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File#: Agenda Date: 10/23/2024
Version: 1 Item #:
Report presenting preliminary Fiscal Year (FY) 2023-24 Year End and FY 2024-25 First Quarter Financial Report as of September 30, 2024 (Karen Chang, Director of Finance)
RECOMMENDATION
Staff requests that the City Council of the City of South San Francisco (“City”) receive this report on the FY 2023-24 Year End and FY 2024-25 First Quarter as of September 30, 2024.
BACKGROUND/DISCUSSION
This financial review summarizes the preliminary year-end results for FY 2023-24 and presents the first quarter financial results for FY 2024-25.
As the City closes out FY 2023-24, we are refining our revenue and expenditure estimates for the General Fund, alongside assessing the anticipated impact on reserves. The year-end process involves a comprehensive evaluation of all financial transactions to ensure accurate reporting of revenues and expenditures. This includes reconciling accounts, assessing outstanding liabilities, and preparing for the Annual Comprehensive Financial Report (ACFR). While final numbers will be confirmed after our annual audit, the narratives below will address significant deviations in major revenues and expenditures compared to the estimates that were presented during the budget approval process in May and June.
For the current Fiscal Year, this quarterly update serves as a critical tool for the City Council and the public, providing transparency and oversight of the City’s financial health. By reviewing actual revenues and expenditures against the approved budget, we can identify trends, monitor fiscal performance, and ensure accountability. This process allows for timely adjustments to be made if necessary. For FY 2024-25, this report analyzes revenues collected and expenditures through September 30, 2024, to evaluate our operational adherence to the budget.
On June 12, 2024, the City Council approved the FY 2024-25 budgets for the General, Special Revenue, Enterprise, and Internal Service Funds. These budgets outline the annual expenditure and resource allocation plan that guides the implementation of City Council policies and priorities.
They ensure funding for a wide range of services that meet community needs, aligning with Council priorities. This year, given the budgeted structural deficit in the General Fund, this update provides greater salience to financial stability and long-term sustainability.
The First Quarter Financial Report, as of September 30, 2024, will provide comparisons to the City of South San Francisco
Legislation Text
P.O. Box 711
(City Hall, 400 Grand Avenue)
South San Francisco, CA
City of South San Francisco Page 2 of 13
previous year and highlight variances from the planned revenue and expenditure allocations.
I. FY 2023-24 Year End and Reserves Update
A. Revenue Review
B. Expenditure Review
C. Year End Estimated Reserves Review
II. Current Fiscal Year (FY 2024-25) Update
A. General Fund Revenues – 1
st Quarter
B. General Fund Expenditures – 1
st Quarter
I. FY 2023-24 YEAR END - RESERVES OVERVIEW & CONSIDERATIONS The City concluded FY 2023-24 in a significantly stronger financial position than initially anticipated. Total revenue is estimated at $155.0 million, while expenditures stand at $140.8 million, resulting in a net surplus of $14.2 million—substantially higher than previously projected.
This positive outcome is largely due to an unexpected increase in property tax revenue, detailed below, which has exceeded initial forecasts. Given that property tax assessments are managed by the County, accurate forecasting has been challenging.
