CITY OF SANTA MARIA
FY 2023-24 Quarter 1 Financial Report
November 21, 2023
Council Action
1. Receive and file the
Financial Report for the First
Quarter Ending September 30,
2023.
2. Adopt a Resolution
Approving First Quarter
amendments to the 2023-24
Budget for personnel and
operational changes.
1. Economic Outlook
2. General Fund Rev/Exp Trends
3. Measure U Rev/Exp Trends
4. Enterprise Funds Rev/Exp Trends
5. Proposed Budget Amendments
Economic Outlook
• “Still-Resilient Economy”
o GDP Growth for the
Quarter 5%
o GDP Annual Growth 2.1%
• Inflation
o Down to 3.7% Sept 2023
from 9.1% annual
inflation in 2022
Economic Outlook
Economists continue to predict potential
for economic downturn
30-Year Mortgage rate remain high 7.6%
Federal Budget Deficit $1.7 trillion
California State Budget Deficit $31.5
billion
General Fund Revenue
City of Santa Maria Major Discretionary
Revenues General Fund
• 70% of General Fund
revenues is derived from
taxes.
⁓ Sales Tax 35%
⁓ Property Tax 29%
⁓ Hotel Tax 6%
Quarterly Revenue Q1
Revenue – Sales Tax
• Sales Tax: Receipts through the first quarter are
approximately 7.4 percent or about $581,200 higher
compared to last fiscal year. All industry groups are
contributing to the year-over-year increase; however,
current economic conditions are experiencing a
slowdown. Autos-transportation reported a mix of results as new and used car dealers had lower sales as
consumers were cautious in their spending.
• FY 2023-24 Budget $32,187,870 (4.9% increase)
• FY 2022-23 Budget $30,694,444
Revenues – Sales Taxes
Revenue – Property Tax
• Property Tax: The bulk of these payments are received through Santa Barbara County in December, January,
April, and May of each year. The City has not received
property tax as of September 30, 2023.
• FY 2023-24 Budget $25,695,680 (11.8% increase)
• FY 2022-23 Budget $22,972,908
Revenues – Property Tax
Revenue – Hotel Tax (TOT)
• Hotel/Bed Tax: Through September, Transient
Occupancy Tax (TOT) receipts are approximately
$372,000 or 42.8 percent more than last fiscal year and ahead of estimates by about $172,700 or 4.0 percent.
The increase in revenues is partly due to inflation
prompting hoteliers to raise room rates, coupled with
steady occupancy rates with the return of community
events attracting visitors to the area. TOT generated
about 7.8 percent of General Fund revenues.
• FY 2023-24 Budget $4,273,430 (35% increase)
• FY 2022-23 Budget $3,152,576
Revenues - TOT
Revenue – Licenses, Permits, & Fees
• Licenses, Permits, & Fees: Permit revenue is at $1.1 million, exceeding projections by 9.0 percent, or nearly $279,600, and is about $305,600 less than the first quarter for the prior fiscal year. During the first quarter, the City issued 87 permits for accessory dwelling units (ADUs), which is less than the 120 ADU permits issued for the same quarter last year. This is the primary reason revenue declined
compared to the first quarter last year. However,
revenue is still higher than the projected amount, since ADU permit activity is still higher-than-anticipated. There were no permits issued for new non-residential
development during this quarter, aside from tenant
improvements.
General Fund Expenditures
General Fund Expenditures Q1
General Fund Budget
2023-24
YTD Actual
Percent
Expended
2022-23
YTD Actual
Police 37,151,740$ 7,569,640$ 20.4% 7,012,870$
Fire 11,561,350 1,943,270 16.8% 2,641,810
Recreation & Parks 12,896,330 2,867,120 22.2% 2,546,940 Finance 4,676,430 1,336,530 28.6% 1,001,760 Community Dev. 6,579,720 1,227,220 18.7% 1,000,700 Public Works 4,873,570 925,980 19.0% 758,940 City Manager's Office 9,590,620 2,142,260 22.3% 1,484,180 City Attorney's Office 1,365,660 303,820 22.2% 259,970 Mayor & Council 206,910 45,090 21.8% 39,290 Sub-Total 88,902,330 18,360,930 20.7% 16,746,460 Transfers 3,841,290 11,830 0.3% 774,640 Total 92,743,620$ 18,372,760$ 19.8% 17,521,100$
General Fund Expenditures Q1
• Police: Under budget by about $1.7 million or about 4.6 percent, mainly due to vacant positions which have
resulted in salary (and benefits) savings of $1.6 million through September.
• Fire: Under budget by $947,100 or about 8.2 percent,
due to vacancies, fewer mutual aid responses resulting
in lower overtime costs, and some fire equipment
purchases that have not yet been made.
General Fund Expenditures Q1
• Community Development: Under budget 6.3 percent or
approximately $417,700 due to vacancies in the
Planning and Community Services divisions, which were
filled during the quarter, and the timing of expenditures for contractual services. The contract for the General
Plan Update extended into the current fiscal year.
• Public Works: Under budget 6.0 percent, or
approximately $292,400, due to vacancies as well as
timing of contract service agreements and operating
and maintenance expenses.
General Fund Expenditures Q1
• Mayor & Council: Under budget 3.2%, or about $6,600,
due to timing of expenditures for contractual services. • Finance: Over budget 3.6 percent or $167,400, primarily due to the semi-annual lease financing payment for the
Computer-Aided Dispatch/Records Management
System (CAD/RMS).
• Other General Fund Departments: The remaining
General Fund departments are under budget by
between 2.7 to 2.8 percent for the City Attorney’s Office and City Manager’s Office as a result of vacant positions and/or incomplete contract service agreements.
