Title
Fiscal Year 2025 Final Year-End Financial and Performance Measures Report as of June 30, 2025
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council Finance Committee review the Fiscal Year 2025 Year-End Financial and Performance Measures Report as of June 30, 2025. This report is for information only.
BACKGROUND
The City Council adopted the FY 2024 and 2025 General Fund, Parking Fund, Enterprise Funds, and Internal Service Funds budgets on May 15, 2023. The adopted budgets are the annual expenditure and resource appropriation plans guiding and ensuring implementation of City Council policies and priorities. The budget implements the vision and direction for the broad range of services meeting the needs of the community in accordance with City Council policy.
This financial review as of June 30, 2025, provides the Final year-end budget update to the City Council for the prior fiscal year and an update on performance measures. Analysis of the revenues collected and all expenditures through June 30, 2025, measures operational adherence to the budgetary appropriation plan. These final numbers have been subject to the annual audit process, resulting in the Annual Comprehensive Financial Report (ACFR). The ACFR will be presented to the Finance Committee on January 28, 2026, and presented to the full City Council for acceptance at a regularly scheduled meeting in February 2026.
DISCUSSION
The revised City budget for FY 2025 was adopted on May 20, 2024. The amended budget incorporates estimated revenues and planned expenditures for all funds. The attached Final Year-End Financial Report as of June 30, 2025 (Attachment A), provides the revenue and expenditure summary for the General Fund, Parking Fund, Enterprise Funds, and Internal Service Funds. The detailed discussion offers comparisons to the prior year and focuses on variances in the revenue and expenditure plans and appropriations contemplated in the budget.
General Fund
The General Fund finances the operations of the City having no special or dedicated revenue sources and pays for basic municipal services. The amended FY 2025 General Fund budget projects revenues totaling $143,433,000 and expenditures totaling $164,149,000, including purchase order encumbrances from FY 2024, approved carryover amounts, and City Council approved appropriation amendments.
Year-end revenue in FY 2025 totaled $147,724,000, an increase of $4,291,000 over the amended budget projection of $143,433,000, and $3,001,000 greater than revenue collected in FY 2024. Expenditures of $153,599,000 through the fourth quarter amount to 93% of the anticipated total of $164,149,000, and increase of $5,830,000 (or 4%) greater when compared to FY 2024. Both revenues and expenditure totals were closely in line with the prior year.
A detailed review of revenue and expenditure variances is presented below.
General Fund Revenue
• Sales/Transaction and Use Taxes-(98% of the FY 2025 amended revenue budget was collected compared to 97% in FY 2024). Sales/Transaction and Use Taxes are the City’s largest revenue source and represent approximately 35% of total General Fund revenue Sales/Transaction and Use Taxes collected in FY 2025 totaled $52,019,000.
During FY 2025 mid-year review, the Sales/Transaction and Use Tax estimates was amended to reflect a decrease in projected revenue by $2,800,000 due to an uncertain economy, an increase in consumer spending on (non-taxable) services, and a sales tax reporting correction from one of the City’s sales tax remitters. Overall, actual revenue at year-end is $1,257,000 below budget, but less than prior year actuals by $2,138,000.
• Property Tax-(103% of the FY 2025 amended revenue budget was collected compared to 105% in FY 2024). Property Tax is the City’s second largest revenue source and represents 22% of the total General Fund revenue. Actual Property Tax revenue came in at $32,762,000, which $837,000 over the amended revenue projection, and was nearly $827,000 higher than revenue collected in FY 2024. The increase is primarily due to a positive variance of $710,000 in Recognized Obligation Payment Schedule (ROPS) residual property tax revenue, which represents the leftover money that was once used for redevelopment but is returned to the City after all prior debts and obligations have been fulfilled for the fiscal year.
• Utility Users Tax-(101% of the FY 2025 amended revenue budget was collected compared to 112% in FY 2024). Actual revenue was approximately $161,000 higher than the amended revenue projection, and a decline of $23,000 over actual revenue in FY 2024. UUT continues to fluctuate slightly, as UUT revenue associated with electricity and gas has continued to increase, which offset the continued declines in the cable tv and telephone categories.
• Property Transfer Taxes-(93% of the FY 2025 amended revenue budget was collected compared to 81% in FY 2024). Property Transfer Taxes continue to be a volatile revenue, which fluctuates based on economic conditions, relying on changes in property ownership. In FY 2025, Property Transfer Taxes total $8,153,000, which represents 93% of the total amended revenue projections. In comparison, in FY 2024, Property Transfer Tax totaling 81% of the originally projected revenue.
• Charges for Services-(102% of the FY 2025 amended revenue budget was collected compared to 115% in FY 2024). Charges for Services in FY 2025 totaled $2,732,000, representing 102% of the total amended revenue projections. In comparison, Charges for Services in FY 2024 totaled 115% of the originally projected revenue. Charges for Services were in line with the estimate of $2,700,000 due to strong trends in Recreation programmatic revenue that offset declines in charges for services associated with development and engineering activity.
