City of Piedmont
COUNCIL AGENDA REPORT
DATE: January 21, 2025
TO: Mayor and Council
FROM: Rosanna Bayon Moore, City Administrator
SUBJECT: Acceptance of the FY 2024-25 Midyear Fiscal Report
RECOMMENDATION
No action necessary, informational report only.
Midyear FY 2024-25 General Fund Summary
The General Fund finances the basic municipal services provided by the City. General Fund revenues are budgeted at $41.5 million (which includes Operating Transfers-In of $1.2 million, primarily from the Sewer Fund). General Fund expenditures are budgeted at $39.8 million. The adopted budget also includes Capital Transfers-Out of $2.0 million to the Facilities Capital Fund and $850,000 to the Facilities Maintenance Fund.
Based on current trends and known expense variances, staff is projecting General Fund revenues to exceed the budget by approximately $800,000 and expenses to be higher than the budget by approximately $150,000. This results in positive General Fund operating net income, before capital transfers, of approximately $600,000 and an ending General Fund Balance of approximately $7.6 million, which is 19% of total expenditures, for Fiscal Year 2024-25. The General Fund remains in a sound position, with revenues exceeding expenses. This is the result of conservative budgeting and prudent management of day-to-day operations. There can be no assurance these trends will continue as the economy continues to face high interest rates and moderate inflation.
The increase in revenue is primarily due to:
• Higher than expected real property transfer tax receipts (+$0.4 million) • Increased Recreation Department revenue (+$0.2 million), • Mutual Aid wildfire support (+$0.2 million)
• Building Permits and Planning Related Fees (+$0.1 million). • Property taxes, primarily unsecured property (+$0.1 million), Revenue increases are partially offset by:
• Timing of recognition of ARPA revenue (-$0.2 million) • Lower than anticipated business license and utility user taxes (-$0.1 million).
Agenda Report Page 2
The increase in expenditures is primarily due to the following:
• Increased Workers Compensation claims
• Higher overtime costs in the Fire Department due to mutual aid wildfire assistance and one vacant position.
• Higher costs in the Recreation Department due to higher-than-expected program interest and third-party contract program costs. These expenditures are more than offset by the corresponding program revenue.
• Offset by lower aquatics subsidy and retiree medical costs.
General Fund Revenues
Total General Fund revenue through December 31, 2024, was $18.6 million, which is 45% of the annual revenue budget.
Staff projects General Fund Revenues to be $42.2 million for FY 2024-25, an increase of $0.8 million as compared to the budget.
The increase is summarized as follows:
The major revenue categories (property tax, parcel tax, and transfer tax) which account for 69% of the General Fund budgeted revenue are discussed below:
• The City has received property tax revenues of $9.7 million through December 31, 2024, which is 51% of the annual budget of $19.0 million. This is 3% higher than the
REVENUE
(in thousands)
Projected Budget $ %
CATEGORY
Property Taxes 19,072 18,994 78 0%
Real Property Transfer Tax 4,200 3,800 400 11%
Parcel Tax 2,690 2,690 - 0%
Other Taxes and Franchises 3,051 3,108 (57) -2%
License and Permits 832 846 (14) -2%
Revenue from Use of Money or Property 1,069 1,036 33 3% Revenue from Other Agencies 4,774 4,844 (70) -1%
Charges for Current Services 5,211 4,843 369 8%
Other Revenue 142 91 52 57%
Transfers In 1,200 1,200 - 0%
42,241 41,451 789 2%
FY 2024-25 Variance
Agenda Report Page 3
amount received in the same period last year. Based on the total amount of secured and unsecured property taxes to be received as communicated by Alameda County, staff projects total property tax revenue to be approximately $19.1 million, which is $78,000 (1%) higher than the adopted budget.
• Parcel tax revenue received through December 31, 2024, was $1.3 million, which is 50% of the annual budget. This revenue increased $35,000 as compared to the same period last year. Staff expects parcel tax revenue to be in line with budget for the year. • Real property transfer tax revenue received through December 31, 2024, was $1.9 million, which is 50% of the annual budget of $3.8 million, and flat to the amount received in the same period last year. Year over year, the number of homes sold increased 8% (65 homes sold compared to 60 in the same period last year), and a 6% decline in the average home sale price to $2.6 million from $2.8 million in the same period last year. Average sales price has declined in each of the past two years. For FY 2024-25, staff projects transfer tax revenues to be $4.2 million, which is $0.4 million greater than the adopted budget.