Table 1 below shows the summary of the revenue and expenditures of the projected year close revenues and expenditures:
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Table 1: Estimated FY 2023-24 Year End vs FY 2022-23 (in millions) Adjusted
Budget
Actual as
of
6/30/2023
% of
budget
Adjusted
Budget
Actual as
of
6/30/2024
% of
budget
REVENUES
Taxes
Property Tax $45.8 $54.0 118% $49.3 $56.4 114%
Sales Tax 22.4 21.7 97% 22.0 23.6 108%
Transient Occupancy Tax 14.2 16.4 116% 14.0 14.9 107%
Other Tax 5.7 8.1 142% 6.7 7.1 107%
Franchise Fees 4.6 5.2 114% 4.6 5.3 116%
License and Permits
Building 16.6 16.4 99% 9.4 10.0 107%
Fire 2.8 4.0 143% 3.1 3.8 123%
Other 0.0 0.0 0% 0.0 0.2 0%
Fines & Forfeitures 0.7 0.8 106% 0.7 0.5 69%
Intergovernmental 4.3 3.6 82% 7.8 6.5 84%
Charges for Services
Planning 0.3 0.5 194% 0.7 0.7 106%
Fire 2.6 4.5 171% 3.9 4.8 122%
Parks & Recreation 2.8 3.8 135% 3.7 4.2 112%
Police 1.0 1.3 128% 1.2 1.3 103%
Other 0.0 0.1 167% 0.0 0.0 230%
Inter-Fund Admin Charge 1.5 1.5 101% 2.0 2.0 101%
Use of Money & Property 5.5 (0.3) -6% 4.5 7.1 159%
Other Revenues 0.3 0.4 127% 0.3 0.3 101%
Transfers In 6.2 5.3 86% 9.0 6.3 71%
TOTAL REVENUES $137.3 $147.1 107% $142.7 $155.0 109%
EXPENDITURES
City Council $0.3 $0.2 93% $0.3 $0.3 112%
City Clerk 1.2 1.0 89% 1.1 1.0 87%
City Treasurer 0.2 0.0 21% 0.1 0.2 128%
City Attorney 0.9 1.2 130% 1.1 1.7 155%
City Manager 5.3 3.8 72% 4.5 3.4 76%
Finance 4.4 3.1 70% 3.9 3.3 84%
Non expense/Dept 2.9 9.4 161% 1.9 2.0 100%
Human Resources 2.7 2.2 83% 2.8 2.6 92%
Economic & Comm Development 15.6 11.8 75% 15.1 11.1 74% Fire 33.4 35.5 106% 36.8 36.7 100%
Police 34.5 36.3 105% 37.4 37.1 99%
Public Works 8.6 7.9 92% 14.2 10.1 71%
Library 7.3 6.5 89% 8.0 7.7 96%
Parks and Recreation 22.9 20.5 90% 25.8 22.9 88%
CIP 3.8 0.7 18% 4.4 0.7 17%
TOTAL EXPENDITURES $143.9 $140.2 97% $157.4 $140.8 89%
Revenue in excess of Expenditures (6.7) 7.0 (14.7) 14.2 Information Technology* 5.2 3.8 72% 5.0 4.2 82%
* Non-General Fund: budgeted as internal service fund in Fund 785 FY 2022-23 FY 2023-24
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A. Revenue Review
The following is a review of the largest deviations from budget:
1. Property Tax. The City's allocation of property tax revenue, which includes residual property tax from the dissolution of the former Redevelopment Agency (RDA) and return of excess collections from the Educational Revenue Augmentation Fund (ERAF), which are local property revenues that have been diverted by the State of California to offset its obligation to fund public schools since 1992, significantly exceeded staff projections. This unexpected increase of approximately $7 million was primarily driven by higher-thananticipated returns from ERAF shifts and residential property tax increment that is allocated to the RDA is greater than anticipated. These components of the City’s property tax allocation are particularly challenging to forecast, as they depend on countywide property valuations and taxes. Staff were not informed of this revenue increase until July.
To improve forecasting accuracy moving forward, staff will collaborate with the County Assessor’s Office to analyze the underlying factors contributing to these deviations and determine whether these effects are one-time occurrences or indicative of an ongoing trend.
Staff further recommends that the City enter into an agreement in the near future with a property tax consultant that will enable staff to more accurately project these specific elements of property tax revenues.
2. License and Permits. Revenue from licenses and permits has proved difficult to forecast; mid-year adjustments had led staff to reduce the revenue projection for licenses and permits by $4.5 million. However, actual revenue ended up exceeding the revised budget by $1.5 million, although it remains $3 million below the original adopted budget. It is primarily building inspection and fire prevention driving the favorable revenue variance. This fluctuation highlights the unpredictability of this revenue stream, which is influenced by varying levels of economic activity and development projects. However, the increase is a positive sign that development may be returning to the City.
3. Use of Money & Property. Revenue from this category has surpassed expectations, largely due to market interest rate reductions anticipated in June 2024, which resulted in an increase in the value of the City’s bond holdings. Part of this increase reflects the City’s strategic decision to maintain a managed portfolio that anticipated these changes, extending the duration of its investments to maximize potential returns.
4. Transfers In & Intergovernmental. Transfers In and Intergovernmental revenue is provided to fund specific projects. If these projects are not completed within the current fiscal year, the associated revenue is deferred to future periods, which explains the shortfall in these two revenue sources.
B. Expenditure Review
The following is a review of the largest deviations from budget:
1. CIP. In FY 2023-24, only 16.8% of the budgeted capital for the General Fund was completed. While this appears to reflect immediate savings, it's important to note that unspent project budgets are rolled forward to the next fiscal year. As a result, these savings City of South San Francisco Page 5 of 13
represent a draw on future reserves rather than a reduction in operational expenses, meaning they do not provide the same flexibility as operational savings. There is $3.9 million in budget capital rolling forward.
