City of Pacifica
Fiscal Year 2025-2026
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 2025 through September 2025. The City of Pacifica has completed the First Quarter of the Fiscal Year 2025-26. 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%, and General Fund Revenues & Transfers In are at 13% of the FY2025-26 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. Expenditures paid from July to September that were for the previous fiscal year were not captured in this new fiscal year.
Table 1: General Fund Quarterly Summary as of September 30, 2025 The General Fund Balance as of September 30, 2025, is estimated to be $19,162,599, based on the unaudited fund balance of $22,512,464 as of the end of the Fiscal Year 2024-25, and factoring in year-to-date net change of -$3,349,963 in the first quarter.
Expenditures:
Table 2 presents General Fund Expenditures by Department for Quarter 1 (Q1) of Fiscal Year (FY) 2024-25 and FY 2025- 26, alongside the adopted budget for FY 2025-26. 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 2025-26.
General Fund Qtr 1
FY2024-25
Qtr 1
FY2025-26
FY2025-26
Adopted
Budget
% Change
Qtr 1 FY24-25
vs
Qtr 1 FY25-26
Qtr 1
% Budget
Revenues $ 6,424,272 $ 6,690,514 $ 51,707,306 4% 13%
Transfer in 355,500 369,700 1,478,800 4% 25% 13%
Expenditures 8,974,439 9,530,533 49,660,418 6% 19%
Transfer Out 415,650 879,645 3,518,579 112% 25% 20%
Net Change in Fund $ (2,610,317) $ (3,349,963) $ 7,109
City of Pacifica
Fiscal Year 2025-2026
FirstQuarter Financial Report
2 Table 2: General Fund Quarterly Expenditures as of September 30, 2025 Total Q1 expenditures increased by 11% from $9,390,089 (FY24-25) to $10,410,178 (FY25-26). 20% of the total adopted budget ($53.2M) has been spent in Q1. This suggests spending is roughly on track if distributed evenly across the year.
All departments are on target at the end of the First Quarter and 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.
Police Department Q1 of $2,755,007 saw a decrease of $71K compared with last year Q1 of $2,846,039. The main reason was an administrative position was temporarily filled by the Finance Department during recruitment, and also the allocation percentage reduction for the PERS Unfunded accrued liabilities (UAL) for the retirement related benefits.
Fire Department Q1 of $1,953,537 saw a decrease of $314K compared with last year Q1 of $2,267,574. Upon closer look, overtime is about $200K less due to no fire emergency, and salary savings from retirement of the Deputy Fire Chief that happened in July 2025.
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 increase in Q1 expenditures compared to previous fiscal year Q1 is mainly due to an increase in legal related expenditures.
The Non-departmental expenditures are on track with the FY 2025-26 budget. In prior years the OPEB and PENSION trust allocations would happen entirely at the end of the fiscal year, starting with FY 2025-26 the allocations will happen quarterly. The annual OPEB contribution in FY 2025-26 is budgeted at $283,750. In order to adopt a balanced budget, there was no adopted contribution to the PENSION trust in FY 2025-26.
The significant 158% increase in "Transfer Out" quarter over quarter is due to the Debt Service Fund being fully funded in FY2024-25 from the Debt Service Fund and not the General Fund. This provided fiscal relief to the General Fund, General Fund Expenditures
by Department
Qtr 1
FY2024-25
Qtr 1
FY2025-26
FY2025-26
Adopted
Budget
% Change
Qtr 1 FY24-25
vs
Qtr 1 FY25-26
Qtr 1
% Budget
General Government $ 1,168,906 $ 1,327,556 $ 8,709,896 14% 15% Police Department 2,846,039 2,775,007 13,498,183 -2% 21% Fire Department 2,267,574 1,953,537 8,510,440 -14% 23%
Community Development 290,861 514,096 4,884,974 77% 11% Public Works 938,805 1,084,954 5,143,615 16% 21%
PB&R 1,323,339 1,516,776 7,267,193 15% 21%
Non-Departmental 138,916 358,607 1,646,117 158% 22%
Transfer Out 415,650 879,645 3,518,579 112% 25%
Total General Fund
Expenditures&TransferOut $ 9,390,089 $ 10,410,178 $ 53,178,997 11% 20% City of Pacifica
Fiscal Year 2025-2026
FirstQuarter Financial Report
3 allowing more flexibility for other expenditures, in FY 2024-25. FY 2025-26 sees the transfer out to Debt Service Fund from General Fund again. Transfers Out for FY 2025-26 are reflected at 25% of budget since Finance is doing quarterly transfers per the schedule.
