City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
1 OVERVIEW
This Fourth Quarterly Financial Report is an analysis of the unaudited financial status of the City’s General Fund from July 1, 2025 through June 30, 2026. The City of Pacifica has completed the Fourth Quarter of the Fiscal Year 2025‐26.
The Fourth Quarter Financial Report will summarize the City’s General Fund and is not meant to be inclusive of all finance and accounting transactions that are yet to come subject to final audit. 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 and audit process.
GENERAL FUND
General Fund Financial Condition: This first table provides a snapshot of General Fund Expenditures by department for Q4 FY 2024-25 and Q4 FY 2025-26, comparing the year-over-year changes and the percentage of the FY 2025-26 Amended Budget spent as of Q4.
With twelves months data in, General Fund Revenues & Transfers In are at 105% of the FY 2025-26 Budget. General Fund Expenditures & Transfers Out are at 93% of projections. At this time, actual revenues exceed actual expenditures by $4,933,455. This amount is preliminary and should not yet be considered a final addition to General Fund balance.
This quarter’s revenues showed a 16% increase compared to the prior year’s fourth quarter revenues. This quarter’s expenditures show an 8% increase compared to the prior year’s fourth quarter.
Table 1: General Fund Quarterly Summary as of June 30, 2026
The General Fund Balance as of June 30, 2026, is estimated to be $27,569,102, based on the audited General Fund balance of $22,635,647 as of the end of FY 2025-26 and factoring in year-to-date net change of $4,933,455 as of the end of the fourth quarter. This amount is preliminary and should not yet be considered a final addition to General Fund balance.
The City is still completing fiscal year-end close, including final accruals and other audit-related entries, as well as General Fund Qtr 4
FY2024-25
Qtr 4
FY2025-26
FY2025-26
Amended
Budget
% Change
Qtr 4 FY24-25
vs
Qtr 4 FY25-26
Qtr 4
% Budget
Revenues $ 47,523,059 $ 54,941,440 $ 52,200,100 16% 105% Transfer in 1,422,000 1,478,800 1,478,800 4% 100% 105%
Expenditures 44,226,412 47,680,385 51,559,921 8% 92%
Transfer Out 2,584,600 3,806,400 3,806,400 47% 100% 93% Net Change in Fund $ 2,134,048 $ 4,933,455 $ (1,687,421) City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
2 identifying purchase order and other authorized expenditure carryforwards into FY 2026-27. These adjustments may reduce or otherwise change the projected year-end result. Final General Fund results will be reported following completion of the year-end closing and audit process.
Expenditures Highlights: Table 2 presents General Fund Expenditures by Department for Quarter 4 (Q4) of Fiscal Year (FY) 2024-25 and FY 2025-26, alongside the amended budget for FY 2025-26. It also includes the percentage change in expenditures between Q4 of both fiscal years and the percentage of the budget spent in Q4 of FY 2025-26.
Table 2: General Fund Quarterly Expenditures as of June 30, 2026
General Fund expenditures increased $4,675,773 from $46,811,012 in Q4 FY24-25 to $51,486,785 in Q4 FY25-26. At the end of June 30, 2026, 93% of the Amended Budget has been spent suggesting that all departments are on track or slightly under budget for the year. At the end of the Fourth Quarter, there is an increase of 10% year-over-year for expenditures and transfer out.
General Government is about 89% of the budget at Q4 review, and a 21% increase year-over-year. This is mostly due to lower expenditures from the contractual services category from Administrative Services department and City Manager’s offices than the amended budget. The 21% increase over the previous year is largely due to rising payroll expenditures as the Administrative Services Department reached full staffing capacity in FY 2025-26.
Police Department expenditure stands at 92% of the budget. Actual expenditures represent a 3% year-over-year increase, largely due to salaries and benefits, namely the unfunded actuarial liability pension allocation.
Fire Department expenditure stands at 99% of the budget, representing a 2% year-over-year reduction that is primarily driven by lower reimbursable overtime costs due to a reduction in mutual aid fire incidents.
Community Development expenditures stand at 88% of the amended budget. On a year-over-year basis, actual spending increased by 28% (approximately $1.2 million). This growth is primarily driven by professional services for outside planning consultants, reimbursable legal fees, increased staffing, and pension liability allocations.
