However, revenues typically come in during the second half of the year, resulting in a different pattern. At the end of the third quarter (March 31, 2024), staff will conduct another review of revenues and expenditures and provide updates to the City Council.
The Mid-Year Budget Report provides an in-depth assessment of the City’s revenues and expenditures during the first half of the fiscal year and provides projections of the fiscal year-end results, which serve as a critical evaluation and analysis of the financial status and performance. Moreover, it serves as a foundation for the refinement of next year’s budget. The Mid-Year review allows the City to monitor its revenues and expenditures, with the intent to proactively respond to unanticipated changes and emerging trends. This comprehensive report is designed to provide stakeholders, including government officials, residents, and relevant agencies, with a transparent overview of the City’s fiscal health, revenues, expenditures, and adherence to the strategic priorities of the City’s goals.
Discussion:
Based on the first six (6) months of activity, the Mid-Year outlook is cautiously optimistic as the City remains in a period of uncertainty driven by inflation, increases in interest rates, and ongoing trends impacting the retail sector. The City has been continuously working to avoid negative impacts from future economic downturns, by developing and monitoring responsible and strategic budgets that provide essential services to our residents and fulfill City Council priorities. These efforts ensure the City maintains current and future financial sustainability and security. A detailed analysis highlighting the major changes will be presented in this report.
General Fund Mid-Year Review – Six Months through December 31, 2023 Revenues
General Fund revenues through the halfway point (second quarter) total $23.45 million, or 39% of the $60.09 million Amended Budget, compared to $22.18 million at FY 2022- 23 Mid-Year. General Fund revenues are not received evenly throughout the year, so revenue received through the second quarter is not expected to be 50% of the total budget. Staff projects that General Fund revenue will come within the amended budget for all revenue categories. See Table 1 for revenue categories and preliminary yearend projections.
The General Fund has several sources of revenue, encompassing five (5) major categories including Sales Tax, Property Tax, Utility Users Tax (UUT), Business License, and Licenses and Permits. Table 1 below shows revenues by category.
Sales Tax is the largest source of revenue for the General Fund, representing 43% of total General Fund Operating Revenue. The Sales Tax revenue increased by $147,000, or 2%, as compared to this same period last year, primarily due to the CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
favorable growth in major sales tax generating groups, including Restaurants and Hotels, Business and Industry, and Building and Construction. The addition of a new building construction vendor and business-industrial firm contributed to positive results that further lifted returns. Another contributing factor is the additional payment made by a local vendor to correct previous reporting errors.
Property Tax is the second largest General Fund revenue source, representing 24% of total General Fund Operating Revenue. The Property Tax revenue increased by $319,000, or 5%, as compared to this same period last year, primarily due to the increase in re-valued home prices upon sale. The median sale price of a detached single-family residential home in Pico Rivera from July through December 2023 was $691,250. This represents a $16,000 or 2.4% increase in median sale price from the same period in 2022. Growth in median home prices has strengthened due to high demand and limited properties for sale. For many surrounding cities, median prices have decreased slightly in recent months but still represent increases in sale price when compared to the prior year.
Utility Users Tax (UUT) is slightly lower by $6,900 as compared to the same time last fiscal year, primarily due to a decrease in usage and pricing of natural gas billed charges. When comparing Utility (piped) gas prices per therm (UGT), the Bureau of Labor Statistics shows UGT went down 13% in the Los Angeles Area. Additionally, the price per gallon of gasoline decreased by 4% in 2023 compared to the same period in 2022. While this trend shows a decrease in energy pricing, it is too early to tell whether this will result in total UUT coming in below budget estimates. Staff will continue to monitor and include any new estimates in the FY 2023-24 Third Quarter Review.
Business License Tax revenue is higher at mid-year in FY 2023-24 as compared to FY 2022-23 by $714,600 primarily due to an increase in new businesses obtaining business licenses and renewals. The voter-approved Measure AB modernized the City’s BL fee structure. While this trend shows an increase compared to last year, the actual revenue has not aligned with the forecasts provided by our team of professional consultants during the revenue estimation process. The estimates provided to the City were based on a comprehensive analysis of industry-specific factors and collection and audit-related services. However, the BL revenues that have been collected through the first half of the year are not as high as originally expected. The initial assessment made by staff and our BL consultants, HdL, is that some businesses have not remitted their payments in accordance with Measure AB. Rather, they are remitting based on their past calculations.
