Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: FISCAL YEAR 2023/24 - THIRD QUARTER - FINANCIAL UPDATE
Date: April 23, 2024
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive the presentation on the un-audited financial position for the City as of the Third Quarter Fiscal Year 2023/24.
Background
City staff are committed to continued financial updates to report on receipts of key revenues and the overall City cash position.
Analysis/Discussion
General Fund:
Revenues:
The City of Cotati’s main revenue sources as a % of total General Fund Sources are Sales Taxes at 26.6%, Voter Approved Local Revenue (Measure S) at 27.75%, Property Taxes at 17% then other Taxes, Charges for Services, Permits and Licenses for a combined 29.2%.
Overall Revenues for the General Fund are $467,267 or 7.7% above the same period in Fiscal year 2022/23. There are additional accrued payments still pending and will be adjusted within the annual audited financial statements. Significant changes to the total revenues for the General Fund were:
• Other Taxes, primarily made up of cannabis business taxes, had increases of approximately 16% over prior year due to additional businesses operations. • Property Taxes received to date decreased over the previous year by approximately 6.8%, which is primarily due to reassessments of commercial properties. • Other Revenues received to date increased over 200% or by $148K primarily due to reimbursements for administrative costs related to grants • Other Agencies increased by 115K or 96.7% over the prior year primarily related to state reimbursements for mandated reporting and catch-up payments for the SSU dispatch contract.
• Investment Earnings have increased approximately $55K and over 50% from the previous year due to active management of investments and increased interest rates for investments.
• Rents increased over the prior year by $35K or 45.3%due to increased facilities rentals for events post covid as well as a one-time renegotiating fee for the cell tower lease agreement for approximately $12K.
Expenditures:
Overall, cumulative General Fund expenditures increased from the previous year by approximately 14.1% or $1.1M. This change was due to increased transfers for capital projects and the additional discretionary payment made to CalPERS to pay down the unfunded pension liability.
By department, total dollar increases were noted in Police, Community Development, Public Works, and the Administrative Services Departments. Most of the increases are related to the proportional share of allocated expenses for the additional discretionary payment (ADP) to CalPERS and tech and data management. Other increases for the Administrative Services Department are related to one-time expenditure on recruiting efforts. Each department is anticipated to complete the fiscal year in line with the adopted budget. Staff will be proposing the estimated actual budget to the council with the budget studies for the Fiscal Year 2024/25.
Enterprise Funds:
The revenues for the Water Funds and Wastewater have continued to increase primarily related to the move to monthly billing, better matching the period of service with the revenues derived and expenditures incurred. Additional factors that increased revenues are the increases applied based on the adopted rate schedule.
For Fiscal Year 2023/24, most of the expenses are in line with the budget at year-end. Increases in salaries and benefits were primarily due to the additional discretionary payment made to CalPERS. Overall expenses are expected to be in line with the budget at the end of the fiscal year.
City-Wide Cash and Investments:
Cash and Investments remain stable at $18.1M, where most of the funds are held in US Bank Trust laddered investments (48%). Followed by liquid pooled investment funds at California Asset Management Program (44%), Local Agency Investment Funds (LAIF) and Sonoma County Investment Pool (SCIP) both with less than 1%, then Cash held in Escrow Funds of which $899K is liquid held for funding the park and ride project, and the remainder $293K is tied to the S. Sonoma Business Park Bond and will be paid out at maturity of the debt service.
The remaining balance is held within the City’s Operating Checking account held at Exchange Bank. The balances within the checking accounts are managed very closely to match availability of funding requirements while optimizing investments to earning more returns.
Financial Considerations
There is no immediate fiscal impact or budget action necessary. City Staff will continue to report to Council and the community quarterly.
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.