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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Fiscal Year 2025-26 Second Quarter Financial Status Report
1. Motion to note and file the Financial Status Report for the period ending December 31, 2025
2. Resolution of appropriation
COUNCIL ACTION
Item Type: Action Item
Approved for March 10, 2026 calendar
EXECUTIVE SUMMARY
The FY 2025-26 Second Quarter Financial Update report, which includes the General Fund revenues and expenditures recorded through December 31, 2025, are presented in this report. General Fund revenues received through the second quarter are approximately $113.6 million, or 32.4% of the revised revenue budget. Total General Fund expenditures through the second quarter are approximately $167.5 million, or
47.1% of the revised budget.
The General Fund Five-Year Forecast has been updated with the latest assumption factors. Due to multiple financial strategies implemented or in the process of being implemented, the General Fund’s financial outlook has improved. While the structural imbalance still exists, if the City can implement all the financial strategies included in the forecasting model, the City is expected to maintain the General Fund Reserve above 25% and remain in compliance with the City’s reserve policy within the next five fiscal years.
In addition, the City of Glendale received a donation from the Los Angeles Dodgers in the amount of $10,000 for the Senior Services Program managed by the Community Services and Parks Department. The Community Services and Parks Department is respectfully requesting a resolution of appropriation from this revenue to expend the funding and enhance services.
RECOMMENDATION
That the City Council approve the attached motion accepting the FY 2025-26 Second Quarter Financial Status Report. That the City Council also approve the resolution of appropriation to appropriate the donation from the Los Angeles Dodgers. 10b2
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ANALYSIS
General Fund Revenues
Revenues received in FY 2025-26 through December 31, 2025, total approximately $113.6 million, an increase of $14.5 million (14.6%) compared to the same period last year. Based on second quarter performance, combined with first quarter results, the revenue projection has been increased by a net $1.7 million. Revenues through the second quarter represent 32.4% of projected actuals, which is consistent with expectations at this point in the fiscal year.
Sales taxes receipts totaled $28.0 million, essentially flat compared to last year, with performance varying across tax groups. Losses from an auto dealership lowered autos and transportation revenues, and the departure of an office-supply/furniture taxpayer reduced revenues in the business and industry group. The City’s allocation from the countywide use-tax pool also declined due to reduced regional activity. General retail remained stable, and the City’s voter-approved transactions and use tax showed stronger results, particularly from in-store and online retail activity. Overall performance aligns with the previous forecast, and only a slight adjustment of $73 thousand is being included in the revenue projection.
Utility users taxes increased by $1.3 million (9.0%) compared to the same period last year, driven by higher Electric UUT resulting from increased electricity rates, along with higher Gas UUT. Transient occupancy taxes decreased slightly by $457 thousand compared to the prior year. Based on current trends, no adjustments to the revenue projections are needed at this time.
Licenses and permits continued to outperform expectations following strong first quarter results, with second quarter results exceeding last year by $1.2 million. As a result, revenue projections are being increased by $1.5 million overall: 1.0 million for building permits, $300 thousand for planning permits, and $200 thousand for street permits.
Revenue from other agencies is $399 thousand higher than last year, primarily because the annual motor vehicle-in-lieu payment was received earlier in the fiscal year. This category is also trending upward due to increased federal and state grant receipts, and we are making a $192 thousand increase to the revenue projection.
Charges for services are tracking $5.5 million higher than last year due to the collapse of the Parking Fund, with parking meter and parking garage revenues—approximately $4.4 million—now deposited into the General Fund. These revenues are performing in line with projections. However, other revenues within this category are trending higher, and a net increase of $190 thousand is included in the revenue projection. This reflects higher emergency medical response fees ($350 thousand), express plan check fees ($315 thousand), parking agreement revenue ($150 thousand), and various miscellaneous fees ($75 thousand). These increases were partially offset by a $700 thousand reduction in Scholl Canyon Landfill host assessment fees. 10b3
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Fines and forfeitures are $1.1 million higher than last year due to the collapse of the Parking Fund, with all parking citation revenue now recorded in the General Fund.
However, this category is tracking below projections. A $460 thousand reduction is included in the revenue projection, largely due to delays in implementing the Speed Safety Camera Program and fewer citations issued. The Police Department considers this trend normal.
Miscellaneous & non-operating revenues are $17 thousand higher than last year. In addition, our unclaimed property amount was higher than originally budgeted. As a result, we are increasing the revenue project by $217 thousand.
Typically, no actuals are recorded in the transfers from other funds category mid-year, as the Electric Transfer from Glendale Water & Power is posted at year-end. However, in FY 2025-26, a one-time $9.0 million transfer was budgeted from the Capital Improvement Fund to the General Fund. This transfer returned funds previously allocated to the cancelled/defunded projects as part of budget balancing strategies. In the first and second quarters, $4.5 million of this transfer was recorded.
The following table shows General Fund revenues by major category as of December 31 for each fiscal year.