Staff enlisted HdL not only to assist with the processing of these payments but also with the enforcement of this new measure. It is expected that as the reviews of the remittances are being done, additional assessments will be collected in the next six (6) months with more accurate fees paid. Initial estimates, however, show a likely shortfall CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
of $2.1 million in the General Fund Business License Tax budget. Staff will continue to monitor this and will report more accurate estimates in the third quarter.
Licenses and Permits are coming in lower by $139,000 in FY 2023-24 as compared to FY 2022-23 primarily due to a decrease in Plan Check fees that were higher in the previous year from two (2) significant developments. Currently, the development projects have been postponed to future dates that have not been determined.
Therefore, it is too early to project accurate estimates at this time. Staff will continue to monitor this and will report in the third quarter with better estimates.
Parks and Recreation revenues are slightly higher by $8,200 as compared to this period in FY 2022-23, primarily due to an increase in Parks and Recreation programs and services, with the most notable increases in Camps and Contract Programs. Staff will continue to monitor this and expect this category to come in within budget.
All Other Revenues are coming in lower by $111,000 as compared to this period last fiscal year primarily due to Sales of Property, Miscellaneous Revenue, and Cost Reimbursements higher in the prior year. FY 2022-23 included one-time revenue for Sales of Property from a vacated site. Additionally, the Miscellaneous Revenue category in the prior year included the one-time recognition of unclaimed deposits and Cost Reimbursements attributed to State reimbursement receipts. The decrease has been partially offset due to favorable growth in the Interest Income and Use of Money categories from higher interest rates. Staff will continue to monitor and will report in the third quarter with better estimates.
Overall, General Fund revenues are projected to end the year at approximately $742,000 or 1% lower than what was budgeted at the start of the fiscal year for a total FY 2023-24 revenue projection of approximately $59,352,712. This is primarily attributed to decreased revenue in Business License Tax and Licenses and Permits, as described above and outlined in Enclosure 1. Staff will continue to monitor the revenue trends for the remainder of the fiscal year and modify the year-end estimate, if necessary, during our third-quarter review.
CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
Table 1. General Fund Revenues by Category
Revenue Source
FY 22-23
MID-YEAR
ACTUALS
FY 23-24
ADOPTED
FY 23-24
AMENDED
FY 23-24
MID-YEAR
ACTUALS
FY 23-24
YEAR-END
PROJECTIONS
$
FY 22-23
vs.
FY 23-24
MID-YEAR
%
FY 22-23
vs.
FY 23-24
MID-YEAR
YEAR-END
VARIANCE
Sales Tax 8,182,304 24,937,496 24,937,496 8,329,351 25,339,268 147,047 2% 401,772 Property Tax 6,264,929 13,906,142 13,906,142 6,584,270 13,906,142 319,340 5% - Utility Users Tax 1,734,924 4,178,135 4,178,135 1,727,996 4,178,135 (6,928) (0%) - Franchise Tax 92,447 970,000 970,000 78,347 970,000 (14,100) (18%) - Transient Occupancy Tax (TOT) 247,622 560,000 560,000 152,372 560,000 (95,250) (63%) - Business License Tax 641,975 6,493,628 6,493,628 1,356,565 4,413,000 714,590 53% (2,080,628) Parks & Recreation Fees 226,968 371,030 371,030 235,122 371,030 8,154 3% - Licenses & Permits 1,039,450 2,417,665 2,417,665 900,343 1,993,500 (139,106) (15%) (424,165) All Other Revenues* 2,910,047 3,973,460 3,973,460 2,799,296 5,334,540 (110,751) (4%) 1,361,080 OPERATING REVENUE 21,340,666 57,807,556 57,807,556 22,163,661 57,065,615 822,995 4% (741,941) Transfers In** 837,756 1,757,097 2,287,097 1,286,909 2,287,097 449,153 35% - TOTAL - GENERAL FUND REVENUE 22,178,422 59,564,653 60,094,653 23,450,570 59,352,712 1,272,148 5% (741,941) *Includes Fines & Forfeitures, Charges for Services, Use of Money, Other Revenue, and Intergovernmental Revenue **Includes Transfer In (Gas Tax)
Expenditures
General Fund expenditures through the halfway point (second quarter) total $27.64 million, or 44% of the $63.13 million Amended Budget. Most departments had increases from the prior year primarily in Salaries and Benefits by $473,600 due to Cost-of-Living Adjustment (COLA), merit increases, and filling vacancies in various City departments. On September 13, 2022, the City Council approved a Memorandum of Understanding (MOU) between the City of Pico Rivera and two (2) Full-time employee bargaining groups, Professional and Confidential Employee Association (CEA) and Service Employees’ International Union 721 (SEIU). The approved MOU included an annual COLA salary increase of 4% in July 2021, 3% in July 2022, and an additional 3% in July 2023. FY 2023-24 is the third and final year of the MOU. The anticipated COLA increase for FY 2023-24 is approximately $271,195 to salaries and additional employer costs. The Maintenance and Operations costs in the General Fund departments increased by $1.73 million as compared to this same period last year primarily due to the increase in contributions to the City’s Public Employees Retirement (PERS), Contracted Services increases, and more programs/services being offered as described below.
