1 TO: City Council
FROM: Ryan Smoot, City Manager
PREPARED BY: Susan Kamada, Administrative Services Director MEETING DATE: March 21, 2023
SUBJECT: Fiscal Year (FY) 2022/23 Quarterly Financial Report
RECOMMENDATION
Staff recommends that the City Council receive and file the Fiscal Year (FY) 2022/23 Quarterly Financial Report Second Quarter Ending December 31, 2022.
BACKGROUND
This financial report summarizes the city’s financial position for the quarter ending December 31, 2022, for the General Fund, Water Funds, and Special Revenue Funds.
The purpose of this report is to provide City Council, City management, and the Lomita community an update on the city’s fiscal status based on the most recent financial information available.
The city operates on a biennial budget cycle. Through the budget, the City Council approves revenue estimates and authorizes city staff to expend the city’s limited financial resources. As one of the many activities that the city undertakes to help ensure its financial soundness, staff provides quarterly financial reports on the city’s budget condition.
The Second Quarter Financial Report covers financial activity through the second quarter of FY 2022/23, ending December 31, 2022.
OPTIONS:
None. Information only. Receive and file.
Item No. 7i
CITY OF LOMITA
CITY COUNCIL REPORT
2 FISCAL IMPACT
None. Information only. Receive and file.
ATTACHMENT
1. FY 2022/23 Quarterly Financial Report Second Quarter Ending December 31, 2022.
Reviewed by: Approved by:
________ ____________________________
Gary Y. Sugano Ryan Smoot
Assistant City Manager City Manager
Prepared by:
__________________________
Susan Kamada
Administrative Services Director
Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
1 2nd QUARTER ENDING DECEMBER 31, 2022
OVERVIEW
This financial report summarized the city’s financial position for the quarter ending December 31, 2022 for the General Fund, Water Funds, and Special Revenue Funds. The purpose of this report is to provide City Council, City management, and the Lomita community an update on the city’s fiscal status based on the most recent financial information available.
General Fund Summary
Through the second quarter, the General Fund is tracking as expected. The table presented in this report include budgetto-actual comparisons between the current fiscal year and the previous fiscal year to show results of the second quarter of each year compared to the adjusted budget as it stood on December 31st of each year. A year-over-year comparison is also presented to show results of the first three months of the current fiscal year as compared to the previous year. Major difference in budget-to-actual and year-over-year comparisons are explained in this report.
The city’s General Fund for the first two quarters of Fiscal Year 2022-2023, which ended December 31, 2022, are tracking as expected. General Fund revenues are up $1.3 million compared to the same period last year; this increase is due mainly to sales and use tax, building and safety fees, interest, and Prop A Exchange. Fiscal year to date expenditures, excluding transfers to other funds, are at $5 million, compared to $4.6 million last year. Details of revenue and expenditure changes from the prior year are explained later in this report.
Budgeted Fund Balance Summary
The General Fund audited fund balance as of July 1, 2022 was slightly higher than the projected beginning balance at $6,074,923 in the Fiscal Year 2021-2022 Adopted Annual Operating & Capital Improvements Budget. The projected ending fund balance for Fiscal Year 2022-2023 is $6,485,632.
Revenues
Property Tax, Sales Tax, Vehicle License Fees, Franchise Tax, and Building and Safety Fees are the city’s major tax revenues, and account for nearly 80% of total General Fund Revenues. The table below shows second quarter budget-to-actual revenues for Fiscal Years 2021-2022 and 2022-2023. The Fiscal Year 2022-2023 General Fund revenue budget is $13,851,603. Through the end of the second quarter (Q2) of Fiscal Year 2022-2023, total General Fund Revenues were at $4.9 million which is approximately $1.3 million, or 37% more than the same period last fiscal year. Current projections show that General Fund Revenues will be at $15,125,812 at the end of the fiscal year. Overall, total revenues are at 35% of budget through the second quarter of the current fiscal year, which is on par to the same period last fiscal year. Typically, revenues for the city come in in the second half of the fiscal year (January through June).
Attachment No 1
Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
2 2nd QUARTER ENDING DECEMBER 31, 2022
Six revenue sources account for over 79% of the General Fund revenue budget. Those accounts, in order of greatest to smallest, are Vehicle License Fee, Sales and Use Tax, Property Taxes, Franchise Taxes, and Building and Safety Fees. As of the end of the second quarter, these revenues are tracking closely to last fiscal year’s percentages, except for building and safety fees which is due to collection delays. Below is a comparison of prior and current fiscal year through the end of the second quarter.
