HomeMy WebLinkAboutE-8 Staff Report - Q4 Quarterly Financial ReportCONSENT ITEM
E-8
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES
DATE: OCTOBER 4, 2021
SUBJECT: FY 2020/21 FOURTH QUARTER FINANCIAL REPORT ENDING JUNE 30, 2021
BACKGROUND:
In an effort to continue to be transparent and to provide an opportunity to evaluate the City's fiscal health, the
Finance Department has prepared a quarterly financial report. This report summarizes the fourth quarter budget-
to-actual analysis for the City’s General Fund, Gas Tax, Fire Safety Special Revenue funds, the Sewer
Enterprise fund, and major Internal Services funds including Risk Management/Liability and Information
Technology. The proposed action consists of receiving, reviewing and filing the quarterly financial report.
RECOMMENDATION:
Staff recommends the City Council take the following action:
1) Receive and file the Fiscal Year 2020/21 fourth quarter financial report ending June 30, 2021.
ANALYSIS:
Attached is a quarterly financial report for the major non-utility funds to provide the City Council and public
an update on the City’s financial position. Included in the report are the statuses of the General Fund, Gas Tax,
Fire Safety Special Revenue Funds, Sewer Enterprise Fund, and Risk Management/Liability and Information
Technology Internal Services funds.
FISCAL IMPACT:
The attached financial report is a high-level summary of budget-to-actual results for the General Fund and
major Special Revenue Funds of the City, and provides a snapshot of revenue and expenditure activities for
Fiscal Year 2020/21 through fourth Quarter ending June 30, 2021. This report is unaudited and may be modified
slightly by the closing year-end audit.
APPROVED
CITY COUNCIL
10/6/2021
FY 2020/21 4th Quarter Financial Report
October 4, 2021
Page 2
Staff will continue to closely monitor fiscal activities, and if necessary, recommend revisions to the City
Council as appropriate.
Prepared By: Prepared By:
Richard Lam Talika M. Johnson
Budget Administrator Director of Administrative Services
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachment:
1. Quarterly Financial Report – 4th Quarter, Ending June 30, 2021
FY 2020/21 Quarterly Financial Report
4th Quarter, Ending June 30, 2021
OVERVIEW
This financial report summarizes the City’s General Fund’s position for the 4th quarter of Fiscal Year 2020/21 (July
1, 2020 through June 30, 2021). Also, included are the major Special Revenue Funds: Gas Tax and Fire Safety; the
Sewer Fund; and the major Internal Services Funds: Risk Management/Liability and Information Technology. The
purpose of this report is to provide the City Council, City Management, and the Azusa community with an update on
the City’s fiscal status based on the most recent financial information available.
GENERAL FUND SUMMARY
With the 4th quarter’s revised data, the projection through the end of the fiscal year for total sources (revenues and
transfers-in) are estimated to be $49,465,106, higher than the adopted revenue of $46,654,102 by $2,831,004 primarily
due to higher property tax $458,895, sales tax $970,560, transaction use tax $756,375, and one-time allocation of the
Coronavirus care act fund $613,134. Total uses (expenditures and transfers-out) are estimated to be $485,345 higher
than the adopted budget mainly due to budget carryforwards for in progress projects such as upgrade of the Land
Management System. Table 1 shows the adjusted budget figures:
A B C
Adopted
Budget
2020-21
Revised
Budget
2020-21
Variance
(B - A)
Beginning Estimated Fund Balance $ 20.55 $ 20.55 * $ -
Plus Revenues 45.11 47.92 ** 2.81
Transfers In 1.55 1.55 -
Total 2020-21 Sources 46.65 49.47 2.81
Less Expenditures 39.84 40.33 ** 0.49
Transfers Out 7.92 7.92 -
Total FY 2020-21 Uses 47.76 48.24 0.49
Expenses in (excess)/below Exp-FY 2020-21 (1.11) 1.22 2.33
Estimated Unassigned Fund balance before reserves 19.44 21.77
Less: Internally Restricted Reserves
Budget Stabilization & Catastrophic Reserve 9.55 9.63 *** 0.08
Capital & Infrastructure Replacement Reserve 1.50 1.50 *** -
Insurance Reserve 1.00 1.00 *** -
Retiree Benefits Reserve 2.00 2.00 *** -
Available Fund Balance $ 5.39 $ 7.64 $ 2.24
*Unaudited
**Financial Data as of 9/7/21 - Q4 FY20-21
***Council aaproved Reserve Policy - adopted 6/15/20 Resolution# 2020-037
Table 1
Budget vs. Estimated Actual
(in millions)
Attachment 1
FY 2020-21 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2021
Page 2 of 6
Fourth quarter revenues ended at 111% of forecast due to higher than anticipated tax collections in all categories with the
exception of Utility User’s Tax and Money & Property Use. The chart and explanation below will go over each of the
revenue categories in detail.
