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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: September 3, 2025
To: Honorable Mayor and City Council Members
C. Jeannie Fortune, Interim Director of Finance and Management Services
Department: Finance & Management Services
Subject: Fiscal Year 2024/25 Year-End Projected General Fund Financial Update (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California receive and file the Fiscal Year 2024/25 Year-End Projected General Fund Financial Update.
Executive Summary
This report provides the unaudited year-end financial update for the City’s General Fund for Fiscal Year 2024/25. Compared to mid-year projections, General Fund revenues are estimated to finish approximately $5.3 million higher, driven by stronger performance in investment income, property-related revenues, and charges for services. Expenditures are projected to come in $13.3 million higher than anticipated, largely due to year-end execution of capital projects, fleet replacement, utility costs, and increased departmental personnel spending. Despite these changes, the City remains within its adopted appropriation, and the projected ending fund balance is $190.3 million, maintaining a strong 83.5% reserve level.
Background
On March 19, 2025, the Mayor and City Council received the Fiscal Year 2024/25 Mid- Year Financial Update, which included revised General Fund revenue and expenditure projections based on trends observed during the first half of the fiscal year. Since that time, City departments have continued to monitor spending closely, align service delivery with available resources, and update forecasts in response to ongoing changes in economic conditions. The Year-End Financial Update provides the Mayor and City Council with updated year-end projections for FY 2024/25, including General Fund revenues, expenditures, and fund balance.
These projections are based on actual data through June 30, 2025, as of August 15th, supplemented with accrual estimates to reflect anticipated year-end accounting 2 8
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adjustments. It is good to note that these are still projections; financial transactions are still being booked into the financial system, which include additional revenue and expense costs, fixed assets recordation, and payable and receivable balance updates.
These processes will conclude by the 2 nd week of September; after which review, preparation, and submission to the City auditors for their review will continue until the end of December.
This report also reflects the City’s continued commitment to financial responsibility and long-term sustainability. Despite economic challenges such as declining sales tax revenue, reduced development activity, and increased operating costs, the City closed the year with strong reserves and a healthy fund balance. These efforts position the City to begin FY 2025/26 with a stable fiscal outlook while maintaining essential services and preparing for upcoming strategic investments.
Discussion
At the time of the FY 2024/25 Mid-Year Financial Update in March 2025, staff projected year-end General Fund revenues of $222.6 million and expenditures of $224.3 million.
These projections were based on actual data through January and conservative estimates through June, in light of weakening economic indicators, particularly in sales tax and development-related revenues.
Since then, the City has updated these projections based on receipts and expenditures recorded through June 30, 2025. As of August 15, 2025, the revised projections show:
Revenues are estimated to come in at $227.9 million, approximately $5.3 million higher than mid-year projections. This improvement is largely attributed to stronger-than-expected performance in investment income, use of money and property, Measure S, and modest rebounds in charges for services and franchise tax revenues during Q4.
High interest rates continue to benefit the City, as investment pools yield well above historical averages. With the establishment of a formal Investment Advisory Group, the City is well-positioned to sustain improved investment returns and optimize its portfolio performance moving forward.
Property tax revenues (in-lieu of VLF) exceeded mid-year projections possibly due to stronger-than-expected growth in assessed property values and timely collections.
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Expenditures, including capital improvement projects costs, are projected at $238.2m, which is $16.6m higher than mid-year estimates. The variance is primarily the result of:
Capital Project expenditures were finalized and booked in the second half of the year, including $7.0 million in Measure S Capital Projects and additional General Fund capital improvements.
General Government expenditures rose due to a City Council approved $2.9 million transfer to the Fleet Fund and an additional $700,000 transfer to the Animal Services Fund. Utility costs were also trending approximately $1.5 million higher than the prior year, despite conservative projections by the Finance Department.
Police Department projections at mid-year were conservative, based on prior vacancy trends. However, as the department accelerated hiring to support public safety and community service, personnel costs increased more rapidly than anticipated, driving year-end expenditures above initial expectations.
Public Works experienced a late-year ramp-up in activity following the mid-year review. Capital maintenance, infrastructure work, and catch-up on core operations contributed to expenditures exceeding earlier forecasts.
