City of Pacifica
Fiscal Year 2024-2025
FirstQuarter Financial Report
1 OVERVIEW
This First Quarterly Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 2024 through September 2024. The City of Pacifica has completed the First Quarter of the Fiscal Year 2024-25. The First Quarter 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 mid-year and year-end processes.
GENERAL FUND
General Fund Financial Condition: With one quarter of the year complete, General Fund Expenditures & Transfers Out are at 20% of and General Fund Revenues & Transfers In are at 14% of the FY2024-25 Budget projections. Revenues are typically less than 25% during the first quarter due to the timing of certain key revenues such as property tax, business license taxes, franchise fees, and sales tax.
Table 1: General Fund Quarterly Summary as of September 30, 2024 The General Fund Balance as of September 30, 2024, is estimated to be $16,136,078, based on the audited fund balance of $18,740,450 as of the end of the Fiscal Year 2023-24, and factoring in year-to-date net change of - $2,605,372 in the first quarter.
Expenditures: Table 2 presents General Fund Expenditures by Department for Quarter 1 (Q1) of Fiscal Year (FY) 2023-24 and FY 2024-25, alongside the adopted budget for FY 2024-25. It also includes the percentage change in expenditures between Q1 of both fiscal years and the percentage of the budget spent in Q1 of FY 2024-25.
Table 2: General Fund Quarterly Expenditures as of September 30, 2024 General Fund Qtr 1
FY2023-24
Qtr 1
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q1 FY24 vs
Q1 FY25
Qtr 1
% Budget
Revenues $ 4,506,250 $ 6,424,272 $ 46,646,300 43% 14%
Transfer in $ 322,975 $ 355,500 $ 1,422,000 10% 25% 14% Expenditures 8,216,985 8,969,493 45,249,871 9% 20%
Transfer out 1,006,550 415,650 1,666,200 -59% 25% 20%
Net Change in Fund $ (4,394,310) $ (2,605,372) $ 1,152,229 City of Pacifica
Fiscal Year 2024-2025
FirstQuarter Financial Report
2 Total Q1 expenditures increased by 2% from $9,223,535 (FY23-24) to $9,385,143 (FY24-25). 20% of the total adopted budget ($46.9M) has been spent in Q1. This suggests spending is roughly on track if distributed evenly across the year.
Departmental operating expenditures in General Government, Police, Public Works and PBR are on target at the end of the First Quarter an align with expected spending patterns. The expenditures are slightly lower than 25% of the budget because some contractual payments were accrued back to the previous fiscal year for some July and August payments to match with the services rendering time.
Fire Department increased 19%, from $1.90M to $2.27M in Q1. 29% of the budget spent in Q1, which is high because of overtime for OES reimbursement related that will be reimbursed later in the year.
Community Development expenditures are low due to the delay in processing and timing of reconciliation of the cost reimbursable expenses and accounting entries, which is consistent with the last year’s actuals at the end of the first quarter. We are gradually truing up the projections for the planning budget.
The Non-departmental expenditures are on track with the FY2024-25 budget, but as a tradition, we do funding of the OPEB and PENSION trust in the 4th Quarter only.
The significant 59% decrease in "Transfer Out" quarter over quarter is due to the Debt Service Fund being fully funded, reducing the need for transfers from the General Fund. This essentially provides fiscal relief to the General Fund, allowing more flexibility for other expenditures, but this is only a one-time occurrence in FY 2025. The actual transfer out based on budgete is correctly at 25%.
Revenues:
Table 3: General Fund Quarterly Revenues as of September 30, 2024 General Fund
Expenditures by
Department
Qtr 1
FY2023-24
Qtr 1
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q1 FY24 vs
Q1 FY25
Qtr 1
% Budget
General Government $ 1,143,772 $ 1,169,191 $ 7,973,229 2% 15% Police Department 2,440,078 2,843,391 12,175,197 17% 23% Fire Department 1,904,475 2,267,574 7,890,064 19% 29%
Community Development 402,478 290,861 4,439,250 -28% 7% Public Works 956,307 937,317 4,827,591 -2% 19%
PB&R 1,260,740 1,322,243 6,302,690 5% 21%
Non-Departmental 109,135 138,916 1,641,850 27% 8%
Transfer Out 1,006,550 415,650 1,666,200 -59% 25%
Total General Fund
Expenditures&TransferOut $ 9,223,535 $ 9,385,143 $ 46,916,071 2% 20% City of Pacifica
Fiscal Year 2024-2025
FirstQuarter Financial Report
3 Here are the key observations and insights:
Total Q1 revenues increased by 40% from $4.83M (FY23-24) to $6.78M (FY24-25). 14% of the total annual budget ($48.07M) has been collected in Q1.
Property Tax: Property Tax is the City’s largest revenue source. The first installment of the Property Tax payment will be remitted to the City by the County of San Mateo in December 2024; The major difference between Q1 in FY2023- 24 and Q1 in FY2024-25 primarily results from less property transfer taxes received this quarter due to fewer houses sold in FY 2023-24 compared to the prior year period.
Sales Tax: As of September 30, 2024, the City has received 8% of its budgeted Sales Tax revenues. There is a two-month lag on the receipt of sales tax revenues,so the amount shown only represents one month of allocation and is consistent with the prior year.