Revenues:
Table 3: General Fund Quarterly Revenues as of September 30, 2025 Here are key revenue observations and insights:
Total Q1 revenues increased by 4% from $6.78M (FY2024-25) to $7.06M (FY2025-26). 13% of the total annual budget ($53.19M) was 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 2025; The major difference between Q1 in FY2024- 25 and Q1 in FY2025-26 primarily results from less property transfer taxes received this quarter due to fewer houses sold in FY 2025-26 compared to the prior year period, potentially resulting from uncertainties of the mortgage rates.
Sales Tax: As of September 30, 2025, the City has received 9% 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, 2025, the City has received 8% of its budgeted Measure Y Transaction and Use Tax revenues. There is a two-month lag on the receipt of sales tax revenues, so the amount shown only represents one General Fund Revenues by
Type
Qtr 1
FY2024-25
Qtr 1
FY2025-26
FY2025-26
Adopted
Budget
% Change
Qtr 1 FY24-25
vs
Qtr 1 FY25-26
Qtr 1
% Budget
Property tax $ 40,399 $ 65,029 $ 17,466,700 61% 0%
Sales Taxes 278,637 281,208 3,241,230 1% 9%
Measure Y 181,371 189,594 2,505,100 5% 8%
Transient Occupancy Tax 760,341 918,710 2,358,000 21% 39% Franchise Tax 161,357 134,166 1,352,550 -17% 10%
Business License Tax 10,138 14,016 582,000 38% 2%
Utility Users Tax 621,288 445,850 2,870,000 -28% 16%
Vehicle License Fee 1,450,027 1,607,419 5,410,902 11% 30% Cannabis Tax 94,381 120,020 800,000 27% 15%
ERAF - 172,342 3,860,000 4%
Grants 651,723 797,257 2,762,824 22% 29%
Investment Earning 230,227 240,890 972,100 5% 25%
Department Programs 1,944,382 1,704,013 7,525,900 -12% 23% Transfer In 355,500 369,700 1,478,800 4% 25%
Total General Fund
Revenues&TransferIn $ 6,779,772 $ 7,060,214 $ 53,186,106 4% 13% City of Pacifica
Fiscal Year 2025-2026
FirstQuarter Financial Report
4 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 exceed the budget as 39% 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 TOT revenues as first quarter remittances are typically higher due to increased activity during the peak vacation season.
Other 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 draw 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 a portion of the two year backfill payment by the state. At the mid-year budget review, staff will bring an amendment to utilize the set aside reserve since the State only funded 2/3 of the backfill payment.
Cannabis Tax shows a slight increase in comparison to the prior year, primarily due to timing issues of the business filing, it could be that some businesses were just paying prior year’s late returns’ 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). ERAF in General Fund is recorded in the third quarter in FY2024-25, 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. However, in FY2025-26, to help alleviate the General Fund financial strain, revenues will be recorded in General Fund according to the council resolution. Normally these revenues are anticipated by the County Controller’s office in January and August, which will be the third quarter and fourth quarter respectively. The current receipt of $172,342 represents 5% of reserves held from the total excel ERAF amount from three years ago.
Grants: 29% of the annual budget was collected, all of them are from Child Care program. The childcare program has increased manpower for the program management, making timely processing bill reimbursement with the grantors.
Investment Earnings: 25% of the budget collected, still relatively strong, considering that the LAIF interest earned from the first quarter will be received 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, 2025, the City received 23% 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.
City of Pacifica
Fiscal Year 2025-2026
FirstQuarter Financial Report
5 SUMMARY
Overall, staff is pleased to report that the FY 2025-26 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 current revenues are at 13% 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 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.