Staff Report re FY2024-25 Mid-Year Financial Update Page 1 of 5
STAFF REPORT
T
O: Mayor and Members of the City Council
FROM: Renee Eshun, Administrative Services Director
VIA: Dan Barros, City Manager
MEETING DATE: February 12, 2025
SUBJECT: FY2024-25 Mid-Year Financial Update & Budget Amendment
RECOMMENDATION
Staff recommend that the City Council adopt:
MOTION ACCEPTING THE FISCAL YEAR 2024 -25 MID - YEAR FINANCIAL REPORT THROUGH DECEMBER 31, 2024, AND AUTHORIZE A COPY TO BE POSTED ON THE TOWN’S WEBSITE
AND
ADOPT A RESOLUTION APPROPRIATING FUNDS AND AMENDING BUDGET FOR THE FISCAL YEAR 2024-25 TO INCREASE GENERAL FUND (11) APPROPRIATION BY $261,250, PURSUANT TO CEQA GUIDELINE 15378
COUNCIL ADOPTED VALUES
P
eriodic review of the Town’s financial condition aligns with the City Council adopted responsibility value.
BACKGROUND
The City Council approved the fiscal year 2024-25 budget on June 26, 2024, with $32.9 million in projected revenue and $32.7 million in expenditure across all funds. The General Fund accounts for $21.7 million in revenue and $20.30 million in expenditure, including $290,000 for annual debt service. The budget reflects a fiscally responsible approach, maintaining a slight surplus while prioritizing essential services and infrastructure investments.
A
nnually, a mid-year financial review is submitted to the City Council for consideration and discussion. The review serves as a key tool for assessing the Town’s fiscal health and ensuring alignment with budgetary goals. By calculating and comparing the "mid-year ratio" over multiple years, the Town can effectively gauge financial trends, anticipate potential overages, and make informed decisions about fund allocation and savings utilization, in accordance with Colma Administrative Code 4.01.200.
ITEMN #6
Staff Report re FY2024-25 Mid-Year Financial Update Page 2 of 5
ANALYSIS
For the six months ending December 31, 2024, revenues and expenditures were analyzed and compared to the projected budget for June 30, 2025, to determine if the Town of Colma is currently on track to be within its 2024-25 adopted budget.
I. General Fund Revenues
The Town’s General Fund is performing well against budgeted expectations. With strong sales tax revenues and steady performance in other revenue categories, the Town is well-positioned to achieve its fiscal goals. The total General Fund Revenues through July to December 31, 2024, have a revenue run rate of 47% compared to its budget. The Town received 45% of its budgeted sales tax revenues and 41% of its cardroom tax by mid-year. These are good indicators the Town will reach our General Fund revenue projections by the end of the fiscal year. Additionally, as of December 31, 2024, the Town received sales tax revenue higher than last year by $1.5 Million. This is due to retro sales tax revenue payments from Colma car dealerships.
The General Fund other revenues totaled $1.2 million, maintaining consistency with the prior year’s mid-year figures. (See graph below):
CHART 1: MID-YEAR REVENUES TO FULL YEAR COMPARISON
General Fund Revenues
$28.00 M $25.21 M
$24.00 M $19.40 M $18.76M
$20.00 M
$16.00 M
$1200M
$8DOM
$4DOM
$0.00
M
$7.3SM
(4511>]
$7..23M
j39'16j
$8.65 M
[34it)
Thru Thru Tora Thru Thru Thru
6/YJ/22 12/31/21 6/30/23 12/31/22 6(31:J/24 12/31/23
Sales Tax ■ Ciirdroom Tax Other Re-venues
$21.70M
St0.17M
(47%]
24/25 Thru
Budget 12/31/24
Staff Report re FY2024-25 Mid-Year Financial Update Page 3 of 5 II. General Fund Expenditures
The Town’s general fund expenditure remains aligned with its adopted budget for FY24-25. Mid-year spending trends indicate that expenditure across all categories is on track. The consistency in general fund expenditure compared to prior years further reinforces stability in budgeting and financial management.
At mid-year the expenditure is $10.26 Million, which is 51% of its budgeted amount.
Personnel costs are $6.56 Million and non-personnel costs are $3.68 Million.
