corresponding project. In many cases, funding has
been appropriated for these projects, and too often the funding carries over from one
year to the next without any activity occurring on the project. This ties up funding
that could be used for other purposes or projects. Departments will need to resubmit
justification for the funding needs of the projects and acquire approval.
Proposed Budget Amendments:
General Fund:
1. Reduce adopted Sales Tax budget amount by $1,075,000. Current budget
projection for Sales Tax is $17,793,000. Due to the closing of two major
businesses, continued record low retail sales, dismal overall economic
outlook, adjustment of $150,000 due to an overpayment from the State of the
in-lieu sales tax in 2007-08, and combined analysis with the City’s Sales Tax
auditors, staff believes it is prudent the adopted Sales Tax projection be
reduced from $17,793,000 to $16,718,000 for fiscal 2008-09. Further
analysis will be done, and the fiscal 2009-10 approved amount will be
reviewed and adjusted accordingly during the upcoming budget process.
2. Reduce Property Tax budgeted amount by $600,000 from $3,940,000 to
$3,340,000 to reflect adjustment from initial projection received from the City’s
Property Tax consultants. Increase the Property Tax pass-through by
$112,000. Net adjustment for Property Tax will be a reduction of $488,000.
3. Reduce State Motor Vehicle License Fee (VLF) by $100,000 (does not
affect VLF In-Lieu portion). Department of Motor Vehicle administrative
charges to the VLF fund (set in the state budget by the Legislature) have
been increasing at roughly 10% per year while the VLF revenue has been flat
|1010| Note that due to its own troubles, the Redevelopment Agency may not be able to pay the remaining loan
amount in full in fiscal 2008-09. City of Culver City, California
City Council Agenda Item Report
or declining. The first cut of VLF revenue (about 75%) goes to counties for
health and welfare realignment, then the DMV (and Franchise Tax Board and
State Controller’s Office) takes their administrative cut, then there are a few
relatively small fixed allocations (recently incorporated cities that get no
property tax in lieu of VLF for example). The remaining amount goes to cities
on a per capita basis - and it has steadily been declining. Beginning in
November 2008, there was no funding remaining for distribution to cities. The
League of California Cities has recommended cities make adjustments to
their budget amounts as there are clear indications this funding will not meet
projections.
4. Reduce Real Property Transfer Tax by $200,000. Mid-year receipts show
this revenue category lower than anticipated, and commercial real estate
sales have slowed significantly.
5. Reduce Commercial Industrial Development Tax by $300,000. This
revenue category has seen dramatic increases the last few years due to
major development activity within the City. The revenue has mainly been
designated as one-time due to the nature of the projects. Projections for
fiscal 2008-09 were based on activity moving forward, and given the current
downturn of the economy and credit markets, this development has for the
most part come to a standstill for this fiscal year. It is hoped that it will move
forward in fiscal 2009-10.
6. A budget adjustment increase of $135,500 for the annual maintenance of the
Public Safety computer aided dispatch and records management system is
being requested. During the budget preparation for fiscal year 20008-09, it
was undetermined whether or not this expenditure would be due in fiscal year
2008-09 or 2009-10 given the implementation schedule. The annual
maintenance payment was invoiced and due in December 2008. The annual
maintenance expenditure was issued from the capital project budget and
approval of this request would replenish the project account (42000902). The
budget appropriation would be from the City’s General Fund Unappropriated
Reserve and transferred to Fund 420 – Improvements & Acquisitions.
7. When the Fire Department is reimbursed for strike team callouts, an
administrative surcharge portion of the reimbursements is added to cover
indirect/additional costs expended by the Department. This administrative
surcharge is 15% for the U.S. Department of Forestry, and 16.59% for the
State OES. Due to the significant amount of callouts this fiscal year and the
exceptional expenses related to them, the Fire Department has requested this
additional administrative surcharge percentage be appropriated to their Small City of Culver City, California
City Council Agenda Item Report
Tools & Equipment (10145100.514600) line item to pay for the additional
equipment that has been needed to be purchased.
8. Additional strike team reimbursement checks will be received during the
remaining months of fiscal 2008-09. The amount of the administrative
surcharge on the additional reimbursements total $59,388. It is requested
that Council approve the appropriation of the future administrative surcharge
receipts into the account noted in #7, as they are received for the remainder
of fiscal 2008-09. (This issue will also be discussed and included in the 2009-
10 budget process and resolution for discussion and subsequent adoption if
approved by City Council at that time.)