The Operations & Maintenance Division was also authorized for an additional $2.65 million in fund balance use to support Street Segment Repair projects, further contributing to year-end expenditure growth.
Revenue CategoryF Y 2022-23
A ctuals
F Y 2023-24
A ctuals
F Y 2024-25
A dopted
F Y 2024-25
P rojected Y E
(presented at MY )
F Y 2024-25
P rojected
Y ear-E nd T otal
S ales and Use T ax $55,651,769$55,612,168$58,623,667 $52,796,986$53,052,514 Utility Users T ax $31,208,992$28,671,310$28,893,750 $30,229,505$30,127,807 F ranchise T ax $12,692,337$14,328,378$14,939,265 $14,402,938$14,577,757 Other T axes $11,173,774$12,414,954$15,060,480 $11,259,440$11,400,382 Miscellaneous $3,304,140$7,737,244$4,238,229 $5,335,144$5,030,837 L icenses & permits $15,740,360$16,059,891$16,989,168 $14,083,412$14,354,295 F ines and forfeitures$1,082,037$766,079$1,593,262 $876,142$1,114,360 Investment income $963,828$3,373,049$999,900 $2,635,949$2,485,658 Use of Money and P roperty$3,158,026$5,273,844$2,640,627 $4,887,459$6,532,912 Intergovernmental $2,225,143$6,708,044$2,949,651 $5,506,961$5,060,514 C harges for services$9,107,888$6,829,807$10,319,801 $6,275,538$7,984,843 P roperty T axes in L ieu of V L F$21,312,883$23,604,046$25,806,000 $24,180,179$25,436,458 Measure S S ales T ax$52,124,592$51,259,760$53,550,000 $50,159,000$50,749,058 General F und Revenue T otal$219,745,769$232,638,574$236,603,800$222,628,653$227,907,395 2 8
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Despite these expenditure increases, the overall budget performance remains within the adopted appropriation and continues to reflect sound fiscal management.
The projected ending fund balance has been adjusted to reflect these expenditure increases; however, this still reflects a strong reserve position, maintaining a reserve ratio of 86.4%, far exceeding the City’s 25% policy target and the GFOA minimum of 17%.
Department F Y 2022-23A ctualsF Y 2023-24A ctualsF Y 2024-25A dopted F Y 2024-25P rojected Y E(presented at MY )
F Y 2024-25 P rojectedY ear-E nd T otal
Mayor $306,227$279,481$298,025 $298,025$312,597C ity C ouncil $1,015,993$1,061,509$1,156,448$1,156,448$1,144,563C ity C lerk $1,300,833$1,391,383$1,942,869$1,571,500$1,597,199C ity A ttorney $4,559,283$4,795,033$5,181,587$5,181,587$5,470,989G eneral G overnment $32,886,990$19,370,893$17,967,471$18,227,743$21,249,703C ity Manager $2,103,300$3,424,979$5,156,385$3,635,811$3,091,589Human R esource & R isk Management$2,055,421$2,390,082$2,784,522$2,772,510$2,573,322F inance & Management S ervices$5,163,873$5,044,637$6,612,496$5,947,838$6,010,726E conomic Development $0 $237,278$1,785,363$1,814,730$1,991,184S pecial A ssessment District $115,996$114,321$150,000 $120,000$145,653C ommunity Development & Housing$9,040,721$9,341,981$15,004,584$10,721,947$10,750,134P olice $103,840,116$114,176,196$132,847,479$124,951,642$128,681,329P arks, R ecreation & C ommunity$4,132,108$5,109,685$6,000,401$5,936,896$5,258,874P ublic W orks $21,764,427$26,606,218$35,591,030$29,008,952$29,571,522Operations & Maintenance $0 $421,981L ibrary $2,610,050$2,601,058$4,975,030$4,221,603$4,670,444Non-Departmental $0 $0 $0 $0 $0General Operating E xpenditures$190,895,337$195,944,735$237,453,690$215,567,232$222,941,809Capital Improvement P rojects (General F und)$89,235$320,505 $0 $3,715$1,257,298Capital Improvement P rojects (Measure S )$11,803,164$7,314,997$3,565,500$6,062,650$8,434,472P arks, R ecreation & Community (Measure S )$3,000 $0 $0 $0 $0MCC F und B alance Use - S treet S eg. R epair$0 $0 $0 $0 $2,650,000T ransfer Out to F leet F und $0 $0 $0 $0 $2,931,625T OT A L General F und Operating E xpenditures$202,790,736$203,580,237$241,019,190$221,633,597$238,215,204 2 8
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These updated projections emphasize a few key trends:
Although Sales & Use Tax and Measure S continued to underperform, the City benefited from higher returns in investment income and property taxes in lieu of VLF.