Benefits-Pension are less than in prior year due to additional payment in the amount of $.391 Million in FY2023-24 for the unfunded liability.
Public Safety accounts for 48% of general fund expenditure, making it the largest spending category.
Chart 2: Mid Vear Expenditures to Budget Comparison
Table 2 FY2023-24 FY2024-25
General Fund Expenditures Mid-Year %of Mid-Year %of
(by major categories) Budget Actual Budget Budget Actual Budget Expenditures
Personnel Expenses $12.81 M $ 6.69 M 52% $ 13.26 M $ 6.56 M 49% Supplies and services $ 1.69 M $ 0.93 M 55% $ 1.75M $ 0.80 M 46% Insurance (Liability/ Property) $ 1.00M $ 0.94 M 94% $ 1.04 M $ 1.04 M 100% Facility Operations $ 0.81 M $ 0.28 M 35% $ 0.87 M $ 0.37 M 43% Professional & Contract Services $ 3.23 M $ 1.33 M 41% $ 3.35 M $ 1.48 M 44% Capital Outlay $ 0.03 M $ 0.00 M 0% $ 0.03 M $ 0.01 M 33% Total GF Expenditures $19.57 M $ 10.17 M 52% $ 20.30 M $ 10.26 M 51% CHART 3: MID-YEAR EXPENDITURE TO FULL YEAR COMPARISON
General Fund Expenditures (by Departments)
$24.00M $20.30 M
$20.00 M $16.47 M $17.06M $1LS.34M
$16.00 M
$12.00 M
$8.62M
152%)
$9c42 M
(5-596)
$10.18M
(56%)
$10.2 6 M
(51%}
$&.OOM
$4.00M
$0.00M
Thru Thru Thru Thru Thru Thru 24/25 Thru
6/30/22 12/31/21 6/30/23 12/31/22 6/"§J/24 12/31/23 Budget 12/31/24 ■ R.ecrei!l:iori II Pu blii:: Wms & Planning Public Safety II General Governmem:
Staff Report re FY2024-25 Mid-Year Financial Update Page 4 of 5 III. General Fund Reserves
The general fund reserve, or fund balance of the general fund, is a measure of the financial resources available. Table 4 shows the total General Fund reserves by category. The Town’s total general fund reserves as of December 31, 2024, is $30.8 Million. The unassigned reserves are generally lower by mid-year because major tax revenues are one to two months delayed. The Budget Stabilization reserve is $15.5 million based on City Council actions adopting the 2024-25 budget. Transfers to accrued leave payout reserves, capital program, and sewer operations will be completed as part of the FY 2024-25 year-end process.
Reasons For the Recommended Action/Findings
Receive feedback from the City Council regarding the mid-year budget financial review and update. Acceptance of the report provides disclosure of current year’s revenue and expenditure trends. Also, part of the mid-year financial review includes assessing the need to amend the budget to prepare for new programs or changes in operation. FY2024-25, Staff identified five main operating changes.
• Housing Element Implementation Programs- The Planning Department needs an additional $57,000 to meet State Housing and Community Development requirements for the Housing Element Implementation Programs. (11-410-71009) • Sustainability Services- The Town’s Climate Action Plan (CAP) 2030 was approved by City Council to reduce gas emissions by 40%. The Planning department is requesting $33,500 in additional funds due to an increase in work volume. The additional work includes efforts to expand electric vehicle infrastructure, solar installments, managing franchise agreements, and meeting state mandate requirements of SB 1383, AB 341, and AB 1326. (11-410-71013)
• Current Planning- The current planning is a division of the Town’s planning department that reviews and approves development applications concerning zoning ordinance, other land use policies, and use permits. The Planning Department is TABLE 4: GENERAL FUND RESERVES HISTORY
GENERAL FUND RESERVES: J •• 30. 2023 J •• 30 . 202, Dec 31 1 202.a COMMITTED RESERVES: (12)
BUDGET STABILIZATION 15,000,000 15,000,000 15,500,000
DEBT REDUCTION 600,000 600,000 600,000
ACCRUED LEAVE PAYOUT 1,064,087 1,064,087 1,064,087
COMMITTED RESERVES TOT AL 16,664,0:37 16,664,0:37 17,164,0:37 AS:S:IGNED RESERVES: (11)
LITIGATION 100,000 100,000 100,000
INSURANCE 100,000 100,000 100,000
DISASTER RESPONSE 8: RECOVER' 750,000 750,000 750,000
ASSIGNED RESERVES TOT AL :350,000 :350,000 :350,000
UNAS:S:IGNED RESERVE (11) 8,424,526 14,:334,332 12,710,027 TOT AL GF RESERVES: 27,033,623 32,543,:32:3 30,324,124
Staff Report re FY2024-25 Mid-Year Financial Update Page 5 of 5 requesting additional funds of $66,750 due to an increase in work volume. (11-410- 71008)
• Police Patrol- The Police Department is requesting additional funds of $100,000 to cover the payroll costs of overtime. This is due to two vacancies. (11-220-51005) • Recreation-The recreation department wants to upgrade or replace the six credit card machines readers at Sterling Park and Colma Community Center. The amount requested is $4,000 (11-510-6004).
