HomeMy WebLinkAboutE-25 Staff Report - Q4 Fiscal Year 21-22CONSENT ITEM
E-25
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES
DATE: SEPTEMBER 19, 2022
SUBJECT: FY 2021/22 FOURTH QUARTER FINANCIAL REPORT ENDING JUNE 30, 2022
BACKGROUND:
In an effort to be more transparent and to provide an opportunity to evaluate the City's fiscal health, the
Administrative Services 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, review, and file the Fiscal Year 2021/22 fourth quarter financial report ending June 30t, 2022.
ANALYSIS:
Attached is the 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.
APPROVED
CITY COUNCIL
9/19/2022
4th Quarter Financial Report
September 19, 2022
Page 2
FISCAL IMPACT:
The 4th Quarter Fiscal Year 2021/22 financial report was provided to review the fiscal position of the City.
Details of the revenue and expenditure budget adjustments are outlined in the attached quarterly financial report.
Staff will continue to closely monitor the fiscal impact, and if necessary, recommend revisions to the City
Council as appropriate.
Prepared By: Reviewed and Approved:
Richard Lam Talika M. Johnson
Budget & Revenue Manager Director of Administrative Services
Reviewed and Approved:
Sergio Gonzalez
Manager
Attachment:
1. Quarterly Financial Report – 4th Quarter, Ending June 30, 2022
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 1 of 6
FY 2021/22 Quarterly Financial Report
4th Quarter, Ending June 30, 2022
OVERVIEW
This financial report summarizes the City’s General Fund’s position for the 4th quarter of Fiscal Year 2021/22 (July
1, 2021 through June 30, 2022). 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
For the 4th quarter’s revised data, the projection through the end of the forth quarter for total sources (revenues and
transfers-in) are estimated to be $62.65 mil, and increase of $10.44 mil from the adopted revenues due to the American
Rescue Plan Act (ARPA) revenues received and the various mid-year revenue adjustments approved by Council on
March 7. Total uses (expenditures and transfers-out) are estimated to be $56.6 mil and $4.5 mil higher than the
adopted expenditures primarily due to $2.84 Mil in promenade tenant improvement budget approved by council on
January 18, 2022 that will be reimbursed by MTA, $962,043 in budget carryforward for various city projects that have
not been completed in FY2020-21, $500,000 in small business loans that was approved in FY2021-21, and $200,000
in the Transtech agreement for building permit services.
Table 1 shows the adjusted budget figures:
A B C
Adopted
Budget
2021-22
Revised
Budget
2021-22
Variance
(B - A)
Beginning Estimated Fund Balance $ 27.00 $ 27.00 * $ -
Plus Revenues 50.55 60.73 ** 10.18
Transfers In 1.66 1.91 0.26
Total 2021-22 Sources 52.21 62.65 10.44
Less Expenditures 44.88 50.09 ** 5.21
Transfers Out 7.20 6.49 (0.71)
Total FY 2021-22 Uses 52.08 56.58 4.50
Expenses in (excess)/below Exp-FY 2021-22 0.13 6.06 5.93
Estimated Unassigned Fund balance before reserves 27.13 33.06 5.93
Less: Internally Restricted Reserves
Budget Stabilization & Catastrophic Reserve 13.02 13.02 *** (0.00)
Capital & Infrastructure Replacement Reserve 2.00 2.00 *** -
Insurance Reserve 2.50 2.50 *** -
Retiree Benefits Reserve 2.00 2.00 *** -
Available Fund Balance $ 7.61 $ 13.54 $ 5.94
*Unaudited
**Financial Data as of 08/31/22 - Q4 FY21-22
***Established Updated Reserves - Per 10-25-21 Council Approval to Increase Reserves - Original
Reserved Policy was approved under Resolution# 2020-037
Table 1
Budget vs. Estimated Actual
(in millions)
Attachment 1
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 2 of 6
The 4th quarter’s revenues ended the year at the 105.3% mark. The charts and explanation below will go over each of the
revenue categories in details.
