Agenda Item
City Council
Item #: 9.1. 1/28/2025 File #: 24-0688
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
Fiscal Year 2023-24 General Fund Report.
2. SUMMARY
Fiscal Year 2023-24 annual audit is near completion and the Annual Comprehensive Financial Report is being prepared. Staff are prepared to report on the unaudited actuals, focusing on the General Fund.
3. RECOMMENDED ACTION
1. Receive and file the Fiscal Year 2023-24 Year-end Financial Report, focusing on the General Fund.
2. Approve the Purchase Orders carryover requests and continuing appropriations for all funds.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability Objective 2.9: Create a fiscal sustainability plan
6. DISCUSSION AND BACKGROUND
The Fiscal Year 2023-24 (FY24) Budget was adopted on June 27, 2023 with an adopted General Fund revenue of $135.8 million and expenditure of $139.3 million. The projected catastrophic reserve and undesignated fund balance on June 30, 2024 was $23.6 million and $390,549, respectively. The City’sannual audit started on November 18, 2024 and the field work was completed on December 18, 2024. While the Annual Comprehensive Financial Report (ACFR) is being finalized, staff has prepared the unaudited actuals, focusing on the General Fund. Staff will return in February with the ACFR and audited actuals for all funds.
The FY24 General Fund revenue of over $146.6 million, including transfers and one-time revenues, outpaced the FY24 budget by $4.8 million or 3.4%. Over $3.3 million or 70% of the increase is attributed to interest earnings from investments. The other significant increases are Revenue from Other Agencies of $1 million and Fee for Services of almost $1.3 million.
Compared to Fiscal Year 2022-23 (FY23), the General Fund total revenue, including transfers in, increased by $7.7 million or 5.6%. The total operating revenues, excluding transfers, increased by City of Orange Printed on 1/23/2025Page 1 of 5
powered by Legistar™
Item #: 9.1. 1/28/2025 File #: 24-0688
increased by $7.7 million or 5.6%. The total operating revenues, excluding transfers, increased by $7.1 million or 5.2%. The three largest increases from FY23 were Use of Money and Property at $2.4 million, Revenue from Other Agencies at $2.4 million, and Property Tax at $1.8 million. · Revenues in the Use of Money and Property category increased by about $2.4 million or 104% compared to the FY23 actuals. This is attributed to a higher gain in investments than the prior year.
· Revenue from Other Agencies increased by $2.3 million or 188% compared to the FY23 actuals, mostly due to higher receipt of various state and county grants. · Property tax increased by approximately $1.8 million or 3.4% compared to the FY 23 actuals.
Most of this increase is from the 2% CPI increase and property tax transfers.
Table 1: FY24 Unaudited General Fund - Revenue
FY23 Actual FY 24 Budget FY 24 Actual %
Received
%
Change
from
FY23
Property Tax $52,761,607 $55,024,850 $54,579,940 99.2% 3.4% Sales Tax 50,110,935 50,438,051 50,610,366 100.3 1.0
Transient
Occupancy Tax
(TOT)
6,080,399 5,350,300 6,092,658 113.9 0.2
Franchise 2,622,044 2,852,060 2,981,298 104.5 13.7
License & Permit 6,983,399 7,064,011 7,206,692 102.0 3.2 Fine & Forfeiture 2,008,770 2,023,320 1,747,538 86.4 -13.0 Use of Money &
Property
2,344,767 1,466,894 4,794,620 326.9 104.5
Revenue from
Other Agencies
1,235,990 2,615,923 3,570,197 136.5 188.9
Fee for Services 6,491,550 5,590,496 6,851,807 122.6 5.5 Miscellaneous
Revenue
2,779,559 1,820,336 1,958,560 107.6 -29.5
Internal Service
Charges
3,526,228 3,635,631 3,635,631 100.0 3.1
Total Operating
Revenues
136,945,248 137,881,872 144,029,307 104.5 5.2
Transfers in 2,000,000 3,992,330 2,629,162 65.9 31.5
Total Revenues $138,945,248 $141,874,202 $146,658,469 103.4% 5.6% The FY24 General Fund expenditure is $144 million, leaving an unspent budget of $1.5 million or 1%.
Almost $1.4 million of the unspent budget is the budgeted amount for catastrophic reserve. The true unspent budget is $137,270. Salaries and benefits exceeded the budget by almost $3.4 million. This City of Orange Printed on 1/23/2025Page 2 of 5
powered by Legistar™
Item #: 9.1. 1/28/2025 File #: 24-0688
unspent budget is $137,270. Salaries and benefits exceeded the budget by almost $3.4 million. This is due to the vacancy rate of $4.1 million that was built into the budget as a budget balancing measure. The two large unspent budgets are in contractual services and material and supplies for $1.3 million and $640,000, respectively. However, it is important to note that some of the unspent budget has been committed or restricted and will need to be carried over to Fiscal Year 2024-25 (FY25).
When comparing the General Fund expenditure to FY23, total expenditure, including transfers out, decreased by $17.5 million or -10.9%. The decrease is from the one-time transfer out of over $23 million in FY23 to restore fund balances in the Capital Project Fund and Internal Service Funds. The overall operating expenditure increased by $5.7 million or 4.1%. Most of the increase is in salaries and benefits, increasing by $6.5 million or 6.9%, and contractual services increasing by $923,000 or
6.3%. The increases are offset by the decrease in miscellaneous expenditure of -$2.8 million or -91% from the prior year.
