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Summing Up
Tom McGreal | Finance Committee Chair

Note: The editors believe the city budget and other financial documents should be seen as the “drivetrain” of all of our city’s operations. This is part of a series by Tom McGreal to help readers understand the fundamentals of Del Mar’s financial system.

City of Del Mar General Fund Dashboard.
Click to enlarge.

As previously reported, the two year Budget process for Fiscal Year 2018 and 2019 that was concluded in June showed a trend of slow revenue growth and increasing levels of expenses. This resulted in the City Council’s decision to reduce the proposed 2018 Expenditure Budget by $900,000. The Council subsequently increased the 2018 budget by $200,000 in light of the improved 2017 results described below. (For simplicity all references to specific years means the Fiscal Year ended June 30 and all dollar numbers are rounded.)

The preliminary financial results for the fiscal year ended June 30, 2017 show improvement when compared to the City’s last projections, which were provided in June (and served as the basis for the 2018 budget decisions). Revenues exceeded these latest projections by $630,000 and Expenditures came in lower by $293,000. The higher revenues were partly the result of higher Measure Q District Sales tax receipts of $233,000, which go directly to a Designated Measure Q fund, but that still leaves net improved results totaling $690,000. General Fund Reserves are also higher than projected. The City’s outside audit firm is now reviewing these results.

The Dashboard exhibit shows a comparison of results for 2015, 2016, 2017 and the new Budget for 2018. There are a few key comparisons that help tell the fiscal year 2017 story in comparison to the prior year and the new 2018 budget.
The General Fund Revenues for 2017 grew by 4% over 2016 when Measure Q receipts are excluded and grew by 7.5% with Measure Q included. At the same time General Fund Expenditures grew by 10.5% over 2016. While these preliminary results represent an improvement over the projected results, the expense growth was an important factor in the Council’s decision to limit the Expenditure Budget in 2018.

The latest 2018 budget shows that Expenditures are projected to grow by 4.3% from 2017 to 2018. Revenues are projected to be flat when Measure Q revenues are excluded but will grow by 8.9% with Measure Q revenues included.
2018 is also the first full year that the City Hall Debt Service in the amount of $910,000 must be paid. The cash flow from operations (after the Debt Service) for 2018 of $1.4 million shows that the City Hall annual debt service can be comfortably met with normal operational cash flows.

2018 will also be another important year for Capital Improvement Projects with Council’s recent decision to transfer an additional $2.0 million from the General Fund to the Capital Improvement fund for additional projects. This results in a total transfer from the General Fund to the CIP Reserve of $3.7 million for 2018.



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