2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Received
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Received
Revenues
Sales Tax $ 3,851,223 $ 1,445,088 37.5% $ 4,756,791 $ 1,633,643 34.3% Vehicle License Fee 2,500,000 - 0.0% 2,650,000 - 0.0%
Property Tax 1,864,971 818,299 43.9% 1,920,670 849,550 44.2% Other Taxes 1,505,000 600,406 39.9% 1,636,750 619,727 37.9% Licenses and Permits 878,500 192,253 21.9% 1,001,000 337,188 33.7% Fines and Forfeitures 433,000 200,133 46.2% 490,892 259,732 52.9% Intergovernmental 569,000 211,874 37.2% 420,500 896,044 213.1% Use of Money & Property 320,000 24,931 7.8% 350,000 222,827 63.7% Recreation Services 95,000 58,973 62.1% 150,000 60,151 40.1% Other Revenues 134,873 39,500 0.0% 72,500 25,976 0.0%
Transfers In 191,140 - 0.0% 402,500 - 0.0%
Total Revenues $ 12,342,707 $ 3,591,458 29.1% $ 13,851,603 $ 4,904,838 35.4% 2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Received
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Received
4629 - Vehicle License Fee $ 2,500,000 $ - 0.0% 2,650,000 $ $ - 0.0% 4210 - Sales and Use Tax 3,851,223 1,445,088 37.5% 4,756,791 1,633,643 34.3% 4125 - Property Tax 1,864,971 818,299 43.9% 1,920,670 849,550 44.2% 4270 - Franchise Tax 700,000 175,406 25.1% 720,000 215,662 30.0% 4470 - Building and Safety Fee 600,000 38,097 6.3% 650,000 145,892 22.4% Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
3 2nd QUARTER ENDING DECEMBER 31, 2022
Expenditures
The table below shows the budget-to-actual expenditures for Fiscal Years 2021-2022 and 2022-2023 by department.
General Fund expenditures appear to be tracking higher than the prior fiscal year at 41% of the budget through the end of the second quarter of the current fiscal year (50%). Current projections show that General Fund Expenditures will be at $15,125,812 at the end of the fiscal year. Overall, most departments are tracking as expected, apart from Human Resources.
For Human Resources, the expenditures are tracking slightly higher due several factors such as increases in the workers’ compensation/liability premiums, and PERS Unfunded Liability (Tiers 1-3) being paid in a lump sum at the beginning of the fiscal year; this prepayment is made every fiscal year and saves the city approximately 4% on the expenditure. 2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Expended
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Expended
Expenditures
City Attorney $ 185,000 $ 57,757 31.2% 200,000 $ $ 63,856 31.9% City Clerk 267,444 117,826 44.1% 377,249 161,395 42.8%
City Council 55,732 21,744 39.0% 56,514 27,300 48.3%
City Manager 856,238 412,468 48.2% 878,672 457,514 52.1% Community Development 971,336 351,839 36.2% 854,251 312,022 36.5% Administrative Services 573,601 276,866 48.3% 601,628 313,458 52.1% Human Resources 742,493 538,642 72.5% 869,303 568,028 65.3% Information Technology 635,005 96,510 15.2% 672,000 204,419 30.4% Public Safety 4,391,821 1,457,190 33.2% 4,730,921 1,571,830 33.2% Public Works Aministration 1,280,406 497,779 38.9% 1,260,809 559,040 44.3% Recreation & Facilities Administration 1,692,443 763,841 45.1% 1,850,255 843,957 45.6% Transfers Out 2,431,954 - 0.0% 1,500,000 - 0.0%
Total Expenditures $ 11,651,519 $ 4,592,462 39.4% 12,351,602 $ $ 5,082,818 41.2% Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
4 2nd QUARTER ENDING DECEMBER 31, 2022
Proprietary Funds – Water Operations and Water Capital Summary The Water Funds for the first two quarters of Fiscal Year 2022-2023, which ended December 31, 2022, are tracking as expected. The revenues of the Water Funds are comparable to the same period last year. Fiscal year to date expenditures, excluding transfers to other funds, are at $3.3 million, compared to $3.4 million last year. Details of revenue and expenditure changes from the prior year are explained later in this report.