FISCAL IMPACT
Acceptance of the report has no fiscal impact. Approval of the budget amendment will increase the General Fund Expenditures by $261,250.
ALTERNATIVES
The City Council could choose not to adopt the resolution. Doing so is not recommended, because it will not allow the necessary adjustments for revenue projections and expenditure allocations based on real-time data.
CONCLUSION
The staff recommends that the City Council receive and accept the report and adopt resolution on the FY2024-25 Mid-Year Budget Review and financial update.
ATTACHMENTS
A. Resolution
B. 2024-25 Mid-Year Financial Report
C. Mid-Year Budget 24-25 Planning Increase Justification
I
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• JI.• 4 II
Res. 2025-__, FY 2024-25 Budget Amendment Page 1 of 2
RESOLUTION NO. 2025-__
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION AMENDING THE FISCAL YEAR 2024-25 BUDGET AND APPROPRIATING FUNDS TO INCREASE THE GENERAL FUND (11) APPROPRIATION BY $261,250 PURSUANT TO CEQA GUIDELINE 15378
The City Council of the Town of Colma does hereby resolve:
1. Background
(a) On June 26, 2024, the City Council adopted the Fiscal Year (FY) 2024-25 Budget. (b) Staff reviewed the budget to actual through December 31, 2024, and found that the current operating budget does not include appropriations for the Planning Department’s Housing Element, Current Planning, and Sustainability Services Programs, as well as Recreation and Police Patrol departments.
2. Finding
(a) Housing Element Implementation Programs- The Planning Department needs an additional $57,000 to meet State Housing and Community Development requirements for the Housing Element Implementation Programs.
(b) Sustainability Services- The Town’s Climate Action Plan (CAP) 2030 was approved by City Council to reduce gas emissions by 40%. The Planning department is requesting $33,500 in additional funds due to an increase in work volume. The additional work includes efforts to expand electric vehicle infrastructure, solar installments, managing franchise agreements, and meeting state mandate requirements of SB 1383, AB 341, and AB 1326. (c) Current Planning- The current planning is a division of the Town’s planning department that reviews and approves development applications concerning zoning ordinance, other land use policies, and use permits. The Planning Department is requesting additional funds of $66,750 due to an increase in work volume.
(d) Police Patrol- The Police Department is requesting additional funds of $100,000 to cover the payroll costs of overtime. This is due to two vacancies. (e) Recreation -The recreation department wants to upgrade or replace the six credit card machines readers at Sterling Park and Colma Community Center. The amount requested is $4,000.
ATTACHMENT A
Res. 2025-__, FY 2024-25 Budget Amendment Page 2 of 2
3. Amendment to Budget
(a) The FY 2024-25 Budget for the Town of Colma is hereby amended by increasing the general fund (11) budget as follows:
(i) Police Patrol (11-220-51005) by $100,000,
(ii)Current Planning (11-410-71008) by $66,750,
(iii)Planning-Housing Element (11-410-71009) by $57,000, (iv)Sustainability Servies (11-410-71013) by $33,500 and (v)Recreation (11-510-6004) by $4,000.
(b) The funds described in this resolution are hereby appropriated as described above.