Discussion of Departments with significant variances from the prior year are as follows:
• Administration mid-year expenditures are lower compared to the same period last year, due to a vacant position in the City Clerk division. Depending on the timing, the vacant position may remain unfilled this year, resulting in budgetary savings within this department.
• Public Safety Los Angeles County Sheriff’s Department (LASD) is tracking higher compared to the same period last year primarily due to contract increases of CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
more than 8% in FY 2023-24 and the enhancement to public safety infrastructure through the purchase of the ShotSpotter Gunshot Location Services program. It is expected to come within budget by the end of the year. • Administrative Services is higher compared to last fiscal year due to filling an existing vacant position and the BL division moved to the Administrative Services Department in the current fiscal year, resulting in more associated expenditures tracked in this department. Additionally, an expenditure correction is anticipated for the City’s Business License Tax Consultant invoices, as they were being expensed upfront and will be rectified prior to the third quarter review. Other notable increases are due to the rising costs for Software Licensing and projects in the Information Technology (IT) division. It is expected to meet budget expectations by year-end.
• Community & Economic Development is tracking higher by 3% compared to the same period last year primarily due to filling employee vacancies this fiscal year.
Maintenance and Operations costs are tracking higher than last year primarily attributed to a Professional Services reimbursement that occurred in the prior year. Other notable increases in various divisions such as Planning, Economic Development, and Building programs and projects currently in progress include the online Permitting Software, Mobile home Ordinance, and Land Use Plan. It is expected to meet budget expectations by the end of the fiscal year. • Non-Departmental expenditures are higher compared to this same period last year primarily due to an annual contract rate increase including the increase of $138,000 in contributions towards the City’s Unfunded Actuarial Liability (UAL) obligations for FY 2023-24 compared to the last fiscal year. Other notable increases are due to the General Liability increase of $121,000 and the Animal Control contract increase of 172,000. It is expected to meet budget expectations by the end of the fiscal year.
• Human Resources expenditures are higher in the Salaries and Benefits category due to the filling of the vacant Director position in late 2022. The Maintenance and Operations costs are slightly higher due to investigative services. It is expected to come within budget at year-end.
• Parks & Recreation has increased expenditures as compared to last fiscal due to more programs/services being offered and the rising costs of Special Events.
The increase in Salaries and Benefits is primarily due to the filling of two (2) Manager positions, COLA increases, and hourly salaries. The Maintenance and Operations increases are primarily due to Special Events such as the Fireworks Spectacular, three (3) Summer Street Fests, two (2) Movies in the Park, Fiestas Patrias, Spooktacular, Veteran’s Day Event, and Holiday Tree Lighting Event, along with Contracted Services costs for additional programming and services CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
being offered such as the Veterans Resource Center, Senior Services, Youth Sports, and Teen Services. Although as compared to last fiscal year, the Parks & Recreation department expenditures have increased, they are expected to meet budget expectations by the end of the year.
• Public Works is tracking higher compared to this same period last fiscal year primarily due to COLA increases, hourly salaries, and overtime costs. The Maintenance and Operations costs increase is attributed to rising costs for supplies and services such as Contracted Services and Professional Services for street sweeping, tree trimming services, landscaping maintenance, graffiti abatement services, engineering professional services, Heating, Ventilation, and Air Conditioning (HVAC) services, and Janitorial services. Another notable increase was due to the HVAC replacement at Rivera Park in July 2023, costing approximately $190,000. It is expected to come within budget by the end of the year.
• Operating Transfers Out includes the $1.065 million Sales Tax Pledge from the General Fund to the Successor Agency (Fund 851).