9. Convert 1.98 Maintenance Worker II/RPT positions into a full-time
Maintenance Worker I position in the Parks Division. The addition of a
Maintenance Worker I full-time position will offer more incentive and job
advancement opportunities to current city employees and potential City
employees. It will also help stabilize the Parks Division high turnover rate at
the Maintenance Worker II/RPT position, allowing the Parks Division to retain
the employees it has invested time and training in. RPT positions cap at
Step-C. This conversion will allow for a personnel cost savings to the City for
the first few years, and also save valuable time and funds in reducing the
number of recruitments.
Enterprise Funds
There are no significant budgetary issues in the Refuse Fund, Transportation Fund
or Sewer Fund that need mid-year adjustments.
Internal Service Funds
There are no significant budgetary issues to report in the Equipment Replacement,
Equipment Maintenance & Fleet Services, and Central Stores funds at this time.
The Self Insurance Fund (SIF) began the year with a reserve balance of $1.8 million.
During fiscal 2007-08 the SIF transferred $3.6 million to the City’s Capital
Improvement fund to repair the Cranks Road hillside. This reduced the fund’s
balance from a previous healthy $5 million to the current $1.8 million. Building the
reserve back-up will be a major goal over the next few years. Additionally, pending
General Liability and Worker’s Comp costs could further impact the fund balance.
Staff continues to evaluate costs, and during the upcoming budget process will
review the strategy in re-establish the fund reserve and will assess if an increase in
liability reserve charges to operating departments is needed over the next few years. City of Culver City, California
City Council Agenda Item Report
Workers’ compensation and insurance costs are expected to meet the current
budget.
Culver City Redevelopment Agency
Unrestricted Fund
Unrestricted funds are available to provide financial assistance for projects and/or
programs that meet the goals of the redevelopment plan. These funds consist
primarily of tax increment revenues, but also include other revenues generated from
the Agency’s business operations (e.g. revenues from RDA owned parking lots).
The beginning unrestricted fund balance for 2008-09 was approximately $10.8
million. The projected ending fund balance, assuming that the sale of Parcel B is
completed and the $9 million loan to the City is fully repaid in this fiscal year, is
approximately $2.5 million.
Revenues:
During the preparation of the annual budget for Fiscal Year 2008-09, staff received a
projection of tax increment revenues from the Agency’s fiscal consultant, Keyser
Marston Associates (KMA), which was based on the 2007-08 County Assessor’s
Assessed Value Report. Subsequent to the adoption of the 2008-09
Redevelopment Agency budget, KMA provided staff with an updated tax increment
projection based on the 2008-09 Assessed Value Report, which is received in
August each year. The updated projection of $33 million represents an 8% increase
from the original projection of $30.5 million. The increase is a result of higher than
anticipated property valuations|1010|. Mid-year receipts to date support KMA’s revised
projection. Therefore, staff is recommending that the original tax increment revenue
estimate of $30,535,000 be increased to $32,961,000.
Additionally, due to a very strong movie season industry-wide, revenues from the
Pacific Theaters are very strong through mid-year and are expected to exceed the
budget projection of $1.3 million. Conversely, parking revenues are behind last
year’s receipts and may not meet budget projections. Since the increase in Pacific
Theater revenues are expected to offset the potential loss in parking revenues, no
budget amendments to either of these revenue categories are recommended at this
time.
|1010| More information on the 2008-09 Assessor’s Report was provided to the Agency Members in a memo from
the Finance Department dated 8/25/08. City of Culver City, California
City Council Agenda Item Report
Over the last few years, the Redevelopment Agency has acquired a number of
blighted properties throughout the Redevelopment project areas. The Agency is
now moving forward with selling many of these properties for various redevelopment
projects, including Parcel B, the Baldwin Hotel site, and Washington/Centinela. The
adopted budget included the projected sale of those properties. However, due to
current economic conditions, staff only anticipates to receive land sale proceeds
from the Parcel B site in this fiscal year. Therefore, staff is recommending amending
the budget accordingly.
All other revenues appear to be on track. No other revenue amendments are
recommended at this time.
Expenditures:
There are a number of payments that the Redevelopment Agency is required to pay
per State statute. These required payments include the 20% Housing set-aside,
statutory pass through payments to other taxing agencies, and administrative fees to
Los Angeles County. These payments are all calculated as a set percentage of the
total tax increment that the Agency receives. Consequently, as the tax increment
revenue increases, there is a corresponding increase in Housing set-aside and
statutory pass through payments. Therefore, staff is recommending that the
Housing set-aside payment be increased from $6,148,000 to $6,672,000 and the
administrative and statutory pass through payments be increased from $3,896,080
to $4,550,600.
