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El Cerrito Municipal Services Corporation Agenda Report Item No.S(A) Date: To: From: Subject: February 21, 2012 El Cerrito Municipal Services Corporation Board Lori Trevino, MSC Manager Mary Dodge, Chief Financial Officer Mid-Year Budget Update ACTION REQUESTED Adopt a Municipal Services Corporation resolution amending the Corporation's FY11- 12 Annual Budget. BACKGROUND The Board adopted the Corporation's FY11-12 Annual Budget on May 2, 2011. This report is a review of the Corporation's revenues and expenses through December 31, 2011 and includes a resolution to amend the budget for the remainder of the fiscal year to account for revenues and expenses not anticipated during the budgeting process. The following table summarizes the Corporation's Adopted FY11-12 Budget, actual expenses through December 31, 2011, and the Proposed Amended Budget for the FY2011-12. El Cerrito Municipal Services Corporation FY11-12 Budget v. Actual YTD through December 31, 2011 Adopted Budget- Proposed Account Budget YTDActual Actual Amended Interest Income $1,000 $1,000 $1,000 Property Leases 50,000 35,229 14,771 68,000 Developer Contributions 2,200,000 Other Mise Revenue 1,129,340 1,129,340 1,031,340 Total Revenue $1,180,340 $35,229 $1,145,111 $3,300,340 Professional Services $848,000 $69,391 $778,609 $778,000 Property Services 92,000 11,409 80,591 28,000 Other Services and Supplies 89,340 12,887 76,453 54,426 Capital Expenses 11,890 (11,890) 159,000 Loans & Grants 100,000 100,000 273,000 Total Expenses $1,129,340 $105,576 $1,023,764 $1,292,426 ---PAGE BREAK--- Agenda Item No. S(A) Therefore, the current proposed amendment to the revenue budget is $2,120,000 and to the expense budget is $163,086. REVENUE The Corporation originally anticipated three sources of revenue: interest earnings, rent and lease income, and funding from the El Cerrito Redevelopment Agency for the Cooperation Agreement between the Corporation and the Agency for implementation of the City's Redevelopment Plan for the City ofEl Cerrito Redevelopment Project Area. Overall, the Corporation's revenues are greater than expected. Lease revenue from the Cerrito Theater is exceeding the budget due to the percentage rent paid by Rialto Cinemas being greater than anticipated. The Corporation submitted its $1,129,340 demand to the Redevelopment Agency for FY11-12 funding during the first half of the fiscal year. It was not received until January 2012 and was lower than anticipated. The Corporation also received an unanticipated developer contribution in the form of a fee paid for the Corporation's assignment of its option on a piece of property and a contribution to fund future public improvements to be made by the . City once BART completes seismic improvements to its tracks in the Del Norte area. The proposed budget amendment reflects these adjustments and the resulting overall increase in anticipated revenue. EXPENSES The Corporation limited expenditures during the first half of the fiscal year due to the uncertainty regarding funding from the Agency. The proposed budget amendment reflects 1) the continuation and completion of projects and programs already planned, 2) an increase in the scope of work on a staffing contract, 3) the award of a grant recently approved by the Board, and 4) the cost of tenant improvements to the Cerrito Theater, a contractual obligation of the Corporation which was previously reserved but not budgeted. Prior to the end of the fiscal year, contract staff will return to the Board with recommendations regarding the use of the Corporation's reserves and the development of a grant program to fund projects and programs that benefit the El Cerrito community, in keeping with the Corporation's mission. LEGAL CONSIDERATIONS The actions being considered are consistent with California Corporations Law, the Corporation's public and charitable purposes, its Amended and Restated Bylaws, and the Board's previous actions. RECOMMENDATION Approve a resolution amending the Corporation's FY11-12 Annual Budget consistent with the proposed amendment above. Page 2 ---PAGE BREAK--- Reviewed by: Scott Hanin, Executive Director Attachments: 1. Resolution Amending the Corporation's FYll-12 Annual Budget Page 3 Agenda Item No. S(A) ---PAGE BREAK--- Agenda Item No. S(A) Attachment MUNICIPAL SERVICES CORPORATION RESOLUTION NO. 20 11-XX RESOLUTION OF THE BOARD OF DIRECTORS OF THE EL CERRITO MUNICIPAL SERVICES CORPORATION AMENDING ITS FY2011-12 ANNUAL BUDGET WHEREAS, the El Cerrito Municipal Services Corporation (the "Corporation") is a nonprofit public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law for charitable purposes; and WHEREAS, The specific charitable and public purposes for which the Corporation is organized are to benefit and support the City ofEl Cerrito (the "City") and the El Cerrito Redevelopment Agency (the "Agency"), in accordance with Section 509(a)(3) of the Internal Revenue Code of 1986, as amended, and to lessen the burdens of government of the City and the Agency; and WHEREAS, the Board of Directors of the Corporation (the "Board") has reviewed the Corporation's revenues and expenses at mid-year and determined that the Corporation requires additional revenue budget for FY2011-12 of$2,120,000, and additional expenditure budget for FY2011-12 of $163,086; and WHEREAS, the Board desires to amend its FY2011-12 Budget. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the El Cerrito Municipal Services Corporation as follows: 1. The Board of Directors finds that the above recitals are true and correct. 2. The Board of Directors hereby amends the Corporation's FY2011-12 Budget with an additional revenue budget of$2,120,000, and additional expenditure budget of$163,086. 3. This Resolution shall become effective immediately upon its adoption. I CERTIFY that at a regular meeting on February 21, 2012, the Board of Directors of the El Cerrito Municipal Services Corporation passed this Resolution by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: IN WITNESS of this action, I sign this document on February_, 2012. Cheryl Morse, Secretary APPROVED: William C. Jones III, Board Chairperson