City of Pacifica
Fiscal Year 2022‐23
SecondQuarter Financial Report
1 OVERVIEW
This Second Quarterly Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 2022 through December 2022. The City of
Pacifica has completed the Second Quarter of the Fiscal Year 2022‐23. The Second Quarterly Financial Report will summarize 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.
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 the year
complete, General Fund Expenditures are at 48% of
projections, and revenues are at 57% of the FY2022-23
Budget. These figures exclude budgeted once-a-year
operating and capital transfers, and some routine journal entries will be posted later in the year that may change these numbers. 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 and sales tax. In addition, the City has already received a budgeted $4.6m COVID-related
ARPA grant funding. This year’s outlook is slightly better than the prior year, when the City collected 53% of
budgeted revenues at the end of Q2. Both expenditures
and revenues are explained in more detail below.
*Excludes operating and capital transfers
The General Fund Balance as of December 31, 2022, is
$19,756,470 (including net budgeted transfers in and
out). This is based on the audited fund balance as of the end of the fiscal year 2021-22, and includes budgeted
transfers and factors in year‐to‐date revenue and
expenditures.
Expenditures. Departmental operating expenditures
are on target at the end of the Second Quarter. The
Fire department is at 55% spent, partly due to
overtime being more than was budgeted. The Police,
Public Works and Parks Beachs & Recreation
departments expenditures are each at 51% spent.
Staff will conduct additional analysis to determine if a mid-year adjustment is needed for these
departments. The Planning Department’s
expenditures are low due to the delay in processing
and reconciling the cost-reimbursable expenses.
General Government and Non-Departmental are on
target with the Budget. The following chart
summarizes year‐to‐date combined expenditures by
department as of the Second Quarter:
Revenues: The following is a summary of revenues as
of the end of the Second Quarter:
General Fund Qtr 2
FY2021-22
Qtr 2
FY2022-23
FY2022-23
Budget
% Change
Q2 FY22 vs
Q2 FY23
Qtr 2
% Budget
Revenues 20,784,122 26,196,709 46,144,363 26% 57%
Expenditures 19,632,438 20,762,982 43,688,492 6% 48%
General Fund Expenditures
by Department
Qtr 2
FY2021-22
Qtr 2
FY2022-23
FY2022-23
Budget
% Change
Q2 FY22 vs
Q2 FY23
Qtr 2
% Budget
Spent
General Government 2,911,327 3,459,503 7,264,434 19% 48% Police Department 5,726,439 5,824,735 11,506,318 2% 51% Fire Department 4,421,139 4,340,754 7,821,755 -2% 55%
Planning & Building 1,233,762 1,300,619 5,394,439 5% 24% Public Works 2,128,171 2,416,058 4,755,630 14% 51%
PB&R 2,437,409 2,839,078 5,521,616 16% 51%
Non-Departmental 774,191 582,236 1,424,300 -25% 41%
Total General Fund
Expenditures 19,632,438 20,762,982 43,688,492 6% 48%
City of Pacifica
Fiscal Year 2022‐23
SecondQuarter Financial Report
2 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 2022. The City has received roughly 60% of
the budgeted Property Tax revenue through December
31, 2022. This is a healthy increase in property tax
beyond what was budgeted. Secured property tax is the
largest property tax item budgeted at $14.3 million,
assuming an increase of 6.4% from the prior year. The
first large installment in December was 7% more than
the prior yearso this item exceeds the budgeted revenue projections. Included in this category is the Vehicle
License Fee (VLF) in Lieu, which is a property tax in lieu of VLF. This revenue line includes a one time backfill
payment of $2.0 million from the state for the VLF
shortfall in FY 20-21. The City budgeted half of the
projected shortfall since it was uncertain if the State would follow through on their commitment at the time
the budget was developed.
Sales Tax: As of December 31, 2022, the City has
received 35% of its budgeted Sales Tax revenues. There
is a two-month lag on the receipt of sales tax revenues, so the 35% only represents four months of allocation
consistent with the prior year and appears to be on track with the budget.
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 TOT receipts for the months of July through November. The revenues are showing a
substantial increase compared to the prior year, given
the post-COVID recovery of the hotel industry and recent efforts by HdL, the City’s tax consultant, in identifying short-term rentals and bringing them to compliance.
Staff will further analyze this revenue category to report back to Council at Mid-Year Budget review.
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 47% of the Budget has been received as
of December 31, 2022. Utility Users Tax is the largest
revenue source in th Other Taxes category with a
budget of $1.9 million and 51% collected as of
December 2022. Franchise Tax is the second largest
source with a $1.7 million budget, but is only 26%
collected due to a longer delay in which this revenue
is collected. The larger franchisee payers, such as
PG&E, have an average of a quarter lag time, so 26%
is right on target.
Department/Programs: These include building
permits, engineering, and planning fees, fees related
to Parks, Beaches & Recreation programs, and
rentals. As of December 31, 2022, the City received
44% of the Budget, which is reasonable and can be
considered on budget with few late payments
expected to be collected in the next quarter. Permits
and planning fees tend to fluctuate based on the
timing of projects. Building permits are 61% of the
budget, but planning related fees are only 15% of the
budget due to the timing of the cost recovery process
of billing for the revenue.
Grants: These include police grants and all COVID-19-
related grants. The grant revenues primarily
represent the $4.6 million American Rescue Plan Act
allocation from the State.
Excess ERAF: (Excess Educational Revenue
Augmentation Fund). The FY 2022-23 General Fund
Budget only included $88,000 to fund the community
grant program to local non-profit organizations as
previously directed by the Council. The remainder of
the Excess ERAF Allocation is reported in the Disaster
Accounting Fund.
SUMMARY
Overall, staff is pleased to report that the FY2022-23
Budget is on track, with revenues and expenditures
performing as expected and in certain cases a little
better than expected. The City’s operating
expenditures are at 48% of the Budget at the end of
the Second Quarter. It is also important to
City of Pacifica
Fiscal Year 2022‐23
SecondQuarter Financial Report
3 understand 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 figures presented in this report. However, 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 FY 2022-23 Mid-Year
Budget Review analysis that is currently underway and is scheduled to be presented to Council in March.