City Council Meeting – October 22, 2024; Item 3.3
2023-2024
Annual Report
2 2023-2024 Budget: Overall Performance Met
Revised Expectations
• Revenues generally performed as expected
• Overall expenditures ended the year within or below budget • General Fund had an extremely small surplus and most other funds ended the year with balances at or above estimated levels
– After rebudgets and clean-ups, GF fund balance variance of 0.05% of Modified Budget revenues and expenditures
• Recommended actions close out 2023-2024, adjust 2024-2025 as necessary and in accordance with City Council Policy 1-18, recognize grants and reimbursements, and address several urgent needs in the General Fund, Special Funds, and Capital Funds.
3 Key Economic Indicators
2022-2023 2023-2024 % Change
Employment/Jobs (June) 1.2 million 1.2 million 0.3%
SJ MSA Unemployment Rate (June) 3.7% 4.1% 0.4%
Residential Real Estate Property Sales Average 476
per month
Average 460
per month (3.3%)
Median Single-Family Home Price (June) $1.6 million $1.7 million 6.3% Construction Activity Valuation $1.3 billion $1.6 billion 21.7% 4 Major General Fund Revenues:
Year-Over-Year Comparison
Revenue Category
2022-2023
Actuals
($ Million)
2023-2024
Actuals
($ Million)
$ Change
($ Million)
%
Change
Property Tax 449.0 473.7 24.7 6%
Sales Tax 343.5 333.4 (10.1) (3%)
Utility Taxes 124.3 129.8 5.5 4%
Business Tax 89.6 86.1 (3.6) (4%)
Real Property Transfer Tax
(Measure E) 56.3 50.7 (5.5) (10%)
Franchise Fees 44.8 52.5 7.7 17%
Fees, Rates, and Charges 23.6 25.0 1.4 6%
Transient Occupancy Tax (TOT) 14.9 15.9 1.0 6%
5 General Fund: Additional Fund Balance
• General Fund ended the year with a gross fund balance of $600.9 million; $24.5 million above the estimate used to develop the 2024-2025 Adopted Budget (0.6% of the Modified Budget for revenues and expenditures) • Net of required adjustments to close out 2023-2024, the Ending Fund Balance variance was $2.4 million (0.05% of the Modified Budget for revenues and expenditures)
• As revenues ended the year slightly below estimated levels, this marginal amount of fund balance was solely generated by expenditure savings, primarily within the City-Wide expenses category
6 General Fund: Proposed Allocation of
Additional Fund Balance
Recommended 2024-2025 General Fund Adjustments ($000s)
Additional 2023-2024 Ending Fund Balance $24,452
Clean-Up/Rebudget Actions ($22,061)
Fund Balance Available After Clean-up/Rebudget
Actions $2,391
Recommended Budget Adjustments
Required Technical/Rebalancing Actions ($1,601)
Grants/Reimbursements/Fee Activities ($0)
(Sources = ($3.3 million); Uses = ($3.3 million))
Urgent Fiscal/Program Needs ($790)
Total Recommended Budget Adjustments ($2,391)
7 General Fund:
Recommended Budget Adjustments (Partial List)
Required Technical/Rebalancing Actions ($ in 000s)
General Liability Claims ($5,000)
Coyote Creek Project Reaches 5-7 (Valley Water) ($1,939) Contingency Reserve ($1,000)
Election Polling ($250)
Elections and Ballot Measures $2,250
FEMA Non-Reimbursable Expense Reserve $2,000
Transfer from Emergency Reserve Fund (Excess Funds) $2,000 Transfer from Water Utility Fund (Late Fees) $1,000
Urgent Fiscal/Program Needs
Animal Care and Services – 4.0 Animal Health Technicians ($440) Road to 2026 Executive Leadership ($350)
8 Selected Special/Capital Fund
Performance
0 10
20 30
40 50
60 70
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 $ in Millions
Building & Structure, Construction Excise, and
Construction and Conveyance Tax Revenues
Building & Structure Construction Excise C & C
9 Selected Special/Capital Fund
Performance
Airport Operating Funds
• Passenger activity decreased slightly by 1.5% from 12.1 million to 11.9 million • Adopted Budget assumes passenger activity for 2024-2025 is 12.5 million passengers
10 Special/Capital Funds
Recommended Budget Adjustments
• Clean-Up Actions
− Fund Balance Reconciliations
− Rebudget Adjustments
− Technical Adjustments (e.g., Net-Zero Transfers/Reallocations) • Recommended Adjustments
− Recognize Grants and Reimbursements
− Update Cost/Revenue Estimates and Project Timing
− Urgent Needs for Projects and Programs
2023-2024
Annual Report
Jim Shannon Selena Ubando Jennifer Tell
Budget Director Assistant to the City Manager Assistant to the City Manager Bonny Duong Bryce Ball
Assistant Budget Director Assistant to the City Manager Claudia Chang William Yu
Deputy Budget Director Assistant to the City Manager