Clearlake finance director says midyear budget 'mostly on track,' flags grant cash‑flow and audit actions

Clearlake — Finance Director Young told the City Council on March 3 that the midyear budget review shows the city is largely on track while noting cash‑flow challenges tied to reimbursement‑based grants and outstanding audit items.

"Main takeaway is we are mostly on track," Finance Director Young said, summarizing the city’s actuals through Dec. 31, 2021. Young told the council the general fund was about halfway through the fiscal year with roughly $4 million spent of an $8 million budget and that capital projects had spent just over $5 million with another roughly $6 million encumbered.

Why it matters: Staff reported that the city has about $18 million in awarded grant funds (with roughly $18 million more pending). Young warned some grants are reimbursement‑based, meaning the city must front costs and then wait for documentation and approval to be reimbursed. She cited recent procedural changes at the State’s housing agency (HCD) that have slowed reimbursements for large projects such as the Salt Fire recovery work.

What the council heard: Young outlined completed work on procurement and p‑card policies, capital asset inventories, and fraud‑prevention procedures; staff also completed procurement and p‑card trainings and plan to roll out capital‑asset training. The staff recommended specific midyear budget adjustments, including adding LEAP grant revenue ($60,000), SP2 grant ($160,000), a CalRecycle grant (~$5,000), a $46,000 equity payout line, and $53,847 in planning fee revenue.

Council members asked about staffing to handle the increased grant load and whether to hire a dedicated grants person or rely on consultants; staff said some grant writing will continue in‑house, Crystal (a staff member) handled the Clean California application and the city plans an RFP for consultant services. Young said the city is "in a position to cash flow" some projects but that slower reimbursements could require borrowing if conditions were different.

Next steps: The council put the recommended adjustments on the consent calendar for adoption. Staff said they will continue to monitor reimbursements and bring any necessary policy or budget follow‑ups to the council.