M CITY OF GROVER BEACH CITY COUNCIL STAFF REPORT
Agenda Item No. 6
Placement: Consent
Meeting Date: October 14, 2025
TO: Honorable Mayor and City Council DATE: October 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: FY 2024-25 Year-End Financial Review
RECOMMENDATION
Receive a report on the FY 2024-25 Year-End Financial Review.
BACKGROUND
On June 23, 2025, the City Council adopted the FY 2025-27 budget. Since then, staff has conducted an initial review of the year-end financial results of FY 2024-25 to provide a summary to the Council prior to the completion of the City’s annual audit done by outside auditors and brought to the Council in January 2026.The following summary represents this initial review, subject to change, with the upcoming audit process.
General Fund
The General Fund is the City’s primary fund and includes general City services such as police, planning and building, fire protection, emergency medical services, general administration, and allocations to the Capital Improvement Plan. The General Fund is also where property tax, sales tax, and other general revenues are collected. Table 1 below shows the budget for FY 2024-25 compared with the midyear projections and unaudited year-end actuals.
Table 1: General Fund
FY2024-25 FY2024-25 FY2024-25
Budget Midyear
Projection
Unaudited
Actual
Beginning Reserves 5,381,506 5,381,506 5,381,506
Revenues
Revenue/Transfers In 18,153,415 18,172,000 21,644,619
Expenditures
Operating Costs/Transfers Out 18,107,000 17,948,000 21,550,212 Annual Surplus 46,415 224,000 94,407
Ending Reserves 5,427,921 5,605,506 5,475,913
FY 2024-25 actual revenues are higher than projected amounts during the midyear budget review due primarily to grant funding reimbursement for the West Grand Avenue streetscape project as well as higher revenues from property taxes and service charges. Total expenditures for FY 2024- Staff Report: FY 2024-2025 Year End Financial Report Page 2 October 14, 2025
25 are projected at $21.3 million due to higher expenditures primarily driven by planned capital transfers to cover costs also related to the West Grand Avenue streetscape project along with higher than budgeted expenses for overtime and other personnel expenses.
That said, the City is estimated to end the year with a surplus of nearly $100,000 which despite being lower than the midyear projection is still twice the size of the estimated surplus in the adopted budget. Staff anticipates the City to end FY 2024-25 with reserves of approximately $5.5 million or 31% of operating expenses in excess of the 25% reserve policy. Staff will return to the Council with additional information about the City’s current year financial condition in November 2025 and in February 2026 as part of the FY 2025-26 first quarter and mid-year review respectively. The Annual Comprehensive Financial Report audit for FY 2024-25 prepared by the outside auditor will be brought to Council for approval in January 2026.
Staff would note that the FY 2025-26 adopted budget included a carryover of a total of $1,186,000 of unexpended funding from FY 2024-25. This is comprised of the previously allocated funding for the North 4th Street repair project ($1,171,000) as well as $15,000 in previously allocated funding for the West Grand Block Party ($10,000) and for promotion by the Grover Beach Community Foundation for the Ramona Garden Park Rehabilitation Project donation program ($5,000).
Water Fund
The Water Fund is responsible for the maintenance and operation of City’s water system including water lines, tanks, and wells. The Water Fund is estimated to end FY 2024-25 with a deficit of $231,009 which will produce ending reserves to $3.8 million. The higher actual revenue is due to a one-time payment from Pismo Beach to reimburse the City for its cost of property acquisition for the Central Coast Blue recycled water facility. As noted in prior reports to the Council, the current water rate structure adopted in 2021 is insufficient to support increased operations and maintenance costs or needed capital improvements to the City’s water system. The current rate structure expires on June 30, 2026 and no additional rate increases can be implemented without a Proposition 218 process for a new rate structure.
Table 2: Water Fund
FY 2024-25 FY 2024-25 Difference
Budget
Unaudited
Actual
Beginning Reserves 4,047,221 4,047,221
Revenue Total 4,277,560 5,077,549 799,989
Expense Total 5,196,088 5,308,558 112,470
Surplus/(Deficit) (918,528) (231,009) 687,519
Ending Reserves 3,128,693 3,816,212
Wastewater Fund
The Wastewater Fund is responsible for the City’s maintenance and operation of wastewater lines within the City as well as funds collected and forwarded to the South San Luis Obispo County Sanitation District for wastewater treatment. The Wastewater Fund is estimated to end the year with a deficit of $657,730 which will produce ending reserves of $3 million. Wastewater revenues are lower than budgeted by $135,457 and owing to the repeal of the wastewater rate structure adopted in 2023 as a result of the passage of Measure G-24. However, the subsequent approval of the new rate structure in June 2025 will provide sufficient revenues for wastewater services, capital projects including debt service costs, and prudent reserves in FY 2025-26.
Staff Report: FY 2024-2025 Year End Financial Report Page 3 October 14, 2025
Multi-Year Goals
☐ Public Safety and Community Services ☐ Economic Development and Housing ☐ Community Infrastructure ☒ Financial and Organization Sustainability Council Priorities
☐ Water & Wastewater Infrastructure ☐ Community Engagement Table 3: Wastewater Fund
FY 2024-25 FY 2024-25 Difference
Budget Unaudited Actual
Beginning Reserves 3,695,467 3,695,467
Revenue Total 1,385,670 1,250,662 135,008
Expense Total 1,789,469 1,908,392 118,923
Surplus/(Deficit) (403,799) (657,730) 253,931
Ending Reserves 3,291,668 3,037,737
FISCAL IMPACT
There is no fiscal impact from receiving this report.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive a report on the FY 2024-25 Year-End Financial Review; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.