The City’s cautious approach to mid-year forecasting enabled staff to absorb year-end adjustments without negatively impacting reserves.
Category F Y 2023/24 A ctuals(audited)
F Y 2024/25 E stimated(04.28.2025)
F Y 2024/25 Y ear-E nd E stimate(08.12.2025)Beginning Fund Balance, as of J une 30th173,462,555$ 202,925,562$ 202,925,562$ R evenues 233,643,492$ 222,628,653$ 227,907,395$ E xpenditures (Operating Only) (196,185,240)$ (215,567,232)$ (222,941,809)$ Net Surplus/Deficit - Use of Fund Balance)37,458,252$ 7,061,421$ 4,965,586$ Use of Fund Balance - CIP E xpenditures(7,995,245)$ (6,066,365)$ (9,691,770)$ Use of Fund Balance - S treet/S idewalk R epair (2,650,000)$ (2,650,000)$ Use of Fund Balance - Fleet (2,931,625)$ (2,931,625)$ Approved Use of Fund Balance - Homeless E ncampment Clean-upApproved Use of Fund Balance - S tump R emoval/Dead T ree ContractApproved Use of Fund Balance - P olice Vehicles E nding Fund Balance 202,925,562$ 198,338,993$ 192,617,753$ City R equired R eserve - 25% 103.44% 92.01% 86.40%G FOA R ecommended R eserve - 17%
CALCULAT ION OF F UND BALANCE
Category F Y 2023/24 A ctuals(audited)
F Y 2024/25 E stimated(04.28.2025)
F Y 2024/25 Y ear-E nd E stimate(08.12.2025)Nonspendable 40,806,497$ 41,000,000$ 41,000,000$ R estricted 2,099,574$ 2,100,000$ 2,100,000$ CommittedAnimal S ervices -$ -$ -$ G eneral Plan Update 551,312$ 600,000$ 600,000$ Measure S - Capital Projects 86,734,706$ 88,766,736$ 88,766,736$ Approved Use of CIP reserves for CIP projects (8,472,543)$ 15% E mergency R eserve 35,618,054$ 33,245,039$ 33,441,271$ 10% E conomic Contingency R eserve 23,745,369$ 22,163,360$ 22,294,181$ Assigned 13,370,050$ 10,463,858$ -Unassigned -$ -$ 12,888,108$ T OT AL FUND BALANCE 202,925,562198,338,993192,617,753 City R equired R eserve - 25% 103.44% 92.01% 86.40%G FOA R ecommended R eserve - 17%
F UND BALANCE DE S IG NAT ION
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The primary uses of fund balance were tied to Council-approved one-time expenditures (e.g., fleet replacement, street repairs, capital improvements). No structural deficits were introduced, and all recurring costs remain funded by ongoing revenues.
Looking ahead to FY 2025/26, staff will continue to refine forecasts and assess risks, including persistent economic uncertainty, labor cost pressures, and the impact of development slowdowns. As the City continues to invest in staffing and service delivery to meet community needs, personnel costs are expected to grow. The full-year hiring deferral included in the FY 2025/26 Operating Budget will serve as a key budget management tool, helping to balance near-term fiscal constraints while maintaining operational flexibility and long-term financial sustainability. 2021-2025 Strategic Targets and Goals
This item aligns with Key Target No. 1: Improved Operational & Financial Capacity by providing an accurate, transparent year-end projection of City finances, supporting sound budget decisions, fiscal discipline, and long-term financial sustainability.
Fiscal Impact
There is no fiscal impact associated with this item.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California receive and file the Fiscal Year 2024/25 Year-End Projected General Fund Financial Update.
Attachments
None
Ward:
All Wards
Synopsis of Previous Council Actions:
On March 19, 2025, the Mayor and City Council received and filed the Fiscal Year 2024/25 Mid-Year Financial Update.