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HomeMy WebLinkAboutD-1 Staff Report - FY 24-25 Mid Year Budgets Review 1SCHEDULED ITEM D-1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: MARCH 17, 2025 SUBJECT: FISCAL YEAR 2024-25 MID-YEAR BUDGET ADJUSTMENTS BACKGROUND: On June 17, 2024, the City Council adopted year two of its first Biennial (2-year budget) Budget for the current Fiscal Year 2024/25. This report provides the City Council a mid-year review of the budget and recommended budget adjustments and an overview of the City’s General Fund overall financial position projected through the end of the current fiscal year. RECOMMENDATIONS: Staff recommends the City Council and Azusa Utility Board jointly take the following actions: 1)Adopt Resolution No. 2025-C14, a Resolution of the City Council of the City of Azusa adopting mid-year budget adjustments for the City of Azusa for the fiscal year commencing July 1, 2024 and ending June 30, 2025; and 2)Adopt Resolution No. 2025-UB01, a Resolution of the Utility Board of the City of Azusa adopting mid-year budget adjustments for the City of Azusa for the fiscal year commencing July 1, 2024 and ending June 30, 2025; and 3)Receive and file Fiscal Year 2024/25 Second Quarter Budget-to-Actual report ending December 31, 2024. ANALYSIS: Public safety, general government, internal support services, community resources, such as youth and senior recreational services, library activities, parks and facilities maintenance services make up the majority of the General Fund budget. The Fiscal Year (FY) 2024/25 budget was adopted on June 17, Approved City Council March 17, 2025 FY 2024/25 Mid-Year Budget Adjustments March 17, 2025 Page 2 2024, with General Fund projected surpluses of $1.2 million and unrestricted cash reserve balances of $6.0 million. Staff provides quarterly budget-to-actual reports to the public which details revenues received and expenditures at certain periods in the year. Mid-way through the fiscal year, Staff performs an in-depth review of the budget performance of all city departments and presents necessary adjustments to City Council for review and approval. Fiscal Year 2024/25 Mid-Year Budget Adjustments General Fund proposed adjustments in total is an increase in revenue of $375,830 and a decrease in expenditures of $320,300 for net anticipated fund balance increase of $696,130. All funds, including the General Fund, proposed adjustments in total is an increase in revenues of $19,495 and a decrease in expenditures of $250,125 for a net projected citywide fund balance increase of $269,620. Tables 1 and 2 provide a summary of proposed budget amendments by Department and Fund with justifications for the adjustments as follows: Table 1: Proposed Mid-Year Budget Adjustments by Department FY 2024/25 Increase/(Decrease) Department Revenues Expenditures Fund Balance Administrative Services 362,135$ (806,985)$ 1,169,120$ Economic & Community Development 73,660 - 73,660 Information Technology (230,475) (230,475) - Light & Water (125,860) 348,280 (474,140) Public Works - 27,370 (27,370) Public Safety (59,965) 411,685 (471,650) All Departments Total 19,495$ (250,125)$ 269,620$ Increase/(Decrease) Table 2: Proposed Mid-Year Budget Adjustments by Fund FY 2024/25 Increase/(Decrease) Fund Revenues Expenditures Fund Balance (A) General Fund-10 375,830$ (320,300)$ 696,130$ (B) Consumer Services-31 (125,860) (125,860) - (C) Water-32 - 530,775 (530,775) (D) Electric-33 - (56,635) 56,635 (E ) Sewer-34 - (47,630) 47,630 (F) Information Technology-48 (230,475) (230,475) - All Funds Total 19,495$ (250,125)$ 269,620$ Increase/(Decrease) A. General Fund – Budget adjustments are recommended by Department as follows: a. Administrative Services - Revenues are expected to be higher by $362,135 and expenses lower by $806,985. Revenue changes are primarily due to: higher redevelopment property tax trust fund distributions which cannot be easily estimated and FY 2024/25 Mid-Year Budget Adjustments March 17, 2025 Page 3 trued up each year; the new transaction use tax revenues from implementation of Measure ZZ voted in by Azusa residents starting on April 1, 2025; offset by decreases from sales tax and Measure Z transaction and use tax due to weaker consumer sentiment, higher consumer prices from inflation, lower tax from fuel, and lower business spending. Expenses are expected to be lower due to salary savings