City of Pacifica
Fiscal Year 2022‐23
ThirdQuarter Financial Report
1 OVERVIEW
This Third Quarterly Financial Report is an analysis of the unaudited financial status of the City’s General Fund
from July 2022 through March 2023. The City of Pacifica has completed the Third Quarter of the Fiscal Year 2022‐
23. The Third 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 three-forths of
the year complete, General Fund Expenditures are at
67% and revenues are at 69% 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 slightly 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 and sales tax. In addition, the City has already received a budgeted $4.6m COVID-related ARPA grant funding at
the beginning of the year. 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 March 31, 2023, 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 Third Quarter. The Fire department is at 79% spent, partly due to overtime
being more than was budgeted. The Police, Public
Works and Parks Beachs & Recreation departments
expenditures are each in the range of 71% to 73%
spent. The Planning Department’s expenditures
are low due to timing of the cost-reimbursable
expenses. General Government is lower due
to vacancies and Non-Departmental are on target
with 74% spent of the Budget. The following
chart summarizes year‐to‐date combined
expenditures 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 Qtr 3
FY2021-22
Qtr 3
FY2022-23
FY2022-23
Budget
% Change
Q3 FY22 vs
Q3 FY23
Qtr 3
% Budget
Revenues 29,756,562 34,203,063 49,546,470 15% 69%
Expenditures 27,681,369 30,097,478 45,088,976 9% 67%
General Fund
Expenditures by
Department
Qtr 3
FY2021-22
Qtr 3
FY2022-23
FY2022-23
Budget
% Change
Q3 FY22 vs
Q3 FY23
Qtr 3
% Budget
General Government 4,154,751 4,755,028 7,911,434 14% 60% Police Department 8,185,883 8,381,357 11,506,318 2% 73% Fire Department 6,080,330 6,185,142 7,821,755 2% 79%
Planning & Building 1,788,015 1,847,383 5,394,439 3% 34% Public Works 3,121,456 3,526,564 4,928,514 13% 72%
PB&R 3,502,127 3,960,793 5,590,215 13% 71%
Non-Departmental 848,807 1,441,211 1,936,300 70% 74%
Total General Fund
Expenditures 27,681,369 30,097,478 45,088,976 9% 67%
General Fund
Revenues by Type
Qtr 3
FY2021-22
Qtr 3
FY2022-23
FY2022-23
Budget
% Change
Q3 FY22 vs
Q3 FY23
Qtr 3
% Budget
Property Tax 9,389,936 10,060,000 15,510,000 7% 65%
Vehicle Lic. Fees in Lieu 1,892,139 4,592,216 6,986,807 143% 66% Measure Y - - 650,000
Sales Tax 1,589,423 1,704,552 3,000,000 7% 57%
Transient Occupancy Tax 857,319 2,309,259 2,643,000 169% 87% Other Taxes 3,460,943 3,911,458 5,556,800 13% 70%
Department/Program 5,087,506 6,123,711 8,446,698 20% 72% Grants 5,752,301 5,413,867 6,665,165 -6% 81%
ERAF 1,726,995 88,000 88,000 -95% 100%
Total General Fund
Revenues 29,756,562 34,203,063 49,546,470 15% 69%
City of Pacifica
Fiscal Year 2022‐23
ThirdQuarter 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, which was a healthy 7.14% increase
from the prior year first installment. The second large installment will be in April 2023. The City has received roughly 65% of the budgeted Property Tax
revenue through March 31, 2023. Property tax was
conservatively estimated to increase by 6.4% from
the prior year so current year actual exceeds the
budgeted revenue projections.
Vehicle License Fee (VLF) in Lieu: VLF 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 is on target to receive 100% of this revenue by year end.
Measure Y: Measure Y is a ½ cent Transaction & Use
Tax that was passed by the voters in the City of
Pacifica in November 2022. The tax became effective
April 1, 2023. The City is not expected to start receiving remittances of these revenues from the State until late summer, 2023.
Sales Tax: As of March 31, 2023, the City has
received 57% of its budgeted Sales Tax revenues. There
is a two-month lag on the receipt of sales tax
revenues, so the 57% only represents seven
months of allocation consistent with the prior year
and is 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 Third Quarter reflects the TOT receipts for the months of July through February. 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.
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 70% of the Budget has been received
as of March 31, 2023. Utility Users Tax is the largest
revenue source in the Other Taxes category with a
budget of $2.4 million and 76% collected as of
March 2023. Franchise Tax is the second largest
source with a $1.7 million budget, but is only 48%
a longer collection delay and PG&E paying once a
year in June. Franchise revenues are right on target.
Department/Programs: These include
building permits, engineering, and planning fees,
fees related to Parks, Beaches & Recreation
programs, and rentals. As of March 31, 2023, the
City received 72% 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 60% of the budget, but
planning related fees are only 23% of the budget
due to the timing of the cost recovery process and
due to less than expected cost recovery activity.
Grants: The grant revenues primarily represent
the $4.6 million American Rescue Plan Act
allocation from the State. Grants also includes police
and PB&R grants.
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. The
City’s operating expenditures are at 67% of the
Budget at the end of the Third Quarter. It is also
important to understand that these are only
preliminary numbers as additional booking entries
may occur throughout the year and during the
fiscal year-end. However, it is encouraging that the
budget appears to be on target at the end of the
Third Quarter.