2. Payroll. As part of the budget development process for FY 2023-24, staff assumed $3 million in salary savings. With this budgeted savings, payroll actuals were within 1% of budget.
3. Supplies and Services. Supplies and Services show the greatest savings with only 65% of budget expended. However, as with CIP, unspent encumbrances represent a draw on future reserves. There are $7.8 million in encumbrances rolling forward from this expense category. With those approved expenditures included, 87% of the budget is expended.
The department with the largest impact on this adjustment is Public Works, which is why they have the greatest budget savings in the table above.
C. Reserve Review
FY 2023-24 began with an available unassigned fund balance in the General Fund of $21 million.
Given the additional revenue and expenditure savings the estimated year end, available unassigned fund balance in the General Fund is $34.8 million. This is an increase of $13.8 million. This is slightly less than the net savings, due to the increase in the General Reserves, explained below.
During the year, General Fund revenues, excluding Measure W, totaled $155.0 million. In line with the City’s Reserve Policy, which mandates maintaining a minimum of 20 percent of operating revenues, the General Fund reserves were increased by approximately $1.2 million, rising from $28.5 million to $29.7 million. This General Reserve amount remains unchanged throughout the fiscal year. The Pension Stabilization Reserve, established by the Council, has benefited from the rising interest rate environment to $5.8 million. Additionally, the Infrastructure Reserves are $6.7 million.
The total General Fund reserves are estimated at $77.1 million. Table 2 below summarizes the City’s projected reserves as of June 30, 2024:
Table 2: Projected City Reserves Summary as of 6-30-2024 (in millions) General Reserves (20%) $29.7
Pension Stabilization Reserves 5.8
Infrastructure Reserves 6.7
Total Reserve Levels $43.6
Available Unassigned GF Fund Balance 34.8
Reserves & Surplus Fund Balance $77.1
Feedback on use of increased reserves
Staff is seeking City Council feedback on the allocation of $13.8 million in additional unassigned reserves.
Options for consideration include:
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• Setting aside $8 million to offset the City’s project deficit for FY 2024-25 • Allocating $2 million to the Pension Stabilization Reserve • Allocating $1 million to address increasing legal liabilities in the Workers' Compensation Fund
• Allocating $1.6 million to support the Vehicle Replacement Program • Using a portion to relieve the Measure W share of the deficit burden Based on Council's input, staff will return with an updated Reserve Policy to formalize these allocations.
CURRENT FISCAL YEAR (FY2024-25) UPDATE
The General Fund accounts for the City’s tax revenues as well as the cost of core operations of the City. The adjusted FY 2024-25 General Fund budget projects revenues totaling $137.6 million, and expenditures totaling $145.6 million, which includes the 5 percent cuts requested for all departments.
The following sections show the revenue and expenditure results as of September 30, 2024.
A. General Fund Revenues – 1
st Quarter
The following table shows 1
st quarter actual revenues, including a comparative view of where the City’s revenues were at the same time last year:
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Table 3: 1st Quarter FY 2023-24 vs. FY 2024-25 Revenues (in millions) The following are the highlights revenue categories for the FY 2024-25 revenue budget.
1. Property Tax. Base revenues are on track for this year’s budget. The City just received the County levy letter providing the first update to the project property tax revenue. The news has been good, and there is potential for an increase in expected revenue, this will be reviewed as part of mid-year update. Further, City will be working with County to determine if the unexpected increase in FY 2023-24 will be ongoing or one-time, which could result in a favorable change to the projected revenue.
Additionally, the City received the State's backfilling of FY 2022-23 VLF shortfall of $3.0 million in August and had recorded it as FY 2024-25 revenue, which could result in a revision during mid-year budget review.
