CITY OF CULVER CITY
POPULAR
ANNUAL
FINANCIAL
REPORT
This report covers the Fiscal
Year spanning July 1, 2022
through June 30, 2023.
Los Angeles County, California
Fiscal Year
2022 - 2023
Table of Contents
Introduction � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 3 Organizational Structure � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 4 Culver City by the Numbers � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 5 Economic Outlook � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6 Significant Initiative � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6 Financial Report Highlights � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 7 Capital Assets � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 7 General Fund Revenues � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 8 Revenue from Tax Measures � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 9 General Fund Expenditures � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 10 Enterprise Funds � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 11 Awards & Acknowledgments � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 12 3 / / 2022 - 2023 PAFR
Introduction
As part of the City’s ongoing efforts to
promote financial transparency, the City of
Culver City is pleased to present its second
Popular Annual Financial Report (PAFR) for
Fiscal Year 2022-2023.
The PAFR is intended to summarize and
clearly present the highlights of the Fiscal Year
2022-2023 Annual Comprehensive Financial
Report (ACFR), with the goal of making City
finances more accessible to all Culver City
residents. The ACFR is available for review
on the City’s website. It is important to note
that the financial data in these reports has
been prepared in accordance with Generally
Accepted Accounting Principles (GAAP)1. The
ACFR has been independently audited by
Vasquez + Company LLP, a public accounting
firm fully licensed and qualified to perform
audits for the state and local governments
within California.
For More Information
This financial report is designed to be a useful
tool for residents interested in learning about
City finances, regardless of their background
in financial accounting and reporting. Please
contact the Culver City Finance Department
via phone at (3 10) 253-5865 or email at
[email protected] if you have any
questions, comments or suggestions regarding
the information in this report.
We thank you for your interest in the City’s
fiscal health and hope you enjoy this report.
1. Generally Accepted Accounting Principles (GAAP) –
Uniform minimum standards and guidelines for financial
accounting and reporting. They govern the form and
content of the financial statements of an entity. GAAP
encompasses the conventions, rules and procedures
necessary to define accepted accounting practice at a
particular time. They include not only broad guidelines of general application, but also detailed practices
and procedures. GAAP provides a standard by
which to measure financial presentations. The primary
authoritative body on the application of GAAP to state
and local governments is the Governmental Accounting
Standards Board (GASB).
4 / / 2022 - 2023 PAFR
Organizational Structure
Did You Know?
Culver City is a full-service City, serving a resident population of 39,682 with a business community that employs approximately 59,000 people, a 1 38% increase since 201 4.
The City operates under a Council-Manager form of government. The City’s five City Council Members are elected at-large and serve a four-year term. The Council Members select the Mayor and Vice Mayor among themselves, who each serve for one year at a time. The Council also appoints the City Manager, City Attorney, Police Chief and Fire Chief.
In addition, each year, the City Council appoints Commission, Board and Committee members, who support the City Council by focusing on specific issues and initiatives within the community.
Together, these governing bodies and City staff provide a range of services including police, fire, general maintenance, public improvements, planning and zoning, housing and homeless services, building plan review, economic development, refuse collection, municipal bus lines, park, recreation and community services, cultural affairs and general administrative services.
City of Culver City
Organizational Chart
Culver City Residents
City Council
City Manager’s Office
City Attorney’s
Office
Police
Department
Fire
Department
DEPARTMENTS
Administrative
Services
Community
Development Finance Information
Technology
Parks, Recreation &
Community Services Public Works Transportation
5 / / 2022 - 2023 PAFR
Culver City by the Numbers
$296.5 Million
Adopted Fiscal Year 2022-23 Budget
$1.059M
Median
Single-Family
Home Price
Median Age
41.7 years
39,682
Approximate Population
5.1 1 Square Miles
City Area
3 Fire
Stations
$147,10 9
Average
Household
Income
93.9%
Adults with High
School Degree
or Higher
3,260
Building Permits Issued
Approximately
2.66 Million
Annual Culver CityBus
Passengers
Youth Sport Paricipation
19,9 91
14 Miles of Bike
Facilities
7,14 9
Trees Trimmed
13 Parks
92 Park Acres
Adult Sport Participation
68,970
108
Traffic
Signals
3,681
Streetlights
6 / / 2022 - 2023 PAFR
Economic Outlook
As the economy continues to recover and adjust from the impacts of the pandemic, Culver City remains committed to providing high-quality services and programs to support community needs while maintaining the City’s fiscal health.