Other revenue categories to note include the following:
American Rescue Plan Act (ARPA). The federal government allocated $2.6 million in ARPA funds to the City of Piedmont - $1.3 million was received in July 2021 and the remaining $1.3 million was received in July 2022. In accordance with accounting rules, these monies cannot be recognized as revenue until spent. Of the $2.6 million received, $838,995 was spent through June 30, 2024. The remaining $1.8 million, as approved by the City Council in October 2021, is allocated to the Dispatch relocation/renovation project. This project is currently under construction and is expected to be completed in the Spring.
Revenue from Recreation Programs. As of December, recreational programs have been strong, especially contract camps and programs. This is partially offset by lower than planned revenue from facility rentals. Assuming this trend continues, this category is anticipated to exceed the approved budget by approximately $166,000. It should be noted the majority of Recreation Department expenses are variable in nature, and accordingly, an increase in expenses is expected.
Mutual Aid – Wildfire Support. The City expects to receive approximately $154,000 for assistance in battling the season’s wildfires (Line Fire and the Corral Fire) under the related mutual aid agreements with Cal-OES.
General Fund Expenditures
General Fund expenditures are budgeted at $39.8 million. Total estimated expenditures for FY 2024-25 are $39.9 million, or $149,000 (less than 1%) higher than budget.
The following table compares budget and projected expenditures for the full fiscal year:
Agenda Report Page 4
Personnel related costs, the largest expenditure component of the General Fund, represent 62% of the total expenditure budget and are estimated at $24.6 million. The variance is primarily due to:
• Fire Department Personnel costs- $150,000:
o Overtime exceeds budget due to mutual aid wildfire assistance and backfilling positions caused primarily by vacant positions.
o The overtime spend is partially offset by savings in regular salaries and benefit costs.
o Note – Mutual aid revenue of $154,000 offsets this overage.
Operating expenses are expected to be higher than budget by approximately $0.4 million primarily due to:
• Higher costs in the Recreation Department (+$100,000), primarily third-party contract program costs, due to greater than expected increase in Recreation program offerings.
Non-Departmental costs will be higher than budget due to:
• Increased Workers Compensation claims (+$170,000)
• Offset by lower retiree medical premiums (-$70,000)
An Aquatics subsidy of $400,000 was budgeted for the hiring of personnel and other operating costs for the new community pool. With the pool opening date estimated for Spring 2025, the timing of these initial expenses has been delayed. As a result, staff is estimating a subsidy of only $300,000 will be needed this year, a savings of $100,000.
Please see the following pages for schedules detailing this information.
EXPENDITURES
(in thousands) % of
Projected Budget Total $ %
CATEGORY
Personnel Costs 24,648 24,598 62% 50 0%
Operating Expenses 10,422 10,322 26% 100 1%
Non-Depatmental 4,549 4,450 11% 99 2%
Aquatics Subsidy 300 400 1% (100) -25%
39,920 39,771 100% 149 0%
FY 2024-25 Variance
Agenda Report Page 5
Projected Budget
2021-22 2022-23 2023-24 2024-25 2024-25 $ %
General Fund Beginning Balance $ 6,509 $ 7,403 $ 7,423 $ 8,526 $ 8,443 $ 83 1% Property Taxes 16,224 17,529 18,449 19,072 18,994 78 0% Real Property Transfer Tax 5,981 4,465 4,086 4,200 3,800 400 11% Parcel Tax 2,425 2,520 2,622 2,690 2,690 - 0%
Other Taxes and Franchises 2,721 3,097 2,939 3,051 3,108 (57) -2% License and Permits 766 695 809 832 846 (14) -2%
Revenue from Use of Money or Property 508 827 1,262 1,069 1,036 33 3% Revenue from Other Agencies 2,615 2,269 2,779 4,774 4,844 (70) -1% Charges for Current Services 4,179 4,630 4,828 5,211 4,843 369 8% Other Revenue 140 392 275 142 91 51 56%
35,559 36,424 38,049 41,041 40,251 789 2%
Operating Transfers in 905 879 1,009 1,200 1,200 - 0%
Total Revenue 36,464 37,303 39,058 42,241 41,451 789 2% Departmental Expenditures
Administration 3,509 3,730 4,303 5,238 5,338 -2% (100)
Public Works 4,206 4,562 4,607 4,964 4,964 - 0%
Planning & Building 2,390 2,170 2,892 2,933 2,933 - 0%
Recreation 3,296 3,727 3,902 4,237 4,137 100 2%
Police 7,315 7,503 7,961 8,822 8,822 - 0%
Fire 7,700 8,042 8,279 8,877 8,727 150 2%
Departmental Expenditures 28,416 29,734 31,944 35,070 34,920 150 0% Non Departmental Expenditures
Library 350 350 350 350 350 - 0%
Unemployment Insurance 17 22 14 30 20 10 50%
Workers Compensation 872 1,014 1,180 1,309 1,095 214 20% Liability Insurance 1,104 1,472 1,457 1,860 1,915 (55) -3% Pension rate stabilization - - - - #DIV/0!
