City of Pacifica
Fiscal Year 2024‐25
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 2024 through December 2024. The City of Pacifica has completed the Second Quarter of the Fiscal Year 2024‐25.
The Second 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 City’s primary operating fund 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: This first table provides a snapshot of General Fund Expenditures by department for Q2 FY2023-24 and Q2 FY2024-25, comparing the quarter-over-quarter changes and the percentage of the FY2024- 25 Adopted Budget spent as of Q2.
With half the year complete, General Fund Revenues & Transfers In are at 52% of the FY2024-25 Budget, Expenditures & Transfers Out are at 44% of projections. Revenues exceeded expenditures by $4,364,530, which is typical due to the timing of certain revenues such as property tax and sales tax. This quarter’s revenue showed a 19% increase compared to the prior year’s second quarter revenues. This quarter’s expenditures showed a 1% increase compared to the prior year’s second quarter.
Table 1: General Fund Quarterly Summary as of December 31, 2024 The General Fund Balance as of December 31, 2024, is estimated to be $23,104,980, based on the audited General Fund balance of $18,740,450 as of the end of FY 2023-24 and factoring in year-to-date net change of $4,364,530 as of the end of the second quarter.
Expenditures Highlights: Table 2 presents General Fund Expenditures by Department for Quarter 2 (Q2) 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 Q2 of both fiscal years and the percentage of the budget spent in Q2 of FY 2024-25.
Table 2: General Fund Quarterly Expenditures as of December 31, 2024 General Fund Qtr 2
FY2023-24
Qtr 2
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q2 FY24 vs
Q2 FY25
Qtr 2
% Budget
Revenues $ 20,554,400 $ 24,439,907 $ 46,646,300 19% 52% Transfer in 645,950 711,000 1,422,000 10% 50% 52%
Expenditures 18,614,243 19,955,077 45,249,871 7% 44%
Transfer Out 2,013,100 831,300 1,666,200 -59% 50% 44%
Net Change in Fund $ 573,006 $ 4,364,530 $ 1,152,229
City of Pacifica
Fiscal Year 2024‐25
SecondQuarter Financial Report
2 General Fund expenditures increased slightly from $20.63M in Q2 FY23-24 to $20.79M in Q2 FY24-25. At mid-year, 44% of the Adopted Budget has been spent. Departmental operating expenditures are on target at the end of the Second Quarter with overall spending increase of 1% quarter to quarter.
General government is about 34% of the budget at the mid year review. This is mostly due to lower expenditures from the legal bils and recruitment expense that haven’t been billed or paid.
Police department, Public Works and PBR are right on target respectively at the 50%, 46% and 44% of the budget.
Fire Department is 56% of the budget, a little more than what is budgeted for. The reason being overtime charged for the OES services unbudgeded for about $481K during the first half of the year that will be reimbursed later.
Community Development actual expenditures are relatively consistent quarter to quarter comparison, but are low compared to the FY 2024-25 budget due to the delay in processing and reconciling the cost-reimbursable expenses, additional entries will occur in quarters 3 and 4. We are working with the department to develop a mechanism to better budget for the revenue and expenditures regarding the cost reimbursable projects.
Non-departmental expenditures are about 13% of the budget. The quarter over quarter comparison also showed show lower activity in FY2024-25 compared to last year, a deduction of 40% due to the finance department changing it’s accounting methodology to record transfers on a quarterly basis compared to booking them at year-end in prior years.
Revenues Highlights: Table 3 outlines General Fund Revenues by Type for Q2 FY2023-24 and Q2 FY2024-25, alongside the FY2024-25 Adopted Budget and percentage changes.
Table 3: General Fund Quarterly Revenues as of December 31, 2024 General Fund
Expenditures by
Department
Qtr 2
FY2023-24
Qtr 2
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q2 FY24 vs
Q2 FY25
Qtr 2
% Budget
General Government $ 2,659,155 $ 2,677,165 $ 7,973,229 1% 34% Police Department 5,743,596 6,104,885 12,175,197 6% 50% Fire Department 3,831,807 4,416,541 7,890,064 15% 56%
Community Development 1,411,777 1,601,473 4,439,250 13% 36% Public Works 2,081,048 2,205,946 4,827,591 6% 46%
PB&R 2,541,554 2,743,552 6,302,690 8% 44%
Non-Departmental 345,307 205,515 1,641,850 -40% 13%
Transfer Out 2,013,100 831,300 1,666,200 -59% 50%
Total General Fund
Expenditures&TransferOut $ 20,627,343 $ 20,786,377 $ 46,916,071 1% 44% City of Pacifica
Fiscal Year 2024‐25
SecondQuarter Financial Report
3 The following is a summary of revenues as of the end of the 2nd Quarter:
General Fund revenues (including transfers in) increased from $21.2M in Q2 FY23-24 to $25.15M in Q2 FY24-25. 52% of the Adopted Budget has been collected, indicating strong mid-year performance. Revenues have an overall growth of 19% from quarter to quarter.
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 on December 14, 2024. As of December 31, 2024, the City received roughly 50% of the budgeted Property Tax revenue.
Sales Tax and Measure Y: As of December 31, 2024, the City has received respectively 32% and 33% of the budgeted Sales and Measure Y sales Tax revenues. There is a two-month lag on the receipt of sales tax revenues, so the receipts only represent four months of allocation, which is consistent with the prior year and appears to be on track or slightly below 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. Economy-driven revenues like TOT are very sensitive to the market and economy. The receipt of 54% of budget show the economy is good, and the tourism in the first half of the year is thriving. The second quarter’s TOT performance is certainly a positive trend, demonstrating the full recovery of the hospitality industry and continuing efforts in identifying short-term rentals and bringing them to compliance.