Revenues
The Fiscal Year 2022-2023 revenue budget for the Water Funds are $9,967,428. Through the end of the second quarter (Q2) of Fiscal Year 2022-2023, total revenues for the Water Funds were $2.1 million which is comparable to the same period last fiscal year. Current projections show no changes to the Water Fund Revenues at the end of the fiscal year.
Overall, total revenues are at 18% of budget through the second quarter of the current fiscal year, which is comparable to the same period last fiscal year, 23% of budget. Typically, revenues for the city come in in the second half of the fiscal year (January through June).
Water Funds revenues appear to be tracking lower than expectation at 18% of the budget through the end of the second quarter of the current fiscal year (50%). Some revenues sources, such as Interest, transfers, and Grant Revenues, will not be received until later quarters.
2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Received
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Received
Revenues
Waterworks #13 Anney $ 830,000 $ 385,147 46.4% 900,000 $ $ 408,904 45.4% Permits and Fees 90,500 82,909 91.6% 136,000 32,412 23.8% Use of Money & Property 75,000 - 0.0% 25,000 - 0.0%
Intergovernmental 2,769,428 6,581 0.2% 4,220,404 2,291 0.1% Water Billing Fees 6,200,000 1,781,418 28.7% 6,386,000 1,658,287 26.0% Miscellaneous 2,500 5,959 238.4% 2,500 209 8.4%
Total Revenues $ 9,967,428 $ 2,262,015 22.7% 11,669,904 $ $ 2,102,103 18.0% Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
5 2nd QUARTER ENDING DECEMBER 31, 2022
Expenditures
The below shows the current budget-to-actual expenditures for Fiscal Years 2022-2023 and 2021-2022 by department.
Expenditures in the Water Funds appear to be tracking as expected at 25% of the budget through the end of the second quarter of the current fiscal year (50%). Current projections show that Water Fund Expenditures will increase slightly at the end of the fiscal year. Overall, most departments are tracking as expected or under expectations. Those departments that are tracking above 50% are a result of PERS Unfunded Liability (Tiers 1-3) being paid in a lump sum at the beginning of the fiscal year; these prepayments are made every fiscal year and saves the city approximately 4% on these expenditures.
2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Expended
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Expended
Expenditures
City Attorney $ 43,000 $ 6,892 16.0% 20,000 $ $ 8,259 41.3% City Clerk 56,178 29,270 52.1% 57,287 30,184 52.7%
City Council 2,668 1,435 53.8% 2,990 1,422 47.6%
City Manager 138,098 78,435 56.8% 152,241 80,462 52.9%
Administrative Services 480,700 239,281 49.8% 497,267 273,403 55.0% Human Resources 192,405 139,694 72.6% 209,158 157,031 75.1% Information Technology 83,549 40,141 48.0% 83,551 59,767 71.5% Water Maintenance 4,966,274 1,869,982 37.7% 5,203,319 1,860,194 35.8% Capital Outlay 6,779,916 817,855 12.1% 6,711,016 609,857 9.1% Debt Service 469,838 224,594 47.8% 470,008 234,502 49.9% Total Expenditures $ 13,212,626 $ 3,447,580 26.1% 13,406,837 $ $ 3,315,081 24.7% Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
6 2nd QUARTER ENDING DECEMBER 31, 2022
Special Revenue Funds Summary
The Special Revenue Funds for the first two quarters of Fiscal Year 2022-2023, which ended December 31, 2022, are tracking as expected. The revenues are up $285,496, only slightly higher compared to the same period last year; this increase is due mainly to increases in allocations. Fiscal year to date expenditures, excluding transfers to other funds, are at $1,794,123, compared to $754,883 last year.
Revenues
The Fiscal Year 2022-2023 revenue budgets for the Special Revenue Funds are $5,120,179. Through the end of the second quarter (Q2) of Fiscal Year 2022-2023, total revenues were $1,518,577 which is slightly higher than last fiscal year for the same period. Overall, total revenues are at 30% of budget through the second quarter of the current fiscal year, which is slightly higher with the same period last fiscal year, 25% of budget. The Special Revenue Funds’ revenues appear to be tracking lower than expectations at 30% of the budget through the end of the second quarter of the current fiscal year (50%).
Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
7 2nd QUARTER ENDING DECEMBER 31, 2022
2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Received
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Received
Revenues
State Gas Tax $ 1,018,130 $ 405,266 39.8% 1,019,512 $ $ 394,825 38.7% Measure R Local Return 268,159 158,446 59.1% 313,089 142,647 45.6% Measure M 297,580 179,161 60.2% 352,434 193,423 54.9%
Measuer W 225,000 - 0.0% 225,000 226,909 100.8%
Community Development Block Grant 282,326 - 0.0% 142,935 12,761 8.9% Prop A Local Return 448,976 259,339 57.8% 526,451 279,497 53.1% Prop C Local Return 374,212 211,241 56.4% 418,452 228,010 54.5% Transportation Development Act 68,661 - 0.0% 13,226 - 0.0% South Coast AQMD 27,000 6,713 24.9% 26,300 6,926 26.3%
Landscape Maintenance District #1 11,738 4,621 39.4% 11,738 4,649 39.6% Park Facilities Fee - - 0.0% 5,500 1,200 21.8%
Park Athletic 56,000 2,320 4.1% 54,500 22,932 42.1%
Park Grant 36,914 - 0.0% 272,000 - 0.0%
Lomita Manor 461,048 - 0.0% 468,542 - 0.0%
Capital Improvement 1,500 - 0.0% 1,000 - 0.0%
Street Improvement 715,000 - 0.0% 753,000 - 0.0%
Facility Improvement - - 0.0% 100,000 - 0.0%
Equipment Replacement 613,430 - 0.0% 300,500 - 0.0%
Park Equipment Replacement - - 0.0% 100,000 - 0.0%
Sewer Replacement - - 0.0% - - 0.0%
Railroad Museum Foundation 15,000 4,970 33.1% 15,000 4,799 32.0% Tom Rico Memorial 1,000 1,004 100.4% 1,000 - 0.0%
Total Revenues $ 4,921,674 $ 1,233,081 25.1% 5,120,179 $ $ 1,518,577 29.7% Fiscal Year 2022-2023 Quarterly Financial Report
2nd Quarter Ending December 31, 2022
8 2nd QUARTER ENDING DECEMBER 31, 2022
Expenditures
The below shows the current budget-to-actual expenditures for Fiscal Years 2021-2022 and 2022-2023 by department.
Expenditures in the Special Revenue Funds appear to be tracking lower than expectations at 24% of the budget through the end of the second quarter of the current fiscal year (50%). Prop A Local Return expenditures are over budget due to the Prop A Exchange with the City of Commerce. The city sold $1 million of Prop A Funds in exchange for $700,000 of unrestricted General Funds. Overall, all funds are tracking as expected. 2021-2022
Budget
12/31/2021
Actuals
% of
Budget
Expended
2022-2023
Budget
12/31/2022
Actuals
% of
Budget
Expended
Expenditures
State Gas Tax $ 1,680,419 $ 296,083 17.6% 1,336,563 $ $ 272,954 20.4% Measure R Local Return 543,018 14,964 2.8% 787,698 75,263 9.6% Measure M 511,833 10,832 2.1% 1,076,949 73,873 6.9%
Measure W 99,762 84,465 84.7% 273,000 108,884 39.9%
Community Development Block Grant 271,540 14,375 5.3% 142,935 42,148 29.5% Prop A Local Return 124,137 68,634 55.3% 395,487 1,070,326 270.6% Prop C Local Return 41,220 6,220 15.1% 100,000 10,560 10.6% Transportation Development Act 68,661 - 0.0% 13,226 7,560 57.2% South Coast AQMD 43,454 19,628 45.2% 35,000 5,000 14.3% Landscape Maintenance District #1 17,160 8,064 47.0% 23,000 4,029 17.5% Park Facilities Fee - - 0.0% - - 0.0%
Park Athletic 41,236 7,622 18.5% 51,193 16,399 32.0%
Park Grant 120,000 116,126 96.8% 250,000 - 0.0%
Lomita Manor 562,303 - 0.0% 468,542 - 0.0%
Capital Improvement 129,500 89,500 69.1% 75,000 - 0.0%
Street Improvement 625,000 12,084 1.9% 1,438,455 94,518 6.6% Facility Improvement - - 0.0% 9,000 - 0.0%
Equipment Replacement 199,000 - 0.0% 200,000 6,815 3.4% Park Equipment Replacement - - 0.0% 515,000 - 0.0%
Sewer Replacement - - 0.0% 125,000 - 0.0%
Railroad Museum Foundation 15,000 3,787 25.2% 15,000 3,795 25.3% Tom Rico Memorial 5,000 2,500 50.0% - 2,000 0.0%
Other Special Funds Total: $ 5,098,243 $ 754,883 14.8% 7,331,048 $ $ 1,794,123 24.5%