To maintain service levels despite the uncertainty of the global, national and local economies, the City continued to take a conservative approach to budgetting for Fiscal Year 2022-2023. Post-pandemic revenue rebounds have cooled, with rising interest rates, inflation and entertainment strikes also taking effect.
The Adopted Budget for Fiscal Year 2022-2023 restored staff positions and most programming to pre-pandemic levels, and included certain new and one-time expenditures. In response to the COVID-1 9 pandemic, the City had previously implemented budget cuts in Fiscal Year 2020-202 1 and Fiscal Year 202 1-2022. After receiving higher than anticipated revenues for two consecutive years, the City approved an increased General Fund Budget.
Top 10 Employers
1. Sony Pictures Entertainment (5. 1%)
2. Amazon Studios (4.2%)
3. Westfield Shoppingtown-Fox Hills (3.4%)
4. Apple (2.5%)
5. Southern CA Hospital (Brontman Medical
Center) (2%)
6. Culver City Unified School District (1.5%)
7. City of Culver City (1.4%)
8. Goldrich & Kest Industries, LLC (1. 1%)
9. Costco (1. 1%)
10. TikTok (1%)
Significant Initiative
In early 2022, to address the need for local shelter space and supportive housing for homeless individuals in Culver City, the City applied for and was awarded $26.6 million from the State of California, Housing and Community Development Department under Project Homekey for the creation of harm reduction, service-enriched interim and permanent supportive housing for chronically homeless individuals through the acquisition and rehabilitation of two local motels. The motels were acquired on August 1 1, 2022, and construction was completed in September 2023. The City has committed $4.9 million annually from the General Fund for Project Homekey staffing, operations and services. The City also committed $1.5 million annually to fund the creation and ongoing operation of a Mobile Crisis Intervention Unit consisting of professionals to address homeless and mental health crises in the City.
On January 9, 2023, in response to the growth of homelessness in Culver City and the region, the City Council ratified the Proclamation of Local Emergency on Homelessness by the Director of Emergency Services of Culver City, issued by the City Manager on January 3, 2023. During Fiscal Year 2022-2023, the City began work to develop a transitional housing safe sleep program to further expand the City’s response to the local homelessness emergency.
The Safe Sleep Program was launched in August 2023. These new and ongoing expenses are reflected in Fiscal Year 2022-2023 expenditures, with expenditures for these ventures to continue in the Fiscal Year 2023-2024. 7 / / 2022 - 2023 PAFR
$150M
$250M
$200M
$300M
$100M
$50M
Financial Report
Highlights
The City’s total net worth (or “net position”) as of June 30, 2023, including all business and government activities, increased by $29.8 million in the Fiscal Year 2022-2023, reaching a net position of $277.3 million.
$159�3 M
Fiscal Year
2020-2021
Net Position
$245 M
Fiscal Year
2021-2022
Net Position
$277�3 M
Fiscal Year
2022-2023
Net Position
Capital Assets
As of June 2023, the City’s investments
in capital assets for governmental and
business activities amounts to $330. 1
million. “Capital assets” include
land, buildings and related systems,
improvements, machinery and equipment,
park facilities, roads, highways
and bridges.
The City ended Fiscal Year 2022-2023
with $53.5 million of capital improvement
projects in progress. These projects are
designed to enhance City infrastructure,
such as:
• Roads
• Curbs
• Storm drains
• Bridges
• Sidewalks
• Gutters
• Public facilities (parks, restrooms,
community facilities & playgrounds)
The City also made several “capital assets”
additions, including:
• Vehicle replacements
• Street repair & replacement
• Sewer system improvements
8 / / 2022 - 2023 PAFR
10%
6%
27%
12 %
11 %
8%
3%
4%
5%
6%
3% 4%1%
General Fund Revenues
General Fund Reserves
The General Fund is the chief operating fund of the City. In Fiscal Year 2022-2023, the starting balance of all General Fund Reserves was $1 43 million and the ending balance was $1 53.4 million.