General Fund Expenditures by
Department
Qtr 4
FY2024-25
Qtr 4
FY2025-26
FY2025-26
Amended
Budget
% Change
Qtr 4 FY24-25
vs
Qtr 4 FY25-26
Qtr 4
% Budget
General Government $ 6,177,583 $ 7,472,255 $ 8,381,005 21% 89% Police Department 12,442,735 12,877,617 13,972,728 3% 92% Fire Department 8,724,444 8,554,566 8,680,659 -2% 99%
Community Development 4,198,937 5,361,412 6,106,335 28% 88% Public Works 4,788,583 5,459,202 5,587,474 14% 98%
PB&R 6,098,322 6,642,292 7,133,895 9% 93%
Non-Departmental 1,795,809 1,313,042 1,697,824 -27% 77% Transfer Out 2,584,600 3,806,400 3,806,400 47% 100%
Total General Fund
Expenditures&TransferOut $ 46,811,012 $ 51,486,785 $ 55,366,321 10% 93% City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
3 The Public Works Department has utilized 98% of its amended budget, with the small variance attributable to personell costs. On a year-over-year basis, actual expenditures have risen by 14%. This annual growth is mainly driven by an increase in utility expenses combined with rising employee salaries and benefits.
The Parks, Beach & Recreation (PB&R) Expenditures increased by 9% (approximately $0.5 million) year-overyear. This increase is mainly driven by the Unfunded Actuarial Liability (UAL) pension allocations and rising employee health benefit expenditures compared to the previous year. Department remains under budget at 93% of its amended budget. The main contributor of the budget variance is personnel costsfor the Child Care division coming in lower than budget due to staffing vacancies.
Non-Departmental expenditure stands at 77% of the amended budget, representing a 27% year-over-year reduction.
The year-over-year decrease is primarily attributable to a one-time $600,000 legal settlement recorded in June 2025.
Excluding this prior-year one-time expense, the year-over-year change in Non-Departmental expenditures would be significantly smaller. However, additional transactions may still be recorded as part of the year-end adjustments.Transfer Out expenditure stands at 100% of the amended budget, confirming that Council approved transfer entries were recorded appropriately.
Overall, the expenditures in General Fund at this time represent 93% of the amended budget, information presented in this report is unaudited, and additional adjustments may occur during year-end process.
Revenues Highlights: Table 3 outlines General Fund Revenues by Type for Q4 FY2024-25 and Q4 FY2025-26, alongside the FY2025-26 Amended Budget and percentage changes.
Table 3: General Fund Quarterly Revenues as of June 30, 2026 City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
4 The following is a summary of revenues as of the end of the 4th Quarter:
General Fund revenues (including transfers in) increased $7,475,181 from $48,945,059 in Q4 FY2024-25 to $56,420,240 in Q4 FY2025-26, an 15% increase year-over-year. 105% of the Amended Budget has been collected or accrued, indicating strong revenue performance. Information presented in this report is unaudited, and additional adjustments may occur during the year-end and audit process.
Property Tax: Property Tax continues to serve as the City’s primary revenue source, currently outperforming the amended budget projections. The County of San Mateo remitted the two scheduled property tax installments to the City in December 2025 and April 2026, respectively. On a year-over-year basis, revenue increased by 10% ($1,645,125).
This robust growth is partially attributable to property reevaluations triggered by real estate sales, which substantially expanded the City's total assessed valuation base.
Sales Tax and Measure Y: The City has received and accrued 103% of budgeted Sales Tax and 104% of Measure Y sales tax revenues, which includes the recording of July and August receipts from the State of California that are attributable to FY 2025-26. Both revenue sources finished the year modestly (3%) above budget. On a year-over-year basis, Sales Tax grew by $667,000 (26%) and Measure Y by $551,000 (26%), indicating a combination of stronger taxable sales activity compared to the prior year, as well as the impact of higher prices on taxable purchases. Because sales tax revenues can fluctuate based on consumer spending, business activity, inflation, and the timing of State allocations and adjustments, the year-over-year increase should not necessarily be viewed as an indication of a comparable ongoing growth rate.
Transient Occupancy Taxes (TOT): TOT revenue increased 21% year-over-year, with both STR and hotel revenues exceeding the annual budget. STR revenue exceeded budget by approximately $523,000, while hotel revenue exceeded budget by approximately $260,000. The increase was influenced significantly by implementation of the City's new STR ordinance and related changes. STR revenues increased largely due to the one-time collection of taxes attributable to prior periods, as well as implementation of a voluntary compliance agreement with Vrbo that enabled the City to collect TOT directly from STR activity on the platform. Hotel TOT also increased, driven in part by higher hotel occupancy following a substantial reduction in the number of operating STRs after the new ordinance's stricter requirements took effect.