• Non-Operating Transfers Out are lower compared to this same period last fiscal year primarily due to the one-time transfer of $2.98 million to support Community and Economic Development Strategic Projects and General Fund Capital Improvement Projects (CIP) in FY 2022-23. In FY 2023-24 the CIP transfers of $914,000 include projects such as the Median and Parkway Beautification project, Teen Center project, Smith Park Aquatic Center, and the Senior Center Restrooms and ADA Improvement project.
Table 2 on the following page shows expenditures by Department. [This space intentionally left blank]
CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
Table 2. General Fund Expenditures by Department
DEPARTMENT / EXPENDITURE CATEGORY
FY 22-23
MID-YEAR
ACTUALS
FY 23-24
ADOPTED
FY 23-24
AMENDED
FY 23-24
MID-YEAR
ACTUALS
FY 23-24
YEAR-END
PROJECTIONS
$
FY 22-23
vs.
FY 23-24
MID-YEAR
ACTUALS
%
FY 22-23
vs.
FY 23-24
MID-YEAR
ACTUALS
Percentage
of Budget
Used
YEAR-END
VARIANCE
ADMINISTRATION
Salaries & Benefits 890,765 1,656,809 1,656,809 830,320 1,556,809 (60,445) (7%) Maintenance & Operations 305,718 747,174 1,306,886 336,475 1,216,656 30,757 10% TOTAL ADMINISTRATION 1,196,483 2,403,983 2,963,695 1,166,795 2,773,465 (29,688) (2%) 39% (190,230) Public Safety 6,417,158 13,964,004 14,299,669 6,732,192 14,299,669 315,034 5% 47% -
ADMINISTRATIVE SERVICES
Salaries & Benefits 860,902 2,371,763 2,371,763 906,960 2,171,763 46,059 5% Maintenance & Operations 405,537 1,013,613 1,027,681 555,264 1,027,681 149,727 37% TOTAL ADMINISTRATIVE SERVICES 1,266,439 3,385,376 3,399,444 1,462,225 3,199,444 195,786 15% 43% (200,000)
COMMUNITY & ECONOMIC DEVELOPMENT
Salaries & Benefits 1,765,506 4,067,240 4,067,240 1,797,994 3,847,240 32,488 2% Maintenance & Operations 312,960 3,217,901 3,853,716 479,693 2,539,970 166,733 53% TOTAL COMMUNITY & ECONOMIC DEVELOPMENT 2,078,466 7,285,141 7,920,956 2,277,687 6,387,210 199,221 10% 29% (1,533,746) Non-Departmental 4,699,499 6,573,052 6,577,552 5,105,364 6,577,552 405,864 9% 78% -
HUMAN RESOURCES
Salaries & Benefits 276,583 799,375 821,375 419,431 821,375 142,848 52% Maintenance & Operations 168,814 434,137 412,137 172,126 359,788 3,312 2% TOTAL HUMAN RESOURCES 445,397 1,233,512 1,233,512 591,557 1,181,163 146,161 33% 48% (52,349)
PARKS & RECREATION
Salaries & Benefits 2,251,594 5,807,354 5,807,354 2,504,647 5,757,354 253,053 11% Maintenance & Operations 617,531 1,837,550 1,863,279 687,606 1,747,285 70,075 11% TOTAL PARKS & RECREATION 2,869,124 7,644,904 7,670,633 3,192,253 7,504,639 323,128 11% 42% (165,994)
PUBLIC WORKS
Salaries & Benefits 2,490,573 5,406,534 5,406,534 2,550,213 5,156,534 59,640 2% Maintenance & Operations 1,995,258 5,491,644 6,569,950 2,583,606 5,436,454 588,348 29% TOTAL PUBIC WORKS 4,485,831 10,898,178 11,976,484 5,133,819 10,592,988 647,988 14% 43% (1,383,496) GENERAL FUND OPERATING EXPENDITURES 23,458,397 53,388,150 56,041,945 25,661,891 52,516,130 2,203,495 9% 46% (3,525,815) TOTAL Salaries & Benefits 8,535,922 20,109,075 20,131,075 9,009,565 19,311,075 473,643 6% TOTAL Maintenance & Operations 14,922,475 33,279,075 35,910,870 16,652,326 33,205,055 1,729,852 12% 23,458,397 53,388,150 56,041,945 25,661,891 52,516,130 2,203,495 9% 46% (3,525,815) Operating - Transfers Out 1,065,000 1,065,000 1,065,000 1,065,000 1,065,005 - 0% Non-Operating - Transfers Out 2,982,695 5,111,503 6,025,469 913,966 6,025,464 (2,068,729) -69% TOTAL - GENERAL FUND EXPENDITURES 27,506,092 59,564,653 63,132,414 27,640,857 59,606,599 134,766 0% 44% (3,525,815) General Fund Citywide
At the end of the second quarter or halfway point, expenditures exceed revenues due to upfront expenditures such as the Sales Tax Pledge transferred to the Successor Agency, the CalPERS UAL payment, funding General Fund Capital Improvement Projects, COLA increases, and Contracted Services. The mid-year report is developed using six (6) months of actual (unaudited) activity for FY 2023-24. An update will be provided in the FY 2023-24 third-quarter budget results. Except for the identified variances, expenditures, and revenues are tracking as expected. Table 3 below summarizes the total General Fund revenues and expenditures citywide.
CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
Table 3. General Fund Revenues and Expenditures Citywide Totals FY 22-23
MID-YEAR
ACTUALS
FY 23-24
ADOPTED
FY 23-24
AMENDED
FY 23-24
MID-YEAR
ACTUALS
FY 23-24
YEAR-END
PROJECTIONS
$
FY 22-23
vs.
FY 23-24
MID-YEAR
ACTUALS
%
FY 22-23
vs.
FY 23-24
MID-YEAR
ACTUALS
YEAR-END
VARIANCE
REVENUE* $ 22,178,422 $ 59,564,653 $ 60,094,653 $ 23,450,570 $ 59,352,712 $ 1,272,148 5% $ (741,941) EXPENDITURES** 23,458,397 53,388,150 56,041,945 25,661,891 52,516,130 2,203,494 9% (3,525,815) SUBTOTAL (1,279,975) 6,176,503 4,052,708 (2,211,321) 6,836,582 (931,346) 42% 2,783,874 OPERATING TRANSFERS OUT 1,065,000 1,065,000 1,065,000 1,065,000 1,065,000 - 0% - NON-OPERATING TRANSFERS OUT (ONE-TIME) 2,982,695 5,111,503 6,025,469 913,966 6,025,469 (2,068,729) (226%) - SURPLUS / (DEFICIT) $ (5,327,670) $ - $ (3,037,761) $ (4,190,287) $ (253,887) $ 1,137,383 (27%) $ 2,783,874 59,564,653
*Includes Non-Operating Transfers In (Gas Tax and Intergovernmental Transfers) **Includes Vacancy Savings
The Administrative Services Department conducted a four (4) year comparison of the mid-year of FY 2020-21 through mid-year of FY 2023-24 in Graph 1. The mid-year of FY 2020-21 shows revenues and expenditures during the pandemic that are considered under unusual or modified operations and impacted the budget with unexpected expenses. The mid-year of FY 2021-22 is the reduced impact of the pandemic and allowing operations to align more closely with pre-pandemic budgets. FY 2022-23 shows the continued recovery from the pandemic with early signs of inflation impacting expenditures. FY 2023-24 mid-year shows the greater impact of inflation and increasing interest rates for both revenues and expenditures.
Graph 1. Mid-Year 2020 Actuals through Mid-Year 2024 Actuals CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
General Fund Budget Adjustments (Enclosure 1):
On April 12, 2022, the City Council approved the development of a Climate Action Plan (CAP) which is a comprehensive roadmap-serving as a masterplan that helps cities reduce greenhouse gas (GHG) emissions. The City’s CAP is aimed at identifying measurable actions the City can implement to achieve. On June 27, 2023, the City Council approved an agreement with Cascadia Consulting Group, Inc. to develop Phase I and Phase II of the CAP. Staff is recommending a budget adjustment of $65 as outlined in Enclosure 1 for the General Fund to fully fund Phase II of the CAP.
Other Funds Budget Adjustments (Enclosure 2):
In reviewing the City’s Other Funds, staff identified the need for budget adjustments as outlined in Enclosure 2 in the Pico Rivera Innovate Municipal Energy (Fund 560) and Measure R (Fund 207) funds. Staff is recommending a budget adjustment of $3,632,900 in Fund 560 revenues to account for the rate increases that became effective September 1, 2023, and $1,892,897 in Fund 560 expenditures for the increase of purchased power and Resource Adequacy for a total of ($1,740,003) for the remainder of the fiscal year as detailed in Enclosure 2. The expenditure adjustment for Fund 207 includes an increase of $40,000 due to anticipated project costs and an increase in costs and services, as outlined in Enclosure 2.