OPEB - Retiree payments 750 883 950 1,000 1,070 (70) -7% Other 100 1 88 - - - #DIV/0!
Non Departmental Expenditures 3,193 3,742 4,039 4,549 4,450 99 2% Operating Transfers-out
Aquatics - - - 300 (100) 400 -25%
Operating Transfers-out - - 300 (100) 400 -25%
Total Expenditures and Transfers-out 31,609 33,476 35,983 39,920 39,771 149 0% Operating Net Income 4,855 3,827 3,075 2,321 1,681 640 38% Capital Transfers-out
Equipment Replacement Fund 1,361 690 800 - - - #DIV/0!
Facility Maintenance\Sidewalk 900 1,300 850 950 850 100 12% Facility Capital 1,700 1,817 322 1,825 2,016 -9% (191)
Capital Improvements 500 500 - 0%
Total Capital Transfers 3,961 3,807 1,972 3,275 3,366 (91) -3% Net Income after Capital Transfers 894 20 1,103 (954) (1,685) -43% 731 General Fund Ending Fund Balance $ 7,403 $ 7,423 $ 8,526 $ 7,572 $ 6,758 $ 814 12% Fund Balance as % of Operating Exp 23% 23% 24% 19% 17%
Variance
CITY OF PIEDMONT
GENERAL FUND ANALYSIS
2020-21 to 2024-25
(000's)
ACTUAL
Agenda Report Page 6
Description June-22 June-23 June-24 6 Months Budget % Attained Projected $ Variance Actual Annual
PROPERTY TAX - SECURED 14,974 16,027 17,011 8,778 17,654 50% 17,667 13 PROPERTY TAX - UNSECURED 726 761 881 821 885 93% 950 65 PROPERTY TAX-SUPPLEMENTAL 515 733 547 82 450 18% 450 0
PROPERTY TAX-DELINQ & PENLTY 9 8 11 0 5 0% 5 0
SUB-TOTAL Property Tax 16,224 17,529 18,449 9,681 18,994 51% 19,072 78 REAL PROPERTY TRANSFER TAX 5,981 4,465 4,086 1,911 3,800 50% 4,200 400 PARCEL TAX: MUNI TAX 2,425 2,520 2,622 1,345 2,690 50% 2,690 0 TOTAL Property Related Taxes 24,629 24,514 25,157 12,937 25,484 51% 25,962 478 BUSINESS LICENSE TAX 301 391 340 132 400 33% 351 -49
REAL ESTATE RENTAL TAX 339 354 356 8 360 2% 360 0
SALES & USE TAXES 243 227 196 71 225 31% 225 0
TOTAL Business & Sales Taxes 883 972 891 210 985 21% 936 -49 ELECTRIC FRANCHISE FEE 109 133 145 0 160 0% 160 0
GARBAGE FRANCHISE FEE 267 275 280 166 295 56% 295 0
CABLE T.V. FRANCHISE FEE 201 183 176 41 163 25% 165 2
TOTAL Franchise Fees 577 591 601 206 618 33% 620 2
GAS & ELECTRIC USERS TAX 1,043 1,314 1,244 427 1,300 33% 1,300 0 TELEPHONE USERS TAX 173 175 158 60 160 38% 150 -10
WATER USERS TAX 45 45 45 23 45 50% 45 0
TOTAL Utility Users Tax 1,260 1,534 1,446 509 1,505 34% 1,495 -10 BUILDING & OTHER PERMITS 740 673 794 381 824 46% 812 -12 PLANNING FEES 266 210 194 94 185 51% 210 25
PLAN CHECK FEES 363 335 337 186 345 54% 360 15
GENERAL PLAN MAINT. FEES 427 419 466 347 490 71% 550 60 RECORDS MANAGEMENT FEES 27 25 29 15 31 48% 30 -1
TOTAL Permits & Planning fees 1,823 1,662 1,821 1,024 1,875 55% 1,962 87 COMMUNITY HALL - RENTAL 477 468 492 211 480 44% 450 -30 VETERANS HALL - RENTAL 41 49 38 12 51 24% 40 -11
RECREATION BUILDING - RENTAL 0 3 0 2 5 32% 2 -3
801 MAGNOLIA - RENTAL 1 3 8 1 8 19% 8 1
