Bill Aylward: “He’s talking about a deficit in the general fund? When the general fund shows a small surplus of $738..”
Below is the Transcript of November 11, 2014 Beaumont City Council Meeting: http://podcast.ci.beaumont.ca.us/CC_2014-11-18_agenda.htm
56:00 John Dyson: I had a question on the Financial Update. In reading the Financial Update available online and I guess available to the Council I’m surprised that the attached financial statements dated August 31st.
These Reports are more than two months old. I wonder why we are not looking at October month-end data?
The sewer fund and expense report shows an unfavorable variance of almost $1 Million for one month. I was wondering if this could be correct. Did the City not collect sewer fees in August? I know that I paid mine.
The General Fund reflects a negative balance of more than $11 Million as of August. I wonder if this could be correct.
The Sewer Service contains roughly $3.7 Million and yet our City Manager intends to pay off a $9 Million Sewer Bond. Will the remaining $6 Million needed to retire these bonds be taken CFD Bond Fund? Those are my questions.
58:20 Aylward: I’m not sure what he’s talking about. He’s talking about a deficit in the general fund? When the general fund shows a small surplus of $738 I don’t know where he got an $11 Million for the sewer fund. I don’t know where he came up with this. This shows that we’re in the positive by … In the sewer fund…
Castaldo: Low and behold.
Knight: Bill?
Aylward: Yes, I have that in front of me. I don’t know what you’re talking about. (mumblings ) That’s a Cash Balance. A negative Cash Balance. That’s correct. But when we look at our financial statements we do have a positive fund balance of $14 Million.
59:30: Kapanicas: As I’ve said during my Report; we wait six months for property tax. We don’t stop service from July 1 to December 31st. We run it on a cash basis where we use cash from before. We get a big check come right after xmas. The County sends us a; Bill, what’s expected on that County check in January?
Aylward: About $11 Million
Kapanicas: $11 Million Cash. Nice check. We do have an armored car so nobody in the audience think anything about it. (giggles from council) And same with sales tax. We don’t get our sales tax payment until September for three months. Again; we operate from January 1, people are just paying their taxes on December 2nd even though they’ve had six months worth of services by that time. Same with Sewer. The Billing goes out every other months so there’s a cash influx in the even months, in the odd months it’s the other way around. Bill, do you have any other ones?
60:30 Aylward: Yea, just the timing of it.
Berg: The County operates the same way, don’t they?
Aylward: Well, they have to.
Berg: Thank you for answering that question.
Kapanicas: Remind there’s on a modified accrual we’re to show revenues when we received and expenditures when incurred. So we spend for six months then we get our property tax of about $11 Million. Then we expend for another six months and about May we get the other $11 Million. So that’s the reason you’ll see cash flow back and forth, but as we said, we have assets at the end of August of $15 Million.
The other item that was mentioned is paying off the Sewer Bond. Currently we could keep that going, but it’s going to be at a much higher interest and finance charges through Union Bank, so it’s better to pay it off and make it a city-held debt. It’s actually the Teachers’ Union that’s been getting the money over the last 13 years. And at this time we’re going to ask to have those retired, which you will see in a few minutes.