General Fund Financial Report
Fiscal Year End 2021-2022
February 7, 2023
OVERVIEW
This report reflects the General Fund financial position for Fiscal Year 2021-22.
Beginning Balance
The beginning balance presented in the below schedule reflects the Annual Comprehensive Financial Report (ACFR) for year ended June 30, 2021 (after the Fiscal Year 2019-20 year-end assignments and transfers). This beginning balance includes only non-spendable amounts for prepaid costs; assignments for encumbrances, carryovers, and Fiscal Year 2021-22 appropriations; and undesignated fund balance.
Ending Balance
The Fiscal Year 2021-22 ending balance presented below does not take into account any year-end assignments or transfers yet to be made by the City Council.
Adjusted Budget
The revenue and expenditure categories include all adjustments made by the City Council during Fiscal Year 2020-21, including carryover appropriations approved in December 2021 and midyear adjustments approved in February 2022.
Year-End Actual
The year-end actual amounts are preliminary and subject to audit adjustments. The audit is nearing completion and as no major issues have been brought to the City’s attention by the auditors, staff is comfortable presenting these amounts as complete for Fiscal Year 2021-22.
FINANCIAL CONDITION
General Fund Financial Condition
As summarized below, Fiscal Year 2021-22 actual General Fund revenues and expenditures both compared favorably to the adjusted budget.
FY 2020-21
FY 2021-22
FY 2021-22
FY 2021-22
Adjusted Budget to Actual
FY 2022-23
General Fund
Year-End
Adopted
Adjusted
Year-End
Favorable
%
Adopted
Balance
Actual
Budget
Budget
Actual
(Unfavorable)
Change
Budget
Beginning Balance
2,583,598)
5,144,303)
5,144,303)
5,144,303)
-)
0.0)%
-)
Revenues
90,000,682)
94,655,364)
101,823,992)
103,770,924)
1,946,932)
1.9)%
100,119,290)
Expenditures
90,244,824)
86,929,791)
90,408,745)
83,980,886)
6,427,859)
7.1)%
106,332,914)
Transfers In
6,014,224)
2,874,946)
2,874,946)
1,870,082)
(1,004,864)
(35.0)%
1,750,927)
Transfers Out
3,570,028)
13,777,302)
5,740,408)
9,415,579)
(3,675,171)
(64.0)%
4,068,582)
Ending Balance
4,783,652)
1,967,520)
13,694,088)
17,388,844)
3,694,756)
27.0)%
8,531,279)
Each year, in preparation for the issuance of the prior fiscal year’s ACFR, the City Council confirms required and standard commitments of the City’s General Fund total balance (those components described above in the “Beginning Balance” paragraph in addition to those excluded here, such as the 8.33% one-month contingency reserve) and determines the use of the remaining fund balance for such items as departmental carryover requests, carryover donations and future cost increases.
REVENUES
Top Ten Revenues
Our top ten General Fund revenues account for 79.0% of total budgeted General Fund revenues from outside sources. By focusing on these, we can get an excellent understanding of our revenue position. In reviewing the combined total of these revenues, revenue is up 5.5% compared to the adjusted budget and 10.2% compared to the prior fiscal year.