Capital Improvement Funds Budget Adjustments (Enclosure 3):
The City has a five-year capital improvement program (CIP) that includes improvements for streets, bridges, and roadways, parks and open spaces, stormwater quality, water production, treatment and delivery, sanitary sewer, City buildings, and other large-scale capital projects. These projects are reviewed as part of the FY 2023-24 Mid-Year Budget Review. Upon analysis, various capital improvement projects require minimal mid-year adjustments to expenditures totaling $107,305 as outlined in Enclosure 3.
Enterprise Funds
The City has four (4) Enterprise Funds – Water Authority, PRIME, Golf Course, and Sports Arena. Collectively, these are all separate funds where the City charges a fee to customers to cover all or most of the costs of services it provides. These funds are reviewed as part of the FY 2023-24 Mid-Year Budget Review. The total Enterprise Funds summary of revenues and expenses as of December 31, 2023, on Table 4 on the next page.
Water Operations Enterprise Fund
The FY 2023-24 Water Fund revenues include the implementation of the water rate increases of 10% that was adopted by the City Council on April 27, 2021, for five (5) consecutive years. FY 2023-24 Mid-Year revenues are tracking higher than expenses by approximately $2.95 million. This is mainly attributed to revenues being collected monthly and the expectation that over half of the budgeted expenses will occur in the second half of the fiscal year, coinciding with the anticipated completion of the ongoing CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
Water Treatment System. Staff will continue to monitor and reevaluate for the rest of the fiscal year.
Pico Rivera Innovative Municipal Energy (PRIME) Fund
The PRIME Fund includes revenues and expenses for the purchase and sale of “greener” energy for consumers. FY 2023-24 Mid-Year revenues are tracking higher than expenses by approximately $6.24 million. This is primarily due to the implementation of the rate increase approved by the City Council in February 2023.
These rate adjustments have generated sufficient revenue to support PRIME’s operations, maintain approved reserves according to PRIME’s adopted policies, and facilitate the purchase of future energy at competitive prices. The budgeted expenses are anticipated to be spent in the second half of the fiscal year for sustainability programs and projects. Staff expect to meet the budget by year-end.
Golf Course Fund
The Pico Rivera Golf Course experienced a slight increase in golf play, in particular Green Fees and Driving Range Fees. The Golf Course expenses have increased due to the rising costs for building and ground maintenance materials and services, along with the increase in contract management fees. Additionally, in FY 2023-24, the City procured some new equipment to ensure smooth operation of the fully open Golf Course. Staff will continue to monitor and reevaluate for the rest of the fiscal year.
Sports Arena Fund
The Sports Arena has resumed operations to pre-pandemic levels for rentals and events, increasing revenues and expenses as more events were held in the outdoor venue. Staff will continue to monitor and reevaluate for the rest of the fiscal year.
Table 4. Summary Enterprise Funds Budgets
Water Operations PRIME Golf Course Sports Arena
Revenue $ 6,788,706 $ 14,703,873 $ 462,326 $ 168,371
Expense $ 3,833,426 $ 8,465,429 $ 759,131 $ 122,187
SURPLUS / (DEFICIT) $ 2,955,279 $ 6,238,444 $ (296,804) $ 46,185 Conclusion:
This Mid-Year (second quarter) Report presents an overview of the City’s operating revenues and expenditures for the mid-year ending December 31, 2023, compared to the previous year. Mid-Year operating expenditures are in line with the current budget at 44%. The projected year-end General Fund revenues are on target compared to the budget and are projected to come in within budget by the end of FY 2023-24. The financial results from the prior fiscal year, combined with the FY 2023-24 mid-year data, confirm the City’s goal of continuing to remain on the path to structural balance through fiscal discipline which is a fundamental component of financial reporting. Departments CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 13, 2024 FISCAL YEAR 2023-24 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2023
continue to work to reduce impacts to the General Fund and understand their financial pressures and should be commended for their efforts. Staff will continue to monitor each revenue source and expenditure activity closely and will evaluate opportunities to enhance revenues and reduce expenditures.
