City of Pacifica
Fiscal Year 2021‐22
SecondQuarter Financial Report
1 OVERVIEW
This Second Quarter Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 2021 through December 2021. The City of Pacifica has completed the second quarter of the Fiscal Year 2021‐22.
The Second Quarter Financial Report will summarize the
City’s General Fund, and is not meant to be inclusive of all finance and accounting transactions. The intent of this report is to provide the Council and the public a broad overview of the City’s fiscal condition, as the General Fund is the primary operating fund of the City and is used to account for most operational activities. The information presented in this report is unaudited and additional
adjustments may occur during the year-end process.
GENERAL FUND
General Fund Financial Condition: With half of the year complete, General Fund Expenditures are at 51% of
projections, and revenues are at 53%. These figures exclude budgeted once-a-year operating and capital transfers.
Revenue exceeded expenditures for the second quarter as revenues are typically more during the second quarter due to the timing of certain key revenues such as property tax, franchise fees, and sales tax. This year’s outlook is more optimistic compared to the prior year when the City
collected 25.35% of budgeted revenues at the end of the Q2.
Both expenditures and revenues are explained in more
detail below. The 25% increase in revenues over the second quarter from the prior year is due to the receipt of ARPA funds in July, 2021.
*Excludes operating and capital transfers
The General Fund Balance as of December 31, 2021 is
$17.7 million. This is based on the unaudited fund balance as of the end of fiscal year 2020-21, excluding transfers and factoring in year‐to‐date revenue, expenditure, and
encumbrance activity.
Expenditures. Departmental operating expenditures are
on target at the end of the second quarter and include
outstanding purchase orders/encumbrances. The Planning
& Building department show slightly lower expenditures
compared to the budget in salaries and benefits category due to vacancies and timing of payments for contractual services. The General Government, Public Works, and
PB&R Departments are on target with their budget. Police and Fire Departments costs are slightly ahead of budget as a result of overtime costs exceeding budet. Nondepartmental is also slightly ahead of budget, due to certain costs being spend at the beginning of the year, but are expected to be under budget by the end of the year.
All departments have an increase from the same quarter
in prior year, which are mostly attributed to increases in salaries and benefits as per new MOU provisions and
timing of filling vacancies. The following chart summarizes year‐to‐date combined expenditures and encumbrances
by department as of the second quarter:
Revenues: The following is a summary of revenues as of
General Fund
the end of the second quarter:
Qtr 2
FY2020-21
Qtr 2
FY2021-22
FY2021-22
Budget
% Change
Q1 FY21
vs
Q1 FY22
Qtr 2
% Budget
Revenues 16,870,993 21,030,762 39,720,145 25% 53%
Expenditures 16,167,688 19,632,438 38,308,363 21% 51%
General Fund Expenditures
by Department
Qtr 2
FY2020-21
Qtr 2
FY2021-22
FY2021-22
Budget
% Change
Q2 FY21
vs
Q2 FY22
Qtr 2
% Budget
Expende
d
General Government 2,160,994 2,911,327 6,188,551 35% 47% Police Department 5,100,021 5,726,439 10,611,060 12% 54% Fire Department 3,425,278 4,421,139 7,101,477 29% 62%
Planning & Building 1,006,590 1,233,762 3,832,577 23% 32% Public Works 1,959,146 2,128,171 4,673,066 9% 46%
PB&R 2,042,248 2,437,409 4,861,545 19% 50%
Non-Departmental 473,411 774,191 1,040,087 64% 74%
Total General Fund
Expenditures 16,167,688 19,632,438 38,308,363 21% 51%
General Fund
Revenues by Type
Qtr 2
FY2020-21
Qtr 2
FY2021-22
FY2021-22
Budget
% Change
Q2 FY21
vs
Q2 FY22
Qtr 2
% Budget
Received
Property Tax 6,941,803 7,218,878 13,924,864 4% 52%
Sales Tax 884,213 896,647 2,559,413 1% 35%
Transient Occupancy Tax 543,990 565,075 1,750,423 4% 32% Other Taxes 2,062,842 2,068,359 5,454,306 0% 38%
Department/Program 4,160,175 4,909,002 10,179,827 18% 48% Grants 1,087,967 5,284,800 5,763,312 386% 92%
ERAF 1,190,004 88,000 88,000 -93% 100%
Total General Fund
Revenues 16,870,993 21,030,762 39,720,145 25% 53%
City of Pacifica
Fiscal Year 2021‐22
SecondQuarter Financial Report
Property Tax: Property Tax is the City’s largest revenue source. The first installment of the Property Tax payment was remitted to the City by the County of San Mateo in
December 2021. The City has received roughly 52% of the budgeted Property Tax revenue through December 31,
2022.
