QUARTERLY
FINANCIAL
REPORT
FIRST QUARTER ENDED
SEPTEMBER 30, 2025
ATTACHMENT A
1 MAYOR
Alice Patino
MAYOR PRO TEM
Carlos Escobedo
COUNCIL
Gloria Soto
Maribel Aguilera-Hernandez
Gloria Flores
CITY MANAGER
David W. Rowlands
REPORT PREPARED BY
Rebecca Campbell
Director of Finance
206 East Cook Street
Santa Maria, CA 93454
(805)925-0951 Ext. 2215
www.cityofsantamaria.org
QUARTERLY
FINANCIAL
REPORT
CITY OF SANTA MARIA, CA
V
TABLE OF CONTENTS
ECONOMIC INDICATORS ................................................... 1 GENERAL FUND ................................................................ 2 MEASURE U FUND ............................................................. 6 ENTERPRISE FUNDS ............................................................ 8
WATER/WASTEWATER FUND
SOLID WASTE FUNDS
PUBLIC TRANSIT FUNDS
FY 2025-26 MID-CYCLE BUDGET ...................................... 9 Quarterly Financial Report: First Quarter Ending September 30, 2025
1 ECONOMIC INDICATORS
The nation's gross domestic product grew at an a nnual rate of 3.8 percent in April, May and June, according to the third estimate released by the Bureau of Economic Analysis. Real GDP was revised upward 0.5 percentage points from the second estima te, primarily reflecting an upward revision to consumer spending and a downturn in imports. Infl ation was 3.0 percent for the 12 months ending in September. As of late October, home prices and th e s t o c k m a r k e t w e r e a t o r n e a r a l l - t i m e h i g h s .
Artificial Intelligence (AI) is poised to disrupt the job market.
A buoyant stock market through late October cont ributed to household wealth and together with higher wages, these rising measures give households reasons to spend. Real hourly wages in the U.S. increased 1.1 percent in August over the same month a year ago, according to the Bureau of Economic Analysis. Business investment levels, especially on software and AI, increased at exceptionally high rates, driving productivity gains.
As AI technology sweeps across industries, many are asking what is for the labor market in the coming years. AI-related investments, particularly in soft ware, computing and data infrastructure, have been a major driver of U.S. GDP growth in 2025. AI has particularly affected the Professional Business Services sector, the Information sector, and workers in TV/f ilm and sound production. AI systems are replacing lower level software development, web design, and da ta analysis positions. While generative AI looks likely to join the ranks of transformative, general purp ose technologies, experts say it is too soon to tell how disruptive the technology will be to jobs.
The national unemployment rate in August was 4.5 percent. There was no September jobs report as of late October, due to the Federal government shutdown. California delayed the release of its September employment report – originally schedule d for October 17th - due to the ongoing Federal government shutdown. The State’s estimates rely on data from the U.S. Department of Labor’s Bureau of Labor Statistics, which had suspended operations during the shutdown. As of August, California unemployment rate was 5.5 percent.
California’s job market continues to be soft. The Legislative Analyst’s Office said California added 4,000 jobs in August, and the July report was revised down from about 15,000 new jobs to negative 300 jobs.
The jobless rate in Santa Barbara County in August was 4.7 percent, down from a revised 5.0 percent in July, and above the year-ago estimate of 4.6 perc ent. As of August, the jobless rate in Santa Maria was 5.3 percent.
In September, California’s median home price fell 1.7 percent to $883,640, down from $899,130 in August. The California Association of Realtors said this monthly decrease aligned with the long-term average decline of 1.8 percent between August an d September. Despite the dip, the median price remained 1.8 percent higher than the $868,150 recorded a year ago, marking a modest improvement over the previous month’s annual gain. With prices stabilizing and mortgage rates hovering in the low 6 percent range, some sidelined buyers may be enco uraged to return to the market once economic uncertainty begins to ease.
KEY STATISTICS
Quarterly Financial Report: First Quarter Ending September 30, 2025
2 GENERAL FUND
Budget:
The table below presents the budget as adopte d and amended along with expenditures through September 30, 2025. General Fund appropriations adopted on June 3, 2025, were $114.94 million compared to budgeted sources of $114.94 million, in clusive of a $14.43 million draw from the Local Economic Augmentation Fund (LEAF) and the use of $5.92 million of reserves for unfunded pensions.
