City of Pacifica
Fiscal Year 2024‐25
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 1, 2024 through March 31, 2025. The City of Pacifica has completed the Third Quarter of the Fiscal Year 2024‐25. The Third 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 year-end process.
GENERAL FUND
General Fund Financial Condition: This first table provides a snapshot of General Fund Expenditures by department for Q3 FY2023-24 and Q3 FY2024-25, comparing the quarter-over-quarter changes and the percentage of the FY2024- 25 Amended Budget spent as of Q3.
With nine months data in, General Fund Revenues & Transfers In are at 72% of the FY2024-25 Budget. General Fund Expenditures & Transfers Out are at 69% of projections. Revenues exceeded expenditures by $1,843,799, which is good news for the moment. This quarter’s revenue showed a 12% increase compared to the prior year’s third quarter revenues. This quarter’s expenditures showed a 12% increase compared to the prior year’s Third quarter.
Table 1: General Fund Quarterly Summary as of March 31, 2025
The General Fund Balance as of March 31, 2025, is estimated to be $20,584,249, 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 $1,843,799 as of the end of the third quarter.
Expenditures Highlights: Table 2 presents General Fund Expenditures by Department for Quarter 3 (Q3) of Fiscal Year (FY) 2023-24 and FY 2024-25, alongside the amended budget for FY 2024-25. It also includes the percentage change in expenditures between Q3 of both fiscal years and the percentage of the budget spent in Q3 of FY 2024-25.
City of Pacifica
Fiscal Year 2024‐25
ThirdQuarter Financial Report
2 Table 2: General Fund Quarterly Expenditures as of March 31, 2025
General Fund expenditures increased slightly from $31.06 M in Q3 FY23-24 to $32.87M in Q3 FY24-25. At the end of March 31, 2025, 69% of the Amended Budget has been spentsuggesting that departments are on track or slightly under budget for the year except Police Department and Fire Department. At the end of the Third Quarter, there is an increase of 6% quarter over quarter for expenditures and transfer out.
General government is about 53% of the budget at Q3 review. This is mostly due to lower expenditures from the legal bils and recruitment expense that haven’t been billed or paid.
Police department saw a 9% increase quarter to quarter, spending at 77% of the budget, which is moderately high at benchmark of 75% but manageable.
Fire Department is 85% of the budget, a little more than what is budgeted for. It has the second highest spending growth at 16% quarter over quarter. 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 has the largest spending growth of 24% among all departments. This is partly due to catching up in processing and reconciling the cost-reimbursable expenses, such as legal bills are handled in a different way than previously. As for budget, we are working with the department to develop a mechanism to better budget for the revenue and expenditures regarding the cost reimbursable projects so that we don’t over budget both of them.
Public Works, PB&R and Non-Department are below the 75% mark, suggesting that the budget is on track and potentially under budget for the year.
Transfer Out should be right on target of 75% as we normally do four quarterly installments based on original budget.
In Mid-Year Review, the general fund was asked to provide $352K funding to Motor Pool at the March 10th Council Meeting, which was completed. Hence a 79% of the budget for the transfer out at Q3 review, which is slightly more than the benchmark.
Revenues Highlights: Table 3 outlines General Fund Revenues by Type for Q3 FY2023-24 and Q3 FY2024-25, City of Pacifica
Fiscal Year 2024‐25
ThirdQuarter Financial Report
3 alongside the FY2024-25 Amended Budget and percentage changes.
Table 3: General Fund Quarterly Revenues as of March 31, 2025
The following is a summary of revenues as of the end of the 3rd Quarter:
General Fund revenues (including transfers in) increased from $30.92M in Q3 FY23-24 to $34.72M in Q3 FY24-25, a 12% increase quarter over quarter. 72% of the Amended Budget has been collected, indicating strong performance.
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. The second installment of the property tax payment is expected in April. We saw a 1% increase for property tax revenue in quarter over quarter comparison.
Sales Tax and Measure Y: As of Marchr 31, 2025, the City has received respectively 58% and 61% 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 seven months of allocation, which is consistent with the prior year and appears to be on track or slightly below the budget, indicating a potential weak consumer spending. The Amended Budget included some reductions to this revenue category given current economic trends.
Transient Occupancy Taxes (TOT): TOT revenue saw a 6% increase quarter over quarter. 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. Economydriven revenues like TOT are very sensitive to the market and economy. The receipt of 74% of budget show the economy is good, and the tourism in the first half of the year was doing well. The Third quarter’s TOT performance is certainly a positive trend, demonstrating potentially the full recovery of the hospitality industry and continuing efforts in identifying short-term rentals and bringing them to compliance.
Other Taxes: These include five categories: Franchise tax, Business License, Utility Users Tax, Vehicle License Fee, and City of Pacifica
Fiscal Year 2024‐25
ThirdQuarter Financial Report
4 Cannabis Operations Tax. Payments for most of these taxes are remitted 30 days after the end of the month. 71% of the Budget has been received as of March 31, 2025.
Franchise Tax seems to see a decline of 18% quarter over quarter and needs to be monitored as only 42% of current budet is collected, maybe signal compliance issues. However we do know that the largest franchisee payer, PG&E, typically remits in the middle of April on a yearly basis, so 42% collected as of the Third quarter is expected.
Business License Tax is at 89% collected this quarter because our annual business license renewal is set for November 1 each year and was already recorded in the Third quarter financial. 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 and is only 89% collected as of March 31, 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.
Vehicle License Fee (VLF) in Lieu (property tax in lieu of VLF) is the largest in the other tax catgory. It includes 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 which will be accrued in the Q4 financial.
Cannabis Tax is down by 17% quarter over quarter comparison and has only reached 57% 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, verifying whether the accounts receivable bills were paid in time. The Amended Budget included some reductions to this revenue category given current economic trends.
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.
It was recorded when the first payment of ERAF came in January. The remainder of the FY2024-25 Excess ERAF Allocation is shared equally in the Disaster Accounting and Housing Funds as per Council approval for respective uses.
Grants: These include police grants, fire OES reimbursements, as well as PBR child care and senior grants. The grant revenues showed a 126% 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. It has already 105% budget.
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 in Quarter 4 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 March 31, 2025, the City received 78% 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
ThirdQuarter 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 $1,843,799. The City’s total General Fund expenditures are at 69% of the budget at the end of the third quarter, and the City’s total General Fund revenues are at 72% of the budget at the end of the third quarter.
It is important to note that the figures presented in this report are preliminary, as additional booking entries may be recorded throughout the remainder of the fiscal year and during year-end closing. Nonetheless, it is encouraging to observe that the budget remains on track as of the end of the third quarter.