Sales Tax: As of December 31, 2021, the City has received about 35% of our budgeted Sales Tax revenues. There is a two month lag on the receipt of sales tax revenues and so the 35% only represents four months of allocation. The
Sales Tax revenue is only 1% higher than prior year second quarter showing the City’s slow recovery from the effects of COVID.
Transient Occupancy Taxes (TOT): TOT revenues are
remitted approximately 30 days after the end of each
month, and revenues are not accrued at quarter‐end (as
they are at the end of the fiscal year), the second quarter reflects the months of July to November of TOT receipts.
The TOT revenues show a growth of 4% compared to the
second quarter of the prior year as hotels continue to
rebound from COVID pandemic but the overall decline in
occupancy rates of business and international travelers may still cause a lag in the hotel industry compared to the pre-COVID level.
Other Taxes: These include franchise tax, business license, utility users tax, ½ cent public safety sales tax and cannabis operations tax. Payments for most of these taxes are
remitted 30 days after the end of the month. As such, only 38% of the budget has been received as of December 31,
2021, representing only five months of the reporting
quarter. The total revenue received is the same as the
second quarter of prior year.
Department/Programs: These include building permits,
engineering and planning fees, charges related to Parks, Beaches & Recreation programs and rentals. The City
received 48% of budget at the end of the second quarter.
Permits and planning fees tend to fluctuate based on the timing of projects, but the overall budget appears to be on track.
Grants: These include Police and all COVID-19 related
grants. The increase in grant revenues represents the
$4.6 million American Rescue Plan Act allocation from
the State which was conservatively budgeted at $4.2
million based on the initial estimate. Last fiscal year’s second quarter revenue were from the CARES Act
funding.
Excess ERAF: Although, the overall projection for the
Excess Educational Revenue Augmentation Fund (ERAF)
revenue of $2.5 million is consistent with the prior
allocations, the FY 2021-22 General Fund Budget only
included $88,000 of it to fund the community grant
program to local non-profit organizations as previously directed by the Council. The $1.5 million were allocated towards the Civic Center CIP and the remainder of $0.9
million was budgeted in the Disaster Recovery Fund,
which explains the budget variance over the prior year.
Based on the second quarter’s distribution, the Excess
ERAF allocation exceeded the Budget, however all
additional funds in excess of the budget have been
allocated to the Disaster Recovery fund per City policy.
SUMMARY
Overall, staff is pleased to report that the FY2021-22
Budget appears to be on track with revenues and
expenditures performing as expected. The City’s
operating expenditures are at 51% of the budget at the
end of the second quarter. The slight increase in
expenditures from prior year quarter is mainly
attributable to salaries and benefits, including overtime.
These are only preliminary numbers as additional
booking entries may occur throughout the year and
during the fiscal year-end that may modify some figures presented in this report. However, overall it is
encouraging that the budget appears to be on target at
the end of the second quarter. Staff will use the data in this report for more in-depth FY2020-21 mid-year budget review analysis that is currently underway and is
scheduled to be presented to City Council in March.
2