Financial ReportFourth Quarter of FY 2024-25 (unaudited)Financial ReportFourth Quarter of FY 2024-25 (unaudited) Financial Report
Fourth Quarter of FY 2024-25 (unaudited)
Financial Report
Fourth Quarter of FY 2024-25 (unaudited)
April-June 2025
Current Financial Condition
In FY 2024-25, the City’s adopted General Fund budget included a positive operating position. At the end of the fourth quarter, while total expenditures exceed revenues, due mainly to transfers into the General Fund from previously funded capital projects, both revenues and expenditures are within budgetary expectations for this time of the fiscal year. At year-end, the estimated General Fund unrestricted fund balance is $7,711,373, nearly $2.7 million above the adjusted budget amount. It is important to note that these are unaudited numbers for Fiscal Year 24-25.
General Fund
General Fund revenues through the fourth quarter total $88.3 million, or 99% of the $89.3 million FY24-25 budget. General Fund revenue is $186k lower than the fourth quarter of the prior year. Increases were seen in property taxes, permits and fees, services charges, intergovernmental, and interest and rents, whereas decreases were seen in sales tax, transient occupancy tax, other taxes, fines and interfund transfers.
General Fund expenditures total $89.8 million for the fourth quarter, or 87% of the $103.7 million adopted annual budget, as compared to $85.2 million at this time last year. The current budget for General Fund expenditures is $103.8 million which reflects an increase of $300k from the third quarter adjusted budget of $103.5. The increase is due to the mid-year adjustments approved by Council in the fourth quarter of this fiscal year which includes an increase to planning staff support services, professional services agreement for CETO, and contractual services for the offshore borrow site investigation.
Additional information on General Fund revenues and expenditures are discussed further in this report.
General Fund Revenues
Revenues by Category
Budget
YTD Actual
%
Property Taxes
46,275,728
46,916,049
101%
Sales Tax
12,803,000
12,771,872
100%
Transient Occ. Tax
3,550,000
3,142,120
89%
Other Taxes
3,402,000
3,473,025
102%
Permits & Fees
1,402,540
1,771,882
126%
Intergovernmental
2,868,750
1,205,861
42%
Service Charges
7,940,300
7,795,938
98%
Fines
607,500
616,741
102%
Interest, Rents, Other
3,724,190
5,037,522
135%
Interfund Transfers
6,685,100
5,565,241
83%
89,259,108
88,296,251
99%
Property Taxes: Property taxes total $46.9 million, primarily from secured taxes. This amount is $2 million higher than the prior year. Property tax continues to be the primary reliable source of revenue for the General Fund. Property Tax is distributed unevenly throughout the year, with 50% in Q2, 40% in Q4, and the remainder is spread across Q1 and Q3.
Sales Tax: Sales tax receipts amount to $12.8 million, which is slightly lower than the $12.9 million from the prior year ($165k). This decrease in Sales Tax revenue was anticipated due to various factors including economic uncertainty, reduced discretionary consumer spending, and lower fuel prices.
Transient Occupancy Taxes (TOT): Transient occupancy taxes total $3.1 million, which is $95k lower than the fourth quarter in FY 23-24. TOT is a fluctuating revenue source that varies year over year.
Other Taxes: Other taxes, consisting mostly of franchise fees and business licenses, total $3.5 million which is $134k lower than prior year due to lower franchise fee receipts. Due to the increase in alternative streaming sources, the Cable Franchise Fees continue to decrease, while other franchise fees remain stable.
Permits & Fees: Permits and fees are at $1.8 million. This is $253,382 more than in the prior year, due to an increase in construction, alarm, and encroachment permits.
Intergovernmental: Intergovernmental revenue derives mainly from grant revenues total $1.2 million, which is $248k higher due to an increase in mandated cost reimbursement and state grant receipts.
Service Charges: Service charges, from general government, public safety, parking meter and recreation, amount to $7.8 million, which is higher than prior year totals by $484k mainly due to higher public safety service charges which include ambulance service charges, junior lifeguard services, and special event permit fees.
Fines: Revenues from fines total $616k which is $65k lower than the prior year due to a decrease in parking violation and vehicle code fines.
Interest, Rents & Other: Interest, rents and other reimbursements total $5 million, which is roughly $1.7 million higher due to unrealized gains on investments and rental income for a new lease of City property.
Interfund transfers: Interfund transfers decreased from the prior year by $5.7 million due to a one-time transfer of $5.5 million from Capital Reserves fund in the prior year to fund the Casa Romantica slope repair.