Adjusted
Budget
Actual as
of
9/30/2023
% of
budget
Adjusted
Budget
Actual as
of
9/30/2024
% of
budget
REVENUES
Taxes
Property Tax $48.0 $0.0 0% $50.2 $2.9 6%
Sales Tax 23.4 2.3 10% 23.2 1.6 7%
Transient Occupancy Tax 14.9 2.4 16% 14.5 2.7 19%
Other Tax 7.0 0.7 10% 6.7 1.1 16%
Franchise Fees 4.6 0.6 12% 6.2 0.4 6%
License and Permits
Building 13.9 3.0 22% 10.9 2.3 21%
Fire 3.0 1.0 34% 2.3 0.7 30%
Other 0.0 0.0 0% 0.0 0.0 0%
Fines & Forfeitures 0.7 0.1 13% 0.9 0.1 7%
Intergovernmental 4.2 1.7 41% 2.8 1.1 40%
Charges for Services
Planning 0.5 0.1 27% 0.4 0.5 133%
Fire 2.7 1.0 37% 3.7 0.9 24%
Parks & Recreation 3.7 0.9 24% 3.4 0.8 24%
Police 1.2 0.3 21% 1.1 0.3 31%
Other 0.0 0.0 60% 0.0 0.0 60%
Inter-Fund Admin Charge 2.0 0.5 25% 2.0 0.0 0%
Use of Money & Property 3.9 0.7 18% 4.5 0.3 6%
Other Revenues 0.3 0.0 12% 0.3 0.3 95%
Transfers In 8.7 0.5 6% 4.7 0.0 0%
TOTAL REVENUES $142.9 $15.9 11% $137.6 $15.9 12%
FY 2023-24 FY 2024-25
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2. Sales Tax. There is a two-month lag from when sales taxes are remitted by businesses to the California Department of Tax and Fee Administration (CDTFA) and when the CDTFA remits the City’s share of sales tax revenues. Given that, the City has only seen one month of revenue data for this fiscal year. Therefore, there is not enough data to provide an update at this time. A more actionable review will be provided as part of the mid-year report and budget update.
3. Transient Occupancy Tax (TOT). TOT is somewhat seasonal, which is why it is good to compare the percentage to the prior year at the end of the 1st Quarter. While the budget was only a slight increase over the prior year, actuals at quarter end are higher this year. While no adjustment is recommended yet, this is a good sign for a revenue source that continues to lag post pandemic.
4. Other Taxes. Other taxes include real property transfer tax, business license tax, and commercial parking tax. Real property transfer tax is showing no change from the prior year. Business license tax is up $85,000 from the prior year, however, with the vast majority of revenue anticipated in January and the business license tax ballot measure still before the voters, this revenue forecast remains unchanged. Finally, the commercial parking tax has increased when compared to last year. Staff will continue to monitor the trend and will have more information during the mid-year review.
5. Licenses & Permits. & Services Charges These revenues are charged by departments for services provided to the public. These revenues are difficult to forecast but are slightly higher in aggregate than prior year and budget thus far. In particular, the planning department has collected slightly higher than anticipated revenues thus far this year.
Part of Service Charges includes the interdepartmental overhead revenue charged by the General Fund to the restricted funds. This is a budgeted amount that transferred from the restricted funds to the General Funds on a scheduled basis.
6. Intergovernmental. This revenue source represents grants and other outside funding sources. The budget is generally updated throughout the year as new grants are awarded to the City.
7. Use of Money and Property. The revenue for this item comes in irregularly. If the Federal Open Market Committee (FOMC) continues to lower the federal funds rate in response to a cooling economy, the value of the City’s investments will continue to increase. Staff will continue to monitor the FOMC’s actions and coordinate with our investment advisory firm to best position the investment portfolio.
B. General Fund Expenditures – 1
st Quarter
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1. Payroll. Payroll represents 79% of total operational expenditures. For the City of South San Francisco, the vast majority of payroll costs are neither seasonal nor concentrated.
Instead, it is evenly spread throughout the fiscal year. As a result, a comparison to prior year is less informative than on the revenue side. As a result, the table below reports the percent spent relative to the amended budget.
For FY 2024-25, the California Public Employees’ Retirement System (CalPERS) offers a discount of 3.40% for paying the the unfunded accrued liability (UAL) in lump sum at the beginning of the fiscal year, which represents the amortized cost of investment gains/losses, changes in actuarial assumptions, etc. For every deviation in assumptions and actual results, such as the return on investment (ROI) compared to the discount rate, mortality, and inflation, an amortization base is generated that CalPERS will include in the UAL calculation. An appropriate analogy for an amortization base is a home mortgage. In February 2018, CalPERS changed its actuarial practices to reduce the amortization period for amortization bases from 30 years to 20 years, which reduces the amount of interest that its member agencies pay on the amortization bases. For FY 2024-25, similar to previous years, if the City makes a lumpsum prepayment of our annual Unfunded Accrued Liability (UAL) in July, the contributions can be invested early in the fiscal year, maximizing potential investment returns. The City took advantage of this discount in FY 2024-25, recording an expenditure of $17.3 million in July 2024. The UAL cost is allocated to departments throughout the year, reflecting 25% of their total allocation in this first quarter.
