City of Pacifica
Fiscal Year 2021‐22
ThirdQuarter Financial Report
1 OVERVIEW
This Third Quarter Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 2021 through March 2022. The City of Pacifica has
completed the Third Quarter of the Fiscal Year 2021‐22.
The Third 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 three-forths of the year complete, General Fund Expenditures are at 74% of
projections, and revenues are at 80%. These figures exclude budgeted once-a-year operating and capital transfers.
Revenue exceeded expenditures for the third quarter as
revenues are typically more during the third 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 64% of budgeted revenues at the end of the Q3.
Both expenditures and revenues are explained in more
detail below. The 49% increase in revenues over the third 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 March 31, 2022 is $17.7
million. This is based on the audited 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 third quarter. The Planning & Building department show 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 expenses like insurance premiums being spend at the beginning of the year, but are expected to be at or slightly 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 filling vacancies. The following chart summarizes year‐to‐date
combined expenditures and encumbrances by
department as of the third quarter:
Revenues: The following is a summary of revenues as of
the end of the third quarter:
General Fund
Revenues by Type
Qtr 3
FY2020-21
Qtr 3
FY2021-22
FY2021-22
Budget
% Change
Q3 FY21 vs
Q3 FY22
Qtr 3
% Budget
Received
Property Tax 8,066,435 11,376,736 13,924,864 41% 82%
Sales Tax 1,438,607 1,589,423 2,559,413 10% 62%
Transient Occupancy Tax 806,879 857,319 1,750,423 6% 49% Other Taxes 3,419,057 3,460,943 5,454,306 1% 63%
Department/Program 5,402,272 6,979,645 10,179,827 29% 69% Grants 1,444,754 5,752,301 5,763,312 298% 100%
ERAF 737,600 1,726,995 88,000 134% 1962%
Total General Fund
Revenues 21,315,605 31,743,362 39,720,145 49% 80%
City of Pacifica
Fiscal Year 2021‐22
ThirdQuarter 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 and the second and third installment in
January and March 2022. The City has received roughly 82% of the budgeted Property Tax revenue through March 31,
2022. The 41% change from the prior year 3rd quarter is due to certain payments being received on April 1, 2021 and recorded in the forth quarter vs. March 31, 2022 or second quarter this year. Asside from the timing of revenue being recieted, property tax has grown by 5.3% from last year.
Sales Tax: As of March 31, 2022, the City has received
about 62% of our budgeted Sales Tax revenues. There is a two month lag on the receipt of sales tax revenues and so the 62% only represents seven months of allocation. The Sales Tax revenue is about 10% higher than prior year third quarter showing the City’s 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 third quarter reflects the months of July to February of TOT receipts. The TOT revenues show a increase of 6% compared to the third 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, 63% of the budget has been received as of March 31, 2022,
representing about eight months of the reporting. The
total revenue is on a par with the prior year with only 1% more received as the third quarter.
Department/Programs: These include building permits,
engineering and planning fees, charges related to Parks, Beaches & Recreation programs and rentals. The City
received 69% of budget at the end of the third 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 reflects 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 third 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 third 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. The properjournal entries will take place at the year-end to reflect this.
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 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 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.
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