TOT is an economy-sensitive revenue source and can fluctuate based on tourism, lodging demand, and available inventory. TOT is generally remitted approximately 30 days after month-end. Because July receipts attributable to FY 2026 were accrued back to the prior fiscal year, the Fourth Quarter results reflect a full year of TOT activity.
Other Taxes: These include five categories: 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. 104% of the Budget has been received as of June 30, 2026.
Franchise Tax declined by 2% year-over-year and will be closely monitored to determine the underlying cause.
However, total collections have already reached 114% of the amended budget, demonstrating that conservative revenue projections accounted for this potential trend.
Business License Tax revenue is tracking well ahead of target, with collections reaching 114% of the budgeted amount and representing a 17% increase year-over-year. This strong performance highlights the diligent collection and compliance review efforts of HdL, the City’s contracted revenue administration partner.
City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
5 Utility Users Tax (UUT) is the second-largest revenue source within the Other Taxes category achieved a 78% collection rate of the $3.6 million budget. With year-over-year growth remaining completely flat, this performance indicates that the collections are not indicative of growth in gas and electric prices. Staff will be embarking on further assessments of remittance and compliance within this category.
Vehicle License Fee (VLF) The Vehicle License Fee (VLF) Property Tax In-Lieu revenue is the premier funding source within the Other Taxes category, currently performing at 109% of its budget with a 5% year-over-year increase.
Accurate forecasting for this revenue remains structurally challenging due to ongoing State budget constraints, constant funding shortfalls, and irregular backfill allocations. In response, San Mateo County—in collaboration with Mono and Alpine counties—is actively engaging with their elected officials and state representatives to advocate for legislative remedies and ensure the local jurisdictions are made whole as soon as possible Cannabis Tax collections currently track at 96% of budgeted projections, experiencing a minor 3% decline year-overyear. Cannabis operators undergo an annual revenue review, however this softening is more indicative of Statewide trends of reduced cannabis revenue.
Excess ERAF (Educational Revenue Augmentation Fund) collections are performing slightly above target at 105% as compared to budget. For background, the year-over-year comparison is unusual as the FY 2024–25 General Fund budget only included $145,000 to support the Council's community nonprofit grant program, as the bulk of those funds were accounted for in the Disaster Accounting Fund and Housing Action Fund. To insulate the General Fund against a projected deficit, the Council approved recording the FY 2025–26 Excess ERAF allocation in the General Fund.
Grants Revenues, which encompass Police grants, Fire OES reimbursements, PB&R child care and senior grants, reached 130% of their total budgeted target, despite posting a 37% decrease year-over-year. The primary driver behind outperforming the budget is the Child Care program, which generated $2.8 million in revenue against a $1.8 million projection, this revenue is due from previous years contracts. The decline as compared to the quarter last year is in other categories of grants receipts, attributed to reduced Fire OES reimbursements, with a difference of approximately $800k.
Investment Earnings including interest income and Parks facility rentals, continue to exhibit strong performance. This year receipts are at 162% of amended budget, and show an 110% increase year-over-year. Driven by proactive staff management of bank deposits, the City has successfully maximized returns within a favorable interest rate environment. Concurrently, facility rentals yielded outstanding results, more than doubling year-over-year with $214,000 recorded this period compared to $102,000 during the same period last year.
Department/Programs: These include building permits, engineering and planning fees, fees related to Parks, Beaches & Recreation programs, and rentals. As of June 30, 2026, the City received 99% of the budget. The year-over-year shows a slight decrease of 1% in these revenues. Overall, permits and planning fees tend to fluctuate based on the timing of projects.
Transfers In consist of indirect cost reimbursements from the NPDES Stormwater Fund (Fund 216), the Gas Tax Fund (Fund 210), and the Sewer Utility Fund (Fund 518). Because the four scheduled quarterly transfer entries are executed in strict accordance with the budgeted allocations, these revenue streams routinely track exactly on target.
SUMMARY
City of Pacifica
Fiscal Year 2025‐26
Fourth Quarter Financial Report
6 The City’s total General Fund expenditures are at approximately 93% of the amended budget at the end of the fourth quarter, while the City’s total General Fund revenues are at 105% of the budget. Overall, staff is pleased to report that preliminary year-to-year results are favorable compared with budget projections.
It is important to note that the figures presented in this report are preliminary, as additional booking entries may be recorded during year-end closing. In addition, the favorable variance should not be interpreted as an equivalent amount of ongoing available revenue or structural budget improvement, as the results reflect a combination of onetime revenues, expenditure savings, timing differences, vacancies, and other factors that may not recur in future years.
Nonetheless, it is encouraging to observe that the budget remains on track as of the end of the fourth quarter.