TITLE
Recommendation to request City Auditor to perform an independent review of the Marina Fund (TF403), Tidelands Operating Fund (TF401) and Rainbow Harbor Fund (TF411) expenses within the next 30 days to determine whether or not the Marina Fund is subsidizing the non-marina Tidelands areas, and report findings to the Mayor, City Council and City Manager. Additionally, request City Manager to direct city staff to provide City Auditor with the information needed to complete the analysis in a thorough and timely manner.
DISCUSSION
On January 25, 2103, Parks, Recreation and Marine Director George Chapjian submitted a memo (see attached) to City Manager Pat West stating that the Marina Fund (TF403) is subsidizing the Tidelands Operating Fund (TF401) by $830,000 annually and the Rainbow Harbor Fund (TF411) by $65,000 annually for a total of $895,000 annually. This conclusion was based on an analysis of work orders in October and December 2011, and work orders in February, April and June 2012.
According to the January 2013 memo, this problem has occurred because employees charge the funds in which they are budgeted, regardless of the area where they are working.
It has apparently been known for some time that the Marina Fund was subsidizing the Tidelands Fund, but this was deemed necessary due to the Tidelands Operating Fund being fiscally strapped for a number of years. However, with the increase in oil revenue beginning several years ago, this is no longer the case.
At the request of the City Manager's office, Parks, Recreation and Marine was requested to resubmit their recommendations with reduced amounts. Accordingly, a revised memo dated November 25, 2013 was created (see attached). This memo indicates that only $195,000 in annual expenses should redirected from the Marina Fund to the Tidelands Fund. This figure is further confused by the fact that the memo states that in FY13 $293,000 should be redirected from the Marina Fund to the Tidelands Fund.
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