Education Revenue Augmentation Fund (ERAF)
The FY 2008-09 budget was particularly tough one for the State. The budget was
adopted 85 days late and was re-opened by the Governor less than a month later
due to a significant revenue shortfall (approximately $15 billion in this fiscal year). In
an effort to close some of the deficit, the legislature re-instituted ERAF payments,
basically shifting some of the state’s obligation to fund education to local
redevelopment agencies. As a result, the Culver City Redevelopment Agency is
obligated to make a $2,251,463 ERAF payment this fiscal year. At this point, the
ERAF payment is a one-year obligation. However, considering the state’s
worsening financial condition, there is a possibility that the ERAF shift may become
permanent.
The trailer bill that officially made the ERAF requirement a law is called AB 1389. In
addition to the ERAF payment, AB 1389 imposed a number of new requirements on
redevelopment agencies such as an official reporting of pass through payments to
the County Controller’s office.
City of Culver City, California
City Council Agenda Item Report
AB 1389 also provided a provision for the Redevelopment Agency to borrow up to
50% of their ERAF obligation from low/moderate income set aside funds. There are
some conditions that need to be met in order to be able to borrow from housing set
aside funds, and the money that is borrowed can only be used to pay the ERAF
obligation. The Culver City Redevelopment Agency is required to pay $2,251,463,
which means that up to $1,125,731.50 can be borrowed from Housing Set Aside
funds to pay ERAF, provided that the agency can meet conditions for borrowing
provided in AB 1389.
The conditions that need to be met, as described in AB 1389, are as follows:
• The RDA must make a finding that it does not have sufficient funds to pay the
entire ERAF obligation without the loan;
• The funds must be repaid to the Low/Mod Income Housing Set Aside Fund within
10 years. The loan may be repaid interest free.
According to the Agency’s legal counsel, the Agency may be able to make the
necessary findings of financial need validly. However, the borrowed funds may only
be used to pay the ERAF obligation.
Considering the Agency’s current land rich, cash poor financial situation, the Agency
Board may wish to pursue a loan from Housing Set Aside funds for 50% of the
ERAF obligation. Staff is seeking direction to either pursue this option and begin the
process of making the necessary findings or pay the entire amount now from
unrestricted tax increment funds. If the Agency Board would like to pursue the loan,
$1,126,000 will need to be appropriated in the Unrestricted Tax Increment funds and
$1,126,000 will need to be appropriated in Housing Set Aside funds. Otherwise,
$2,252,000 will need to be appropriated in Unrestricted Tax Increment funds.
NOTE: The California Redevelopment Association (CRA) has filed a lawsuit against
the state alleging that taking local redevelopment agency funds is illegal under
Proposition 1A approved by voters in November 2004. It is likely that the lawsuit will
still be pending on May 1
st
(when the ERAF payment is due), so the CRA has
recommended that agencies make the required payment to avoid any penalties.
Recap of Proposed Budget Amendments:
1. Increase tax increment revenues by $2,426,000;
2. Decrease Land Sale Proceeds by $5,600,000;
3. Increase Housing set-aside expenditures by $524,000 from the Tax
Increment Funds and increase the revenues to the Low/Moderate Housing
fund by $524,000;
4. Increase statutory pass through payments by $541,000; City of Culver City, California
City Council Agenda Item Report
5. Increase CCUSD pass through payment by $113,520;
6. Appropriate $2,252,000 for ERAF payment.
a. $2,252,000 in Unrestricted Tax Increment funds; or
b. $1,126,000 in Unrestricted Tax Increment funds AND $1,126,000 in
Housing Set Aside funds.
Tax Exempt Bond Funds
The beginning restricted tax exempt bond fund balance for 2008-09 is approximately
$20 million. Approximately $430,000 is anticipated in interest income and $10.5
million is currently appropriated for capital projects. An additional $9.6 million is
earmarked for various projects. Therefore, all bond funds are currently either
appropriated or earmarked for projects that meet the restrictions of tax exempt bond
funding. No budget amendments are recommended at this time, however, as
projects for which funds have been earmarked become more clearly defined, the
Agency Board will be asked to allocate those funds at the appropriate time.