Current General Fund appropriations are $114.97 million compared to budgeted sources of $114.97 million, inclusive of a $14.43 million draw from the LEAF as a revenue source, and the use of $5.95 million of available General Fund balance.
It was reported in the FY 2024-25 Fourth Quarter Fi nance Report that revenues came in $3.6M more and expenditures came in $2.2M less than year-end estimates. Those results had a favorable impact by reducing the budgeted draws on reserves for unfunded pensions ($3.2M), LEAF ($5.2M), and unassigned fund balance ($5.7M), thereby leaving estimated unassi gned fund balance of $5.3M. At the end of FY 2024-25 there were several projects, contracts, and transactions that were not yet completed. The remaining appropriations for those w ill be reflected in a future report when they are carried forward into FY 2025-26, the results of which may affect unassigned fund balance.
GENERAL FUND
(in millions)
Adopted
Budget
Amended
Budget
2025-26
Actual
Percent of
Amended
Budget
Beginning Fund Balance $ - $ - $ 5,315
Cancelled Reserves
Unfunded Pensions $ 5,922 $ 5,947 $ 542 9.1%
LEAF 14,427 14,427 - 0.0%
Total Cancelled Reserves $ 20,349 $ 20,374 $ 542 2.7% Revenues & Transfers In
Sales Tax $ 31,666 $ 31,666 $ 2,623 8.3%
Property Tax 28,888 28,888 - 0.0%
Hotel/Bed Tax 4,023 4,023 707 17.6%
Licenses, Permits & Fees 3,826 3,826 1,239 32.4% All Other Revenues 26,189 26,189 4,335 16.6%
Total Revenues & Transfers In $ 94,592 $ 94,592 $ 8,904 9.4% Total Resources $ 114,941 $ 114,966 $ 14,219
Expenses & Transfers Out
Staffing $ 82,499 $ 82,499 $ 11,588 14.0%
Contracts & Services 12,026 12,051 1,753 14.5%
Materials & Supplies 4,343 4,343 979 22.5%
Maintenance & Operations 9,870 9,870 326 3.3%
Capital Outlay 2,431 2,431 105 4.3%
Debt Service 267 267 10 3.7%
Transfers 3,505 3,505 - 0.0%
Total Expenses & Transfers Out $ 114,941 $ 114,966 $ 14,761 12.8%
Ending Fund Balance $ - $ - $ -
Quarterly Financial Report: First Quarter Ending September 30, 2025
3 GENERAL FUND (CONTINUED)
Year-Over-Year Comparison:
The chart below compares revenue receipts, expend itures, and transfers through the quarter ending September 30, 2025, versus the quarter ending September 30, 2024.
Major Revenues:
Through the first quarter, receipts for four major General Fund revenue sources (Sales Tax, Property Tax, Hotel Tax, and Licenses, Permits, & Fees) are at 6.7 percent of projections and account for 51.3 percent of total General Fund revenues.
Revenue Variances:
Receipts from Sales Taxes are higher than the first qu arter receipts from the prior year by 3.6 percent, or $91 thousand. Receipts from Hotel Tax and Licens es, Permits & Fees are lower by 22.6 percent, or $207 thousand, and 14.9 percent, or $217 thousand, respectively. Property Tax : The bulk of these payments are received through Santa Barbara County in December, January, April, and May of each year.
Sales Tax: When analyzing monthly sales tax receipts, it is important to note that there is a two- month lag from the time that sales tax is collected to the time it is distributed to the City.
Therefore, the data presented here reflects distributions from activity for July 2025. The chart
Quarterly Financial Report: First Quarter Ending September 30, 2025
4 GENERAL FUND (CONTINUED)
below displays activity by major business group for the fourth quarter of FY 2024-25 as compared to the same period of FY 2023-24. Receipts were 0.1 percent, or $10 thousand less.
Receipts through the first quarter of FY 2025- 26 are 3.6 percent, or $91 thousand, more than those for the same period last year.