Certification of Adoption
I c
ertify that the foregoing Resolution No. 2025-__ was duly adopted at a regular meeting of said City Council held on February 12, 2025 by the following vote:
Name Voting Present, Not Voting Absent
Ay e No Abstain Not Participating
Kenneth Gonzalez, Mayor
Carrie Slaughter
Helen Fisicaro
Joanne F. del Rosario
Thomas Walsh
Voting Tally
D
ated _____________ _____________________________
Kenneth Gonzalez, Mayor
At
test: ____________________________
Michelle Estabillo, City Clerk
GENERAL FUND RESERVES Jun 30, 2023 Jun 30, 2024 Dec 31, 2024 COMMITTED RESERVES (12)
BUDGET STABILIZATION 15,000,000 15,000,000 15,500,000 # DEBT REDUCTION 600,000 600,000 600,000 #
ACCRUED LEAVE PAYOUT 1,064,097 1,064,097 1,064,097 #
COMMITTED RESERVES TOTAL 16,664,097 16,664,097 17,164,097 ASSIGNED RESERVES (11)
LITIGATION 100,000 100,000 100,000 #
INSURANCE 100,000 100,000 100,000 #
DISASTER RESPONSE & RECOVERY 750,000 750,000 750,000 #
ASSIGNED RESERVES TOTAL 950,000 950,000 950,000
UNASSIGNED RESERVE (11) 9,424,526 14,934,832 12,710,027 # TOTAL GF RESERVES 27,038,623 32,548,929 30,824,124
TABLE 4: GENERAL FUND RESERVES HISTORY
CHART 2: MID-YEAR EXPENDITURE TO FULL YEAR COMPARISON
FY 2024-25 MID-YEAR FINANCIAL REPORT
(JULY 1, 2024 – DECEMBER 31, 2024)
CHART 3: MID-YEAR EXPENDITURE TO FULL YEAR COMPARISON
CHART 1: MID-YEAR REVENUES TO FULL YEAR COMPARISON
$19.40 M
$7.35 M
(45%)
$18.76 M
$7.23 M
(39%)
$25.21 M
$8.65 M
(34%)
$21.70 M
$10.17 M
(47%)
$0.00 M
$4.00 M
$8.00 M
$12.00 M
$16.00 M
$20.00 M
$24.00 M
$28.00 M
Thru
6/30/22
Thru
12/31/21
Thru
6/30/23
Thru
12/31/22
Thru
6/30/24
Thru
12/31/23
24/25
Budget
Thru
12/31/24
General Fund Revenues
Sales Tax Cardroom Tax Other Revenues
GENERAL FUND: BUDGET VS ACTUAL
Overall, the Town is financially healthy at mid-year. By December 31, 2024, the Town received $10.17 million in
General Fund revenues - with $7.26 million in sales tax, $1.71 million in cardroom tax and $1.20 million in other general fund revenues.
GENERAL FUND REVENUES
As shown in Chart 1 (right), the revenue for General Fund is 51% of budget, which is higher than prior three fiscal years. Additionally, the Town received 47% of its
budgeted sales tax revenues and 41% of its cardroom tax by mid-year. These are good indicators the Town will
reach our General Fund revenue projections by the end of the fiscal year; absent another unforeseen interruption to the economy.
GENERAL FUND EXPENDITURES
General Fund Expenditures are shown by Categories
(Chart 2) and by Departments (Chart 3).
In Chart 2, The total General Fund expenditures were
10.26 million at 12/30/2024. The personnel expenditures totaled $6.56 million, or 50% of budget. The typical burn rate for personnel cost by mid-year is between 50% and
55%, because of lump-sum payments made towards
unfunded pension liabilities in July of each fiscal year.
Non-personnel expenditures of $3.69 million, or 53% of
budget, is reasonable as well, since the budget for non- personnel includes special projects slated for the second half of the fiscal year and contingency budget to address unforeseen emergencies.
Comparing expenditure trends by department (Chart 3),
General Government and Public Safety spending rate is
consistent with prior years, at 54% and 52%, respectively.
General Government includes insurance payments
($1,036,128) in the beginning of the fiscal year, and
therefore the burn rate will generally be higher than 50% by mid-year. Public Works & Planning and Recreation are both trending at 43% and 55% respectively. This is typical of Public Works & Planning as majority of their budget is non-personnel.
