City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
Overview
City management is pleased to present this quarterly
update summarizing the City’s overall budget activity
through Quarter 1 (September 30, 2022) for Fiscal
Year (FY) 2023. The City’s fiscal year is July 1
through June 30. For audited information, or to find
greater detail, please refer to the City’s annual financial statement, which is released by December 31st following the end of the fiscal year.
Budget Adjustments and Revenue Estimates. The
revenue projections and budget expenditures presented in this update include budget adjustments approved by the City Council, continuing appropriations, and prior year encumbrances.
General Fund
General Fund Financial Condition. The City’s General Fund is the primary source of discretionary resources that funds many of the services provided to the citizens of the City of Corona.
The General Fund inflows (revenue and transfers in)
for FY 2023 are currently estimated at $196.1 million. This represents an increase of $0.1 million over the adopted inflows amount of $196.0 million.
The City has received or recorded 13.4% of the estimated General Fund inflows, through the end of Quarter 1 (at the time this information was prepared). Overall, inflows are up by 46.7% when compared to the same quarter of FY 2022.
As of Quarter 1 of FY 2023, the General Fund has
expended 16.0% of its cumulative budget. The current savings is primarily due to capital improvement projects which will take multiple years to complete.
Comparing Quarter 1 of FY 2023 to FY 2022, expenditures are 5.6% lower, or $2.0 million.
General Fund Inflows
Top Five Revenues. The City’s top five General
Fund revenue categories account for approximately
92% of the total estimated General Fund inflows for
November 2, 2022 Quarter 1, Fiscal Year 2023
FY 2023. Focusing on these sources can provide a
useful understanding of the City’s income position.
Details of the categories will be described in the following paragraphs.
The bar graph above illustrates the performance of
the top five revenues as compared to the same quarter of the prior two fiscal years.
Sales Tax. At the end of Quarter 1, Sales Tax is the
largest General Fund revenue category. This category includes the City’s portion of sales tax, Measure X, Prop. 172 sales tax, and allowance for sales tax
agreements. As of Quarter 1, the total received is
$7.7 million. At the time this information was prepared, the revenues are up by 4.1% as compared to the prior year.
General Fund Revenues
Top 5 Revenues Compared, Quarter 1
Investment Earnings. This category is usually not
one of the five largest, but as of Quarter 1, FY 2023,
it ranks second largest. There is a significant difference when compared to the prior year that needs to be explained.
Interest on Investments and Other Interest Income are
up by $7.6 million when compared to Quarter 1 of
FY 2022. The biggest factor in this category’s increase is due to how the City must report the unrealized gains/losses from investments. These are book entries and not actual cash. At the end of Quarter 1,
the Gain/Loss entries total $6.1 million which is a
positive change of $8.3 million as compared to FY
2022.
Current Services. At the end of Quarter 1, a total of
$2.9 million has been received in the Current Services
category. Items in this revenue group include plan
check fees, engineering and inspection fees, recreation revenues, and the Emergency Medical Services Program. Current Services are up 2.5%, or $70,933
as compared to Quarter 1 of FY 2022.
When comparing to the prior fiscal year, there is an
increase in the cannabis program related revenues,
due to the startup of hosting cannabis businesses in
the City. Plan check and inspection related revenues
November 2, 2022 Quarter 1, Fiscal Year 2023
City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
are also experiencing increases, as well as reimbursement for public safety emergency response and police false alarms. In addition, there are decreases in paramedic program revenues and recreation program revenues.
Other Revenues. The Other Revenues category is the
fourth largest category at the end of the Quarter 1.
Activity in this revenue group includes Rental/Lease
Income, Development Agreements, Telecommunication
Site Rentals, and Billboard Revenues. At the end of
Quarter 1, the total received is $2.6 million. Overall, the Other Revenues category is up by 13.3%, or
$304,763 as compared to the same quarter in FY
2022.
Other Taxes. At the end of Quarter 1, a total of $1.9
million has been received in the Other Taxes category. Items in this category include Franchise Fees, Transient Occupancy Taxes (TOT), and Business Licenses Taxes. Through the end of Quarter 1, revenues are
up by 13.2%, or $227,403, as compared to FY
2022.
