Title
Fiscal Year 2024-25 Preliminary 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 2024-2025 Year-End Financial and Performance Measures Report as of June 30, 2025. This report is for information only.
BACKGROUND
The City Council adopted the 2023-2024 and 2024-2025 General Fund, Enterprise and Internal Service Funds, and Parking Fund budgets on May 15, 2023. The approved budgets are the annual expenditure and resource allocation 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 preliminary 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 allocation plan. These preliminary numbers are subject to the annual audit process, which will result in an Annual Comprehensive Financial Report (ACFR). Upon completion, the ACFR, will be presented to the Finance Committee and City Council for acceptance at a later date.
DISCUSSION
The revised City budget for 2024-2025 was adopted on May 20, 2024. The amended budget incorporates estimated revenues and planned expenditures for all funds. The attached Preliminary Year-End Financial Report as of June 30, 2025, provides the revenue and expenditure summary for the General, Enterprise, and Internal Service Funds, as well as the Parking Fund. The detailed discussion offers comparisons to the prior year and focuses on variances from the revenue and expenditure plans and allocations contemplated in the budget. As noted, all results presented are preliminary and subject to change pending completion of the ACFR.
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 2024-2025 General Fund budget projects revenues totaling $143,433,000 and expenditures totaling $164,149,000, including purchase order encumbrances from 2023-2024, approved carryover amounts, and City Council approved appropriation amendments.
Revenue in 2024-2025 totals $146,795,000, 102% of the amended budget of $143,433,000 and $4,101,000 greater than revenue in 2023-2024. Expenditures of $152,451,000 through the fourth quarter amount to 93% of the anticipated total of $164,149,000 and 4% or $5,856,000 greater when compared to 2023-2024. 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 amended revenue budget was collected compared to 97% in 2023-2024). Sales and Use Transaction Taxes are the City’s largest revenue source and represent approximately 35% of total General Fund revenue. Sales/Transaction and Use Tax estimates have been revised downward by $2,800,000 in FY 2024-2025 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 amended revenue budget was collected compared to 105% in 2023-2024). Property Tax is the City’s second largest revenue source and represents 22% of the total General Fund’s revenue. Actual Property Tax revenue came in at $32,762,000, which is $827,000 higher than revenue collected in 2023-2024 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 amended revenue budget was collected compared to 112% in 2023-2024). Actual revenue was approximately $19,000 less than actual revenue in 2023-2024 as better than expected UUT revenue associated with electricity and gas was offset by declines in the cable tv and telephone categories.
• Property Transfer Taxes-(93% of the amended revenue budget was collected compared to 81% in 2023-2024). This tax is highly volatile, relying on changes in property ownership. The impact of high interest rates and limited housing supply continue to impact changes in ownership turnover, though trending upward compared to the prior year. The sale of the Marina Square shopping center also contributed to $8,200,000 in revenue and the positive year-over-year increase of $1,600,000.
• Charges for Services-(102% of the amended revenue budget was collected compared to 115% in 2023-2024). 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-(166% of the amended revenue budget was collected compared to 124% in 2023-2024). Actual interest income was $2,454,000 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 amended revenue budget was collected compared to 115% in 2023-2024). The Franchise Fee revenue budget of $7,207,000 came in at $7,657,000 led by electric, refuse, and Ora Loma fees.
• Licenses & Permits-(94% of the amended revenue budget was collected compared to 109% in 2023-2024). The largest component in this revenue category is Building Permit revenue. Actual Building Permit revenue received was approximately $3,088,000 in 2024-2025 compared with revenue of $3,340,000 in the same period last fiscal year.
• Intergovernmental-(183% of the amended revenue budget was collected compared to 102% in 2023-2024). $655,000 in grant reimbursements contributed to the favorable budget variance of $755,000 with approximately $585,000 in FEMA reimbursements associated with prior year expenditures.
As reported in the attached Preliminary Year-End Financial Report, all other taxes and revenue receipts are in line with budgeted revenues. All financial results presented are estimates and subject to change pending finalization of the annual audit and presentation of the ACFR.
General Fund, Total Expenditures-(93% of the amended budget compared to 92% in 2023-2024). The year-end expenditure total was $152,451,000, 93% of the amended budget of $164,149,000. General Fund expenditures were $5,856,000 greater when compared to the prior year. Most departments were under budget due to salary savings and funding for ongoing initiatives that will carryover into the next year. Overall, department operating expenditures totaled $139,046 compared to expenditures of $126,736 the previous year, a 10% increase.
• Fire-(98% of the amended budget compared to 100% in 2023-2024). The amended budget in 2024-2025 was $33,869,000 and actual expenditures were 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 amended budget compared to 25% in 2023-2024). 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.
• Transfers-(100% of amended budget compared to 100% in 2023-2024). Transfers were budgeted at $9,304,000 and were transferred as planned.
• Enterprise, Internal Service Funds, and Parking Fund
Four Enterprise Funds make up the City's business-type operations. The Water Pollution Control Plant Fund, the Environmental Services Fund, the 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 for parking meter and parking lot operations and maintenance at the Downtown Parking Structure. All financial results presented are preliminary and subject to change pending finalization of the annual audit and presentation of the ACFR.
• Shoreline Enterprise, Revenues, and Expenditures-(122% of the revenue budget has been collected compared to 532% in 2023-2024 and 79% of the amended expenditure budget compared to 104% in 2023-2024). Shoreline revenue was $1,100,000 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-(76% of the expenditure budget compared to 79% in 2023-2024). 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.
Parking, Revenues and Expenditures-(113% of the revenue budget has been collected compared to 83% in 2023-2024 and 87% of the amended expenditure budget compared to 79% in 2023-2024). Less the $376,718 transfer from the General Fund, parking revenue was estimated at $951,000 and actual revenue was $1,129,000, which includes vehicle code fines that are now being recorded in the Parking Fund. Expenditure savings mainly related to consulting and the operating transfer from the General Fund contributed to a positive estimated net position of $444,000.
FY 2024-25 Biennial Budget Performance Measures
New for the FY 2024-25 Biennial Budget were specified Performance Measures. During the budget process, each Department proposed specific performance measures to track throughout the fiscal year. Attachment B shows detail on each Department’s annual progress.
ATTACHMENTS
Attachment A - Preliminary Year-End Financial Report as of June 30, 2025
Attachment B - FY 2024-25 Biennial Budget Performance Measures
Attachment C - FY 2024-25 Preliminary Year-End Financial Report Presentation
PREPARED BY
Tyler Hammond, Accountant II
Felicia Silva, Assistant Finance Director
Nicole Gonzales, Finance Director