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DISCUSSION
City of San Bernardino
Request for Council Action
Date: January 15, 2025
To: Honorable Mayor and City Council Members
From: Rochelle Clayton, Acting City Manager;
C. Jeannie Fortune, Interim Director of Finance and Management Services
Department: Finance and Management Services
Subject: Unaudited FY 2023/24 Year-End Update General Fund Financial Update
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino receive and file the FY 2023/24 Unaudited Year-End Update.
Executive Summary
This report provides an internal analysis of the City’s financial performance for the fiscal year ending June 30, 2024, pending a finalized audit and production of Annual Comprehensive Financial Report (ACFR). Both General Fund and Measure S combined ended FY 2023/24 with a net surplus of $29.05 million, reflecting higher- than-anticipated revenues and strong performance.
Background
The General Fund and Measure S revenues are crucial to funding essential city services, including public safety, infrastructure, and community programs. The FY 2023/24 budget emphasized strengthening financial stability while addressing community priorities and deferred maintenance. Measure S funds were allocated to enhance public safety, senior and youth services, and infrastructure projects.
Discussion
FY 2023/24 Year-End Performance
Revenues
•General Fund revenue totaled $181.37 million, exceeding the amended budget of $158.41 million by $22.96 million (+14.5%). This was largely driven by 2 4
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continued recovery from pandemic-era disruptions. As businesses and households regain stability, increased activity in retail, dining, and entertainment sectors significantly boosted Sales and Use Tax collections. oKey Contributors:
▪Utility Users Tax: $28.67 million, exceeded budget by $7.67 million—higher consumption of utilities is typically driven by economic growth and extreme weather conditions.
▪Licenses & Permits: $16.06 million, surpassing budget by $3.29 million. Increased demand for housing helps create momentum in secondary industries such as construction and local retail. ▪Investment Income: $3.37 million, significantly outperforming budgeted expectations (+524.6%). Rising interest rates created an environment conducive to higher investment income, but as the Federal Reserve continues announcing interest rate cuts, this performance is not expected to continue.
•Measure S revenues totaled $51.26 million, which is closely aligned with the amended budget of $51 million (+0.5%).
Expenditures
•General Fund expenditures totaled $196.27 million, coming in under the amended budget of $218.17 million by $21.90 million (-10%). These significant savings were partially due to salary savings from the large numbers of full-time positions added through the Strategic Initiatives and eligible expenses such as Nuisance Abatement and Graffiti Abatement charges being moved from the Property Taxes in Lieu of VLF
Sales & Use Tax
Utility User Tax
Franchise Tax
Other Taxes
Licenses & Permits
Fines & Forefeitures
Investment Income
Use of Money and Property
Intergovernmental
Charges for services
Miscellaneous
Measure S Sales Tax
$0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 FY 2023/24 Unaudited Actuals FY 2023/24 Amended Budget
FY 2023/24 Budget vs Actuals - Revenues
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General Fund into the American Rescue Plan Act (ARPA).
•Measure S expenditures totaled $7.31 million, performing significantly under the amended budget of $33.90 million, primarily due to delays in CIPS or having various projects in different phases (i.e., planning, design, and construction).
Net Position
•Combined: Both General Fund and Measure S show a net surplus of $29.05 million, reflecting unspent funds that are earmarked for future capital and public safety initiatives.
Review of Fund Balance
The City of San Bernardino's total unaudited fund balance for FY 2023/24 is anticipated to end at $202,515,453. The calculation for the fund balance total is shown in Table 1 below. The Fund Balance designation is outlined in Table 2 to identify the different categories within Fund Balance.
Key revenue drivers contributing to the increase in fund balance for FY 2023/24 include Utility Users Tax, Licenses and Permits, and Investment Income, which outperformed projections due to favorable economic conditions, while delays in Capital Improvement Projects (CIPs) contributed to underspending in expenditures.
It is good to note that this surplus (increase in fund balance) is one time funding and should not be relied upon for recurring operational costs or long-term planning like staff increases. Instead, the surplus is earmarked for strategic, one-time uses such as funding deferred maintenance, public safety enhancements, and critical infrastructure projects, including road improvements and facility upgrades previously approved by the Mayor and City Council. Reinvesting these funds into CIPs and other high-priority initiatives ensures they create lasting community value and safeguard the City’s long- term financial sustainability.
See tables on next page.
Table 1
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Table 2
2021-2025 Strategic Targets and Goals
The review of the financial update aligns with all key targets of the City Council’s Strategic Plan. The funding of projects and programs at every level of the organization ensures that the City can achieve the goals and priorities established by the Mayor and City Council.
Fiscal Impact
There is no financial impact associated with receiving and filing this financial update.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino receive and file the FY 2023/24 Unaudited Year-End Update.
Attachments
1. FY 2023/24 General Fund and Measure S Revenue and
Expenditure Summary
Category FY 2022/23 Actuals
FY 2023/24 Estimate to City Council (Apr-2024)
FY 2023/24 Actuals(unaudited)
FY 2024/25 Estimated
Beginning Fund Balance, as of June 30th 156,449,095$ 173,462,555$ 173,462,555$ 202,515,453$ Revenues 221,320,505$ 218,558,821$ 232,633,135$ 236,603,800$ Expenditures (204,307,045)$ (206,707,151)$ (203,580,237)$ (237,453,690)$ Net 17,013,460$ 11,851,670$ 29,052,898$ (849,890)$ CIP Projects (3,565,500)$
Ending Fund Balance 173,462,555$ 185,314,225$ 202,515,453$ 198,100,063$
CALCULATION OF FUND BALANCE
ACFR 2022-23 6/30/2024
Category FUND BALANCE 06-30-2023
Estimate to City Council( Apr-2024) FUND BALANCE 06-30-2024 FUND BALANCE 06-30-2025 Nonspendable 41,421,536 40,000,000 40,000,000 40,000,000Restricted 2,086,366 2,000,000 2,000,000 1,800,000CommittedAnimal Services 68,387 - - -General Plan Update 142,877 2,400,000 2,400,000 -Measure S - Capital Projects 81,762,949 83,512,719 93,512,719 89,947,21915% Emergency Reserve 28,788,264 31,006,073 31,006,073 35,618,05410% Economic Contingency Reserve 19,192,176 20,670,715 20,670,715 23,745,369Unassigned - 5,724,718 12,925,946 6,989,421TOTAL FUND BALANCE 173,462,555 185,314,225 202,515,453 198,100,063
FUND BALANCE DESIGNATION
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Ward:
All Wards
Synopsis of Previous Council Actions:
On June 26, 2024, the Mayor and City Council adopted Resolution No. 2024-142, approving and adopting the City of San Bernardino’s Operating Budget and Capital Improvement Plan (CIP) for Fiscal Year 2024/25.