from vacancies throughout the fiscal year, including vacancies in Information Technology (see F below). b. Economic and Community Development - Revenues are expected to be higher by $73,660 due to: higher plan check revenues, higher excavation activities and open space payments by Vulcan; higher hazardous waste tax collections from both increased activities and implementation of a scheduled tax increase from 5.5% to 6.0%; offset by lower Waste Management disposal and expansion fees due to planned temporary production reductions to allow for upgraded equipment installation. c. Public Safety – Revenues are expected to be lower by $59,965 due to lower parking enforcement citations. Additional expense appropriations of $411,685 are being requested for: jail services contract due to hiring lag of new Special Services Officers division (which is funded by salary savings to be programmed in the Administrative Services Citywide General Fund budget); unanticipated legal fees; and higher prices for leased vehicles and settlement fees for returned leases. d. Public Works – Additional appropriations of $75,000 are requested for HVAC repair costs. Not included in the mid-year adjustments are any potential budget adjustments for the Los Angeles County Fire Services contract. The County will not have the year-end estimate until the end of March – early April. Staff will return to Council if there are additional budget appropriations over $100,000 needed for this contract for FY 2024/25. B. Consumer Services Fund – This is Light & Water’s internal service fund. Expenses are expected to be lower by $125,860 from Information Technology Allocation savings (see F below), and revenue also expected to be lower by the same amount as costs in this fund are allocated 55% to Water and 45% to Electric. C. Water Fund – Construction inspection services for the South Tank capital improvement project are expected to increase Water Fund capital costs by $600,000. The inspection services will ensure all construction work meets state regulations compliance throughout the life of the project. The total proposed increase is offset by $69,225 in savings from the Information Technology Allocation (see F below). D. Electric Fund – Expenses expected to be $56,635 lower from the Information Technology Allocation savings (see F below). E. Sewer Fund – Expenses expected to be $47,630 lower from the Information Technology Allocation savings (see F below). F. Information Technology (IT) Fund – This internal service department is funded by the General Fund, Light & Water, and the Sewer Fund. Due to position vacancies, the department’s anticipated salary savings are $289,490 and passed on to the aforementioned funding FY 2024/25 Mid-Year Budget Adjustments March 17, 2025 Page 4 departments as a cost savings in their Information Technology Allocation expense. The department is also requesting additional funding for firewall software licensing ($17,015) and one-time vendor implementation ($42,000) for a total cost of $59,015, allocated to General Fund and Light & Water. General Fund Reserve Forecast The General Fund’s financial position remains healthy. Table 3 provides an updated estimate of the General Fund cash reserves forecast. The FY 2024/25 proposed mid-year adjusted budget includes: • Revenues of $67,478,005 ($67,102,175 + $375,830 mid-year adjustments); • Expenditures of $71,710,994 ($72,031,294 - $320,300 mid-year adjustments) which include $4,843,993 in appropriations carried forward from FY 2023/24 for projects in progress; and • Extraordinary Capital Improvement projects and recent property acquisition (609 N. Azusa Ave. and Great Park city contribution), mainly carried forward from prior year totaling $14,984,464. With FY 2024/25 mid-year adjustments, total reserves by end of the fiscal year are estimated at $40.9 million, of which $34.9 or 48% of budgeted expenses is set aside to mitigate risk in high liability exposure areas such as claims expenses, aging infrastructure, and for rising costs in retiree benefits, leaving $6.0 million undesignated. Table 3: Fiscal Year 2024/25 Mid-Year General Fund Reserves Forecasts AUDITED ACTUALS FY 23-24 ADOPTED BUDGET FY 24-25 MID-YEAR BUDGET FY 24-25 Total Revenues 73,142,920 67,102,175 67,102,175 Total Expenses 64,798,633 65,896,595 72,031,294 Normal Operating Surplus or (Deficit)8,344,287$ 1,205,580$ (4,929,119)$ Add/(Less): Net Mid-Year Adjustments - - 696,130 Less: Extraordinary Capital Projects (1,950,690) (2,315,500) (14,984,464) Total Sources/(Uses) of Reserves 6,393,597$ (1,109,920)$ (19,217,453)$ Net Payment of (Payables)/Collection of Receivables 1,037,339 - - Beginning Reserves Balance 52,643,169 42,038,834 60,074,105 Ending Reserves Balance 60,074,105$ 40,928,914$ 40,856,652$ Less: Internally Restricted Reserves Target 28,603,914 34,858,638 34,858,638 Reserves In Excess/(Short) of Restricted Funds 31,470,191$ 6,070,276$ 5,998,014$ FISCAL IMPACT: Adoption of the recommended FY 2024/25 mid-year adjustments will result in a General Fund net fund balance increase of $696,130. Mid-year adjustments for All Funds, including the General Fund, will result in a citywide net fund balance increase of $269,620. FY 2024/25 Mid-Year Budget Adjustments March 17, 2025 Page 5 Reviewed and Approved: Talika M. Johnson Director of Administrative Services Reviewed and Approved: Sergio Gonzalez City Manager Attachments: 1) Summary of the FY 2024/25 Proposed Budget Adjustments 2) Resolution No. 2025-C14 3) Resolution No. 2025-UB01 4) FY 2024/25 Second Quarter Budget-to-Actual Report Attachment 1 Fund Department Division Description Revenues Expenditures Account Coding Reason General Fund Administrative Services Citywide Salary Savings (750,000)$ 1090000000-6095 Savings from vacancies across multiple GF departments General Fund Administrative Services Citywide Information Technology Allocation (56,985) 1090000000-6670 Savings from IT Department vacancies, offset by Firewall installation General Fund Administrative Services Citywide Sales Tax (480,950) 1090000000-4101 Tax consultant estimate lower due to inflation and higher prices impacting consumers, and sales and economic growth slow down General Fund Administrative Services Citywide Transaction Use Tax-Measure Z (654,000) 1090000000-4108 Tax consultant estimate lower due to inflation and higher prices impacting consumers, and sales and economic growth slow down General Fund Administrative Services Citywide Transaction Use Tax-Measure ZZ 427,000 1090000000-4109 Measure ZZ collections beginning 4/1/25 General Fund Administrative Services Citywide SA Statutory Property Tax 1,070,085 1090000000-4090 Redevelopment area property tax revenues higher than anticipated due to 4.2% of residential property valuation growth and conservative revenue forecast for the current fiscal year General Fund Econ & Comm Dev Building Plan Checks 100,000 1035620000-4704 Plan checks volume higher due to timing of project start dates being sooner than anticipated General Fund Econ & Comm Dev Building Plan Checks 160,000 1035620000-4798 Passthrough building consulting fees higher than anticipated General Fund Econ & Comm Dev Economic Development Hazardous Waste Tax 144,940 1035630000-4112 Improved processing volume and tax rate increased from 5.5% to 6.00% General Fund Econ & Comm Dev Economic Development Land Excavation Tax 150,000 1035630000-4120 Land extraction volume higher than expected General Fund Econ & Comm Dev Economic Development Landfills and Disposal Facility Tax (433,150) 1035630000-4159 Lower volume and installation of new equipment impacting operations General Fund Econ & Comm Dev Economic Development Landfill Replacement/Expansion Fee (48,130) 1035630000-4160 Lower volume and installation of new equipment impacting operations Information Technology Information Technology City Computer Services Information Technology Allocation (230,475) 4849930000-4762 Reduced allocation revenue from vacancy savings Information Technology Information Technology City Computer Services Salary Savings (86,490) 4849930000-6095 Savings from vacancies Information Technology Information Technology City Computer Services Computer Equipment 29,505 4849930000-7142 Increase in Firewall quote plus implementation cost Information Technology Information Technology L&W Information Services Salary Savings (155,370) 4849942000-6095 Savings from vacancies Information Technology Information Technology L&W Information Services Information Services 29,510 4849942000-7142 Increase in Firewall quote plus implementation cost Information Technology Information Technology Sewer Information Services Salary Savings (47,630) 4849944000-6095 Savings from vacancies Consumer Services Light & Water Consumer Services Consumer Services Allocation (125,860) 3140711000-4698 Reduction in revenue from Water and Electric