RECREATION PROGRAMS 2,153 2,617 2,902 1,739 2,906 60% 3,100 195 PRE-SCHOOL 455 496 514 249 525 47% 540 15
TOTAL Recreation Revenue 3,127 3,637 3,953 2,214 3,974 56% 4,140 166 General Fund Revenue (000's)
Actual - Fiscal Year Ended: Fiscal Year 2024-25
Agenda Report Page 7
Description June-22 June-23 June-24 6 Months Budget % Attained Projected $ Variance Actual Annual
MOTOR VEHICLE LICENSE FEE 1,493 1,595 1,695 877 1,747 50% 1,753 6 HOMEOWNER PROP. TAX RELIEF 79 78 76 0 76 0% 75 -1
MISCELLANEOUS RECEIPTS-STATE 6 17 298 0 119 0% 119 0
MISC GRANTS - ABAG 0 0 20 0 0 #DIV/0! 0 0
MISCELLANEOUS-COUNTY 39 35 14 0 500 0% 500 0
FEDERAL GRANTS 284 233 322 0 2,054 0% 1,825 -230
TOTAL Other Agency Revenue 1,902 1,958 2,426 877 4,497 19% 4,272 -225 FORESTRY & FIRE PROTECTN 510 0 0 19 0 #DIV/0! 154 154
PARAMEDIC TAX 70 70 70 35 70 50% 70 1
AMBULANCE SERVICE CHARGE 302 367 314 150 300 50% 350 50 FIRE CPR COURSES 0 2 1 1 1 204% 1 1
TOTAL Fire Related Revenue 881 438 385 205 370 55% 575 205 STATE GRANTS - TOBACCO 0 106 131 0 135 0% 135 0
1/2% SALES TAX FOR PUB SAFE 124 127 130 53 133 40% 133 0 P.O.S.T. 9 8 23 4 10 40% 10 0
EMERYVILLE ANIMAL CONTROL 121 100 0 0 0 #DIV/0! 0 0
CROSSING GUARD 61 48 65 0 60 0% 65 5
SPECIAL SERVICES 4 10 4 1 0 #DIV/0! 5 5
DOG LICENSES 26 22 17 8 22 34% 20 -2
TOTAL Police Related Revenue 345 421 370 65 360 18% 368 8 INTEREST 76 279 498 107 350 30% 400 50
UNREALIZED GAIN/LOSS -217 -124 91 23 0 #DIV/0! 27 27
TOTAL Investment Income\(Loss) -141 155 589 130 350 37% 427 77 TELECOMMUNICATIONS - LEASE 108 112 106 48 107 45% 107 0 VETERANS HALL - LEASE 20 20 21 11 22 49% 22 0
801 MAGNOLIA - LEASE 2 12 13 6 13 50% 13 0
SALE OF MISC. PROPERTY 33 1 38 11 0 #DIV/0! 12 12
MISCELLANEOUS REVENUE 103 393 238 125 91 137% 130 39
TRANSFER IN 1,013 905 882 0 1,200 0% 1,200 0
OTHER REVENUE 1 1 2 0 2 0% 1 -1
TOTAL Miscellaneous Revenue 1,280 1,445 1,299 202 1,434 14% 1,485 51 TOTAL GENERAL FUND REVENUE 36,567 37,326 38,937 18,579 41,451 45% 42,241 789 General Fund Revenue (000's)
Actual - Fiscal Year Ended: Fiscal Year 2024-25
Agenda Report Page 8
Capital Funds
FACILITIES CAPITAL
As of December 31, 2024, the City has spent approximately $870,000 of the $8.4 million of expenditures included in the FY 24-25 Approved Budget. In December, City Council approved a budget allocation of $2.67 million for the Community Pool Project, bringing the total allocation from the Facilities Capital Fund to just under $5.8 million. Staff revised the project schedule to accommodate the additional allocation. Major projects currently underway are the Community Pool, Dispatch Relocation & Renovation, and the Piedmont Park Pedestrian Bridge. Recently completed projects include the renovation of the Fire Department bathrooms to accommodate gender diversity and the Crocker Park Pathway replacement.