GENERAL FUND REVENUES
Table 2 shows collections of revenues by category and the percent collected compared to the adjusted budget. Table 3 shows
revenues came in at $8.1 Mil higher than the same period last year. This is primarily due the passage of Measure Z, the
transaction use tax, and stronger than forecasted sales and property taxes combined for $6.9 Mil. In addition, there was a
one-time allocation of the Coronavirus Relief fund of $613,134. Finally, revenue ramp up efforts established in the fiscal
sustainability plan are coming to fruition including the hazardous waste tax rate approved per council, and also consumer
price index and other increases allowable in the enterprise agreements.
Revenue Collection by Source
as of 06/30/21
Chart 1
Revenues Collected by Source
Quarter Ending: 6/30/20 vs. 6/30/21
Adjusted Budget Actual % of
REVENUE FY 2020/21 YTD 06/30/21 Adj. Budget
Property Tax 12,187,428$ 13,539,792$ 111.1%
Sales Tax 5,878,710 6,782,124 115.4%
Transaction Use Tax 4,124,202 5,718,161 138.6%
Utility User's Tax 3,323,341 3,164,940 95.2%
Other Taxes 10,112,888 10,481,545 103.6%
Charges for Services 4,452,305 4,578,315 102.8%
Cost Reimbursements 2,690,523 2,664,487 99.0%
Fines & Penalties 794,680 1,360,681 171.2%
License & Permits 2,526,900 3,026,656 119.8%
Miscellaneous 815,784 1,007,062 123.4%
Money & Property Use 2,558,345 2,349,269 91.8%
Total Revenues 49,465,106$ 54,673,034$ 110.5%
Table 2: YTD % of Budget
Actual Actual Increase/
REVENUE YTD 6/30/2020 YTD 6/30/2021 (Decrease)
Property Tax 12,389,903$ 13,539,792$ 1,149,889$
Sales Tax 6,797,957 6,782,124 (15,833)
Transaction Use Tax - 5,718,161 5,718,161
Utility User's Tax 3,168,932 3,164,940 (3,992)
Other Taxes 9,561,888 10,481,545 919,657
Charges for Services 3,588,721 4,578,315 989,594
Cost Reimbursements 2,344,287 2,664,487 320,200
Fines & Penalties 1,383,256 1,360,681 (22,575)
License & Permits 2,859,136 3,026,656 167,521
Miscellaneous 1,790,309 1,007,062 (783,247)
Money & Property Use 2,668,269 2,349,269 (319,000)
Total Revenues 46,552,659$ 54,673,034$ 8,120,375$
Table 3: Year-to-Year Comparison
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
YTD 06/30/2020
YTD 06/30/2021
FY 2020-21 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2021
Page 3 of 6
Property Tax collections came in at 111.1% of the forecast due to the 2% assessed valuation increase allowable
by Prop13, a strong housing market with sales of existing properties triggering higher assessed valuation, and
also a conservative revenue forecast due to the pandemic.
Sales Tax collections are at 115.4% of the adjusted budget. Revenue forecasts were conservative due to
uncertainty economic conditions during the pandemic. However, online sales were much higher than expected
and overall sales tax revenues were consistent with prior fiscal year.
