Agenda Report
Fullerton City Council
MEETING DATE: DECEMBER 17, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: Ellis chang, director of administrative services PREPARED BY: STEVEN AVALOS, BUDGET AND PURCHASING MANAGER
CINNDY BARRIOS, SENIOR BUDGET ANALYST
SUBJECT: FIRST QUARTER FINANCIAL REPORT FOR FISCAL YEAR 2024-25
SUMMARY
The First Quarter Financial Report (Q1 Report) provides an overview of the City financial position through the Fiscal Year (FY) 2024-25 first quarter. The Q1 Report compares General Fund revenues and expenditures incurred between July 2024 and September 2024 against the FY 2024-25 Adopted Budget.
PROPOSED MOTION
Receive and file.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
This is a report of the status of Budget for the first quarter. The expenditures report shows that with the City filling more full-time positions and the increase in unfunded liability costs, there has been a narrowing of the City’s expenditure differential.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
No fiscal impact associated with this report. Staff will use the information in these reports to ensure continued budgetary diligence and support compliance with adopted budget levels through the end of the fiscal year.
BACKGROUND AND DISCUSSION
Staff provides quarterly financial reports for the current year budget to City Council as part of the City’s budget monitoring and financial reporting practices. This provides a sound financial practice and fiscal transparency tool to report ongoing fiscal condition, identify and address budget issues as they arise and strengthen financial planning efforts. Quarterly reports measure the City’s overall fiscal health relative to adopted budget levels and keeps City Council informed and updated on financial conditions.
The FY 2024-25 Q1 Report identifies revenues received and expenditures incurred through the first quarter of the fiscal year, July 1, 2024 through September 30, 2024, in comparison to adopted budget levels.
Assessing the fiscal condition of all City funds is important, however, the Q1 Report presents only the General Fund, the chief operating fund supporting traditional municipal services such as public safety, community and economic development, parks and recreation, library services and public works. Staff will present an update on all funds in the Q2 (or Mid-Year) Financial Report.
FY 2024-25 Q1 General Fund (including Library and Parks and Recreation) Review General Fund revenues through the first quarter of FY 2024-25 total $10.6 million comprising 8.3% of adopted $127.7 million revenues. General Fund expenditures total $32.2 million comprising 24.2% of adopted $132.9 million expenditures.
Revenues
Revenues appear low at 8.3% of adopted levels, however, revenues comprise a small percentage of total revenues through the first quarter of the year. The City receives approximately 90% of Property Tax, the largest General Fund revenue source, in December and April when the County remits secured property tax rolls to the City. The City receives Sales Tax, the second largest General Fund revenue source, three months in arrears and records only one sales tax installment the first quarter of the fiscal year.
The City’s Property Tax and Sales Tax revenues remain in line with budgeted projections through the first quarter. Other tax revenues, such as Transient Occupancy Tax (TOT) and franchise fees, remain flat or slightly down when compared to Q1 in FY 2023-24. However, the timing of recording receipts or receiving revenue could account for this.
Staff records other General Fund revenues, such as fees and charges or lease income, as received but these constitute a small fraction of the overall General Fund revenue base. General Fund revenues compared to the same period last fiscal year have remained flat through the first quarter FY 2024-25 compared to the first quarter FY 2023-24.
Other General Fund revenues generally remain in line with budgeted projections through the first quarter.
Expenditures
Expenditures have a more linear trend as the City processes payroll biweekly and invoices weekly. Expenditures through the first quarter of FY 2024-25 comprise 24.2% of budgeted levels. This represents a 2.0% increase in expenditures through the first quarter of FY 2024-25 compared to the same period last fiscal year. Year 2 of City Council-approved employee bargaining group Memorandum of Agreements (MOAs), factored into the FY 2024-25 Adopted Budget, account for most of this increase. Other operating expenses track in line with budget levels through the first quarter.
Attachments 1 and 2 contain the Q1 General Fund Revenue and Expenditure Schedules for review and reference. Staff would present any significant changes and updates to revenues and expenditures in the Q2 (or Mid-Year) Financial Report.
Next Steps
The City will have a better indicator of overall revenue and expenditure performance for FY 2024-25 in the next quarter financial report, the Q2 Financial Report or better known as the Mid-Year Budget Report. The Q2 Financial Report will include an update on all funds and an overview of the City fiscal position through the fiscal year midpoint. Staff customarily presents mid-year budget adjustments that may affect the current year financial outlook at this meeting normally in February or early March.
Attachments:
Attachment 1 – FY 2024-25 Q1 Revenue Detail General Fund Attachment 2 – FY 2024-25 Q1 Expenditure Summary
cc: City Manager Eric J. Levitt
First Quarter Fiscal Year 2024-25 Financial Report
December 17, 2024 - Page 2