FY 2020-21
FY 2021-22
FY 2021-22
FY 2021-22
Adjusted Budget to Actual
FY 2022-23
Top Ten
Year-End
Adopted
Adjusted
Year-End
Favorable
%
Adopted
Revenues
Actual
Budget
Budget
Actual
(Unfavorable)
Change
Budget
Property Tax
30,930,913)
30,700,000)
30,740,025)
31,864,830)
1,124,805)
3.7)%
32,313,229)
Sales Tax
10,018,216)
10,250,000)
10,911,000)
11,813,896)
902,896)
8.3)%
11,839,338)
Prop Tax Lieu of VLF
8,376,189)
8,650,000)
8,651,706)
8,653,149)
1,443)
0.0)%
9,094,480)
Utility Users Tax
6,713,480)
6,750,000)
7,072,150)
8,024,511)
952,361)
13.5)%
7,072,150)
Trans Occupancy Tax
3,400,322)
4,100,000)
4,978,378)
5,419,197)
440,819)
8.9)%
5,800,000)
Property Transfer Tax
3,255,022)
2,800,000)
3,403,806)
3,745,270)
341,464)
10.0)%
3,000,000)
Parking Meter Fees
2,475,062)
2,300,000)
2,600,000)
2,790,872)
190,872)
7.3)%
2,500,000)
Franchise Fees
1,731,846)
1,775,000)
1,775,000)
1,864,336)
89,336)
5.0)%
1,775,000)
Business License Tax
1,211,540)
1,250,000)
1,271,042)
1,193,814)
(77,228)
(6.1)%
1,271,042)
Parking Citations
1,258,870)
1,250,000)
1,115,000)
1,103,695)
(11,305)
(1.0)%
1,335,000)
Total
69,371,460)
70,100,000)
72,518,107)
76,473,570)
3,955,463)
5.5)%
76,000,239)
Key variances include:
• Sales Tax. FY 2021-22 sales tax revenue increased beyond both prior year revenue and current year expectations reflecting the recovery from pandemic-related economic conditions. The increase in sales in the categories of restaurants and hotels, general consumer goods, state and county pools, business and industry, fuel and service stations and building and construction were the major contributors to the rise in revenue. • Utility Users’ Tax. FY 2021-22 utility users’ tax revenue exceeded expectations by 13.5% due to gas, electric and water sales all increasing over this period. This is due to a number of factors, including increased rates, more people working remotely which resulted in more energy usage, inflation and natural gas prices. • Transient Occupancy Tax. The City’s General Fund revenue source most impacted by COVID-19 restrictions was transient occupancy tax (TOT). With the ending of the pandemic, the TOT revenues exceeded expectations by 8.9% due to increased room rentals. This revenue source is expected to return to pre-pandemic levels in FY 2023-24. • Property Transfer Tax. The higher than expected property transfer tax is due to an increase in the average selling price of homes in Redondo Beach. Although there were fewer homes sold in FY 2021-22, the revenue received was approximately $341,000 higher than expected. • Parking Meter Fees. The FY 2021-22 parking meter fees increase over both prior year actuals and budget can be attributed to the replacement of existing parking meters to new, more efficient credit card meters and an increase in usage with the ending of the pandemic. • Business License Tax. Business license revenues decreased by 1.46% from the FY 2020-21 actuals. The City expected businesses to reopen after the COVID-19 pandemic ended as reflected in the estimated FY 2021-22 revenue amount. As reflected in the FY 2022-23 revenue estimate, business license revenue is still expected to recover to pre-pandemic levels. 9 EXPENDITURES
The total of all operating costs combined showed a favorable balance of 3.4% for the fiscal year as summarized below:
FY 2020-21
FY 2021-22
FY 2021-22
FY 2021-22
FY 2021-22
FY 2021-22
Adjusted Budget to Actual
FY 2022-23
Year-End
Adopted
Adjusted
Year-End
Year-End
Year-End
Favorable
%
Adopted
Expenditures
Actual
Budget
Budget
Expenditure
Encumbrances
Actual
(Unfavorable)
Change
Budget
Personnel
58,696,213)
53,235,087)
53,340,915)
50,754,865)
-)
50,754,865)
2,586,049)
4.8)%
56,010,087)
Maintenance/Operations
6,708,917)
8,460,873)
10,900,131)
7,625,449)
1,197,471)
8,822,920)
2,077,211)
19,1)%
10,730,280)
ISF Allocations
24,641,407)
25,066,046)
25,276,088)
25,276,088)
-)
25,276,088)
-)
0.0)%
25,283,973)
Capital Outlay
198,287)
167,785)
891,611)
324,484)
64,918)
389,402)
502,209)
56.3)%
3,101,130)
Debt Service
-)
-)
-)
-)
-)
-)
-)
0.0)%
11,207,444)
Total Expenditures
90,244,824)
86,929,791)
90,408,745)
83,980,886)
1,262,389)
85,243,275)
5,165,469)
5.7)%
106,332,914)
Transfers Out
3,570,028)
13,777,302)
5,740,408)
9,415,579)
-)
9,415,579)
(3,675,171)
(64.0)%
4,068,582)
Total
93,814,852)
100,707,093)
96,149,153)
93,396,465)
1,262,389)
94,658,854)
1,490,298)
1.5)%
110,401,496)
n/m – Non-meaningful
Key variances by type include:
Personnel. Because personnel expenditures account for 59.5% of the General Fund’s Total Expenditures, a further breakdown is shown in the table above. The following items should be noted in regards to the variances.