GENERAL FUND RESERVES
Total General Fund reserves as of December 31, 2024 is
$30.8 million. The unassigned reserves are generally
lower by mid-year because major tax revenues are one to two months delayed.
$16.47 M
$8.62 M
(52%)
$17.06 M
$9.42 M
(55%)
$18.34 M
$10.18 M
(56%)
$20.30 M
$10.26 M
(51%)
$0.00 M
$4.00 M
$8.00 M
$12.00 M
$16.00 M
$20.00 M
$24.00 M
Thru
6/30/22
Thru
12/31/21
Thru
6/30/23
Thru
12/31/22
Thru
6/30/24
Thru
12/31/23
24/25
Budget
Thru
12/31/24
General Fund Expenditures (by Categories)
Personnel Non-Personnel
$16.47 M
$8.62 M
(52%)
$17.06 M
$9.42 M
(55%)
$18.34 M
$10.18 M
(56%)
$20.30 M
$10.26 M
(51%)
$0.00 M
$4.00 M
$8.00 M
$12.00 M
$16.00 M
$20.00 M
$24.00 M
Thru
6/30/22
Thru
12/31/21
Thru
6/30/23
Thru
12/31/22
Thru
6/30/24
Thru
12/31/23
24/25
Budget
Thru
12/31/24
General Fund Expenditures (by Departments)
Recreation Public Works & Planning Public Safety General Government FY 2023-24 Mid-Year Financial Report (July 2023 - December 2023) Page 1 of 1
ATTACHMENT B
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.i I I I I ■
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• JI.• 4 II
Description/justification for budget increase for Planning Services Advanced Planning Services
The Advanced Planning Division of the Department is responsible for maintaining and updating the Colma General Plan by establishing policies for future growth, preparing community development and land use policies, as well as preparing ordinance updates, as well as regional tasks assigned for the Town, and attending 21 Element’s (regional planning efforts) meetings and reginal projects involving the Town. Below listed tasks have been in addition to Advanced Planning Division’s initial fiscal budget for 24/25:
Housing Element Implementation Programs
• 24/25 continued efforts by planning department to meet State’s Housing and Community Development Agency’s mandated requirements.
a) Program 2.2 – Ac cessory Dwelling Units (ADUs).
b) Program 3.1 – Develop Objective Design Standards for Planned Development (PD) & Create Administrative Approval Process. c) Program 3.3 – High Density Housing Near Colma & South San Francisco BART Stations.
d) Program 4.3 – Identify Opportunities for Emergency Shelters & Homeless Assistance.
e) Program 4.4 – Housing Opportunities for Persons with Developmental Disabilities.
f) Program 5.4 - Address Needs of Extremely Low-Income Households. g) Program 5.5 – Demonstrate Consistency with the Employee Housing Act. • Implementation programs’ update was provided to the City Council on November 18, 2024.
• The implementation programs have been State mandated and it requires additional annual funds for completion.
MTC Transit Oriented Communities grant applications
• Planning staff’s efforts in late 2024 to apply for two grant applications:
a) Town of Colma Residential and Commercial Office zoning update. b) Town of Colma Housing and commercial policies.
Sustainability Services
The Town of Colma’s Climate Action Plan (CAP) 2030 approved by City Council set a target to reduce greenhouse gas emissions (GHG) by 40% from the Town’s 2005 base year GHG. This target is consistent with San Mateo County and Bay Area jurisdictions (though some
ATTACHMENT C
jurisdictions have set more stringent GHG reduction targets). Using the Town’s CAP as a guiding document, the Town’s Sustainability Manager implements CAP programs with a focus on leveraging grant funds, programs that save the Town money and resources, and programs that leverage regional programs (e.g., PCE, BAAQMD and San Mateo County’s Office of Sustainability programs) to reduce staff time and costs to the Town. Additional work includes ensuring the Town meets state mandates related to organics, recycling, solid waste (e, g, SB 1383, AB 341, etc.) as well as management of franchise agreement compliance/meetings with Republic and CalRecycle, managing multiple grants and working to expand electric vehicle infrastructure and solar installations.