• Interest & Property Income-(192% of the FY 2025 amended revenue budget was collected compared to 189% in 2024). Actual interest income was better than planned returns due to a larger investment balance, higher investment rates yielding greater returns, and active cash flow management. Rental income was in line with budget.
• Franchise Fees-(106% of the FY 2025 amended revenue budget was collected compared to 115% in FY 2024). The Franchise Fee revenue budget of $7,207,000 came in at $7,657,000 compared led by electric, refuse, and Ora Loma fees.
• Licenses & Permits-(94% of the FY 2025 amended revenue budget was collected compared to 109% in FY 2024). The largest component in this revenue category is Building Permit revenue. Actual Building Permit revenue received was approximately $3,088,000 in FY 2025 compared with revenue of $3,340,000 in the same period last fiscal year.
• Intergovernmental-(183% of the FY 2025 amended revenue budget was collected compared to 102% in FY 2024). Intergovernmental revenue in FY 2025 totaled $1,664,000, which represents 183% of the amended revenue projection. Of this amount, $655,000 in grant reimbursements contributed to the favorable variance with approximately $585,000 associated with prior year FEMA reimbursements that cannot be precisely timed.
As reported in the attached Final Year-End Financial Report, all other taxes and revenue receipts are in line with budgeted revenues.
General Fund, Total Expenditures-(93% of the FY 2025 amended budget compared to 100% in FY 2024). The year-end expenditure total was $153,141,000, 93% of the amended budget of $164,149,000. General Fund expenditures were $5,830,000 less when compared to the prior year. Most departments were under budget due to salary savings and funding for ongoing initiatives that were carried over into the current year. Overall, FY 2025 department operating expenditures (excluding non-departmental, debt service, and transfers) totaled $139,062,000 compared to expenditures of $126,735,000 the previous year, a 10% increase.
• Fire-(98% of the FY 2025 amended budget compared to 100% in FY 2024). The amended budget in FY 2025 was $33,869,000 and actual expenditures were relatively in line with the amended budget. Expenditures were $1,041,000 greater when compared to the previous year primarily due to increases in the cost of salaries and benefits.
• Human Services-(48% of the FY 2025 amended budget compared to 25% in FY 2024). The budget appropriation of $7,763,000 includes funding for ongoing initiatives such as for Lewelling Interim Housing operating funds and the Alternative Response Unit. Budgets for these ongoing projects continue to be spent down and are brought to Council to roll forward annually.
Enterprise, Internal Service Funds, and Special Revenue Fund
Four Enterprise Funds make up the City's business-type operations. The Water Pollution Control Plant Fund, Environmental Services Fund, Shoreline Enterprise Fund, and the Storm Water Fund are City municipal operations designed to fully recover costs through user fees. Internal Service Funds also operate as business activities, exclusively supporting the City's internal operations. Facilities Maintenance, Information Technology, Insurance Services, and Equipment Maintenance make up these Internal Service Funds. The Parking Fund provides meter parking and parking lot operations and maintenance at the Downtown Parking Structure. All financial results presented are final.
• Shoreline Enterprise Fund: Revenues and Expenditures-(129% of the FY 2025 revenue budget has been collected compared to 534% in FY 2024; and 73% of the FY 2025 amended expenditure budget compared to 102% in FY 2024). Shoreline revenue was $1,797,000 better than planned due to more Transient Occupancy Tax (TOT) revenue than anticipated. In addition, approximately $700,000 is associated with interest payments from the Shoreline developer as the bankruptcy proceedings continue. Revenues from the Monarch Bay golf course operations were in line with budget.
• Internal Service Fund: Expenditures-(74% of the FY 2025 expenditure budget compared to 81% in FY 2024). Insurance expenditures show a decrease primarily due to less Settlement/Judgements expenditures associated with General Liability Insurance. Fleet, Equipment, and Facilities expenditures may vary year-over-year based on capital expenditures. Expenditures for capital purchases and projects may span several fiscal years with appropriated budgets carrying over until project completion.
• Special Revenue / Parking Fund: Revenues and Expenditures-(113% of the FY 2025 revenue budget has been collected compared to 83% in FY2024; and 87% of the FY 2025 amended expenditure budget compared to 79% in FY 2024). Less the General Fund transfer of $376,718, parking revenue was estimated at $951,000 and actual revenue was $1,130,000, which includes vehicle code fines that are now being recorded in the Parking Fund.
Performance Measures
FY 2025 incorporated meaningful department performance measures. During the budget process, each Department proposed specific performance measures to track quarterly throughout the fiscal year. The tables below show detail each Department’s progress by quarter. Attachment B provides an overview of the FY 2024 and FY 2025 target, and report of actual performance in FY 2024 and FY 2025.
ATTACHMENTS
Attachment A - Final Year-End Financial Report as of June 30, 2025
Attachment B - FY 2024-25 Biennial Budget Performance Measures
Attachment B - Final Year-End Financial Report Presentation
PREPARED BY
Nicole Gonzales, Finance Director
Tyler Hammond, Accountant II