Other Taxes: These include Franchise tax, Business License, Utility Users Tax, Vehicle License Fee, and Cannabis Operations Tax. Payments for most of these taxes are remitted 30 days after the end of the month. 54% of the Budget General Fund Revenues
by Type
Qtr 2
FY2023-24
Qtr 2
FY2024-25
FY2024-25
Adopted
Budget
% Change
Q2 FY24 vs
Q2 FY25
Qtr 2
% Budget
Property tax $ 8,365,171 $ 8,532,570 $ 16,958,000 2% 50% Sales Taxes 1,093,485 1,042,521 3,279,200 -5% 32%
Measure Y 725,777 832,232 2,512,000 15% 33%
Transient Occupancy Tax 1,504,959 1,594,456 2,978,000 6% 54% Franchise Tax 429,517 273,222 1,300,000 -36% 21%
Business License Tax 441,470 464,550 570,000 5% 81%
Utility Users Tax 850,319 1,375,521 2,800,000 62% 49%
Vehicle License Fee 2,250,300 3,085,670 4,621,000 37% 67% Cannabis Tax 337,762 235,084 860,000 -30% 27%
ERAF - - 145,000
Grants 293,346 2,692,260 2,358,000 818% 114%
Investment Earning 461,267 663,134 953,100 44% 70%
Department Programs 3,801,027 3,648,688 7,312,000 -4% 50% Transfer In 645,950 711,000 1,422,000 10% 50%
Total General Fund
Revenues&TransferIn $ 21,200,350 $ 25,150,907 $ 48,068,300 19% 52% City of Pacifica
Fiscal Year 2024‐25
SecondQuarter Financial Report
4 has been received as of December 31, 2024.
Franchise Tax is the third largest source with a $1.3 million budget, but only 21% is collected due to the timing of when this revenue is remitted. The largest franchisee payer, PG&E, typically remits in the middle of April on a yearly basis, so 21% collected as of the second quarter is expected. However, a portion of Recology’s Franchise Tax revenues will be reclassified and moved to the street improvement fund to factor in the Recology truck’s impacts on the city streets.
We will need more analysis to see whether the recordings have been correctly reflected.
Business License Tax is at 81% collected this quarter because our annual business license renewal is set for November 1 each year and was recorded in the second quarter. These revenues are projected to meet the budget by the end of the year, as additional revenues will be collected from new businesses and delinquent payments.
Utility Users Tax is the second largest revenue source in the Other Taxes category with a budget of $2.8 million but is only 49% collected as of December 2024. Considering the one-month lag in filing and remittance from utility companies, and third quarter will likely see more remittance considering the high usage in the winter time, we are confident of meeting our budget for FY2025.
Cannabis Tax is down by 30% quarter to quarter comparison and has only reached 27% of the budget. It could potentially mean market saturation or changes in customer preferences. We will monitor the five cannabis business providers and do an audit of their operation and filings with the City.
Included in the other taxes category is also the Vehicle License Fee (VLF) in Lieu (property tax in lieu of VLF). This revenue includes a one-time backfill payment of $1,450,027 from the state for the VLF shortfall in FY 22-23 and 50% of the FY2024-2025 distribution of $1,635,643. The next remittance is likely to happen around August 2025 for the 45% of the FY2024-2025.
Excess ERAF: (Excess Educational Revenue Augmentation Fund). The FY2024-25 General Fund Budget only included $145,000 to fund the community grant program to local non-profit organizations as previously directed by the Council.
These revenues will be booked in the next quarter when they are received in January 2025. The remainder of the FY 2024-25 Excess ERAF Allocation is shared equally in the Disaster Accounting and Housing Funds as per Council approval.
Grants: These include police grants, fire OES reimbursements, as well as PBR child care and senior grants that are projected to come through in the second half of the year. The grant revenues showed a 114% collection, mostly because of prior years disbursements from FY2022 and FY2023 for the child care program in the amount of $1,455,620 after filing the child care audit reports with the State.
Investment Earnings: Investment earnings such as interest income continue to be doing well in the current economy, with favorable interest rate returns on bank deposits strategically managed by staff. However, we will normally do a year end interest allocation for other funds to give them a fair share of the earnings from the pooled cash investment.
That will lead to a reduction of general fund interest revenue but the citywide interest revenue will be the same.
Department/Programs: These include building permits, engineering and planning fees, fees related to Parks, Beaches & Recreation programs, and rentals, and the first two quarterly transfer-ins from other funds for cost recovery needs.
As of December 31, 2024, the City received 50% of the budget, which is right on budget, with few late payments expected to be collected in the next quarter, and the same level of activity is projected through the rest of the year.
Overall, permits and planning fees tend to fluctuate based on the timing of projects.
City of Pacifica
Fiscal Year 2024‐25
SecondQuarter Financial Report
5 SUMMARY
Overall, staff is pleased to report that the FY2024-25 budget is on track, with revenues and expenditures performing as expected and, in certain cases, a little better than expected, leading to a positive estimated net change of $4,364,530. The City’s total General Fund expenditures are at 44% of the budget at the end of the second quarter, and the City’s total General Fund revenues are at 52% of the budget at the end of the second quarter.
It is also important to understand that these are only preliminary numbers as additional booking entries may occur throughout the year and during mid-year and fiscal year-end, which may modify some of the figures presented in this report. However, it is encouraging to see that the budget appears to be on target at the end of the second quarter.
Staff will use the data in this report for a more in-depth FY 2024-25 Mid-Year Budget Review analysis that is currently underway and is scheduled to be presented to the Council in March.