Revenues FY 2023-24
Actuals as of Q2
FY 2024-25
Actuals as of Q2
FY 2025-26
Actuals as of Q2
$ Change
from Prior
Year
% Change
from Prior
Year
Property Taxes $ 17,863,987 $ 19,887,691 $ 20,677,551 $ 789,860 4.0% Sales Taxes 29,005,467 28,407,626 28,001,136 (406,491) (1.4%) Utility Users Taxes 12,091,168 14,489,144 15,800,095 1,310,952 9.0% Occupancy Taxes 3,925,463 4,003,176 3,546,000 (457,176) (11.4%) Licenses & Permits 4,605,775 5,284,536 6,481,738 1,197,202 22.7% Revenue from Other
Agencies 42,853 36,994 435,920 398,926 1078.4%
Charges for Services 14,363,338 13,371,320 18,919,905 5,548,585 41.5% Interfund Revenue 9,517,735 9,860,899 9,930,688 69,789 0.7% Fines & Forfeitures 1,536,300 1,458,780 2,590,065 1,131,285 77.6% Interest/Use of
Money 2,154,549 1,998,172 2,369,374 371,202 18.6%
Misc. & Non-
Operating 121,028 341,412 358,441 17,029 5.0%
Transfers from Other
Funds - - 4,486,683 4,486,683 N/A
Total Revenues $ 95,227,662 $ 99,139,751 $113,597,598 $ 14,457,847 14.6% Revenues Year-to-
Date Collection
Rate
30.7% 30.9% 32.4% - -
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General Fund Expenditures
As of the first six months, expenditures are tracking slightly lower than 50% of the budgeted amount. Total General Fund expenditures as of December 31, 2025 are approximately $167.5 million, or 47.1% of the revised budget. Variances from the expected 50% level are common and may result from seasonal spending patterns or procurements scheduled for later in the fiscal year.
The revised budget includes approximately $991 thousand in Council-approved budget adjustments through December 31, 2025 to the General Fund, along with $2.1 million in budget carryovers from the prior year for programs and activities that have not yet been completed.
Expenditures for the second quarter totaled $167.5 million, a 1.4% increase compared to the same period last year. Salaries and benefits remained stable overall, increasing by approximately $2.7 million due to cost-of-living adjustments, normal step progression, and $1.7 million associated with the collapse of the Parking Fund into the General Fund.
Maintenance and operations increased by $5.0 million (14.1%), with $3.0 million of that growth also attributable to the collapse of the Parking Fund.
Capital outlay increased by $172 thousand, driven by Fire Department equipment purchases, including turnouts and defibrillators, which were made earlier in the year due to the department’s purchasing schedule.
Transfers to other funds decreased by approximately $5.5 million, reflecting FY 2025-26 budget balancing strategies that deferred transfers to the Building Maintenance Fund and the Fleet Fund and reduced the transfer to the Capital Improvement Fund.
The following table reflects General Fund expenditures by major category as of December 31 for each fiscal year.
Expenditures FY 2023-24
Actuals as of Q2
FY 2024-25
Actuals as of Q2
FY 2025-26
Actuals as of Q2
$ Change
from Prior
Year
% Change
from Prior
Year
Salaries & Benefits $108,490,458 $122,470,617 $125,154,648 $ 2,684,031 2.2% Maintenance &
Operations 35,750,402 35,392,594 40,374,402 4,981,808 14.1% Capital Outlay 407,783 39,896 211,878 171,981 431.1%
Transfers to Other
Funds 11,713,991 7,216,492 1,743,177 (5,473,314) (75.8%) Total Expenditures $156,362,635 $165,119,599 $167,484,105 $ 2,364,506 1.4% Year-to-Date
Budget Utilization
Rate
46.2% 49.4% 47.1% - -
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General Fund Projected Ending Fund Balance, June 30, 2026 Based on the results through December 31, 2025, staff is recommending several adjustments: increasing Property Taxes by $29 thousand, Sales Taxes by $73 thousand, Licenses and Permits by $1.5 million, Revenue from Other Agencies by $192 thousand, Charges for Services by $190 thousand, and Miscellaneous and Non-operating Revenues by $217 thousand, while decreasing Fines and Forfeitures by $460 thousand.
Altogether, these changes result in a General Fund revenue increase of $1.7 million compared with the first quarter projection, bringing the revised revenue estimate to $351.0 million.
Staff’s ongoing review of General Fund expenditures indicates anticipated savings of approximately $10.9 million, or 3.1% of the revised budget. These savings occur across multiple categories, with a substantial share tied to one-time salary and benefit savings resulting from slower-than-expected hiring, particularly within the Police Department.
While the City continues to apply a 98% spending assumption in the out-years, the additional savings realized this year offer only short-term relief and are not expected to recur as recruitment efforts accelerate. Based on current spending trends, total year-end expenditures are estimated at $344.6 million. These projected savings reflect a preliminary estimate of year-end performance and are not being recommended as a reduction to the General Fund budget at this time.