Hotel/Bed Tax: Through September, Transient Occupanc y Tax (TOT) receipts are 22.6 percent, or $207 thousand, less than last fiscal year and behind estimates by 29.7 percent, or $298 thousand. The variance is likely due to timing of payments to the City. Licenses, Permits, & Fees: Receipts of $1.239 million exceeds projections by 29.5 percent, or $282 thousand, but are 14.9 percent, or $218 thousand, less than that for the same period of FY 2024-
25. FY 2024-25 marked the highest building permit revenue in the City’s history. While building submittals have remained strong into 2025-26, staff’s projections are conservative to ensure revenue is not overestimated due to that peak. Revenues will continue to fluctuate with the real estate market.
Expenditures:
Through the first quarter, operating expenditures, excluding transfers, are at 12.8 percent of total budget. Expenditures, as shown above in the Expend iture Categories chart above on the right, are within budget.
Expenditure Variances:
Financial Reporting policies require an explanation of variances greater than 5 percent of major categories and departmental variances greater than 10 percent.
Quarterly Financial Report: First Quarter Ending September 30, 2025
5 GENERAL FUND (CONTINUED)
Staffing: Under budget by 43.8 percent, or $9.0 millio n, due to the timing of specific journal entries that have not yet been booked in the City’s new financial system, Workday. The second quarter financial report should capture those costs.
Contracts & Services: Under budget by 41.8 percent, or $1.3 million. Transfers Out: Under budget by 25.0 percent, due to the timing of specific journal entries that have not yet been booked in Workday. The second quarter financial report should capture those costs.
The chart to the right presents percentages of budget spent by department. Each department appears to be under budget due to the reasons discussed above.
Quarterly Financial Report: First Quarter Ending September 30, 2025
6 MEASURE U FUND
The table below presents the budget as adopted and amended along with actual expenditures as of September 30, 2025. Measure U Fund appropriations adopted on Ju ne 3, 2025, were $32.6 million compared to budgeted sources of $31.3 million, inclusive of a $4.8 million draw from LEAF and the use of $1.3 million of availa ble Measure U Fund balance. At the end of FY 2024-25 there were several projects, contracts, and transactions that were not yet completed. The remaining appropriations for those will be carried forward into FY 2025-26 but are not reflected in this report.
It was reported in the FY 2024-25 Fourth Quarter Finance Report that revenues came in $241 thousand more and expenditures came in $321 thousand le ss than year-end estimates. Those results had a favorable impact by reducing the budgeted draws on unassigned reserves ($562 thousand), thereby leaving estimated unassigned fund balance of $1.9 M. At the end of FY 2024-25 there were several projects, contracts, and transactions that were not yet completed. The remaining appropriations for those will be reflected in a future report when they are carried forward into FY 2025-26, the results of which may affect unassigned fund balance.
MEASURE U FUND
(in millions)
Adopted
Budget
Amended
Budget
2025-26
Actual
Percent of
Amended
Budget
Beginning Fund Balance $ 1,319 $ 1,319 $ 1,881
Cancelled Reserves
LEAF $ 4,786 $ 4,786 $ 2,974 62.1%
Total Cancelled Reserves $ 4,786 $ 4,786 $ 2,974 62.1% Revenues & Transfers In
Sales Tax $ 26,339 $ 26,339 $ 2,179 8.3%
All Other Revenues 171 171 - 0.0%
Total Revenues & Transfers In $ 26,511 $ 26,511 $ 2,179 8.2% Total Resources $ 32,616 $ 32,616 $ 7,034
Expenses & Transfers Out
Staffing $ 27,589 $ 27,589 $ 6,714 24.3%
Contracts & Services 2,077 2,077 46 2.2%
Materials & Supplies 334 334 46 13.7%
Maintenance & Operations 1,351 1,351 2 0.1%
Capital Outlay 20 20 226 1,129.3%
Debt Service - - - 0.0%
Transfers 1,245 1,245 - 0.0%
Total Expenses & Transfers Out $ 32,616 $ 32,616 $ 7,034 21.6%
Ending Fund Balance $ - $ - $ -
Revenues received through the first quarter are at 8. 2 percent of budget, or $2.2 million. Expenditures are at 21.6 percent of budget, or $7.0 million. The Measure U Transaction & Use Tax is collected in a similar fashion to the General Fund’s Sales Tax. Therefore, the data presented here reflects distributions from activity for July 2025.