GENERAL FUND REVENUES
Table 2 shows actual collections for the major revenue sources and the percent collected compared to the adjusted budget.
The actuals are $3.31 mil higher than the adjusted budget mainly due to $1.92 mil higher in sales and transaction use taxes
as the economy opened up in FY2021-21 and $.88 mil higher in property tax from a net taxable assessed value increase of
2.0%, Prop 13 inflation adjustments, and higher property sales in 2021 resulting in higher property assessed valuation, and
higher sanitary landfill processing tax and landfill replacement/expansion fees due to increased processing volume in
FY2021-22 in other taxes. The lifting of the Covid-19 restrictions also improved business activities including license and
permits and the ability to collect fines. Finally, miscellaneous revenues had a negative amount compared to the revised
budget due to the change in market value in the City’s fixed income securities.
Table 3 shows that revenues came in at $11.3 Mil higher than the same period last year. This is primarily due to a one-time
allocation of the American Rescue Plan Act funds (ARPA) to the City (the City used $7.34 mil of the funds for general
government services and specifically for public safety) under cost reimbursement. In addition, the lifting of the Covid-19
restrictions improved the economy and business activities, and revenues improved including sales tax $1.48 mil, transaction
use tax $1.56 mil, charges for services $1.3 mil, other taxes $.84 mil, and most revenue categories trended higher. The
property tax also improved as explained with the reasons outlined in the paragraph above. Miscellaneous revenues decreased
by $2.0 mil compared to last year primarily due to the change in market value in the City’s fixed income securities.
Revenue Collection by Source
As of 06/30/22
2021-22 Actual % of
REVENUE Adjusted Budget YTE 06/30/22 Adj. Budget
Property Tax 13,265,797 14,153,967 106.7%
Sales Tax 7,560,692 8,268,517 109.4%
Transaction Use Tax 6,063,751 7,284,114 120.1%
UUT Tax 3,259,463 3,450,039 105.8%
Other Taxes 10,476,982 11,328,333 108.1%
Charges for Services 5,621,170 5,888,149 104.7%
Cost Reimbursement 9,588,704 9,203,451 96.0%
Fines & Penalties 1,309,500 1,646,068 125.7%
License & Permits 2,714,500 3,296,270 121.4%
Miscellaneous 240,500 (1,037,666) -431.5%
Money & Property Use 2,544,483 2,477,487 97.4%
Total Revenues $62,645,542 $65,958,729 105.3%
Table 2: YTE % of Budget
Actual Actual Increase/
REVENUE YTD 06/30/2021 YTD 06/30/2022 (Decrease)
Property Tax $13,539,792 $14,153,967 $614,175
Sales Tax 6,782,124 8,268,517 1,486,392
Transaction Use Tax 5,718,161 7,284,114 1,565,953
Utility User Tax 3,164,940 3,450,039 285,099
Other Taxes 10,481,545 11,328,333 846,788
Charges for Services 4,578,315 5,888,149 1,309,834
Cost Reimb.2,664,487 9,203,451 6,538,964
Fines & Penalties 1,360,681 1,646,068 285,387
License & Permits 3,026,656 3,296,270 269,614
Miscellaneous 1,007,062 (1,037,666) (2,044,728)
Money & Property Use 2,349,269 2,477,487 128,218
Total Revenues $54,673,034 $65,958,729 $11,285,696
Table 3: Year-to-Year Comparison
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 3 of 6
Chart 1
Revenues Collected by Source
Quarter Ending: 06/30/21 vs. 06/30/22
Property Tax Property tax revenues came in at 106.7% of the adjusted budget due to a net taxable assessed
value increase of 2.0%, Prop 13 inflation adjustments, and higher property sales in FY2021 resulting in higher
property assessed valuation
Sales Tax Collections are at 109.4% of the adjusted budget. Since the lifting of the Covid-19 restrictions, the
local economy and businesses have steadily improved. The higher collection of sales tax revenues reflected
positive consumer sentiments in FY2021-22.
