Guadalupe Fiscal Reform

Conclusions 13

• CL1
  The General Fund balance of the City of Guadalupe has improved slightly over the period 2015-16 to 2017-18 compared to the period 2012-13 to 2014-15 fiscal years.
• CL2
  The ratio of current assets to current liabilities in the City of Guadalupe General Fund averaged 3.5 over the period 2015-16 to 2016-17, which is an improvement over the period 2012-13 to 2014-15.
• CL3
  Inadequate General Fund revenue necessitates continuous transfers from Guadalupe’s Enterprise Funds. Given the slow growth of population and of per capita income in Guadalupe and the limited new investment in housing and business, it is unlikely that public revenue can eliminate the dependence of the General Fund on transfers from the Enterprise Funds.
• CL4
  Following the March 13, 2018 Guadalupe City Council meeting, at which the Draft City Audit of 2016-17 was discussed, the City may have used restricted monies from Measure A and Gas Tax funds to finance its General Fund and other fund deficits.
• CL5
  The City of Guadalupe is considering several recommendations to improve its financial condition, in light of material deficiencies found in previous audits.
• CL6
  The total primary government balance – the sum of the General Fund balance and the Enterprise Fund balance – has also improved because of better financial results from the City of Guadalupe’s enterprises. 2017-18 Santa Barbara County Grand Jury 9 GUADALUPE FISCAL REFORM
• CL7
  Guadalupe does not generate enough General Fund revenue from the sources on which most cities rely (property, sales and transient occupancy taxes) to provide basic administrative and safety services while maintaining a positive General Fund balance.
• CL8
  Disagree Wholly with an explanation
• CL9
  Disagree Partially with an explanation Responses to Recommendations shall be one of the following:
• CL10
  Has been implemented, with a brief summary of the implemented actions
• CL11
  Will be implemented, with an implementation schedule
• CL12
  Requires Further Analysis, with an explanation of the scope and parameters of an analysis or study and a completion date of less than 6 months after the issuance of this report
• CL13
  Will not be implemented because it is not warranted or reasonable, with an explanation of why Guadalupe City Council - 90 Days Findings 1, 2, 3, 4, 5, 6, 7