Category
(In Millions) Q1 Q2
Revenues Year-End Projection $349.2
Licenses and Permits 1.5
Revenue from Other Agencies 0.2
Charges for Services 0.2
Miscellaneous and Non-Operating 0.2
Fines and Forfeitures (0.4)
Other 0.1
Revised Year-End Projection $351.0
Expenditures Year-End Projection $348.0
Additional One-Time Personnel Savings (3.4)
Revised Year-End Projection $344.6
Surplus/(Use) $1.2 $6.4
Considering the revised FY 2025-26 projected revenues and expenditures, the unassigned and Charter Reserve fund balance is expected to increase by $6.4 million, resulting in a projected ending General Fund reserve of $144.6 million, representing
41.0% of the FY 2025-26 adopted General Fund budget.
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General Fund
Projected Ending Unassigned & Charter Reserve Fund Balance, June 30, 2026 (In Millions)
Category FY 2025-26
Projected
Revenues $351.0
Expenditures ($344.6)
Net Surplus/(Use) $6.4
Ending Reserve $144.6
Reserve %* 41.0%
*Council Reserve Policy is a minimum of 25% with a target of 35% of budgeted expenditures.
As reflected in the reserve percentage, the City remains in a stable financial position, supported by strong first and second quarter FY 2025-26 revenues and a healthy General Fund reserve balance. However, the long-term forecast shows a structural imbalance over the next five fiscal years, with expenditures projected to outpace revenues. Without corrective action, this growing gap is unsustainable and will ultimately affect the City’s ability to maintain essential services for the Glendale community. While reserves can temporarily offset the imbalance, relying on them is not a viable long-term strategy. Continued reserve depletion would reduce the City’s capacity to respond to emergencies, absorb economic shocks, and sustain critical programs and services.
The City is in the process of developing the proposed FY 2026-27 budget, working closely with consultants and departments to update revenue assumptions and identify additional budget reductions. As this work progresses, the General Fund Five-Year Forecast will be updated in the coming weeks and presented as part of the first Budget Study Session.
General Fund Forecast
Based on the most current internal and external information, the General Fund Five-Year Forecast has been updated. The major revenue and expenditure assumptions updated include:
Major Forecast Assumption
Updates
In Q1
Forecast
In Q2
Forecast
Financial
Impact Notes
Revenues
Sale of underutilized property $0 $2.4 million $2.4 million One-time in FY26-27 Emergency Medical Response
Fees $13.6 million $15.7 million $2.1 million Recurring annually Landfill Host Fees $5.7 million $5.0 million ($0.7 million) Recurring annually until closure
Revenue Collection Rate 100% 100% $0 Critical Strategy
Expenditures
Reducing Liability Insurance Rate 8.5% 8.0% $0.8 million Recurring annually Reducing Workers Comp Rate 2.7% (10.75%) $2.9 million Recurring annually FY 2026-27 Reductions 0% 2.25% $6.8 million Recurring annually FY 2027-28 Reductions 0% 2.0% $0 Critical strategy
Budget Utilization Rate 98% 98% $0 Critical strategy
Total $14.3 million
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In addition to the above major assumption updates, there are other minor assumption changes made to the General Fund forecast which further improved General Fund’s financial outlook. After applying the updated assumptions, the following table provides a summary of the General Fund Forecast for the next five fiscal years.
General Fund Five-Year Forecast
(In Millions)
Projected
25-26
Projected
26-27
Projected
27-28
Projected
28-29
Projected
29-30
Resources $351.0 $349.1 $358.9 $364.6 $370.4
Expenditures 344.6 359.8 364.7 374.6 382.5
Change in Fund Balance 6.4 (10.7) (5.8) (10.0) (12.1)
Ending Reserve $144.6 $133.9 $128.1 $118.1 $106.0
% Reserve* 41.0% 36.5% 34.4% 30.9% 27.1%
*Council Reserve Policy is a minimum of 25% with a target of 35% of budgeted expenditures.
While the structural imbalance still exists, if the City can implement all the financial strategies included in the forecasting model, the City is expected to maintain the General Fund Reserve above 25% and remain in compliance with the City’s reserve policy within the next five fiscal years.
Community Services & Parks Adjustment
The Los Angeles Dodgers donated $10,000 to the Community Services & Parks Department for its Senior Services Program. The Community Services and Parks Department is respectfully requesting a resolution of appropriation from this revenue to expend the funding and enhance services.
STAKEHOLDERS/OUTREACH
Not Applicable
FISCAL IMPACT
The donation from the Los Angeles Dodgers in the amount of $10,000 was not included as a part of the FY 2025-26 budget. Therefore, staff are requesting a resolution of appropriation from revenue. The appropriation request is outlined as follows:
Requesting Appropriation
Amount From (Account String) To (Account String) Funding Source $2,000 38500-1010-CSP-3107-
P5471
43110-1010-CSP-3107-
P5471
General Fund
$4,000 38500-1010-CSP-3107-
P5471
45682-1010-CSP-3107-
P5471
General Fund
$4,000 38500-1010-CSP-3107-
P5471
45350-1010-CSP-3107-
P5471
General Fund
Department Cost Center Program
CSP Human Services
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ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is considered a ministerial activity and therefore, not subject to CEQA review.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: Do not approve the resolution of appropriation.
Alternative 2: Consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Jack Liang, Director of Finance
Prepared by:
Karina Cervantes, Budget Manager
Linda Moossaian, Revenue Manager
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
Not Applicable