IT Allocation Consumer Services Light & Water Customer Records and Collections Information Technology Allocation (125,860) 3140711903-6670 Savings from IT Department vacancies, offset by equipment purchase Electric Light & Water Administrative & General Consumer Services Allocation (56,635) 3340799030-6424 45% Savings from IT Allocation Water Light & Water CIP-Water Structures/Other 600,000 3280000721-7130/ 72119D-7130 South Tank CIP Construction Inspection Services. Water Light & Water Supervision & Engineering Consumer Services Allocation (69,225) 3240721790-6424 55% Savings from IT Allocation General Fund Public Safety PD Contracts Outside Services & Repairs 300,000 1020333000-6493 Internal jail staff, Special Services Officers (SSOs), not hired yet, City must continue to pay vendor until onboarding SSOs General Fund Public Safety Police Parking Enforcement (59,965) 1020310000-5105 Lower citation activities General Fund Public Safety Police Legal Fees 60,000 1020310000-6301 Increase in unanticipated legal services General Fund Public Safety Police Lease/Vehicles 51,685 1020310000-6823 New cars leased (higher price & settlement fees for returned vehicles) General Fund Public Works Facilities Maintenance Outside Services & Repairs 75,000 1055666000-6493 Increase in HVAC contract costs Sewer Public Works Sewer Maintenance Information Technology Allocation (47,630) 3455665000-6670 Savings from IT Department vacancies Total Increase/(Decrease) 19,495$ (250,125)$ Increase/(Decrease) Proposed Citywide Mid-Year Budget Adjustments for Fiscal Year 2024/25 1 RESOLUTION NO. 2025-C14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA ADOPTING MID-YEAR BUDGET ADJUSTMENTS FOR THE CITY OF AZUSA FOR THE FISCAL YEAR COMMENCING JULY 1, 2024 AND ENDING JUNE 30, 2025 WHEREAS, on June 17, 2024, City Council of the City of Azusa adopted the Year Two (Ending June 30, 2025) of the City­wide Biennial Fiscal Year 2023­24 and Fiscal Year 2024­25 Operating and Capital Budgets; and WHEREAS, on March 17, 2025, the City Council of the City of Azusa met and reviewed the mid­year financial status of the General Fund, including consideration of recommended budget adjustments to the General Fund, Sewer Enterprise Fund, and Information Technology Internal Services Fund. NOW, THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF AZUSA DOES APPROVE AND ADOPT THE FOLLOWING FISCAL YEAR 2024-25 BUDGET AMENDMENTS: SECTION 1. On March 17, 2025, the City Council of the City of Azusa met and reviewed the mid­year financial status of the City budget and considered and approved the following recommendations for budget amendments: Fund Department Division Description Revenues Expenditures Account Coding General Fund Administrative Services Citywide Salary Savings (750,000)$ 1090000000­6095 General Fund Administrative Services Citywide Information Technology Allocation (56,985) 1090000000­6670 General Fund Administrative Services Citywide Sales Tax (480,950) 1090000000­4101 General Fund Administrative Services Citywide Transaction Use Tax­Measure Z (654,000) 1090000000­4108 General Fund Administrative Services Citywide Transaction Use Tax­Measure ZZ 427,000 1090000000­4109 General Fund Administrative Services Citywide SA Statutory Property Tax 1,070,085 1090000000­4090 General Fund Econ & Comm Dev Building Plan Checks 100,000 1035620000­4704 General Fund Econ & Comm Dev Building Plan Checks 160,000 1035620000­4798 General Fund Econ & Comm Dev Economic Development Hazardous Waste Tax 144,940 1035630000­4112 General Fund Econ & Comm Dev Economic Development Land Excavation Tax 150,000 1035630000­4120 General Fund Econ & Comm Dev Economic Development Landfills and Disposal Facility Tax (433,150) 1035630000­4159 General Fund Econ & Comm Dev Economic Development Landfill Replacement/Expansion Fee (48,130) 1035630000­4160 Information Technology Information Technology City Computer Services Information Technology Allocation (230,475) 4849930000­4762 Information Technology Information Technology City Computer Services Salary Savings (86,490) 4849930000­6095 Information Technology Information Technology City Computer Services Computer Equipment 29,505 4849930000­7142 Information Technology Information Technology L&W Information Services Salary Savings (155,370) 4849942000­6095 Information Technology Information Technology L&W Information Services Information Services 29,510 4849942000­7142 Information