Agenda Report Page 9
FACILITIES MAINTENANCE
As of December 31, 2024, the City has spent approximately $245,000 of the $1.2 million Approved Budget, including $209,000 spent on annual maintenance and repair. Sidewalk repair/replacement is budgeted at $700,000. Expenditures are estimated to be within budget for the fiscal year.
However, the General Fund subsidy will be increased $100,000 to $950,000 for FY 2024-25 to maintain a reasonable balance in the fund. Please note, last year’s subsidy was lowered by $650,000 as projects were delayed until the current fiscal year.
EQUIPMENT REPLACEMENT
Below is a summary schedule of activity in the Equipment Replacement Fund. Current fiscal year expenditures are estimated to be consistent with or below the Approved Budget. Staff did not include a transfer from the General Fund to the Equipment Replacement Fund in the FY 2024-25 Approved Budget as the balance in the fund was adequate to cover planned expenditures.
As evident in the schedule below, the City’s Equipment Replacement is fully funded, barring any unforeseen circumstances.
Agenda Report Page 10
Street/Sidewalk Related Funds
Funding sources for streets and sidewalks include Measure BB, Measure F, Gas Tax, and SB-1.
The majority of available funding is dedicated to street resurfacing and sidewalk repair work, with the balance dedicated to important sub-categories such as the implementation of projects prioritized by the approved Pedestrian & Bicycle Master Plan, and those related to the Complete Streets program.
Funding for streets for the Fiscal Year 2024-25 is just under $3.8 million, $2.1 million of which is being carried forward from Fiscal Year 2023-24. Major projects planned for this year are the 2024- 25 Paving Project and the Grand Avenue Paving project, which is currently in the bidding process.
Fiscal Begin Planned End
Year Balance Funding Interest Expenditures Balance
17/18 $ 3,937,414 $ 517,193 $ (651,165) $ 3,803,442
18/19 3,803,442 433,000 81,148 (1,216,799) 3,100,791
19/20 3,100,791 400,000 76,067 (513,171) 3,063,687
20/21 3,063,687 610,500 13,195 (590,280) 3,097,101
21/22 3,097,101 1,361,391 (28,188) (338,713) 4,091,591
22/23 4,091,591 690,000 58,713 (1,260,947) 3,579,357
23/24 3,579,357 800,000 146,799 (795,594) 3,730,562
24/25 3,730,562 0 85,000 (1,591,238) 2,224,324
25/26 2,224,324 860,295 77,851 (1,626,016) 1,536,455
26/27 1,536,455 808,075 46,094 (763,867) 1,626,758
27/28 1,626,758 971,629 48,803 (829,962) 1,817,227
28/29 1,817,227 817,705 54,517 (788,371) 1,901,078
29/30 1,901,078 808,965 57,032 (1,852,299) 914,776
30/31 914,776 653,911 27,443 (202,245) 1,393,886
31/32 1,393,886 609,210 41,817 (541,210) 1,503,703
32/33 1,503,703 590,194 45,111 (741,194) 1,397,814
EQUIPMENT REPLACEMENT FUND ACTIVITY
Agenda Report Page 11
Below is a recap of the current status of the street related funds:
COMMUNITY POOL
Since December 2022, City Council approved an additional $5.9 million in funding for the Community Pool Project. The following sources will be utilized for the project:
Funding Source Amount
Measure UU $25,168,577
Facilities Capital Fund 5,767,159
PRFO Contribution 1,932,464
EBCE Loan / CEDA Grant 832,000
Private Contribution (Kroger Estate) 800,000
Piedmont Beautification Contribution 239,000
Sewer Fund 100,000
Measure BB Fund 60,000
Total Fund $34,900,000
The total Community Pool project budget is $34,900,000. Through December 31, 2024, approximately $24.6 million has been expended. Any monies not expended will be returned to the Facilities Capital Fund.
By: Michael Szczech, Finance Director