Quarterly Financial Report: First Quarter Ending September 30, 2025
7 MEASURE U FUND (CONTINUED)
The City Manager’s Office budget includes costs of maintaining the City’s mass notification system database and a position for the Public, Education, and Government (PEG). The Finance budget is for the annual independent audit of Measure U financia l activity. The Fire Department budget includes the City’s proportional cost of participating in the Regional Dispatch.
MEASURE U FUND
(in millions)
Adopted
Budget
Amended
Budget
2025-26
Actual
Percent of
Amended
Budget
Expenses & Transfers Out
Community Development $ 954 $ 954 $ 202 21.2%
City Manager’s Office 251 251 127 50.7%
Finance 3 3 - 0.0%
Library 1,015 1,015 234 23.0%
Recreation & Parks 3,217 3,217 519 16.1%
Fire 13,015 13,015 2,868 22.0%
Police 14,162 14,162 3,084 21.8%
Total Expenses & Transfers Out $ 32,616 $ 32,616 $ 7,034 21.6%
Through September, Measure U expended 21.2 percent on Public Safety, 20.0 percent on Youth Services, 26.7 percent on Quality of Life.
Quarterly Financial Report: First Quarter Ending September 30, 2025
8 ENTERPRISE FUNDS
The Statement of Revenues and Expenses through the first quarter ending September 30, 2025, for the three enterprise funds, are shown in the table below.
ENTERPRISE FUNDS
(in thousands)
Water /
Wastewater
Solid
Waste
Public
Transit
Revenues
Charges for Service $ 7,375 $ 5,783 $ 140
Interest Income 47 - -
Other Revenue - 124 -
Total Revenues $ 7,422 $ 5,907 $ 140
Expenses
Operating $ 3,723 $ 5,008 $ 2,025
Capital 1,821 687 1,765
State Water Payment 5,958 - -
Debt Service 640 - -
Total Expenses $ 12,142 $ 5,695 $ 3,790
Revenues/Expenses $ (4,720) $ 212 $ (3,650)
Water/Wastewater Funds:
Expenditures exceeded revenues by $4.7 million. Revenues reflected in this report are 58.6 percent less than those for the same period of the prior year, likely due to timing of revenue recognition in Workday. Expenses are 6.4 percent more than last year, mostly due to a higher level of capital project activity.
Solid Waste Funds:
The Solid Waste Fund reports refuse colle ction and disposal activities. Revenues reflected in this report are 35.2 percent less than those for the same period of the prior year. Operating and capital expenditures are 26.1 percent and 53.8 percent less than the prior year, respectively. The underexpenditure is primarily attributable to personnel savings from vacant positions.
Public Transit Funds:
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 is $140 thousand, which is 12.9 percent more than last year.
Quarterly Financial Report: First Quarter Ending September 30, 2025
9 FY 2025-26 MID-CYCLE BUDGET REVIEW
The City Council adopted the FY 2025-26 Mid-Cycle Budget on June 3, 2025. Public engagement occurred at the City’ Council’s meeting, during which budget presentations and discussions were conducted and feedback was received. Get the latest information on the public meetings related to the development of the FY 2025- 26 Mid-Cycle Budget by visi ting the City’s website at:
https://www.cityofsantamaria.org/services/departments/city-clerk-records/agendas-reports- meeting-videos.
MAYOR & COUNCIL
Gloria Soto
Councilmember
District 3
Maribel
Aguilera-
Hernandez
Councilmember
District 4
Alice Patino
Mayor
At-Large
Carlos
Escobedo
Councilmember
District 1
Gloria Flores
Councilmember
District 2
City of Santa Maria, California
110 E. Cook Street
Santa Maria, CA 93454
cityofsantamaria.org
EXPLORE
the City’s budget online at
www.cityofsantamaria.org/services/departments/city-manager-s-office/city-budget
CITY OF SANTA MARIA DISTRICTS
DISTRICT 2
Gloria Flores
DISTRICT 1
Carlos Escobedo
DISTRICT 3
Gloria Soto
DISTRICT 4
Maribel Aguilera-Hernandez
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