Technology Information Technology Sewer Information Services Salary Savings (47,630) 4849944000­6095 General Fund Public Safety PD Contracts Outside Services & Repairs 300,000 1020333000­6493 General Fund Public Safety Police Parking Enforcement (59,965) 1020310000­5105 General Fund Public Safety Police Legal Fees 60,000 1020310000­6301 General Fund Public Safety Police Lease/Vehicles 51,685 1020310000­6823 General Fund Public Works Facilities Maintenance Outside Services & Repairs 75,000 1055666000­6493 Sewer Public Works Sewer Maintenance Information Technology Allocation (47,630) 3455665000­6670 Total Increase/(Decrease)145,355$ (598,405)$ Increase/(Decrease) Proposed Citywide Mid-Year Budget Adjustments for Fiscal Year 2024/25 SECTION 2. The City Clerk shall certify as to the adoption of this resolution. ADOPTED and APPROVED the 17th day of March, 2025. ____________________________________ Robert Gonzales Mayor ATTEST: ____________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2025­C14 was duly adopted by the City Council of the City of Azusa, at a regular meeting of said City Council held on the 17th day of March 2025, by the following vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ___________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk APPROVED AS TO FORM: ___________________________________ Best Best & Krieger, LLP City Attorney RESOLUTION NO. 2025-UB01 A RESOLUTION OF THE UTILITY BOARD OF THE CITY OF AZUSA ADOPTING MID-YEAR BUDGET ADJUSTMENTS FOR THE CITY OF AZUSA FOR THE FISCAL YEAR COMMENCING JULY 1, 2024 AND ENDING JUNE 30, 2025 WHEREAS, on June 17, 2024, Utility Board of the City of Azusa approved the Year two (Ending June 30, 2025) of the Fiscal Year 2023-24 and Fiscal Year 2024-25 Biennial Utility Budget; and WHEREAS, on March 17, 2025, the Utility Board of the City of Azusa met and reviewed the mid-year financial status of the Utility Budget, and considered recommendations for budget amendments. NOW, THEREFORE, BE IT RESOLVED, THE UTILITY BOARD OF THE CITY OF AZUSA DOES APPROVE AND ADOPT THE FOLLOWING FISCAL YEAR 2024-25 BUDGET AMENDMENTS: SECTION 1. On March 17, 2025, the Utility Board of the City of Azusa met and reviewed the mid-year financial status of the Azusa Light & Water budget and considered and approved the following recommendations for budget amendments: SECTION 2. The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED and ADOPTED this 17th day of March, 2025. _____________________________________ Robert Gonzales Mayor Fund Division Description Revenues Expenditures Account Coding Consumer Services Consumer Services Consumer Services Allocation (125,860)$ 3140711000-4698 Consumer Services Customer Records and Collections Information Technology Allocation (125,860) 3140711903-6670 Electric Administrative & General Consumer Services Allocation (56,635) 3340799030-6424 Water CIP-Water Structures/Other 600,000 3280000721-7130/ 72119D-7130 Water Supervision & Engineering Consumer Services Allocation (69,225) 3240721790-6424 Total Increase/(Decrease)(125,860)$ 348,280$ Increase/(Decrease) Proposed Citywide Mid-Year Budget Adjustments for Fiscal Year 2024/25 ATTEST: _________________________________________ Jeffery Lawrence Cornejo, Jr. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2025-UB01 was duly adopted by the Utility Board of the City of Azusa, at a regular meeting of said Utility Board held on the 17th day of March 2025, by the following vote of the Utility Board: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ___________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk APPROVED AS TO FORM: ___________________________________ Best Best & Krieger, LLP City Attorney FY 2024/25 Quarterly Financial Report 2nd Quarter, Ending December 31, 2024 OVERVIEW This financial report summarizes the City’s General Fund position for the 2nd quarter of Fiscal Year 2024/25 (July 1, 2024 through December 31, 2024). Also, included are major Special Revenue Funds: Gas Tax and Fire Safety; Sewer Fund; and 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 at a snap shot in time. GENERAL FUND CASH RESERVES FORECAST Through the end of the second quarter ended December 31, 2024, projections for total sources (revenues and transfers- in) are estimated to be $67.48M, and only higher than the Adopted Budget by the proposed mid-year adjustments of $0.38M. Total uses (expenditures, transfers-out, and extraordinary