Hundreds of Millions in City Budget to Be Discussed on Finance Commission Agenda
- $11.5 Million Budget Deficit: The City ran a surplus of $3.1 million in 2019-20. The outlook for 2020-21 is less rosy. The City tentatively expects an $11.5 million deficit. The money will come from the $54 million contingency reserve.
- Air Quality Funds: The City now has over $500,000 for reducing air pollution, encouraging alternative means of transportation, improving security at charging stations, and related projects.
- Great Park Funds: The balance of Great Park funds is $318 million
- City Investments: The City has about $1 billion in investments, which mature in 1-5 years
- Financial Report: For detailed financial information about the City, see the latest Comprehensive Annual Financial Report
When and Where
The Finance Commission will meet on Monday, November 16 at 5:30 p.m. Although the meeting isn’t physically open to the public, the City will be broadcast it online via Zoom here (Passcode: 388132)
There are several options for public comment.
- Submit an e-comment by clicking on the Finance Committee agenda
- Send an email to the Commission
- Send comments by mail to: ATTN: FINANCE COMMISSION,” ONE CIVIC CENTER PLAZA, IRVINE, CA 92606
Summary of Agenda Items
Agenda Item 2: Air Quality Improvement Special Revenue Fund Audit For The Fiscal Year Ended June 30, 2020
Irvine has $559,360 in funds from South Coast Air Quality Management District (SCAQMD). Some permitted uses of SCAQMD money include:
- projects that help reduce air pollution from motor vehicles
- encouraging alternative modes of transportation
- increasing security at charging stations
- projects that help the City implement the California Clean Air Act of 1988
This Agenda item is to recommend that the City Council receive and file an audit that allows Irvine to continue receiving SCAQMD money. The auditors confirm Irvine has $559,360 in its AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND.
Agenda Item 3: Treasurer’s Report For The Quarter Ended September 30, 2020
The Treasurer’s Report indicates the City has $1.05 billion in “market value” assets invested. The purchase price of the assets (“book value”) was $766.15 million.
The Report indicates 30% of the “book value” of the City’s investments are in very short term (0-1 year maturity) investments. The rest is in longer-term investments, as long as 5 year maturity. The Report explains how the money is invested.
This Agenda item is to recommend to the City Council that it receive and file Report.
Agenda Item 4: City Of Irvine Investment Policy For Calendar Year 2021
State law heavily influences how the City invests its money. The City must balance risk (e.g. Orange County’s high-risk portfolio that caused it to go bankrupt once) vs. getting a good return.
This item relates to a lengthy Investment Policy report that explains Irvine’s approach to investments. The Commission is asked to recommend that the City Council adopt the report.
Agenda Item 5: Orange County Great Park Funds Financial Statement Audit – Fiscal Year 2019-20
The history of Great Park funding is fascinating and complicated. A few highlights: initially there was both a desire and the funding to create a world-class Great Park. Then disaster struck: the real estate market crashed and, subsequently, the State took much of Irvine’s Great Park funding. The City scrambled to save the Park. Deals were made with the master developer. More recently, the State paid back some of the Great Park funding that it had taken.
As of June 30, 2020, there is a balance of $317,956,000 in Great Park Funds.
This Agenda item relates to the most recent audit of those funds. The Commission is simply asked to recommend that the City Council receive and file the audit.
More detail about income, assetts, liabilities, and related Great Park financial information can be found in the Auditor’s Report.
Agenda Item 6: Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2020 And Auditors’ Communication
The City’s Comprehensive Annual Financial Report (“CAFR”) includes the financial activities of all City funds. It is a major report, packed with details.
The City’s independent audit firm, White Nelson Diehl Evans, LLP, audited the City’s financial statements for the fiscal year ended June 30, 2020. This Agenda item is to recommend the Council receive and file the CAFR and the audit report.
Agenda Item 7: Fiscal Year 2020-21 First Quarter Budget Update
Despite the pandemic, the City ran a $3.1 million surplus in Fiscal Year 2019-20. The City attributes the surplus to cost-cutting measures and one-time CARES Act funding from the federal government.
The fiscal outlook for Fiscal Year 2020-21 is less rosy. Tax revenue is down, and the City expects unexpected costs from the Silverado Fire. The Director of Financial Management & Strategic Planning expects a General Fund shortfall of $8.5 million and an additional $3 million shortfall in the Building and Safety Fund. These projections are tentative, as the future course of the pandemic and its impact on City revenues and expenses is hard to predict.
The City plans to draw the $11.5 million deficit from its $54.5 million contingency reserve. This will put the contingency reserve 2.6% below the City’s goal of having a contingency reserve of 25% of the annual budget.
This Agenda Item asks the Commission to recommend that the Council receive and file this Budget Update.