General Fund Revenues
General Fund revenues primarily come from taxes and fees for City services. Sales tax is Culver City’s single-largest revenue source. Other tax revenues include business tax, property tax, utility users tax (UUT), real property transfer tax and transient occupancy tax (TOT).
Revenue Highlights
Sales Tax
Sales tax is Culver City’s single largest revenue source, accounting for 27% of total General Fund revenue
for Fiscal Year 2022-2023. The City’s sales tax and
Measures C/CC receipts decreased in Fiscal Year 2022-
2023 due to consumer behavior and softening gas prices.
The State of California collects a total of 10.25% sales and use tax on all taxable sales in the City, of which
the City receives 1.0% of the transactions subject to the sales and use tax under Bradley-Burns Uniform Local
Sales Tax and a combined 0.75% under voter-approved
transaction and use tax (Measures C and CC)
Business Tax
Fiscal Year 2022-2023 business tax receipts, including
penalties, totaled $1 8.7 million, an increase of 1 5.5% from the previous fiscal year. The business tax revenues were higher than anticipated due to successful efforts to bring delinquent businesses into compliance.
State
(8.5¢)
Measures C and CC
(0.75¢)
City of Culver City
(1¢)
Revenue Stream Percentage Amount (in Millions)
Property Tax 10% $1 4.7
Property Transfer Tax 6% $9.7
Sales Tax 27% $42.4
Business Tax 12 % $1 8.7
Utility Users Tax 11 % $1 6.5
Transient Occupancy Tax 8% $1 2
Licenses & Permits 3% $4
Fines & Forfeitures 4% $5.3
Intergovernmental 5% $8. 1
Charges for Services 6% $10.9
Investment Earnings 3% $4.4
Misc. 1% $1.8
Other 4% $6
Total $154.5
9 / / 2022 - 2023 PAFR
Revenue from Tax Measures
The City receives from several recent tax measures. These revenues are part of the General Fund and can be used for any valid General City purpose, such as emergency response, maintaining parks and addressing homelessness.
Second Full-Year in Effect
In November 2020, voters approved Measure RE, which established marginal tax rates for the City’s real estate transfer tax, effective April 1, 202 1. The City projected to receive $1 4 million in Fiscal Year 202 1-2022 and actually received $32.6 million. Almost 50% of this revenue was generated by one commercial property sale. This revenue can vary greatly in any given year and is difficult to predict. With rising interest rates and softening property prices, the City is seeing a cooling in this revenue source. Revenues dropped significantly in Fiscal Year 2022-2023, with only $9.7 million received.
Voters Approved Measure CC, Extending Measure Y
In March 2020, voters approved Measure CC, which extends the Measure Y half-cent transaction and use tax until March 3 1, 2033. Measure CC revenues increased by $100k in Fiscal Year 2022-2023; totaling $1 1.5 million or 7.2% of general fund revenues.
Cannabis Distribution Tax to End
In April 201 8, voters approved a cannabis business tax measure that set a tax rate for cannabis retail, manufacturing and distribution. Sales in the cannabis industry declined sharply at the end of the pandemic. Cannabis tax received in Fiscal Year 2022-2023 declined by over $640,000 to approximately $1.3 million. In October 2023, the City Council reduced the tax rate for cannabis distribution tax from 2% to 0% starting January 1, 2024. This will further reduce this revenue source.
Measure C Going on 5th Year
In November 201 8, voters approved Measure C: a quarter-cent sales tax. Measure C generated a total of $5.7 million in Fiscal Year 2022-2023, representing 3.7% of general fund revenues.
New Revenue Coming Soon
In November 2022, Culver City voters approved Measure BL, which updated Culver City Business tax rates for the first time since 1 965. The new rates went into effect for new businesses registering in the City on April 1, 2023. Existing businesses will pay the new rates with their renewals for the calendar year 2024. The new rates are projected to yield up to $8 million in additional revenue starting in Fiscal Year 2023-2024. 10 / / 2022 - 2023 PAFR
12 %
22%
7%
35%
10%
7%
6%>1%
General Fund Expenditures
The City’s general fund expenditures totaled $1 44. 1 million in Fiscal Year 2022-2023. These expenditures include many essential services: public safety, parks and recreation and community services, community development and public works.