capital improvements) are estimated to be $86.69 million and $18.79M higher than the Adopted Budgeted primarily due to: $4.84M in carryover expenditures from FY 2023/24 of which $2.56M is for the Promenade property tenant improvements, and $14.98M mostly from carryforwards of extraordinary capital improvement projects and property acquisitions including: Senior Center Modernization ($3.90M), Memorial Park Improvements ($2.76M), Dog Park Construction ($0.62M), Library Modernization ($2.5M), Sidewalk Rehabilitation ($0.71M), Women's Club Improvements ($0.74M), Scout House ($0.57M), Outdoor Learning Center ($0.50M), City Hall Sidewalk Improvements ($0.54M), Great Park Construction ($1.80M), and acquisition of 609 N,. Azusa Ave ($0.70M). Undesignated reserves by end of FY 2024-25 are estimated to be $6.0M. A B C Adopted Budget 2024-25 Mid-Year Budget 2024-25 Variance (B - A) Beginning Estimated Reserves Balance $ 42.04 $ 60.07 * $ 18.03 Plus Revenues 64.63 64.63 - Transfers In 2.47 2.47 - Add/Less Mid-Year Adjustments - 0.38 0.38 Total FY 2024-25 Sources 67.10 67.48 ** 0.38 Less Expenditures 58.71 64.85 6.14 Extraordinary Capital Projects 2.32 14.98 12.66 Transfers Out 7.18 7.18 - Add/Less Mid-Year Adjustments - (0.32) (0.32) Total FY 2024-25 Uses 68.21 86.69 ** 18.47 Total Sources/(Uses) of Reserves (1.11) (19.21) (18.09) Estimated Cash Reserves Balance 40.93 40.86 (0.06) Less: Internally Restricted Reserves Budget Stabilization & Catastrophic Reserve 26.36 26.36 *** - Capital & Infrastructure Replacement Reserve 3.00 3.00 *** - Insurance Reserve 3.50 3.50 *** - Retiree Benefits Reserve 2.00 2.00 *** - Available Undesignated Reserves Balance FY 2024-25 $ 6.07 $ 6.00 $ (0.06) *Audited **Financial Data as of 12/31/24 ***Updated Reserves - Per 6-17-24 Council Approved Reserve Resolution # 2024-C35 Table 1: Projected Cash Reserve Position (in millions) Attachment 4 FY 2024-25 Quarterly Financial Report Attachment 4 2nd Quarter, Ending December 31, 2024 Page 2 of 6 The 2nd quarter’s revenues ended the year at the 37.4% mark. The charts and explanation below will go over each of the revenue categories in details. GENERAL FUND CASH RESERVES REVENUES Table 2 does not include recommended mid-year adjustments and shows actual collections for the major revenue sources and the percent collected compared to the adjusted budget. Table 3 shows that revenues came in higher by $3.48M from the same period last year. The increase is primarily the result of $1.3M in higher interest earnings from investment under money and property use, $1.4M in charges for services due to the timing of the services, and $0.86M in other taxes from hazardous waste tax and franchise fee revenues. Revenue Collection by Source As of 12/31/24 Chart 1 Revenues Collected by Source Quarter Ending: 12/31/23 vs. 12/31/24 Adjusted Budget Actual % of Revenue Source FY 2024-25 YTD 12/31/24 Adj. Budget Property Tax 15,692,078$ 2,859,906$ 18.2% Sales Tax 8,237,631 2,344,671 28.5% Transaction Use Tax 7,478,000 2,007,352 26.8% UUT Tax 3,100,000 1,999,372 64.5% Other Taxes 13,100,756 5,006,219 38.2% Charges for Services 8,059,892 3,577,980 44.4% Cost Reimbursement 2,493,148 1,441,967 57.8% Fines & Penalties 1,350,500 809,570 59.9% License & Permits 3,085,735 1,613,588 52.3% Miscellaneous 398,121 110,490 27.8% Money & Property Use 4,106,314 3,301,501 80.4% Total Revenues 67,102,175$ 25,072,616$ 37.4% Table 2: YTD % of Budget Actual Actual Increase/ Revenue Source YTD 12/31/23 YTD 12/31/24 (Decrease) Property Tax 2,815,076$ 2,859,906$ 44,830$ Sales Tax 2,513,226 2,344,671 (168,555) Transaction Use Tax 2,378,936 2,007,352 (371,583) Utility User Tax 1,749,639 1,999,372 249,733 Other Taxes 4,148,856 5,006,219 857,363 Charges for Services 2,137,844 3,577,980 1,440,136 Cost Reimbursement 1,226,110 1,441,967 215,857 Fines & Penalties 675,691 809,570 133,879 License & Permits 1,709,174 1,613,588 (95,586) Miscellaneous 254,002 110,490 (143,512) Money & Property Use 1,982,908 3,301,501 1,318,593 Total Revenues 21,591,461$ 25,072,616$ 3,481,155$ Table 3: Year-to-Year Comparison FY 2024-25 Quarterly Financial Report Attachment 4 2nd Quarter, Ending December 31, 2024 Page 3 of 6 Property Tax collections came in slightly lower in quarter 2 and it is normal due to the timing of when the revenues are allocated by the County of Los Angeles Auditor Controller Tax Division. The majority of the property tax collections are