The same approach applies to retiree health and workers' compensation expenses.
Remaining benefit expenses derive from actual payroll figures, and salary expenses reflect actual payroll costs.
Overtime expenditures are currently higher than budgeted, with 48% of the budget already expended. The majority of this increase is within the Fire Department, primarily due to mutual aid responses, which will be offset by reimbursement revenues from the California Office of Emergency Services (CalOES) and other emergency management government entities.
In total, payroll (excluding overtime) for the General Fund is at 24% of budget following the first quarter. This aligns with first-quarter expectations. However, many departments developed their requested 5% reduction in expenses by freezing open positions for the first part of this year. Therefore, this first quarter includes the hiring delays, making the percent of budget closer.
Although national unemployment remains low, it has been gradually rising in the Bay Area, potentially leading to greater employee retention amidst recent government retirements.
Overall, this fiscal year might yield lower salary savings.
2. Supplies and Services. This category is challenging to analyze after just one quarter of budget expenditures in the General Fund. Currently, no budget adjustments have been City of South San Francisco Page 10 of 13
made to increase expenditures; all increases have utilized outside or restricted funding.
3. Inter-Departmental. Interdepartmental expenditures directly reflect budget allocations made by Finance throughout the year. Thus, as of September 30, 2024, expenses are at exactly 25% of budget.
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Table 4: FY 2022-23 vs. FY 2023-24 Expenditures as of September 30, 2024 (in millions) Expenditures
Adjusted
Budget
Actual as
of
9/30/2023
% of
budget
Adjusted
Budget
Actual as
of
9/30/2024
% of
budget
City Council
Payroll 0.2 0.0 21% 0.2 0.0 23%
Supplies & Services 0.0 0.0 27% 0.1 0.0 6%
Interdepartmental Charges 0.0 0.0 25% 0.0 0.0 25%
Total 0.3 0.1 23% 0.3 0.1 20%
City Clerk
Payroll 1.0 0.2 18% 1.0 0.2 21%
Supplies & Services 0.2 0.0 10% 0.2 0.0 10%
Interdepartmental Charges 0.1 0.0 25% 0.1 0.0 25%
Total 1.3 0.2 17% 1.3 0.2 19%
City Treasurer
Payroll 0.0 0.0 19% 0.0 0.0 25%
Supplies & Services 0.1 0.0 22% 0.1 0.0 17%
Interdepartmental Charges 0.0 0.0 25% 0.0 0.0 25%
Total 0.1 0.0 21% 0.2 0.0 18%
City Attorney
Supplies & Services 1.1 0.1 9% 1.5 0.4 26%
Interdepartmental Charges 0.0 0.0 25% 0.0 0.0 25%
Total 1.1 0.1 9% 1.5 0.4 26%
City Manager
Payroll 3.2 0.5 17% 2.6 0.6 25%
Supplies & Services 1.6 0.1 7% 1.2 0.1 7%
Interdepartmental Charges 0.1 0.0 25% 0.1 0.0 25%
Total 5.0 0.7 14% 3.9 0.8 19%
Finance
Payroll 3.3 0.6 17% 3.3 0.7 22%
Supplies & Services 1.0 0.0 3% 0.5 0.0 8%
Interdepartmental Charges 0.1 0.0 25% 0.1 0.0 25%
Total 4.5 0.6 14% 3.9 0.8 20%
Non expense/Dept
Supplies & Services 1.4 0.0 2% 1.4 0.6 43%
Transfers 0.5 0.1 25% 0.5 0.0 0%
Total Non-Expense/Dept. 1.9 0.2 8% 1.9 0.6 31%
FY 2023-24 FY 2024-25
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Expenditures
Adjusted
Budget
Actual as
of
9/30/2023
% of
budget
Adjusted
Budget
Actual as
of
9/30/2024
% of
budget
Human Resources
Payroll 2.4 0.5 21% 2.4 0.6 26%
Supplies & Services 0.6 0.1 10% 0.3 0.1 47%
Interdepartmental Charges 0.1 0.0 25% 0.1 0.0 25%
Total 3.0 0.6 19% 2.7 0.8 28%
Economic & Comm Development
Payroll 5.5 1.4 25% 6.1 1.5 24%
Supplies & Services 6.5 0.7 11% 2.4 0.4 15%
Capital Outlay 0.1 0.0 0% 0.0 0.0 0%
Interdepartmental Charges 0.4 0.1 25% 0.4 0.1 25%
Total 12.4 2.2 17% 8.9 1.9 22%
Fire
Payroll 28.2 7.7 27% 30.8 7.9 26%