Transaction Use Tax (TUT) collections are at 120.1% of the adjusted budget. Similar to the Sales Tax, since
the lifting of the Covid-19 restrictions, the local economy and businesses have steadily improved. The higher
collection of TUT revenues reflected positive consumer sentiments in FY2021-22.
Utility User’s Tax collections are at 105.8% of the adjusted budget. This percentage is reflective of the
consumption of utility services such as gas, electric and water.
Other Taxes collections are at 108.1% of the adjusted budget. Other taxes are comprised mainly of transient
occupancy tax (TOT), franchise/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 higher production from business
enterprises resulting in higher franchise and tax revenues.
Charges for Services collections are at 104.7% of the adjusted budget. Revenues are collected as services
are rendered. This revenue source was higher compared to the same quarter last year due to the timing of the
development projects and timely collection of service charges.
($2,000,000)
$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 06/30/2021
YTD 06/30/2022
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 4 of 6
Cost reimbursement collections are 96.0% of the adjusted budget. Revenues are collected based on various
reimbursement agreements. The higher revenues are mainly due to a one-time allocation of the American Rescue
Plan Act funds (ARPA) to the City (the City used $7.34 mil of the ARPA funds for general government services
and specifically for public safety) as stated above.
Fines and Penalties collections are at 125.7% of the adjusted budget. The Q4 FY2021-22 revenues were
higher this quarter compared to the same period last year, and it is mainly due to easing of the Covid-19
restrictions, the economy opening up and improving government and business activities.
License and Permits collections are at 121.4 % 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 -431.5% of the adjusted budget. Miscellaneous revenues when compared to
the revised budget and last year decreased due to the change in market value in the City’s fixed income securities.
Money and Property Use collections are at 97.4% of the adjusted budget. The Q4 FY2021-22 revenues are
pacing close to the adjusted budget. Revenues when compared to the same period last year were higher mainly
due to the re-opening of the City's rental and recreation facilities.
GENERAL FUND EXPENDITURES
General Fund expenditures are tracking at 79.6% of the fourth quarter’s budget.
Expenditures by Category
As of 06/30/22
The expenditures outlined in Table 4 are pacing at 79.6% of the 4th quarter’s budget. The personnel budget
came in at 91.2% of the revised budget, and it is lower because of vacancies and the City did not have to pay the
one-time lump sum PERS pension payment. The issuance of the pension obligation bond has made the
expenditure more predictable. The Operating costs compared to the revised budget were lower in Q4 FY2021-
22 due to the timing of the various development projects. The 4th quarter total expenditures on table 5 compared
to the same period last year was higher. As stated above, the lifting of the Covid-19 restrictions improved the
local economy, and resulted in expanded government services and activities in FY2021-22.
DEPARTMENT EXPENDITURES
At the end of the 4th quarter, actuals for most program departments are tracking around the 79.6% or higher of
the 4th quarter adjusted budget. The Economic and Community Development and Public Works department
budgets are based on the timing of the development projects, and the Community Resources and Library
Departments were impacted by the Covid-19 restrictions during Q1 and part of Q2 and improved in the second
half of the fiscal year. The City Clerk’s budget is pacing low due to the timing of when the election will take
place. Finally, the public safety department is pacing low due to vacancies. Although some smaller departments
are slightly over budget, it is immaterial because the General Fund budget overall ended at 79.6% of the adjusted
budget and resulted in a favorable position in fiscal year end FY2021-22.
