QUARTER 1
FY 2024
NOVEMBER 1
2023
Quarterly Budget Update
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
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, 2023, page 112). This quarterly update will
highlight four of those reserves. Noted are
the unaudited FY 2023 amounts, which total
$118.0 million. This represents an increase of
$18.9 million over the FY 2022 noted reserves.
The final amounts may be adjusted once the FY
2023 financial statements are issued.
General Fund Reserves
OVERVIEW
City management is pleased to present this quarterly update summarizing the City’s overall budget activity through Quarter 1 (September 30, 2023) for Fiscal Year (FY) 2024. 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.
The revenue projections and budget expenditures presented in this update include budget adjustments approved by the City Council, continuing appropriations, and prior year encumbrances.
BUDGET ADJUSTMENTS AND REVENUE ESTIMATES
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 2024 are currently estimated at $214.0 million. This represents an increase of $0.3 million over the adopted inflows amount of $213.7 million.
The City has received or recorded 13.3% of the estimated General Fund inflows, through the end of Quarter 1 (at the time this information was prepared). Overall, inflows are up by 7.9% when compared to the same quarter of FY 2023.
As of Quarter 1 of FY 2024, The General Fund has expended 14.7% 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 2024 to FY 2023, expenditures are up by 2.2%, or $735,666.
GENERAL FUND FINANCIAL CONDITION
General Fund Revenues
Top 5 Revenues Compared
Quarter 1
GENERAL FUND INFLOWS
Top Five Revenues
The City’s top five General Fund revenue categories account for approximately 83.4% of the total estimated General Fund inflows for FY 2024. 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 below 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 $8.2 million.
At the time this information was prepared,
the revenues are up by 6.4%, or $0.5 million
as compared to the prior year.
2 1
Investment Earnings. Interest on Investments are down by $1.0 million when compared to Quarter 1 of FY 2023. The biggest factor in this category’s decrease is due to how the City must report the unrealized gains/losses from investments. These are book entries and not actual cash.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
Current Services. At the end of Quarter 1, a total of $4.2 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 44.6%, or $1.3 million as compared to Quarter 1 of FY 2023.
When comparing to the prior fiscal year, there is an increase in animal shelter fees and charges, fire service agreements, and cannabis program related revenues. Plan check and inspection related revenues are also experiencing increases, as well as reimbursement for public safety emergency response and recreation program revenues. In addition, there are decreases in police false alarms and EMS subscription.
3 4
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 $2.4 million. Overall, the Other
Revenues category is down by
6.9%, or $179,624 as compared to
the same quarter in FY 2023.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
Other Taxes. At the end of Quarter 1, a
total of $2.3 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 17.7%, or $345,309 as compared to
FY 2023.
Franchise Fees and Cannabis Tax are
all higher when comparing to Quarter
1 of the prior year.
5 General Fund Inflows = Revenue + Transfers In
Quarter 1, FY 2023 to FY 2024
General Fund Inflows = Revenue + Transfers In
Budget to Actuals, Quarter 1, FY 2024
The FY 2023 budget was adopted with $201.8 million in General Fund expenditures. With continuing appropriations of $21.3 million, and encumbrances (committed purchase orders) of $5.3 million, the beginning outflow budget was $228.3 million.
Through Council Actions and other authorized adjustments, the cumulative budget is $232.9 million, with total outflows of $233.0 million.
Through Quarter 1, the City has spent $34.3 million, or 14.7% 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. The Personnel Services is an increase of $1.4 million as compared to the same quarter last fiscal year. The changes are primarily based on current MOU contracts that are good through December 2024.
Materials and Supplies. The Materials and Supplies category is down by $1.3 million when compared to Quarter 1 of FY 2023.
There are multiple increases and decreases in this category. The primary drivers are one-time expenditures in last fiscal year for technical rescue equipment and furniture/equipment purchases.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
General Fund Expenditures
General Fund Expenditures by Department.
Through September 30, 2023, approximately 25%
of the fiscal year is complete. Departments with
a variance of 10% are explained in the following
section.
CIP / O&M Projects. This budget does not
follow the normal trends as these are multi-year
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.
