CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
8/8/2022
1 SUBJECT:
Quarterly Financial Report for the quarter ending March 31, 2022.
RECOMMENDED ACTION:
Review and accept the Quarterly Financial Report for the quarter ending March 31, 2022.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 738-7402
[email protected]
BACKGROUND/DISCUSSION:
Fiscal Sustainability remains one of the City Council Strategic Goals, which includes planning for and implementing long-term financial health and stability. A key component of this goal includes preparing a quarterly financial report that would provide readers with an executive summary of the City’s current economic conditions related to the annual operating budget.
Staff is pleased to implement the new financial reporting practice on a quarterly basis that started last fiscal year to ensure accountability and transparency in managing public funds. This work is especially meaningful as we are monitoring the effects of the COVID-19 pandemic on the local economy and the City’s financial health.
This report reflects the financial results for the 3rd Quarter of FY 2021-22. On June 28, 2021, the City Council adopted the structurally balanced FY 2021-22 Budget that included the revenue assumptions going into the second year of the COVID-19 pandemic. However, as the COVID situation is still uncertain, it is remains critical to continue monitoring the City’s financial position at the end of each quarter.
Finance staff has completed the third quarter of the Fiscal Year 2021-22. The Third Quarter Financial Report summarizes the City’s General Fund and is not meant to be inclusive of all finance and accounting transactions. This report intends to provide the Council and the public with 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.
This report provides an update on the financial status of the City’s General Fund by outlining the revenues and expenditures for the quarter ending March 31, 2022.
General Fund is the City’s primary operating fund and is used to account for day-to-day activities. It receives unrestricted revenues and provides the City’s general administrative services, law enforcement, fire, public works, parks, beaches and recreation, and community development-related activities such as planning, building, and engineering. Revenue sources include but are not limited to property tax, sales tax, transient occupancy tax (TOT), business Pacifica City Council 2
August 08, 2022
registration, and current fees for services such as parking charges, engineering, planning, and building permit fees, and recreation services.
The Third Quarter Financial Report for the City of Pacifica provides the financial status update of the City’s General Fund by outlining the revenues and expenditures as of March 31, 2022.
The Financial Report is prepared on a cash basis; therefore, only the revenue received by March 31, 2022, is reflected in the analysis. Likewise, expenditures are recorded when paid using the cash basis method of accounting.
With the completion of the Third Quarter, General Fund Revenues were at $31.7 million (80% of budget), and Expenditures were $27.7 million (74% of budget).
General Fund Operating expenditures are on target at the end of the Third Quarter, although total expenditures increased over the Third Quarter of the prior year. This is primarily due to higher salaries and benefits related to implementation of new MOU provisions and timing of filling vacancies. However, some departmental expenditures are slightly lower than prior year third quarter, mainly due to the timing of payments for goods and services and lower personnel cost due to the timing of filling vacancies in those departments.
Overall, the FY2021-22 Budget appears to be on track with revenues and expenditures performing as expected. The City’s operating expenditures are at 74% of the budget at the end of the Third Quarter. The slight increase in expenditures from prior year quarter is mainly attributable to salaries and benefits, including public safety staff 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 Third Quarter.
ALTERNATIVE ACTION:
There is no reasonable alternative to this informational item, as not accepting the 3rd Quarter Financial Report will not change the City’s financial condition as of the end of the quarter ending March 31, 2022.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
This item furthers the City’s efforts toward Fiscal Sustainability.
FISCAL IMPACT:
There is no fiscal impact associated with the Council’s acceptance of this report.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Q3 21-22 Quarterly Financial Report - Attachment 1(PDF)