Supplies & Services 2.8 0.4 14% 3.4 0.2 7%
Capital Outlay 0.4 0.0 0% 0.0 0.0 0%
Interdepartmental Charges 2.3 0.6 25% 2.3 0.6 25%
Total 33.6 8.6 26% 36.5 8.7 24%
Police
Payroll 32.4 7.8 24% 33.2 7.9 24%
Supplies & Services 1.8 0.3 19% 2.4 0.4 16%
Interdepartmental Charges 2.6 0.7 25% 2.6 0.7 25%
Total 36.8 8.9 24% 38.3 8.9 23%
Public Works
Payroll 4.8 1.1 24% 5.4 1.3 24%
Supplies & Services 7.0 0.6 9% 3.9 0.5 12%
Capital Outlay 0.3 0.0 0% 0.0 0.0 0%
Interdepartmental Charges 1.8 0.4 25% 1.8 0.4 25%
Total 13.8 2.2 16% 11.1 2.2 20%
Library
Payroll 6.4 1.4 21% 7.3 1.6 22%
Supplies & Services 1.1 0.3 29% 0.8 0.4 44%
Interdepartmental Charges 0.7 0.2 25% 0.7 0.2 25%
Total 8.2 1.8 23% 8.9 2.1 24%
Parks and Recreation
Payroll 19.2 4.0 21% 21.1 4.6 22%
Supplies & Services 6.6 1.0 15% 4.0 1.0 26%
Capital Outlay 0.1 0.0 50% 0.0 0.0 0%
Interdepartmental Charges 1.3 0.3 25% 1.3 0.3 25%
Total 27.1 5.3 19% 26.4 6.0 23%
CIP
Transfers 4.4 0.0 0% 0.0 0.0 0%
Total 4.4 0.0 0% 0.0 0.0 0%
Total General Fund Expenditures $153.7 $31.4 20% $145.6 $33.5 23% FY 2023-24 FY 2024-25
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Conclusion
The City’s stronger-than-anticipated financial performance at the close of FY 2023-24 has resulted in an additional $13.8 million in unassigned General Fund reserves, presenting a valuable opportunity for strategic financial planning. Staff propose setting aside $8 million of this surplus to establish a Budget Stabilization Reserve, which would provide a safeguard against future revenue shortfalls, thereby enhancing the City's ability to manage economic uncertainties.
In addition to the Budget Stabilization Reserve, staff presents to the City Council with a range of options to consider, which include bolstering the Pension Stabilization Reserve, helping to mitigate the long-term cost of pension obligations; other potential uses include addressing the City's Workers' Compensation Fund liabilities, which would improve the City’s ability to manage risk and employee-related costs, or supporting the City’s Vehicle Replacement Program, ensuring that critical municipal services continue to operate efficiently with up-to-date resources.
City Council's feedback on these proposed allocations is essential in shaping the City's financial strategy moving forward. Based on this input, staff will return with an updated Reserve Policy that formalizes these decisions and ensures that the City's reserves are positioned to both protect against economic fluctuations and address long-term financial obligations. This comprehensive approach will support the City's fiscal resilience and ability to meet ongoing community needs.
The FY 2024-25 First Quarter Financial Report reflects a stable and positive financial position for the City, though the structural deficit remains. Revenues, including property tax, transient occupancy tax (TOT), and sales tax, are performing well, with license and permit revenues exceeding expectations due to increased development activity. On the expenditure side, payroll is generally on track, though higher overtime costs in the Fire Department will be offset by mutual aid reimbursement revenues. The City's overall financial health remains sound. Staff will continue to monitor these trends closely and provide a more comprehensive update during the mid-year review, ensuring that any necessary adjustments are made to maintain fiscal stability.
Information Technology*
Payroll 2.3 0.5 20% 2.2 0.5 25%
Supplies & Services 2.7 0.4 14% 2.0 0.3 16%
Interdepartmental Charges 0.0 0.0 25% 0.0 0.0 25%
Total 5.0 0.9 17% 4.3 0.9 20%
* Non-General Fund: budgeted as internal service fund in Fund 785