received in four payments in December, January, April and May of each calendar year. Sales Tax collections are at 28.5% of the adjusted budget. The reason for the low collections rate is due to the timing of when the revenues are available. The November and December 2024 sales tax will not be distributed by the California Department of Tax and Fee Administration until January and February of 2025. Transaction Use Tax (TUT) collections are at 26.8% of the adjusted budget. Similar to Sales Tax, the low collection rate is due to the timing of when revenues are available. The November and December 2024 TUT will not be distributed by the California Department of Tax and Fee Administration until January and February of 2025. Utility User’s Tax collections are at 64.5% of the adjusted budget. This percentage is reflective of the consumption of utility services such as gas, electric, and water. The actuals compared to the same period last year was higher, and it is mainly due to a higher utility usage and higher water rates from the water cost of service study. Other Taxes collections are at 38.2% of the adjusted budget. Other taxes are comprised mainly of transient occupancy tax (TOT), franchise/landfill, land excavation, material recovery facility, other franchise fees, and hazardous waste fees. The sanitary landfill tax, landfill replacement/expansion fee, and waste management fees were lower for the first half of FY 2024-25 due to equipment upgrade on one of the enterprises. Staff has requested the revenue forecast to be updated in the mid-year review with the latest change. Other Taxes are higher in comparison to the same period last year mainly due higher than forecasted hazardous waste tax and franchise fees. Charges for Services collections are at 44.4% of the adjusted budget. Revenues are collected as services are rendered and is slightly lower than the budgeted forecast. This revenue source was higher compared to the same period last year due to the timing of the development projects, and greater demand for government services. Cost reimbursement collections are at 57.8% of the adjusted budget. Revenues are collected based on various reimbursement agreements and when the claims are paid. Cost reimbursement is higher when compare to the same period last year mainly due to the terms of the various reimbursement agreements and when it is paid. Fines and Penalties collections are at 59.9% of the adjusted budget due to the timing of when the fines are collected. The fines were higher due to the timing of when the payouts were distributed. This revenue source was higher compared to the same period last year due to the timing of when the fines were paid out. License and Permits collections are at 52.3% of the adjusted budget and is pacing very close to the forecast. Revenue is slightly lower when compared to the same period last year and this is mainly due to the timing of development activities and when the licenses and permit fees are issued. Miscellaneous collections are at 27.8% of the adjusted budget. The miscellaneous revenues are pacing lower and is not a significant revenue source as a percentage of the total revenues. Miscellaneous revenues were lower when compared to the same period last year mainly due to a one-time investment gain. Money and Property Use collections are at 80.4% of the adjusted budget, and the revenues are higher due to the metro payment of the promenade lease, higher interest from investments, and higher water rights revenues. The second quarter revenues were higher when compared to the same period last year, and it is mainly due to the same reasons stated above. FY 2024-25 Quarterly Financial Report Attachment 4 2nd Quarter, Ending December 31, 2024 Page 4 of 6 GENERAL FUND CASH RESERVES EXPENDITURES Expenditures by Category As of 12/31/24 The expenditures outlined in Table 4 do not include proposed mid-year adjustments and are pacing at 39.1% of the 2nd quarter budget. Personnel budgets came in at 49.4% of the revised budget, and it is pacing consistent with the personnel budget forecast. The Personnel costs were higher in Q2 of FY 2024-25 when compared to the same period last year on table 5 primarily due to cost of living adjustments and higher benefits costs. Operating costs came in at 32.6% of the revised budget due to the timing of the various development and CIP projects. Operating costs was higher in second quarter of