Franchise Fees, TOT revenues, and Business License
Taxes are all higher when comparing to Quarter 1 of
the prior year.
Property Tax. This revenue category is usually at the
top of mind when people think of City revenues, however, it does not fall in the top 5 categories for Quarter 1 due to the timing of how property tax is collected and received by local agencies. The majority of property tax revenues are recorded as revenue and
booked as a receivable, once the annual report is received from the County of Riverside (generally November/December). Year-end adjustments ‘true-up’ the amounts to the actual cash received.
General Fund Inflows - Revenues + Transfers In
Quarter 1, FY 2022 to FY 2023
November 2, 2022 Quarter 1, Fiscal Year 2023
City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
The Personnel Services (Other) is an increase of
$719,478 as compared to the same quarter last fiscal
year. The changes are based on current MOU contracts that are good through December 2024.
Materials and Supplies. The Materials and Supplies
category is up by $2.4 million when compared to
Quarter 1 of FY 2022. There are multiple increases
and decreases in this category. The primary drivers
are one-time expenditures in the current fiscal year
for technical rescue equipment and furniture/
equipment purchases.
General Fund Outflows
Expenditures + Transfers Out
Quarter 1, FY 2022 to FY 2023
General Fund Inflows - Revenues + Transfers In
Budget to Actuals, Quarter 1, FY 2023
General Fund Expenditures
The FY 2023 budget was adopted with $182.5 million in General Fund expenditures. With continuing appropriations of $19.2 million, and encumbrances
(committed purchase orders) of $5.5 million, the beginning outflow budget was $207.2 million. Through Council Actions and other authorized adjustments, the
cumulative budget is $207.5 million.
Through Quarter 1, the City has spent $33.2 million,
or 16.0% of the cumulative budget. At this point in
the fiscal year, expenditures should be approximately 25% of budget. The largest expenditure category for the General Fund is Personnel Services.
Personnel Services. In the PERS unfunded liability
line items, there is a decrease of $4.0 million, or
99.5%, when compared to the prior year. This is due
to the issuance of pension obligation bonds in October 2021. For the life of the bonds, the debt service payments will move from the personnel category to
materials and supplies.
General Fund Outflows
Expenditures + Transfers Out
Budget to Actuals, Quarter 1, FY 2023
November 2, 2022 Quarter 1, Fiscal Year 2023
City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
General Fund Expenditures by Department.
Through September 30, 2022, approximately 25%
of the fiscal year is complete. Departments with a
variance of greater than 10% are explained in the
following section.
• Capital Improvement Projects. This budget does
not follow the normal trends as these are multiyear projects. Any unspent encumbrances (purchase orders) or remaining balance carries
forward to the next fiscal year to continue the
project activities.
• City Manager’s Office. Current savings are related to the contractual services budget. The contractual services are primarily related to the Homeless Program. The improvement project for
the shelter is still in progress and contracted operating costs will begin once the shelter is operational. • Debt Services. Quarter 1 is low due to the timing
of debt service payments based on approved
payment cycles.
• Information Technology. Related to Measure X.
There are some vacancy savings and some projects that have not started as of quarter 1. • Maintenance Services. The Maintenance Services Department currently is higher than 25% due to the personnel and utilities categories. This
is related to the reorganization that occurred in
FY 2022. Staff is working to address the charges
and the issues should be resolved by Quarter 2.
• Planning & Development. Current savings is due
to vacancies and contractual services.
• Public Works. The Public Works Department currently has savings due to personnel vacancies, materials and supplies, and contractual services.
General Fund Reserves
The General Fund has multiple reserves in fund balance for various purposes. For the full list, please reference the City’s financial statements, Note 14 (for Fiscal Year Ending June 30, 2021, page 112). This
quarterly update will highlight three of those reserves. Noted below are the unaudited FY 2022 amounts, which total $75.7 million. This represents a
decrease of $4.4 million over the FY 2021 noted reserves. The final amounts may be adjusted once the FY 2022 financial statements are issued.
Enterprise Funds-Utilities
The City operates three utility services through the
Utilities Department (formerly the Department of Water and Power): electric, water, and sewer. Through the collection of fees and charges, these funds should
collect revenues sufficient to finance the costs associated with administration, operations, capital improvement projects (CIP), and debt service.