In Fiscal Year 202 1-2022, the City funded all previously frozen positions and authorized the reinstatement of many services and programs that had been limited during the pandemic. Due to the large number of vacancies, it has taken time to recruit and onboard new staff and, as a result, personnel costs were lower in Fiscal Year 202 1-2022 than projected and increased in Fiscal Year 2022-2023, with the city restoring staff positions and most programming to pre-pandemic levels.
Revenue Stream Percentage Amount (in Millions)
General Government 12 % $1 7 .8
Fire Department 22% $ 31
Parks, Recreation & Community Services 7% $10.2
Police Department 35% $50. 1
Public Works 10% $ 15
Community Development 7% $10.3
Capital Outlay >1% $0.5
Debt Service >1% $0.3
Transfers Out 6% $8.9
Total $144.1
11 / / 2022 - 2023 PAFR
Enterprise Funds
Cities use proprietary funds to account for the maintenance operation and capital assets of fee-based goods and services.
One type of proprietary fund is an enterprise fund. These funds are intended to be entirely self-supporting. Culver City has four enterprise funds: municipal bus lines, refuse disposal, sewer enterprise and municipal fiber network to account for the operation and capital assets of these business-type activities.
Municipal Bus Lines
This enterprise fund includes the Culver CityBus and is the City’s largest enterprise fund. Culver CityBus is the second-oldest municipal-owned bus line in California.
Municipal bus operations are mainly funded by operating and capital grants and contributions from federal and county sources, in addition to fare revenues, resulting in a $5.8 million increase in revenues in Fiscal Year 2022-2023, totaling $3 1 million.
Culver CityBus ridership has increased by almost 400,000 passengers since Fiscal Year 202 1-2022, steadily growing back to pre-pandemic levels.
Refuse Disposal
Refuse disposal is the second-largest enterprise fund. It includes 23 refuse collection trucks and is responsible for collecting an average of 43 tons of residential refuse and greenwaste and 88 tons of commercial refuse daily. Commercial refuse increased by 6 tons daily, likely in response to California Senate Bill 1 383 green waste regulations. Refuse disposal generated $20.2 million in revenues in Fiscal Year 2022-2023, increasing by $1.7 million following operational investments by the City in Fiscal Year 202 1-2022.
Sewer Enterprise
This fund is used to account for the maintenance and operation and the capital assets of the City’s sewage disposal service. The sewer enterprise’s largest annual operating expense is the payment to the City of Los Angeles for the City’s use of the Hyperion Treatment Plant and Los Angeles Sewer transmission lines. The primary source of revenue for the sewer fund is sewer users’ services charges. The City currently operates 9 1 miles of sanitary sewer lines, generating $9 million in revenues.
Municipal Fiber Network
In November 201 5, the City Council approved a new municipal fiber network enterprise fund. Funding for this project, known as Culver Connect, was appropriated through a loan from the General Fund to design and construct an open access network where Internet Service Providers (ISPs) will utilize the City’s fiber infrastructure to service the business community. During Fiscal Year 2022-2023, the fund generated $2.4 million in revenues.
The net position of these funds increased by $3.4 million during Fiscal Year 2022 - 2023, totaling $58.7 million.
Have
Feedback?
Please contact the Culver City
Finance Department via phone
at (3 10) 253-5865 or email at
[email protected] with
questions, comments or suggestions
regarding the information in this
report. Additionally, you may review
the City’s other Financial & Investment
Reports on the City website.
@CityOfCulverCity
@CulverCityGov
@CulverCityGov
/City/Culver-City--CA
@CityOfCulverCityGov
Stay Connected
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Culver City for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2022. This marks the 38th consecutive year that the City received this prestigious award.
In order to receive the Certificate of Achievement award, a government must publish an easily readable and efficiently organized comprehensive financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements.
The Certificate of Achievement is valid for a period of one year only. The City believes that the current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
For the first time, the City also received the Outstanding Achievement Award for the first edition of the Popular Annual Financial Report (PAFR) for Fiscal Year 202 1-2022.