Vacant budgeted positions account for the savings in the regular salaries category for FY 2021-22. The City, along with other agencies, have been challenged with the filling of vacancies during the year. This is an ongoing trend that is expected to also affect FY 2022-23.
While overtime exceeded the budget due to the necessity to backfill vacant positions or leave times in the Police Department and to meet Fire Department constant manning obligations, departmental savings more than offset these overages. It should be noted that although Fire Department overtime exceeded budgeted amounts, it was reduced from that in the prior year due to the substantive overtime reform in the Memorandum of Understanding with the Redondo Beach Firefighters’ Association for the period beginning July 1, 2020.
While not utilized to the extent budgeted, medical insurance expenditures were higher than those in the prior year due to Memorandum of Understanding flexible spending allowance increases.
The reductions in retirement costs are a result of the payment made to CalPERS for the City’s unfunded liability being made by the 2021 bond issue.
The following table further illustrates the City’s various personnel expenditures:
FY 2020-21
FY 2021-22
FY 2021-22
FY 2021-22
Adjusted Budget to Actual
FY 2022-23
Year-End
Adopted
Adjusted
Year-End
Favorable
%
Adopted
Expenditures
Actual
Budget
Budget
Actual
(Unfavorable)
Change
Budget
Regular Salaries
30,391,551)
23,395,253)
23,492,830)
32,343,015)
(8,850,185)
(37.7)%
38,240,298)
Overtime Salaries
4,981,662)
2,970,234)
2,978,484)
4,876,759)
(1,898,275)
(63.7)%
3,077,334)
Medical Insurance
3,904,667)
4,990,996)
4,990,996)
4,469,120)
521,876)
10.5)%
5,079,015)
Retirement
16,093,014)
18,213,994)
18,213,994)
5,501,219)
12,712,775)
69.8)%
5,921,129)
Other Benefits
3,325,319)
3,664,610)
3,664,611)
3,564,752)
99,858)
2.7)%
3,692,311)
Total Personnel
58,696,213)
53,235,087)
53,340,915)
50,754,865)
2,586,049)
4.8)%
56,010,087)
Maintenance/Operations and Capital Outlay. The favorable variance in the maintenance/operations category (increased slightly by the favorable variance in the capital outlay category) is primarily due to contracts and professional services not expended to their budgeted amount. However, approximately $230,000 in donations are expected to be carried over into the next fiscal year, requests to carry over General Fund departmental savings total approximately $770,000, and General Fund capital improvement projects not yet completed totaling approximately $550,000 are recommended for carryover. If all these amounts had been spent in Fiscal Year 2021-22, the favorable variance for the total of these two categories would decrease to approximately $1.0 million.
EXPENDITURES (Continued)
Internal Service Fund (ISF) Allocations. Fiscal Year 2021-22 expenditures reflect the allocations based on actual activity of Fiscal Year 2020-21. ISF adjustments are updated annually with the midyear budget review.
Transfers Out. The increases in transfers out reflect the 2021 lease revenue (pension obligation) bond debt service payment which was partially reimbursed with transfers in from other funds.