Transaction Use Tax (TUT) collections are at 138.65% of the adjusted budget. Forecasting the TUT was
challenging with businesses shut downs part of the year due to COVID-19 and there were no historical data on
past revenues. Revenues compared to the same period last fiscal year are higher primarily due to the passage of
Measure Z, the voter approved transaction use tax, and better than expected sales tax revenues. Overall, revenues
came in higher than anticipated.
Utility User’s Tax collections are at 95.2% of the adjusted budget. This percentage is reflective of the
consumption of utility services such as gas, electric and water and consistent with prior year.
Other Taxes collections are at 103.6% of the adjusted budget. Other taxes are comprised mainly of transient
occupancy tax (TOT), franchise fees for landfill, land excavation, material recovery facility, and hazardous
waste fees. Other Taxes are higher in comparison to the same period last year mainly due to increases allowable
in the enterprise agreements and higher hazardous waste tax.
Charges for Services collections are at 102.8% of the adjusted budget. Revenues are collected as services
are rendered. This revenue source was slightly higher due to the timing of the development projects. Even
though the City did not receive any revenues from recreation fees including sports, recreational classes,
swimming, etc. during the pandemic shutdown, other one-time revenues were received such as plan check fees
from One Legacy that offset some of the loss. This revenue category recovered nicely once the economy opened
up.
Cost Reimbursements collections are at 99.9% of the adjusted budget. Revenues are collected based on
various reimbursement agreements. The revenues were higher in FY2021 due to greater demand for government
services.
Fines and Penalties collections are at 171.2% of the adjusted budget. Fourth quarter revenues are pacing
higher than anticipated. There was a government mandate not to charge penalties or close any accounts for
utility customers early in the pandemic. The City and Light & Water resumed assessing penalties in November
2020 and the cumulative penalties through Q4 came in higher than anticipated.
License and Permits collections are at 119.8% of the adjusted budget. This is mainly due to the timing of
development activities and when the licenses and permit fees are issued.
Miscellaneous collections are at 123.4% of the adjusted budget. The revenues are pacing high primarily due
to a one-time Corona Virus Relief Stimulus payment of $613,134.
Money and Property Use collections are at 91.8% of the adjusted budget. Fourth quarter revenues are lower
due to lower rental revenues received from Women's Club, Senior Centers, and Recreation Facilities as a result
of the pandemic. In addition, the Promenade lease from the LA County Metro was delayed and the anticipated
lease of $59,040 was not realized in Fiscal Year 2020/21.
FY 2020-21 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2021
Page 4 of 6
GENERAL FUND EXPENDITURES
General Fund expenditures shown in Table 4 are at 87.9% of Fourth Quarter budget.
Expenditures by Category
as of 6/30/21
Personnel expenditures were nearly at 100% of budget, and Operating costs were lower due to the temporary
shut down and less business activities from the pandemic. Fourth quarter total expenditures shown in Table 5
compared to the same period last year was lower by $588,786. Personnel cost efficiency efforts such as the
consolidation of the Human Resources and Finance units into one department in Fall 2019 was realized, and the
temporary shut down due to the pandemic in 2020/21 and lowered operational costs relating to recreation and
sports program activities.
DEPARTMENT EXPENDITURES
At the end of fourth quarter, most departments are tracking fairly close to the 100% mark of the adjusted budget.
The Community Resource Department is pacing low due to the pandemic shut down and halted the recreation
activities. Human Resources was pacing low due to position vacancies and less citywide travel and training due
to restrictions from the pandemic. Economic & Community Development was low due to the timing of the
various development projects.