Observations 1

• OB1
  This report begins by examining the findings of the 2014-15 Santa Barbara County Grand Jury report titled “Guadalupe Shell Game Must End” and the responses to the report by the Guadalupe City Council (GCC), http://sbcgj.org/2015/Responses/Guadalupe_GCC.pdf and considers new data provided to the 2017-18 Jury. The sole recommendation of the 2014-15 Jury was that Guadalupe should disincorporate, which will be discussed below. Table 1: GUADALUPE – Fiscal Table, 2012-13 to 2017-18 Table 1: GUADALUPE - Fiscal Table 2012-2013 2013-14 2014-15 2015-16 2016-17 2017-18 CAFR CAFR CAFR CAFR CAFR approved budget General Fund (GF) Revenue 4,091,605 4,025,400 3,615,752 3,888,271 4,348,009 4,973,468 of which tax 2,130,262 1,814,244 1,851,340 2,147,185 1,956,421 2,013,600 of which other 1,961,343 2,211,156 1,764,412 1,741,086 2,391,588 2,959,868 Expenditure /1 4,368,821 4,893,574 4,196,709 4,259,795 4,983,120 5,743,645 General Fund Balance in $ (277,216) (868,174) (580,957) (371,524) (635,111) (770,177) in % GF revenue -6.8% -21.6% -16.1% -9.6% -14.6% -15.5% Enterprise Funds (EF) Revenue 3,218,382 3,736,124 3,719,537 4,373,458 4,313,426 5,002,587 Expenditure 3,411,735 3,802,718 3,611,774 3,658,339 3,283,493 4,652,882 Transfers to General Fund from Special and Enterprise Funds total, in $ 438,333 22,774 428,293 436,304 491,867 707,850 in % GF revenue 10.7% 0.6% 11.8% 11.2% 11.3% 14.2% as allowed by cost allocation study, in $ #N/A #N/A 619,321 640,220 681,900 707,850 in % GF revenue #N/A #N/A 17.1% 16.5% 15.7% 14.2% Total Primary Government Revenue 7,309,987 7,761,524 7,335,289 8,261,729 8,661,435 9,976,055 Expenditure 7,780,556 8,696,292 7,808,483 7,918,134 8,266,613 10,396,527 Balance of GF + EF in $ (470,569) (934,768) (473,194) 343,595 394,822 (420,472) in % of GR + EF revenue -6.4% -12.0% -6.5% 4.2% 4.6% -4.2% Population 7,165 7,194 7,223 7,252 7,281 7,310 Note: The General Fund balance is revenue minus expenditure, excluding interest expenditure Dollar values are current; they are not adjusted for inflation. Data for 2018-19 are not yet available. /1 Expenditures = Total GF expenditures - interest Source: Guadalupe Comprehensive Annual Financial Reports (CAFR), 2012-13; CAFR 2013-14; CAFR 2014-15; CAFR 2015-16; Guadalupe Fiscal Year 2016-17 Draft City Audit (Guadalupe City Council agenda, March 13, 2018); and Resolution No. 2017-28 "A Resolution of the City Council of the City of Guadalupe, California, Adopting the 2017-18 Budget" Table 1 presents revenue and expenditure data for the City’s General Fund and for its Enterprise Funds from 2012-13 through 2017-18. What is called the General Fund balance is revenue to the General Fund minus expenditures by the General Fund. The Jury observes a small improvement in the City’s General Fund balance from an earlier three year- period 2012-13 through 2014-15 to the most recent three-year period of 2015-16 through 2017-18. 2017-18 Santa Barbara County Grand Jury 2 GUADALUPE FISCAL REFORM Table 2: GUADALUPE – Assets and Liabilities Table, 2012-13 to 2016-17 Table 2: GUADALUPE - Assets and Liabilities Table 2012-2013 2013-14 2014-15 2015-16 2016-17 CAFR CAFR CAFR CAFR CAFR General Fund Current Assets 2,454,704 2,472,525 2,751,271 2,905,171 2,887,660 Non-current assets 10,121,348 9,749,943 9,362,214 8,725,056 8,675,689 Total Assets 12,576,052 12,222,468 12,113,485 11,630,227 11,563,349 Current Liabilities 1,045,839 1,409,586 1,570,391 929,322 746,737 Non-current Liabilities 1,455,042 405,792 2,286,089 2,142,869 3,046,822 Total Liabilities 2,500,881 1,815,378 3,856,480 3,072,191 3,793,559 Current ratio /1 2.35 1.75 1.75 3.13 3.87 Current liabilities / general revenue 0.26 0.35 0.43 0.24 0.17 Enterprise Funds Current Assets 620,396 1,324,785 2,300,283 2,117,994 2,553,660 Non-current assets 10,234,355 9,666,217 9,294,723 9,529,956 9,033,811 Total Assets 10,854,751 10,991,002 11,595,006 11,647,950 11,587,471 Current Liabilities 437,929 1,048,606 1,500,958 1,219,813 619,843 Non-current Liabilities 1,729,940 2,573,448 2,469,644 2,400,951 2,507,996 Total Liabilities 2,167,869 3,622,054 3,970,602 3,620,764 3,127,839 Current ratio /1 1.42 1.26 1.53 1.74 4.12 Current liabilities / enterprise revenue 0.14 0.28 0.40 0.28 0.14 Total Primary Government Current Assets 3,075,100 3,797,310 5,051,554 5,023,165 5,441,320 Non-current assets 20,355,703 19,416,160 18,656,937 18,255,012 17,709,500 Total Assets 23,430,803 23,213,470 23,708,491 23,278,177 23,150,820 Current Liabilities 1,483,768 2,458,192 3,071,349 2,149,135 1,366,580 Non-current Liabilities 3,184,982 2,979,240 4,755,733 4,543,820 5,554,818 Total Liabilities 4,668,750 5,437,432 7,827,082 6,692,955 6,921,398 Current ratio /1 2.07 1.54 1.64 2.34 3.98 Non-current liabilities / total assets 0.14 0.13 0.20 0.20 0.24 Population 7,165 7,194 7,223 7,252 7,281 Note: Dollar values are current; they are not adjusted for inflation. Assets and liabilities data for 2017-18 are not yet available. /1 The current ratio is current assets / current liabilities. Source: Financial data from Guadalupe Comprehensive Annual Financial Reports (CAFR), 2012-13; CAFR 2013-14; CAFR 2014-15; CAFR 2015-16; Guadalupe Fiscal Year 2016-17 draft audit (Guadalupe City Council agenda, March 13, 2018); and Resolution No. 2017-28 "A Resolution of the City Council of the City of Guadalupe, California, Adopting the 2017-18 Budget" Population data from US census. Table 2 presents the City’s assets and liabilities from 2012-13 through 2016-17. The Jury notes a modest improvement in the City’s General Fund current ratio, a commonly used indicator of debt service capacity, over the period 2012-13 through 2016-17. The Jury further notes an improvement in the consolidated current ratio of the City’s General Fund and Enterprise Funds over the period 2012-13 through 2016-17. 2017-18 Santa Barbara County Grand Jury 3 GUADALUPE FISCAL REFORM Current Status of Issues Raised in Report of 2014-15 Santa Barbara County Grand Jury The Jury reviewed and analyzed each finding and response by the Guadalupe City Council (dated May 26, 2015) as follows: 2014-15 Finding 1

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

No Responses Found 1

Government entities assigned to respond to this report. No response documents have been linked in our database.