Steve Carmona
SC:AG:MP:DS:ep
Enclosures: 1) FY 2023-24 Mid-Year General Fund Budget Adjustment Worksheet 2) FY 2023-24 Mid-Year Other Funds Budget Adjustment Worksheet 3) FY 2023-24 Mid-Year Capital Improvement Funds Budget Adjustment Worksheet
CITY OF PICO RIVERA
Fiscal Year 2023-24 Mid-Year Budget Adjustments
ENCLOSURE 1 - General Fund
GENERAL FUND Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes
REVENUE
$ - $ - $ - $ -
EXPENDITURE
Administration - Sustainability
100.11.1111-54500 $ - $ 65 $ - $ 65 Fund remaining amount of Phase II of the Climate Action Plan. $ - $ 65 $ - $ 65
$ - $ - $ - $ -
$ 65
February 13, 2024
EXPENDITURE ADJUSTMENTS
REVENUE ADJUSTMENTS
NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 1
17a
CITY OF PICO RIVERA
Fiscal Year 2023-24 Mid-Year Budget Adjustments
ENCLOSURE 2 - Other Funds - No General Fund
OTHER FUNDS - NO GENERAL FUND Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes
REVENUE
PICO RIVERA INNOVATIVE MUNICIPAL ENERGY (PRIME)
560.00.0000-47750 $ - $ 3,594,817 $ - $ 3,594,817 Increase for Collection rates effective September 1, 2023 560.00.0000-47751 $ - $ 38,083 $ - $ 38,083 Increase for PRIME Future rates effective September 1, 2023
EXPENDITURE
MEASURE R
207.40.4010-54500 $ - $ 20,000 $ - $ 20,000
Increase in as-needed traffic engineering services due to increase in volume of traffic studies and permit reviews
207.40.4030-54650 $ - $ 20,000 $ - $ 20,000
New funds requested to provide guardrails replacement Citywide. Funds will be used to replace the signage, keep inventory as needed throughout the year, and installation PRIME
560.16.1635-54275 $ - $ 1,496,221 $ - $ 1,496,221 Increase for purchased power. 560.16.1635-54277 $ - $ 396,676 $ - $ 396,676 Increase for resource adequacy purchase. $ - $ 1,932,897 $ - $ 1,932,897
$ - $ 3,632,900 $ - $ 3,632,900
$ (1,700,003)
February 13, 2024
EXPENDITURE ADJUSTMENTS
REVENUE ADJUSTMENTS
NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 2
17b
CITY OF PICO RIVERA
Fiscal Year 2023-24 Mid-Year Budget Adjustments
ENCLOSURE 3 - CIP Other Funds - No General Fund
CAPITAL IMPROVEMENT - NO GF Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes
REVENUE
$ - $ - $ - $ -
EXPENDITURE
SENATE BILL 1 (SB1)
202.70.7300-54500-50048 $ - $ - $ 7,206 $ 7,206
SB1 - Fund 202 add $7,206 to fund the final processing and cover the total costs for construction.
202.70.7300-54500-50067 $ - $ - $ 99 $ 99
SB1 - Fund 202 add $99 to complete the project and cover the total costs for construction.
Project: Residential Resurfacing Program - Slurry & Cape Seal
MEASURE R
207.70.7300-54500-50081 $ - $ - $ 100,000 $ 100,000
Meas R - Fund 207 add $100,000 to fund additional major arterial segments this fiscal year due to fading.
Project: Annual Signing and Striping
$ - $ - $ 107,305 $ 107,305
$ - $ - $ - $ -
$ 107,305
February 13, 2024
EXPENDITURE ADJUSTMENTS
REVENUE ADJUSTMENTS
NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 3
17c
COUNCIL
MEETING
DATE
COUNCIL MEMBER REQUEST DETAIL DIRECTOR(S)
ACTION TAKEN: Memo; Staff
Report; Closed Session;
Presentation; Follow-up
Meeting; City Manager Reports;
Informal Action
DISCUSSION
ITEM
ACTION ITEM
DATE
STATUS:
Complete;
Pending;
On-going;
In-Progress
2/14/2023 Garcia/Sanchez Establishing Safe Spaces for kids Take to City Council P. Yugar TBD 2/14/2023 8/8/2023 In-Progress 11/14/2023 Lara/Lutz MHKO Ordinance Take to City Council A. Betancourt In-Progress 1/23/2024 Lara/Garcia Drone Technology Report Take to City Council S. Carmona In-Progress
GOOD OF THE ORDER