Enterprise Funds-Utilities Revenues
Through Quarter 1 FY 2023, revenues received have
an increase of 113%, or $25.3 million, as compared
to the same quarter in Fiscal Year 2022.
Electric. Comparing Quarter 1 FY 2023 revenues to
FY 2022, there is an increase of $833,039, or
20.5%. There is currently an increase in Current Services, Fines, Penalties, and Forfeitures and Investment Earnings. The change in the Investment Earnings category is due to how the City must report the unrealized gains/losses from investments. These are book entries
and not actual cash. The book entries for the Electric
Utility are an increase of $1.3 million when compared
to Quarter 1 of FY 2022.
Enterprise Funds-Utilities Revenues
Revenues Compared, Quarter 1
FY 2021 - FY 2022 - FY 2023
November 2, 2022 Quarter 1, Fiscal Year 2023
City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
Enterprise Funds-Utilities Outflows
When comparing the total of utility outflows, Quarter
1 of FY 2023 to FY 2022, outflows are lower by
6.7%, or $1.4 million.
Enterprise Funds-Utilities
Inflows - Revenues + Transfers In
Quarter 1, FY 2022 to FY 2023
Water. Through the first quarter of FY 2023, there is
an increase of 152.2%, or $20.3 million, as compared to FY 2022. Other Revenue has an increase of $19.0 million, largely due to a one-time lawsuit settlement. Investment Earnings has an increase of $1.6 million, almost entirely due to the unrealized gains/
losses from investments which are book entries. There
is a decrease of $0.4 million in the Licenses, Fees and Permits category related to one-time capacity fees
received in FY 2022 (building related activity).
Sewer. Through Quarter 1, there is an increase of
83.2%, or $4.1 million, when compared to FY 2022.
There is an increase of $4.1 million in the Investment
Earnings, almost entirely due to the unrealized
gains/losses from investments which are book entries.
There is also an increase of $83,231 in Fines, Penalties & Forfeitures and a decrease of $42,199 for licenses, fees, and permits.
Enterprise Funds-Utilities
Inflows - Revenues + Transfers In
Budget to Actuals, Quarter 1, FY 2023
Enterprise Funds-Utilities
Outflows - Expenditures + Transfers Out
Quarter 1, FY 2022 to FY 2023
November 2, 2022 Quarter 1, Fiscal Year 2023
City of Corona, CA
Quarterly Budget Update - Quarter 1, FY 2023
Electric. Overall, the Electric utility expenditures
through Quarter 1 are up by 33.1% when compared
to last fiscal year. There is a decrease in materials
and supplies and personnel services. There is an increase of $1.3 million in utilities and an increase in contractual services.
Water. Overall, the Water utility expenditures are
down by 11.2% or $1.4 million, when compared to
Quarter 1 in FY 2022. Much like the Electric utility,
the Water utility saw the same decreases in materials
and supplies and personnel services. In addition,
there was a decrease of $1.0 million in the contractual services category. The water utility had an increase of $649,957 in utilities.
Sewer. The Sewer utility expenditures are down by
15.6%, or $972,874, when compared to Quarter 1
of FY 2022. There were decreases across the board
for the Sewer utility in contractual obligations, materials and supplies, personnel services, and utilities.
Enterprise Fund Reserves
To build the target reserve amount, the Utilities Department shall annually contribute ten percent (10%) of the difference between actual operating revenues
and actual operating expenses for each of the Utilities Department Operating Funds at the beginning of each fiscal year until the target reserve is met. If the reserve amount exceeds the target reserve amount,
the additional funds shall remain in reserves.
The reserve process will occur once the FY 2022 audit
and financials are finalized and it will be posted as
of 07/01/2022 in FY 2023.
Enterprise Funds-Utilities
Outflows Expenditures + Transfers Out
Budget to Actuals, Quarter 1, FY 2023
What do you think? We value your opinion.
Is there anything additional you’d like to see in future reports? This will be an evolving process to capture
the areas that are of most interest to the City Council and the community. Please let us know. We appreciate the feedback! Please share your ideas at Budg[email protected], Julie.Kennicutt@CoronaCA. gov, or contact Budget staff at (951) 279-3500.