The total of all operating expenditures combined showed a favorable balance of 3.2% by department as summarized by the following:
FY 2020-21
FY 2021-22
FY 2021-22
FY 2021-22
FY 2021-22
FY 2021-22
Adjusted Budget to Actual
FY 2022-23
Year-End
Adopted
Adjusted
Year-End
Year-End
Year-End
Favorable
%
Adopted
Expenditures
Actual
Budget
Budget
Expenditures
Encumbrances
Actual
(Unfavorable)
Change
Budget
Mayor & City Council
621,170)
785,775)
766,844)
651,871)
-)
651,871)
114,973)
15.0)%
944,757)
City Clerk
1,135,584)
1,185,135)
1,315,768)
1,008,618)
72,324)
1,080,942)
234,826)
17.8)%
1,538,955)
City Treasurer
330,658)
397,786)
397,662)
310,592)
27,217)
337,809)
59,853)
15.1)%
432,462)
City Attorney
3,347,356)
3,348,037)
3,646,191)
3,224,360)
31,514)
3,255,874)
390,317)
10.7)%
3,998,085)
City Manager
1,062,987)
1,019,549)
1,142,977)
955,049)
116,769)
1,071,818)
71,159)
6.2)%
1,247,483)
Human Resources
2,180,237)
2,374,175)
2,580,642)
2,187,134)
8,320)
2,195,454)
385,188)
14.9)%
2,706,306)
Financial Services
2,486,962)
2,447,855)
2,715,440)
2,434,040)
162,983)
2,597,023)
118,417)
4.4)%
3,020,113)
Police
40,731,734)
37,929,026)
38,425,442)
36,899,250)
137,394)
37,036,644)
1,388,798)
3.6)%
45,479,394)
Fire
19,393,059)
17,810,188)
18,199,110)
17,236,357)
247,374)
17,483,731)
715,379)
3.9)%
21,732,944)
Public Library
3,932,456)
4,327,907)
4,136,536)
3,916,507)
-)
3,916,507)
220,029)
5.3)%
4,465,314)
Community Services
4,486,946)
5,355,538)
5,199,022)
5,022,045)
-)
5,022,045)
176,977)
3.4)%
5,629,356)
Community Development
3,429,698)
2,928,181)
3,201,487)
2,905,163)
202,229)
3,107,392)
94,095)
2.9)%
4,013,660)
Waterfront & Econ Dev
239,146)
335,638)
410,845)
259,484)
946)
260,430)
150,415)
36.6)%
301,314)
Public Works
6,866,831)
6,685,001)
7,654,779)
6,914,994)
243,789)
7,158,783)
495,996)
6.5)%
7,721,641)
Capital Projects
-)
-)
616,000)
55,422)
11,530)
66,952)
549,048)
89.1)%
3,101,130)
Total
90,244,824)
86,929,791)
90,408,745)
83,980,886)
1,262,389)
85,243,275)
5,165,470)
5.7)%
106,332,914)
Key variances by department include with a variance greater than +/-5% are described below:
Mayor and City Council. Fiscal Year 2021-22 expenditures for training, meetings and conferences were lower than expected. Additionally, employee recognition supplies remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23.
City Clerk. Election costs remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23.
City Treasurer. The department’s FY 2021-22 use of contracts for auditing remained unspent.
City Attorney. Unspent funding for legal matters account for the Fiscal Year 2021-22 savings. A carryover of this unspent funding is being requested for future unplanned matters.
City Manager. Fiscal Year 2021-22 funding for miscellaneous contracts and professional services remained unspent.
Human Resources. Fiscal Year 2021-22 expenditures reflect citywide retiree medical insurance savings. Additionally, contracts for the class and compensation study and employee negotiation services remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23.
Public Library. Savings from part-time salaries from reduced hours of operations and adult and youth collection development funding remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23. • Waterfront and Economic Development. Fiscal Year 2021-22 funding for Artesia/Aviation storefront improvement grants and economic development consulting remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23.
EXPENDITURES (Continued)
• Public Works. Signing bonus funding remained unspent resulting in a request for these funds to be carried over to Fiscal Year 2022-23. • Capital Projects. Fiscal Year 2021-22 capital project expenditures represent partial spending for multiyear projects.
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General Fund Financial ReportFebruary 7, 2023Fiscal Year End 2021-22