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2 DATE: March 3, 2025
TO:
Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: Nate Cruz, Finance Director/Treasurer
SUBJECT: 2ND QUARTER FY 2024-25 FINANCIAL UPDATE
RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept the report on the 2nd Quarter FY 2024-25 Financial Update.
EXECUTIVE SUMMARY
City staff has prepared the attached Second Quarter FY 2024-25 Financial Update report, also known as the Mid-Year Financial Report. General Fund revenues (Funds 001 to 003) for the six-month period were $32.9 million.
Amended revenue and expenditure projections for the full year are $64.8 million and $62.9 million respectively. Property Tax revenues, including ERAF refunds, are projected to reach $39.1 million. FY 2024-25 property tax in lieu of vehicle license fees (VLF) is anticipated to be $4.6 million, which includes an unbudgeted payment of $1.4 million to Foster City representing the shortfall from FY 2022-23. San Mateo County continues to work with the State for a permanent solution for VLF shortfalls. Transient Occupancy Tax (TOT) is anticipated to meet the budgeted amount of $4.7 million. The City’s investment income is anticipated to exceed budget assumptions of $1.6 million and is projected to earn $2.2 million compared to $2.6 million in the prior fiscal year.
At the 6-month mark, General Fund (Funds 001 to 003) operating expenditures were
49.3% of its amended budget or $35.2 million and included 9 months of funding to San Mateo Consolidated Fire Department for the City’s shared costs for fire protection and prevention services. The FY 2024-25 budget assumes full staffing for the entire year.
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2 Normal vacancy rates through the first six months are expected to continue until year end, resulting in lower than budgeted personnel costs.
Overall, staff projects a $2.65 million deficit at year end as opposed to the originally budgeted deficit of $5.6 million. This updated projection includes approximately $1.2 million in unspent personnel cost at the 6-months mark.
Expenditures for the City’s other Governmental Funds, Internal Service Funds, and the District’s Water and Wastewater Funds are performing generally as expected.
BACKGROUND/ ANALYSIS
The City Council and City staff have committed to providing quarterly financial updates at City Council meetings to review quarterly financial performance and identify general economic trends and specific issues that may affect, positively and negatively, the City’s financial condition.
The report is intended to provide high-level financial information for the City Council, City Departments, and the community as a whole. Supplemental revenue and expenditure analyses are also provided for those readers desiring more detailed financial information.
FISCAL IMPACT
There is no fiscal impact associated with this report.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Sustainability
ATTACHMENTS:
•Attachment 1 - Foster City Financial Update FY 2024-25 Q2 (for the six months ended December 31, 2024)
•Attachment 2 – Second Quarter Projections for the Fiscal Year Ended June 30, 2024
•Attachment 3 - Comparison of Budget vs. Actual and Prior Year's Revenues (for the six months ended December 31, 2024)
•Attachment 4 - Comparison of Budget vs. Actual and Prior Year's Expenditures (for the six months ended December 31, 2024)