CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
12/12/2022
1 SUBJECT:
Quarterly Financial Report for the Quarter ending September 30, 2022.
RECOMMENDED ACTION:
Review and accept the Quarterly Financial Report for the Quarter ending September 30, 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 implemented a 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 monitor post COVID-19 pandemic recovery of the local economy and the City’s financial health.
On June 27, 2022, the City Council adopted the structurally balanced FY 2022-23 Budget that included the revenue assumptions post-COVID-19 pandemic. Finance staff has completed the first Quarter of the Fiscal Year 2022-23, and this report reflects the financial results for the Quarter.
The First 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 operations and fiscal condition. 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 September 30, 2022.
The 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 registration, and current fees for services such as parking charges, engineering, planning, building permit fees, and recreation services.
Pacifica City Council 2
December 12, 2022
The First 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 September 30, 2022.
The Financial Report is prepared on a cash basis; therefore, only the revenue received by September 30, 2022, is reflected in the analysis. Likewise, expenditures are recorded when paid using the cash basis method of accounting.
With the completion of the First Quarter, General Fund Revenues were $7.4 million (16% of budget), and Expenditures were $7.5 million (17% of budget). Expenditures of most municipalities typically exceed revenue during the first Quarter of any given fiscal year. This is primarily due to the majority of tax payments being remitted in the second and fourth quarters.
The County of San Mateo will remit property tax payments, the City’s largest source of revenue, in the second and fourth quarters of the fiscal year. Subsequent reports should provide a clearer picture of how the City’s General Fund revenue sources perform relative to budgeted figures.
General Fund Operating expenditures are on target at the end of the first Quarter. The General Government, Police, Fire, and Non-Departmental Departments show lower expenditures in salaries and benefits category due to vacancies and timing of payments for contractual services.
Additional year-end entries related to cost-reimbursable transactions will likely occur during the year-end process. The Planning, Public Works, and PB&R Departments are on target with the budget.
Overall, staff is pleased to report that the FY 2022-23 Budget is on track with revenues and expenditures performing as expected, validating the assumptions made by staff at the budget adoption. However, it is important to note that these are only preliminary numbers, as additional booking entries may occur throughout the year and during the fiscal year-end that may modify some of the First Quarter figures. Staff will continue monitoring the City’s economic conditions and report to City Council throughout the future, reporting any new information as it becomes available to ensure that the overall budget remains on target and to better prepare for the new budget cycle.
ALTERNATIVE ACTION:
There is no reasonable alternative to this informational item, as not accepting the First Quarter Financial Report will not change the City’s financial condition as of the end of the Quarter ending September 30, 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:
Pacifica City Council 3
December 12, 2022
Attachment 1 – Treasurer's Report 09-30-22(PDF)
Attachment 2 – City of Pacifica Glossary of Cash and Investment Terms (PDF)