Measure U
1.1%
Higher
than
Budget
Enterprise Funds
Water/Wastewater
• Revenues exceeded expenditures by $5.5 million, which is about $3.5 million more than last year. Revenues
increased 37.2 percent or $4.6 million compared to the
prior year due to higher revenues generated through
sales of metered water. Expenses are $1.1 million more
than last year primarily due to an increase in payments to the Central Coast Water Authority. Through the first quarter, Water and Wastewater operational expenses
are under budget by 9.6 percent as a result of personnel savings from vacant positions and timing of payment of
ongoing maintenance and contractual services
agreements.
Solid Waste
• The Solid Waste Fund reports refuse collection and
disposal activities. Through the first quarter, Solid Waste revenues exceeded expenditures by approximately $2.0
million as a result of operational costs being under
budget by approximately $2.1 million or 6.0 percent.
Budget of approximately $10.8 million was carried
forward to 2023-24 to complete several capital projects, including $6.1 million towards development of the
Integrated Waste Management Facility at Los Flores and
$2.3 million for the landfill collection gas system
expansion project. Compared to the prior year, revenues and expenditures increased by $81,000 and $692,600,
respectively.
Transit
• The City operates the Santa Maria Regional Transit
(SMRT) and Breeze Transit systems, which are funded by
a combination of Federal grants, State transportation
funds, and user fares. Fare revenue through the first
quarter is approximately $142,000, which is about
$22,100 more than fares earned through the first quarter of the prior year. This difference is attributed to an
increase in ridership. The farebox ratio through
September 30, 2023, is 16.1 percent based on fares
received and operating expenses recorded to date.
Proposed Budget Amendments
Proposed Budget Amendments Summary
PROPOSED BUDGET AMENDMENTS
Fund
Revenues
Expenditures
Net Impact to
Fund Reserves
General Fund $ - $ 385,000 $ (385,000)
Water Fund - 215,000 (215,000)
Wastewater Fund - 175,000 (175,000)
Solid Waste Collection Fund - 45,000 (45,000)
Solid Waste Disposal Fund - 1,000,000 (1,000,000)
Citywide Total $ - $ 1,820,000 $ (1,820,000)
RECREATION AND PARKS/GENERAL FUND
Increase one (1) Full-Time Assistant Recreation and Parks Director allocation.
The Assistant Recreation and Parks Director allocation was previously authorized and funded for the 2022-24 Budget adopted by Council on June 21, 2022. A clerical error
during the 2023-24 Mid-Cycle Review inadvertently
excluded the authorized and funded status of the position.
The Recreation and Parks Department requests the
allocation and funding be restored. The ongoing cost of the position is estimated at $385,000.
PUBLIC WORKS/SANTA MARIA REGIONAL TRANSIT (SMRT) FUND
Authorize the purchase of fourteen (14) mini electric buses utilizing budget appropriated for the purchase of five (5) electric buses in the Public Transit Fund in fiscal year 2023-24.
The Public Works Department-Transit Division requests authorization to purchase fourteen (14) mini electric buses using the HIRTA consortium contract utilizing budget appropriated for the purchase of five (5) electric buses. Transit’s mini electric buses will allow public transit operations to continue to process more efficiently and effectively and can be used for both fixed route and demand response as needed.
This procurement is part of the Transit Division’s effort to become 100 percent electric by 2040.
PUBLIC UTILITIES/WATER FUND
Increase appropriations by $215,000 in the Water Fund to fund the purchase of a dump truck (fleet expansion) for the Water Resources division.
As part of the 2023-24 Mid-Cycle Review process, the Utilities Department requested funding for the purchase of a dump truck (fleet expansion) for the Water Resources division. The request was inadvertently omitted from the amendments to the 2023-24 Budget considered during the 2023-24 Mid-Cycle Review process. Finance recommended Utilities request funding during this first quarter amendment.
PUBLIC UTILITIES/WASTEWATER FUND
Increase appropriations by $175,000 to rent specialized equipment to mechanically dry the sludge in the drying beds to increase the capacity of the drying beds.
The Utilities Department requests an additional appropriation in the amount of $175,000 to rent specialized equipment to mechanically dry the sludge in the drying beds to increase the capacity of the drying beds. The sludge drying beds are exceeding capacity because of cumulative impacts of multiple storms.
PUBLIC UTILITIES/SOLID WASTE COLLECTION FUND
Increase appropriations by $45,000 to fund the purchase of a vehicle (fleet expansion) for the Solid Waste Collections division for pool use.
The Utilities Department requests an additional appropriation in the amount of $45,000 to purchase a vehicle (fleet expansion) for the Solid Waste Collections division for pool use. The request was inadvertently omitted from the amendments to the 2023-24 Budget considered during the 2023-24 Mid-Cycle Review
process. Finance recommended Utilities request funding during this first quarter amendment.
PUBLIC UTILITIES/SOLID WASTE DISPOSAL FUND
Increase appropriations by $1,000,000 to fund Construction Quality Assurance (CQA) and Construction Management (CM) for the Cell I Liner Expansion Phase II project.
The Utilities Department requests an additional appropriation of $1,000,000 to fund Construction Quality Assurance (CQA) and Construction Management (CM) for the Cell I Liner Expansion Phase II project. This project has been accelerated to ensure sufficient capacity at the Santa Maria Regional Landfill.
Council Action
1. Receive and file the
Financial Report for the First
Quarter Ending September 30,
2023.
2. Adopt a Resolution
Approving First Quarter
amendments to the 2023-24
Budget for personnel and
operational changes.
Questions