A summary of projects is below with the monthly average number of hours to complete this project:
1. Complete reporting and ensuring compliance with state mandates AB 341, SB 1383, AB 1826, etc. with reporting to state and on-site audit with CalRecycle, Implementation Record, EFR Program, Disposal Reporting System (DRS): 5 hours/month
2. Manage Republic franchise agreement compliance, meetings/communication with Republic regarding accounts, services, invoices, rates, recycling/organics data for businesses and their required reporting: 5 hours/month
3. Manage Town’s GHG emission inventory for community and municipal emissions, meet with Office of Sustainability/Regional Integrated Climate Action Plan team, subcommittee to discuss program alternatives and leverage resources for emission reduction programs. Monitor and report on the Town’s emission trends (e.g. natural gas usage increases) and impacts on meeting the 2030 GHG reduction target. Develop program alternatives which reduce emissions cost effectively, are practical and acceptable to Town staff and council. 10 hours /month
4. Develop outreach and education for social media and website content (working in coordination with other agencies) highlighting rebates, 0% financing, resources for energy efficiency, electrification, solar, water conservation for residents: 2 hours/month
5. Complete ongoing compliance for Green Business Certification for Town Hall and outreach and education for commercial business certification: 1 hour/month
6. Manage grants e.g. SB 1383 grants, PCE grants, CCPP grants, etc. with reporting, meeting milestone requirements and contract management. 1 hour/month
7. Develop project for PCE Energy Grant (complete), ongoing process to manage grant to meet deadline for HV AC replacement at Sterling: 1 hour/month
8. Expand Electric Vehicle Infrastructure installations via outreach, education and technical assistance for commercial, Town and residential. Leverage grants, financing for Town, commercial and residential: 7/month Note: CCC EV no cost installation w/ grant, Measure K
9. Facilitate progress/meetings/timeline/communication for solar installation e.g. PG&E staff to complete interconnection, timeline, communication with McMillan and PCE (outside of Ed Slintak work): 2/month Note: 3 projects save $1.6 million for Town
10. Meetings with Town staff, City Manager other staff to provide recommendations and sustainability project updates: 2 hours/month
11. Manage compliance for Sustainable Procurement Policy and Foodware Ordinance for facilities: 2 hours/month Note: CCPP grants fund recycling bins, water refill stations
12. Manage Compost Procurement Program, assist cemeteries with compost, coordinate with Republic, manage RCD contract, while meeting Town’s annual Organics procurement target: 2 hours/month Note: compost provided at no cost to Town
13. Complete outreach, education, technical assistance for commercial, cemeteries, etc. for energy efficiency, electrification, solar, highlighting rebates, financing, etc. to place on social media, website, direct outreach to business. Provide water conservation resources, technical assistance, provide alternatives, resources to reduce natural gas, stationery resources to reduce GHG emissions 9 hours/month
14. Development of report of alternatives regarding expiring Franchise Agreement (e.g. amendment to current franchise agreement, another alternative, e.g. RFP). Note: a separate CIP project has been defined with a timeline and hours outside of this task.
The most recently completed (2023) GHG inventory shows Colma reduced GHG 16.52% from the Town’s base year, 2005. The Town has 5 years remaining to meet the 40% reduction target as established in the Town’s Climate Action Plan; to meet this reduction target, additional staff time is needed for sustainability program implementation. Currently, the sustainability manager is limited to 8 hours/week which restricts CAP program implementation and opportunities to reduce GHG. Staff recommends a minimum of 12 hours/week to enable staff time to implement CAP programs and meet the GHG reduction target by 2030.
Note that the franchise agreement project noted above has been identified as a CIP project.
Note that the Sterling Rec HV AC heat pump project has been identified as a CIP project.
Lastly, a note for consideration for the next FY 25/26 budget cycle and revenue sources for sustainability staff. Note that revenue for sustainability staff could come from the solid waste agreement franchise fee which generates approximately $82,000 per year (the franchise fee is based on a percentage of the hauler’s gross revenue), the new SB 1383 fee proposed in the franchise agreement amendment, or the recycling rebate which generates $14,000 per year.
These hours total 49 per month divided by 4.33 weeks in month=11.32 hours per week.