Low/Moderate Income Housing Fund
The beginning Low/Moderate Income Housing Fund balance for 2008-09 is
approximately $19 million. Other than an increase of $524,000 in Housing set-aside
revenues discussed earlier in the report, there are no significant budgetary issues in
the Low/Moderate income housing fund. Housing and Community Development
staff are currently developing strategies to program the Low/Moderate Income
Housing funds and develop a long term work program.
State Budget Analysis
Typically, the Governor releases his proposed budget for the upcoming fiscal year
(i.e. 2009-10) in January. However, with the 2008-09 State budget in dire straights,
a feasible and realistic budget plan has yet to be released. As previously
mentioned, the 2008-09 State budget was adopted 85 days late and was re-opened
less than a month later due to significant budget shortfalls and cash flow problems in
the current fiscal year. The Governor’s office, with concurrence from the Legislative
Analyst’s Office, estimates a budget shortfall of more than $40 billion over the next
18 months. To date, no solutions to close the gap have been reached. Some of the
proposals being considered include:
• Reducing the school year by 5 days and increasing the class size limit of 20
students for kindergarten through third grade (no class limit exists for higher
grades); City of Culver City, California
City Council Agenda Item Report
• Implementing an additional 1.5% state sales tax for the next three years and
apply the tax to certain goods and services to which it does not currently
apply;
• Restoring the Vehicle License Fee to its original rate of 2% (it is currently less
than 0.6%);
• Making the RDA ERAF payment permanent;
• Mandatory furloughs for State employees;
• Reduction of transportation funding;
• Reduction of funding for many state funded programs.
It is unclear at this point which of these proposals have traction and will garner
enough support by the legislature (and voters in some cases) to be implemented. It
is clear that some drastic measures will have to be implemented to address the
substantial shortfall.
In terms of direct impacts to cities, Proposition 1A provides protection from long-term
shifting of local funds; however, in the short term, under certain circumstances
borrowing is allowed as long as the funds are repaid within three years. Additionally,
pending the outcome of existing litigation by the CRA, redevelopment agencies may
not be provided with the same protection under Proposition 1A and may be exposed
to further ERAF-type funding shifts. As further information on the State budget
becomes available, staff will provide the City Council with updates and analyze the
potential impact on Culver City.
Proposed Federal Budget Analysis
The new administration’s main focus during the first 100 days will be getting a
federal budget passed that addresses the current economic crisis. Early details of
the American Recovery and Reinvestment Act contain targeted efforts in clean,
efficient American energy; transforming the economy with science and technology;
modernizing roads, bridges, transit and waterways; educating for the 21
st
century;
providing tax cuts to create jobs; lowering healthcare costs; helping workers’ hurt by
the economy; and saving public sector jobs and protecting vital services. This plan
must still go through the House and Senate and will undoubtedly undergo a number
of changes before finally adopted. The final version may or may not include all of
the characteristics highlighted above.
Preliminary reports estimate that the cost of this plan would result in more than a
$850 billion budget deficit in 2009-10, and the President has warned of the need to
prepare for large budget deficits over the next few years, possibly in the trillions of
dollars.
City of Culver City, California
City Council Agenda Item Report
FISCAL ANALYSIS:
City of Culver City
Given this mid-year data, General Fund expenditures are projected to come in below
the 96.5% spending assumption for the full fiscal year, which is primarily due to the
pull-back measures put in place in October 2008 and combined with the high
number of vacancies in several Departments. It is now anticipated, though, that this
will not be enough to offset the gap from less than stellar recurring revenue activity
and the recent news of two large sales tax generating business closures. If the
economy continues to weaken even more, which is a strong possibility given recent
news reports, and revenues continue to lag even further, the City will be faced with
distressing financial decisions in the future. The City is facing a significant deficit
for fiscal 2009-10 that is rapidly approaching $4 million.
The General Fund has been able to hold up well prior to this fiscal year due to a
previously healthy economy and increased new development activity around the
City. There were also one-time revenues, such as the sale of the Warner Parking
Lot, that enabled the funding of capital projects. The second payment of the Warner
Parking Lot sale is expected to be received this fiscal year, which is crucial in
covering one-time expenses. The large reduction of the Sales Tax amount, though,
is felt to be a necessary adjustment due to current economic trends and unfortunate
occurrences. There is currently a sufficient General Fund balance to absorb this
decrease this fiscal year, but ongoing projections show the reserve dropping below
the required 30% threshold within the next year or two given current trends.