Measure Y: As of September 30, 2024, the City has received 7% of its budgeted Measure Y Sales Tax revenues. There is a two-month lag on the receipt of sales tax revenues, so the amount shown only represents one month of allocation and is consistent with the prior year.
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 first quarter reflects the TOT receipts for the months of July and August. The revenues are on target and slightly exceed the budget as 26% of the budgeted revenues is received in the first Quarter representing only two months of remittances. This healthy trend reflects the recovery of the hospitality industry, as well as recent efforts by Hdl, the City’s tax administrator in identifying short-term rental properties and bringing them to compliance. It is important to note the seasonality of the General Fund Revenues
by Type
Qtr 1
FY2023-24
Qtr 1
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q1 FY24 vs
Q1 FY25
Qtr 1
% Budget
Property tax $ 65,639 $ 40,399 $ 16,958,000 -38% 0%
Sales Taxes 301,709 278,637 3,279,200 -8% 8%
Measure Y 109,217 181,371 2,512,000 66% 7%
Transient Occupancy Tax 702,574 760,341 2,978,000 8% 26% Franchise Tax 103,701 161,357 1,300,000 56% 12%
Business License Tax 19,693 10,138 570,000 -49% 2%
Utility Users Tax 254,494 621,288 2,800,000 144% 22%
Vehicle License Fee 681,567 1,450,027 4,621,000 113% 31% Cannabis Tax 107,875 94,381 860,000 -13% 11%
ERAF - - 145,000
Grants 22,291 651,723 2,358,000 2824% 28%
Investment Earning 287,790 230,227 953,100 -20% 24%
Department Programs 1,849,700 1,944,382 7,312,000 5% 27% Transfer In 322,975 355,500 1,422,000 10% 25%
Total General Fund
Revenues&TransferIn $ 4,829,225 $ 6,779,772 $ 48,068,300 40% 14% City of Pacifica
Fiscal Year 2024-2025
FirstQuarter Financial Report
4 TOT revenues as first quarter remittances are typically higher due to increased activity during the peak vacation season.
Others Taxes: These include Franchise tax, Business License, Utility Users Tax, Vehicle License Fees, and Cannabis Operations Tax. Payments for Franchise Tax and Utility Users Taxes are remitted 30 days after the end of the month.
Business License Tax renewal takes place on November 1 annually, as such the majority of these revenues will be recorded in the second quarter.
Vehicle License Fee (VLF) remittances are delayed due to the state budget’s processing time expected in December and April. VLF draws from two funding sources: ERAF (Educational Revenue Augmentation Fund) allocations, which non-basic aid school districts are entitled to, and, if necessary, property tax revenues of non-basic aid school districts.
Any funds used by non-basic aid school districts for VLF purposes are reimbursed by the State. This year’s large allocation in Q1 represents the two years’ backfill payment by the state. Last year’s State budget did not include the remaining backfill obligations to cities. Staff will continue monitoring this revenue category and will update the Council at mid-year budget review on any new developments with the State.
Cannabis Tax shows a slight decline in comparison to the prior year, primarily due to timing issues or market shifts.
Most September payments were not recorded in this quarter and some cannabis providers were late in submitting their August tax remittances. We will be monitoring whether the cannabis industry will be performing in line with the budget projections.
Excess ERAF: (Excess Educational Revenue Augmentation Fund). Only $145,000 of the ERAF budget is recorded in the FY 2024-25 General Fund, representing the funding for the community grant program to local non-profit organizations.
The majority of these revenues are recorded in the Disaster Accounting and Housing funds, as previously directed by the Council. These revenues are anticipated in the second and fourth quarters of the year.
Grants: 28% of the annual budget collected, indicating successful grant funding receipts that were not present in the previous year’s Q1. The child care program alone has received about $580K in Q1.
Investment Earnings: 24% of the budget collected, still relatively strong especially considering that the LAIF interest earned but not received will be in the second quarter.
Department/Programs: This category includes building permits, engineering, and planning fees, and charges related to Parks, Beaches & Recreation programs and rentals. As of September 30, 2024, the City received 27% of the budget, which is consistent performance at the end of the first quarter after the summer activities. Overall, permits and planning fees tend to fluctuate based on the timing of projects.
Transfer In: 25% of the budgeted amount transferred, indicating the quarterly transfer in from other funds for cost recovery was timely done.
SUMMARY
Overall, staff is pleased to report that the FY2024-25 budget is on track at the end of the first quarter, with revenues and expenditures performing as expected. The City’s operating expenditures are at 20% of the budget at the end of the first quarter. Due to the nature and timing of tax collection receipts, it is difficult to fully analyze revenue based on projections after the first quarter alone, but currently Revenues are at 14% of the budget at the end of the first quarter.
It is also important to understand that these are only preliminary numbers as additional booking entries may occur City of Pacifica
Fiscal Year 2024-2025
FirstQuarter Financial Report
5 throughout the year and especially during the mid-year and fiscal year-end processes that may modify some figures presented in this report.
Future reports for this fiscal year, including the mid‐year budget review, will provide a better understanding of the City’s revenue and expenditure transactions and their fiscal impact on the City. Staff will continue monitoring the City’s economic conditions and report to City Council any new information as it becomes available.