Table 2: FY24 Unaudited General Fund - Expenditure
FY23 Actual FY24 Budget FY24 Actual % Spent %
Change
from
FY23
Salaries &
Benefits
$93,878,356 $97,024,998 $100,385,131 103.5% 6.9%
Contractual
Services
14,623,181 17,868,125 15,545,853 87.6 6.3
Materials &
Supplies
2,590,240 2,868,141 2,227,988 77.7 -14.0
Capital Outlay 501,255 552,441 135,064 29.8 -73.1
Miscellaneous
Expenses
3,122,854 365,700 282,313 77.2 -91.0
Debt Services 1,908,256 1,713,000 1,711,460 99.9 -10.3
Internal Service
Costs
21,566,017 23,668,706 23,636,031 99.9 9.6
Total Operating
Expenditures
138,190,159 144,061,110 143,923,841 99.9 4.1
Transfers Out 23,276,946 1,363,261 - 0.0 -100.0
Total
Expenditures
$161,467,104 $145,424,391 $143,923,841 99.1% -10.9
At the end of FY24, the General Fund has almost $2.3 million in unspent purchase orders, however the purchase order carryover request is $877,565 or 38% of the unspent balance for ongoing projects and commitments (Attachment A). Staff is also requesting a continuing appropriation of $1,144,345 for General Fund purposes such as grants and donations that were received in FY24 but have not been spent (Attachment B).
At the end of FY24, the General Fund had an operating surplus of just over $234,000, revenue at City of Orange Printed on 1/23/2025Page 3 of 5
powered by Legistar™
Item #: 9.1. 1/28/2025 File #: 24-0688
At the end of FY24, the General Fund had an operating surplus of just over $234,000, revenue at $144 million and expenditure of $143.9 million, excluding one-time revenue. There was a one-time transfer of $2.5 million from the CIP Fund to the General Fund. On June 30, 2024, the total General Fund ending fund balance is almost $27 million, including reserves. After applying the 16.6% catastrophic reserve of $23.9 million and carryover of just over $2.0 million, the undesignated reserve on June 30, 2024 is just under $1.1 million. It is important to note that the City would have closed with a deficit of $1.45 million and would need to borrow from the catastrophic reserve if the one-time transfer of $2.5 million from the CIP Fund had not occurred.
Table 3: FY24 Unaudited General Fund - Fund Balance
Budget Actual Variance to
Budget
Beginning Fund Balance $24,228,416 $24,228,416
Operating Revenues 137,881,872 144,029,307 6,147,435
Transfers in 1,492,330 129,162 -1,363,168
Total Revenues 139,374,202 144,158,469 4,784,267
Operating Expenditures 144,061,110 143,923,841 -137,269 Transfers out 1,363,281 - -1,363,281
Total Expenditures 145,424,391 143,923,841 -1,500,550
Surplus/(Deficit) -6,050,189 234,628 -6,284,817
One-time Transfer in (CIP Fund) 2,500,000 2,500,000 -
Total One-time Revenues 2,500,000 2,500,000 -
Total Fund Balance at 6/30/24 20,678,227 26,963,044 6,284,817 Catastrophic Reserve at 6/30/24 23,914,144 23,891,358 -22,786 Carryover to FY25 - 2,021,910 2,021,910
Ending Undesignated Fund Balance -$3,235,917 $1,049,776 $4,285,693 In closing, the minimum reserve is short of the City Council 30% minimum designated reserve for all funds by over $6.7 million. Any available undesignated fund balance should be used to cover the shortfall of the 30% minimum designated reserve. Staff will return in February with the FY24 audit results and a report of the audited actuals for all funds.
Table 4: FY24 Discretionary Reserves
Fund Defined Minimum Minimum Reserve
Amount
General Fund (100) 16.6% of GF Expenditure $23,891,358
Building Records Management
Fund (110)
None -
Capital Projects Fund (500) Avg. of 5-year CIP 4,330,360 Equipment Replacement Fund
(720)
Avg. 3-year Prior Actuals 1,895,054
Worker’s Compensation Self-
Insurance Fund (730)
150% Avg. 3-year Prior Claims
Paid
4,594,299
General Liability Self-Insurance
Fund (740)
150% 3-year Prior Claims Paid 694,284
Employee Accrued
Liability/Pension Stabilization
Fund (760)
None -
Computer Replacement Fund
(790)
Avg. 3-year Prior Actuals 1,030,258
Total $36,435,613
Minimum Designated Reserve
Policy
30% of GF Expenditure $43,177,152
Excess/(Deficit) Fund
Balance
-6,741,539
City of Orange Printed on 1/23/2025Page 4 of 5
powered by Legistar™
Item #: 9.1. 1/28/2025 File #: 24-0688
Fund Defined Minimum Minimum Reserve
Amount
General Fund (100) 16.6% of GF Expenditure $23,891,358
Building Records Management
Fund (110)
None -
Capital Projects Fund (500) Avg. of 5-year CIP 4,330,360 Equipment Replacement Fund
(720)
Avg. 3-year Prior Actuals 1,895,054
Worker’s Compensation Self-
Insurance Fund (730)
150% Avg. 3-year Prior Claims
Paid
4,594,299
General Liability Self-Insurance
Fund (740)
150% 3-year Prior Claims Paid 694,284
Employee Accrued
Liability/Pension Stabilization
Fund (760)
None -
Computer Replacement Fund
(790)
Avg. 3-year Prior Actuals 1,030,258
Total $36,435,613
Minimum Designated Reserve
Policy
30% of GF Expenditure $43,177,152
Excess/(Deficit) Fund
Balance
-6,741,539
7. ATTACHMENTS
· Purchase Order Carryover Listing
· Continuing Appropriation Listing
City of Orange Printed on 1/23/2025Page 5 of 5
powered by Legistar™