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 personnel savings due to
vacancies and operating costs have not had any
expenditures through Q1 as the funded activity
has not started yet.
Planning & Development. Current savings is
due to vacancies, materials and supplies, and
contractual services.
Public Works. The Public Works Department
currently has savings due to personnel vacancies,
materials and supplies, and contractual services.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
General Fund Outflows
Expenditures + Transfers Out
Budget to Actuals, Quarter 1, FY 2024
General Fund Outflows
Expenditures + Transfers Out
Quarter 1, FY 2023 to FY 2024
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
ENTERPRISE FUNDS - UTILITIES INFLOWS
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.
The Reserve Policy for Utilities Department Operating Funds was approved by the City Council on May 18, 2022. Commencing with FY 2022, the target reserve amount for each of the operating funds shall be set at ninety (90) days. 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. Depending on the fund, it will take time to hit the target reserve amount. If the reserve amount exceeds the target reserve amount, the additional funds shall remain in reserves.
The reserve process will occur annually, once the audit and financials are finalized. Utility Reserve preliminary balance is shown below. The final amounts may be adjusted once the FY 2023 financial statements are issued. Enterprise Funds - Utilities Revenues Compared, Quarter 1 FY 2022 - FY 2023 - FY 2024 Enterprise Funds-Utilities Revenues
Through Quarter 1 FY 2024, revenues received have decreased 32.0%, or $15.2 million, as compared to the same quarter in Fiscal Year 2023.
Electric. Comparing Quarter 1 FY 2024 revenues to FY 2023, there is an increase of $0.1 million, or 1.7%.
There were decrease in categories: Current Services, Fines, Penalties & Forfeitures, Inventment Earnings, and Utility Service Charges. There were increases in categories: Fees & Permits and Other Revenue. 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.
Water. Through the first quarter of FY 2024, there is a decrease of 43.7%, or $14.7 million, as compared to FY 2023. Other Revenue has a decrease of $19.0 million, largely due to a one-time lawsuit settlement from last fiscal year. Investment Earnings has an increase of $564,241, due to the unrealized gains/losses from investments which are book entries. There is an increase of $3.6 million in Intergovernmental Revenues.
This is due to how we record revenue for grants. It is spread over several years and is recognized in the period in which it is earned.
Sewer. Through Quarter 1, there is a decrease of 7.1%, or $0.7 million, when compared to FY 2023.
The decrease is across all categories. Current Services, Fees & Permits, Fines, Penalties & Forfeitures, Inventment Earnings, and Utility Service Charges. 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.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
Enterprise Funds - Utilities
Inflows = Revenues + Transfers In
Quarter 1, FY 2023 to FY 2024
Enterprise Funds - Utilities
Inflows = Revenues + Transfers In
Budget to Actuals
Quarter 1, FY 2024
When comparing the total of utility outflows, Quarter 1 of FY 2024 to FY 2023, outflows are higher by
4.6%, or $1.0 million.
Electric. Overall, the Electric utility expenditures through Quarter 1 are down by 11.2% when compared to last fiscal year. There is a decrease in contractual, materials and supplies and utilities. There is an increase of $15,994 in personnel services.
Water. Overall, the Water utility expenditures are up by 5.5% or $675,977 when compared to Quarter 1 in FY 2023. There are increases in personnel services and materials and supplies. Some decreases are seen in contractual and utilities.
Sewer. The Sewer utility expenditures are up by 12.7%, or $726,339, when compared to Quarter 1 of FY 2023. There was a decreases in utilities, but an increase in contractual, materials and supplies, and personnel services.
Quarterly Budget Update | Quarter 1, FY 2024
November 1, 2023
ENTERPRISE FUNDS-UTILITIES OUTFLOWS
Enterprise Funds - Utilities
Outflows = Expenditures + Transfers Out
Quarter 1, FY 2023 to FY 2024
Enterprise Funds - Utilities
Outflows = Expenditures + Transfers Out
Budget to Actuals, Quarter 1, FY 2024
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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 [email protected], [email protected], or contact Budget staff at (951) 279-3500.