Culver City Redevelopment Agency
As with the City, the Redevelopment Agency is also impacted by the effects of the
current economy. The RDA has experienced significant growth in tax increment
revenues over the past five years. However, the credit crunch and slumping
commercial real estate market will result in much slower growth in tax increment
receipts over the next few years. As a result, staff has taken a conservative
approach to projecting future tax increment revenues using only a 2% annual growth
rate.
Additionally, the State’s cash flow problems and projected $40+ billion budget deficit
over the next 18 months may have an impact on the RDA’s cash flow beyond the
$2.25 million ERAF payment being required this fiscal year as the Governor and
Legislature look for ways to raise funds and balance the State’s budget. There is a
distinct possibility that state mandated ERAF contributions, or some other method of City of Culver City, California
City Council Agenda Item Report
shifting funds from the RDA, may be extended beyond this fiscal year or even
become permanent. Staff will continue to monitor the State’s budget process.
ATTACHMENTS:
1. Fiscal 2008-09 City Mid-Year Financial Monitoring Report
2. Fiscal 2008-09 RDA Mid-Year Financial Monitoring Report
3. Culver City Sales Tax Update Newsletter prepared by HdL
MOTION:
That the City Council:
(1) Receive the presentation of the Fiscal 2008-09 Mid Year Financial Monitoring
Report;
and
(2) Adopt proposed amendments to the Fiscal 2008-09 Budget:
A. Reduce adopted 2008-09 Sales Tax revenue amount by $925,000
(10115100.313000) and $150,000 (10115100.313010);
B. Reduce adopted 2008-09 Property Tax revenue net amount by $488,000
(10115100.311100); and
C. Reduce adopted 2008-09 State Vehicle License Fee by $100,000
(10115100.345000); and
D. Reduce adopted 2008-09 Real Property Transfer Tax by $200,000
(10114400.317000); and
E. Reduce adopted 2008-09 Commercial Industrial Development Tax by
$300,000 (10115100.319000); and
F. Appropriate $135,500 from the General Fund Unappropriated Reserve to
Increase Project 42000902 – Public Safety/CAD/RMS by $135,500 to
replenish for payment of annual maintenance contract; and
G. Appropriate additional Strike Team Administrative Surcharge amount of
$20,402 received with reimbursements into Fire Department object account
10145100.514600 – Small Tools & Equipment; and City of Culver City, California
City Council Agenda Item Report
H. Approve future appropriation of additional Strike Team Administrative
Surcharge amounts received with reimbursements through the remainder of
fiscal 2008-09; and
I. Approve the conversion of 1.98 Maintenance Worker II/RPT positions into
one (1) full-time Maintenance Worker I position in the Parks Division.
A budget amendment requires 4/5
ths
vote
That the Culver City Redevelopment Agency:
(1) Receive the presentation of the Fiscal 2008-09 Mid Year Financial Monitoring
Report;
and
(2) Adopt the following amendments to the Fiscal 2008-09 Budget:
A. Increase tax increment projected revenues by $2,426,000 million in the
following areas;
a. Project Area 1 (51290000.311210): $758,000
b. Project Area 2 (52290000.311210): $473,000
c. Project Area 3 (53290000.311210): $956,000
d. Project Area 4 (54290000.311210): $239,000
B. Decrease the Land Sale Proceeds revenue (55096000.386350) by
$5,600,000;
C. Increase Housing set-aside by $524,000 (this increase will be reflected as an
increased expenditure from RDA and an increased revenue for the
Low/Moderate Housing fund);
Increase Transfer-Out
(Tax Increment Accounts)
Increase Transfer In
(Low/Mod Income Housing Accounts)
51299900.952554: $153,000 55499900.391512: $153,000
52299900.952554: $96,000 55499900.391522: $96,000
53299900.952554: $227,000 55499900.391532: $227,000
54299900.952554: $48,000 55499900.391542: $48,000
D. Increase statutory pass through payments by $654,520;
a. Project Area 2 (52292000.517500): $113,520 (CCUSD Pass Through) City of Culver City, California
City Council Agenda Item Report
b. Project Area 4 (54292000.517500): $541,000
E. Appropriate $2,252,000 for ERAF payment
a. $2,252,000 in Unrestricted Tax Increment funds; OR
b. $1,126,000 in Unrestricted Tax Increment funds and $1,126,000 in
Housing Set Aside funds.