FY 21-22 Actual % of
EXPENDITURE Working Budget YTE 06/30/22 Adopted
Personnel 25,935,697 23,665,075 91.2%
Operating 30,647,834 21,392,212 69.8%
Total Expenditures $56,583,531 $45,057,287 79.6%
Table 4: YTE % of Budget
Actual Actual Increase/
EXPENDITURE YTD 06/30/21 YTD 06/30/22 (Decrease)
Personnel 25,666,394 23,665,075 ($2,001,319)
Operating 16,760,215 21,392,212 4,631,998
Total Expenditures $42,426,608 $45,057,287 $2,630,679
Table 5: Year-to-Year Comparison
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 5 of 6
Table 6 Chart 2
Expenditures by Department % of Budget by Department
As of 06/30/22 as of 06/30/22
MAJOR SPECIAL REVENUE, SEWER AND INTERNAL SERVICES FUNDS
SUMMARY
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 below.
Table 7: Major Special Revenue and Internal
Services Fund Revenues
Table 8: Major Special and Internal
Service Fund Expenditures
2021/22 Actual
EXPENDITURE Adj. Budget YTD 06/30/22 % of Budget
Council $158,950 $168,291 105.9%
City Clerk 657,720 428,703 65.2%
City Attorney 285,000 333,690 117.1%
City Treasurer 136,915 155,093 113.3%
Administration 1,063,886 559,317 52.6%
Finance 1,524,980 1,468,897 96.3%
Economic & Comm. Dev.7,387,954 2,636,091 35.7%
Human Resources 733,665 721,513 98.3%
Library 1,519,910 1,082,894 71.2%
Public Safety 21,236,488 18,362,417 86.5%
Public Works 4,469,035 3,436,010 76.9%
Community Resources 2,680,895 1,398,264 52.2%
City-Wide 14,728,133 14,306,107 97.1%
Total Expenditure $56,583,531 $45,057,287 79.6%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
2021-22 Actual % of
REVENUE Adjusted Budget YTD 06/30/22 Adj. Budget
Gas Tax Fund $1,188,842 $1,175,015 98.8%
Fire Safety 6,424,309 6,424,309 100.0%
Sewer Fund 3,248,928 3,465,014 106.7%
Risk Mgmt/Liab Fund 3,346,377 3,377,618 100.9%
IT Fund 2,335,130 1,698,154 72.7%
Total Revenues $16,543,586 $16,140,110 97.6%
Table 7: YTD % of Budget
2021-22 Actual % of
EXPENDITURE Adjusted Budget YTD 06/30/22 Adj. Budget
Gas Tax Fund $1,800,510 $1,594,723 88.6%
Fire Safety 6,424,309 6,424,309 100.0%
Sewer Fund 2,938,483 1,932,307 65.8%
Risk Mgmt/Liab Fund 4,699,308 4,401,230 93.7%
IT Fund 2,670,831 2,236,199 83.7%
Total Expenditures $18,533,441 $16,588,767 89.5%
Table 8: YTD % of Budget
FY 2021-22 Quarterly Financial Report Attachment 1 4th Quarter, Ending June 30, 2022
Page 6 of 6
Chart 3
Major Special Revenue & Internal Services Funds
Revenues by Funds
Ending 06/30/22
Chart 4
Major Special Revenue & Internal Services Funds
Expenditures by Funds
Ending 06/30/22
Gas Tax Fund
Fire Safety Fund
Fire Safety Fund’s operating revenues are pacing at 100.0% of revenues. The expenditures are pacing at 100.0% of
the 4th quarter budget and consistent with the full year estimates.
Sewer Fund
Sewer year-to-date operating revenues are 106.7% of the adjusted budget. Expenditures are lower than the 4th quarter
end mark at 65.8% due to the timing of the various projects.
Risk Management Fund
The revenues for the Risk Management Fund are at 100.9%. The expenditures are at 93.7% of the adjusted budget due
to the timing of when claims are paid out.
Information Technology Fund
The Information Technology Fund revenues for the 4th quarter are pacing at 72.7%. Its allocations are recorded twice
a year, in December and June. The expenditures are pacing at 83.7% and consistent with the timing of the various IT
projects.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Gas Tax Fund Fire Safety Sewer Fund Risk Mgmt/Liab
Fund
IT Fund
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Gas Tax Fund Fire Safety Sewer Fund Risk Mgmt/Liab
Fund
IT Fund