Table 6 Chart 2
Expenditures by Department % of Budget by Department
as of 6/30/21 as of 6/30/21
Working Budget Actual % of
EXPENDITURE FY 2020/21 YTD 6/30/21 Adopted
Personnel 25,697,251$ 25,666,394$ 99.9%
Operating 22,547,240 16,760,215 74.3%
Total Expenditures 48,244,491$ 42,426,608$ 87.9%
Table 4: YTD % of Budget
Actual Actual Increase/
EXPENDITURE YTD 6/30/20 YTD 6/30/21 (Decrease)
Personnel 25,808,982$ 25,666,394$ (142,588)$
Operating 17,206,412 16,760,215 (446,197)
Total Expenditures 43,015,394$ 42,426,608$ (588,786)$
Table 5: Year-to-Year Comparison
Adj. Budget Actual
EXPENDITURE FY 2020/21 YTD 06/30/21 % of Budget
Council 154,881$ 122,426$ 79.0%
City Clerk 620,697 597,229 96.2%
City Attorney 275,000 271,393 98.7%
City Treasurer 173,105 170,009 98.2%
Administration 554,565 506,306 91.3%
Finance 1,529,312 1,459,870 95.5%
Economic & Comm. Dev.4,330,737 2,844,372 65.7%
Human Resources 565,772 374,851 66.3%
Library 1,452,843 1,200,022 82.6%
Public Safety 22,297,356 20,086,039 90.1%
Public Works 3,590,863 3,152,273 87.8%
Community Resources 1,901,584 1,214,681 63.9%
Citywide 10,797,776 10,427,136 96.6%
Total Expenditure 48,244,491$ 42,426,608$ 87.9%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
FY 2020-21 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2021
Page 5 of 6
MAJOR SPECIAL REVENUE, SEWER AND INTERNAL SERVICES FUNDS
SUMMARY
Revenues and expenditures results in the major Special Revenue funds including the Gas Tax, Fire Safety fund,
Sewer Fund, and the major Internal Services funds such as Risk Management/Liability and Information Technology
funds are reflected in Tables 7 and 8 below.
Table 7: Major Special Revenue and Internal
Services Fund Revenues
Table 8: Major Special and Internal
Service Fund Expenditures
Gas Tax Fund
Gas Tax revenues are pacing at 84.3% of the fourth quarter adjusted budget, and the expenditures are tracking at 77.0%.
More activity was anticipated in the fund, but lower driving activity resulted in lower revenues, thus, less costs being
absorbed by the fund.
Fire Safety Fund
Fire Safety Fund’s operating revenues were pacing at 84.1% of revenues, due to timing of receipts. Expenditures were
at 94.9% and on target with budget.
Sewer Fund
Sewer year -to-date operating revenues are 101.2% of estimated budget. Expenditures were lower 70.9% of budget due
to the timing of the various projects and personnel vacancies throughout the year.
Risk Management Fund
Risk Management fund revenues are generated from allocation of the City’s insurance premiums. Revenues and
expenditures are pacing lower than budget at 72.7% at 73.7%, respectively due to the City’s insurance agency, CJPIA,
offering a no-cost deferment of liability premium payments for pandemic relief; an additional payment of $567,274
will be paid out in Fiscal Year 2021/22 and reflected in revenues and expenditures accordingly.
Information Technology Fund
Information Technology revenues and expenditures were 90.8% and 87.1% of budget, respectively, pacing lower due
to large projects, such as the citywide Phone System Replacement, being ongoing into Fiscal Year 2021/22.
Adj. Budget Actual % of
REVENUE FY 2020/21 YTD 6/30/21 Adj. Budget
Gas Tax Fund 1,279,753$ 1,079,251$ 84.3%
Fire Safety 5,874,032 4,940,013 84.1%
Sewer Fund 3,248,928 3,286,344 101.2%
Risk Mgmt/Liab Fund 3,275,919 2,382,931 72.7%
IT Fund 2,029,376 1,842,135 90.8%
Total Revenues 15,708,008$ 13,530,674$ 86.1%
Adj. Budget Actual % of
EXPENDITURE FY 2020/21 YTD 6/30/21 Adj. Budget
Gas Tax Fund 1,656,568$ 1,274,839$ 77.0%
Fire Safety 5,874,032 5,574,633 94.9%
Sewer Fund 3,548,540 2,514,665 70.9%
Risk Mgmt/Liab Fund 4,366,112 3,218,738 73.7%
IT Fund 2,099,619 1,828,466 87.1%
Total Expenditures 17,544,871$ 14,411,342$ 82.1%