FY 2024-25 when compared to the same period last year in Table 5 and is primarily due to higher insurance costs and higher General Fund capital improvement project costs. DEPARTMENT EXPENDITURES At the end of the second quarter, actuals for some of departments are tracking at or below the 50% quarter two mark of the adjusted budget. Some departments with CIP projects are pacing lower due to the timing of the projects. Economic & Community Development is pacing low due to the timing of the development projects and the General Plan update. Citywide is higher mainly due to insurance costs, pension bond and interest payments, IT charges, interest expenses, retiree health costs, benefit costs, and transfer charges and cash position that the General Fund has to cover and paid early in the fiscal year. Table 6 Chart 2 Expenditures by Department % of Budget by Department As of 12/31/24 as of 12/31/24 Working Budget Actual % of Expenditure Use FY 2024-25 YTD 12/31/24 Adopted Personnel 33,439,306$ 16,531,383$ 49.4% Operating 53,576,452 17,463,744 32.6% Total Expenditures 87,015,758$ 33,995,127$ 39.1% Table 4: YTD % of Budget Actual Actual Increase/ EXPENDITURE YTD 12/31/23 YTD 12/31/24 (Decrease) Personnel 14,171,364$ 16,531,383$ 2,360,019$ Operating 15,139,461 17,463,744 2,324,283 Total Expenditures 29,310,825$ 33,995,127$ 4,684,302$ Table 5: Year-to-Year Comparison Adjusted Budget Actual Department FY 2024-25 YTD 12/31/24 % of Budget Council 219,602$ 88,530$ 40.3% City Clerk 880,458 301,383 34.2% City Attorney 315,000 134,106 42.6% City Treasurer 238,830 139,360 58.4% Administration 1,959,125 503,422 25.7% Finance 2,277,275 1,110,710 48.8% Economic & Comm. Dev.7,935,003 1,834,152 23.1% Human Resources 949,767 468,251 49.3% Library 5,238,737 1,238,714 23.6% Public Safety 24,198,432 11,463,697 47.4% Public Works 15,122,151 2,820,345 18.7% Community Resources 10,411,724 2,334,658 22.4% City-Wide 19,096,474 11,557,798 60.5% Total Expenditures 88,842,578$ 33,995,127$ 38.3% FY 2024-25 Quarterly Financial Report Attachment 4 2nd Quarter, Ending December 31, 2024 Page 5 of 6 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 Chart 3 Major Special Revenue & Internal Services Funds Revenues by Funds Ending 12/31/24 Chart 4 Major Special Revenue & Internal Services Funds Expenditures by Funds Ending 12/31/24 Adjusted Budget Actual % of Fund FY 2024-25 YTD 12/31/24 Adj. Budget Gas Tax Fund 1,420,032$ 640,182$ 45.1% Fire Safety 7,179,410 3,589,705 50.0% Sewer Fund 3,650,000 1,721,871 47.2% Risk Mgmt/Liab Fund 4,709,911 3,960,906 84.1% IT Fund 3,477,503 1,482,062 42.6% Total Revenues 20,436,856$ 11,394,726$ 55.8% Table 7: YTD % of Budget Adjusted Budget Actual % of Fund FY 2024-25 YTD 12/31/24 Adj. Budget Gas Tax Fund 2,144,812$ 890,850$ 41.5% Fire Safety 7,179,410 4,078,385 56.8% Sewer Fund 4,287,219 1,878,524 43.8% Risk Mgmt/Liab Fund 5,761,710 5,015,760 87.1% IT Fund 4,215,518 1,493,374 35.4% Total Expenditures 23,588,669$ 13,356,894$ 56.6% Table 8: YTD % of Budget 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 FY 2024-25 Quarterly Financial Report Attachment 4 2nd Quarter, Ending December 31, 2024 Page 6 of 6 Gas Tax Fund Gas Tax revenues are pacing at 45.1% of the 2nd quarter FY 2024-25 adjusted budget, and the expenditures are tracking at 41.5%. Revenues are slightly lower due to the timing of when the revenues are distributed by the State. Fire Safety Fund Fire Safety Fund’s operating revenues are pacing at 50.0% of revenues. The expenditures are also pacing at 56.8% for the 2nd quarter. The expenditures are slightly higher but is expected to remain consistent with the budget forecast for the full year. Sewer Fund Sewer year-to-date operating revenues are 47.2% of the adjusted budget. Expenditures are pacing lower at 43.8% the 2nd quarter budget due to the timing of the projects. Risk Management Fund The revenues for the Risk Management Funds are at 84.1% due to the timing of when the claims are paid out. The expenditures are at 87.1% of the adjusted budget and fairly consistent with the forecast, and the higher expenditure rate are due to the timing of when the claims are paid out. Information Technology Fund The Information Technology Fund revenues for the 2nd quarter are pacing at 42.6%. Its allocations are recorded twice a year, in December and June. The expenditures are pacing at 35.4% mainly due to salary savings from vacancies and timing of projects.