General Fund Expenditures
Expenditure by Type
Budget
YTD Actual
%
Salaries
15,597,715
14,662,155
94%
Benefits
7,188,730
6,978,782
97%
Supplies
1,653,369
1,456,243
88%
Contractual Services
54,571,370
49,102,356
90%
Other Charges
1,739,247
1,540,898
89%
Capital Outlay
13,065,131
7,074,638
54%
Interdepartmental
5,697,340
5,728,340
101%
Transfers & Debt
4,375,061
3,234,302
74%
Total
103,887,963
89,777,714
87%
Expenditure by Dept
Budget
YTD Actual
%
General Government
6,786,150
6,234,566
92%
City General
7,253,541
5,899,387
81%
Police
23,079,250
22,567,057
98%
Fire
14,749,320
14,797,357
100%
Marine Safety
2,376,290
2,249,861
95%
Comm. Development
9,930,400
6,915,500
70%
Public Works
33,033,210
24,708,495
75%
Beaches, Parks & Rec
6,679,802
6,405,491
96%
Total
103,887,963
89,777,714
87%
Expenditures for the fourth quarter of FY 2024-25 are $89.8 million compared to prior year’s $85.2 million. This is an increase of $4.6 million from the prior year. Contributing factors include police and fire increases of $1.15 million and $900,000, respectively. City personnel costs increased with the filling of vacant positions from the prior fiscal year, a 3.5% COLA increase, as well as benefit costs. Contractual services decreased by $3.0 million while Capital Outlay increased by $4.3 million, which is largely due to the timing of projects such as the Casa Romantica Stabilization and North Beach Sand Replenishment. Transfers and Debt increased from the prior year by $1.0 million due to unfunded liability pension payments and a transfer to the Local Transit fund to subsidize operations in the current year.
Beyond the $2.1 million public safety increase, other department changes are as follows: 1) General Government costs increased $825,699 due to the filling of several staff vacancies and one-time personnel related costs. 2) Community Development increased by $941,003 from the prior year due primarily to growth in the Park Ranger Program and to higher personnel and contractual service costs. 3) City General Government increased by $259,972 due to one-time transfers in the current fiscal year, including reserve transfers and a subsidy to Transit operations for the trolley. 4) Beaches, Parks and Recreation and Marine Safety are slightly higher compared to prior year due to activity levels. 5) Public Works costs decreased by $140,374 in part to the costs of the Casa Romantica Stabilization project incurred in FY 2023-24.
In total, actual costs are currently below budgeted expenditures.
Enterprise Funds
The following tables summarize the operating revenues, operating expenses, and changes in operating fund working capital for enterprise funds including Water, Sewer, Golf, and Storm Drain funds.
Revenues
Revenue
Budget
YTD Actual
%
Water Fund
36,565,180
30,493,064
83%
Sewer Fund
18,537,776
13,071,550
70%
Golf Fund
4,105,900
4,446,447
108%
Storm Drain Fund
3,997,550
2,177,959
54%
Water commodity revenues increased $1 million due to higher metered and effluent water sales, however it was offset by other water revenue sources like one time grants that were received in the prior fiscal year. Sewer revenues are higher by $900k due to an increase in service rate charges and increased other governmental revenues (SMWD).
Golf Course revenue is higher by $82k compared to the prior year due to increases to green fee revenues. Storm drain revenues are lower than FY 23-24 by $477k due to interfund transfer of $400k in FY 2024-25.
Expenses
Expenses
Budget
YTD Actual
%
Water Fund
29,458,458
25,283,064
86%
Sewer Fund
12,910,025
8,718,542
68%
Golf Fund
3,452,760
2,880,321
83%
Storm Drain Fund
1,728,000
673,244
39%
Water expenses decreased by $1.7 million when compared to the prior year. Sewer expenses decreased by $2.5 million. Golf Course operations decreased by $123k, and storm drain operating expenses increased by $106k.
Working Capital
Working Capital
Budget
YTD Actual
Water Fund
6,718,644
7,392,770
Sewer Fund
122,880
4,673,112
Golf Fund
1,724,343
2,803,119
Storm Drain Fund
1,555,597
1,602,481
All working capital levels are positive for the fourth quarter ending June 30, 2025. Depreciation entries have not yet been completed, which will affect the final working capital numbers.
The Sewer Fund recently completed a cost-of service study and fee revision which has improved the working capital balance. A cost-of-service study for the Water Fund is currently underway and the results will soon be presented to the City Council. In the future, a cost-of-service study and fee review is recommended for the in the Storm Drain fund, to assist in sustaining related projects and activities.
Additional Information
General Fund comparative information for the prior year is provided in Table 1 (see attachment).
Financial Report Fourth Quarter of FY 2024-25 – (unaudited)