Torrance City Council
December 17, 2024

10F
Date: December 17, 2024
To: Honorable Mayor and Members of the City Council
From: Finance and Governmental Operations Committee
By: Sheila Poisson, Finance Director | [email protected] Subject: Finance and Governmental Operations Committee – Accept and File Fiscal Year 2024-25 First Quarter Budget Review Report, Approve Proposed Program Modifications, and Appropriate Funds. Expenditure: $669,108 (General Fund and Non-General Fund).

RECOMMENDATION
Recommendation of the Finance and Governmental Operations Committee that City Council:

1. Accept and file the Fiscal Year 2024-25 First Quarter Budget Review Report; and

2. Approve the proposed program modification in the City Council’s fiscal year 2024-25 General Fund operating budget in the amount of $141,908; and

3. Approve the proposed program modification in the City Manager’s Office’s fiscal year 2024-25 General Fund-Measure SST Fund operating budget in the amount of $102,447; and

4. Approve the proposed program modifications in the Community Services Department’s fiscal year 2024-25 General Fund operating budget in the amount of $13,457; and

5. Approve the proposed program modification in the Finance Department’s fiscal year 2024-25 General Fund operating budget in the amount of $265; and

6. Approve the proposed program modifications in the General Services Department’s fiscal year 2024-25 General Fund operating budget in the amount of $46,091; and

7. Approve the proposed program modifications in the Public Works Department’s fiscal year 2024-25 General Fund operating budget in the amount of $93,906; and

8. Approve the proposed program modification in the Public Works Department’s fiscal year 2024-25 Sanitation Fund operating budget in the amount of $71,034; and

9. Approve the proposed increase to the Airport Capital Fund’s fiscal year 2024-25 operating revenue budget in the amount of $2,500,000; and

10. Appropriate $2,500,000 to the Airport Capital Fund’s fiscal year 2024-25 operating expenditure budget; and

11. Appropriate $200,000 to the Sewer Fund’s fiscal year 2024-25 operating expenditure budget.
1 City Council
December 17, 2024

FUNDING
Funding is available in the following fiscal year 2024-25 operating budget and is anticipated to be available in subsequent fiscal years.

Funding Source Amount
Council – General Fund $141,908
City Manager – General Fund – Measure SST Fund 102,447
Community Services – General Fund 13,457
Finance – General Fund 265
General Services – General Fund 46,091
Public Works – General Fund 93,906
Public Works – Sanitation Fund 71,034
Public Works – Sewer Fund 200,000
Total $669,108

DISCUSSION
Fiscal Year 2024-25 First Quarter Budget Review Report
Each year, the Finance Department provides the Finance and Governmental Operations Committee with two (2) budget updates on the City’s overall financial performance. The First Quarter Budget Review Report provides a financial analysis for the first three (3) months of the fiscal year ending September 30 and the Mid-Year Budget Review Report provides a financial analysis for the first six (6) months of the fiscal year ending December 31. The Fiscal Year 2024-25 First Quarter Budget Review Report (Attachment 1) is prepared in collaboration with City departments using actual, unaudited activity and examines the budget of the City’s major funds with an emphasis on the General Fund’s core revenues and expenditures, including year-to-date spending, reserve balances, projected year-end figures, and a summary of economic trends.

Proposed Fiscal Year 2024-25 First Quarter Program Modifications The Fiscal Year 2024-25 First Quarter Budget Review Report includes proposed program modifications which are summarized below for the consideration of the City Council. If approved, these program modifications will have a net cost of $669,108. A detailed cost breakdown has been provided as Attachment 2.
2 City Council
December 17, 2024

Council
Mayor and City Council Compensation
Expenditure: $141,908 (General Fund)
On November 4, 2024, the residents of Torrance voted to approve Measure TC, an amendment to the City Charter. This amendment modifies Section 604 (now renumbered as Section 404) to establish a cap on City Council compensation, setting it equal to the current minimum wage of the State of California, which is $16 per hour. Measure TC further stipulates that City Council members’ compensation will be based on 2,080 hours annually.

Previously, the compensation for City Council members was set at $100 per month, or $1,200 per year. Under the new provisions of Measure TC, Council members will receive $2,773 per month, or $33,280 per year. This change in compensation is anticipated to take effect on December 1, 2024, and this program modification amends the current fiscal year’s budget for the additional cost through June 30, 2025. The annual fiscal impact will be $243,271 in the next budget cycle for fiscal year 2025-26.

City Manager’s Office
Add 2.0 FTE Staff Assistant
Expenditure: $102,447 (General Fund-Measure SST Fund)
The City Manager’s Office is requesting the addition of 2.0 Full-Time Equivalent (FTE) Staff Assistants to support the interim housing site (3290 Temporary Housing Village), which is currently operating at full capacity with 40 residents in 40 available units. The Outreach Team maintains a waitlist of 10 individuals seeking access to the site, and while they are on the waitlist, the team continues to provide essential services, such as assisting with documentation and connecting individuals to medical, mental health, and subsidized income resources. These tasks are resource-intensive.

Additionally, the Outreach Team is experiencing an increasing number of non-Torrance residents seeking assistance. While the interim housing site is restricted to Torrance residents, the team provides basic services to non-residents and transports them to their current service providers, sometimes as far as Oceanside or Perris. For safety reasons, two Outreach Coordinators are required to transport individuals outside the city, adding to the team's workload.

The team also notes a growing complexity in client needs, including an increase in seniors experiencing homelessness. Coordinators are also engaged in both preventative services related to rent increases and intervention services for those who become unhoused. Moreover, with heightened public awareness of how to report homeless individuals, the team's administrative workload has increased, including logging requests and providing updates.

Another factor contributing to the request is the turnover of homeless services professionals in other agencies, which places additional responsibilities on Torrance staff to ensure continuity of care. For instance, a recent Social Services Commission meeting highlighted the high turnover of mental health professionals, requiring Torrance staff to become more involved in client care to bridge this gap.

With the addition of two budgeted Staff Assistant positions (one of which will be filled), the City will pilot Saturday coverage for outreach services to assess the effectiveness of weekend operations. Furthermore, one existing Outreach Coordinator will assume administrative responsibilities, ensuring cross-training within the team. This request aims to address the increasing demands on the Outreach Team and ensure continued service delivery to the Torrance 3 City Council
December 17, 2024

community. The annual fiscal impact will be $204,893 in the next budget cycle for fiscal year 2025-26.

Community Services Department
Delete 2.0 FTE Program Coordinator and Add 2.0 FTE Recreation Supervisor Expenditure: $14,302 (General Fund)
The Community Services Department is requesting the conversion of 2.0 FTE Program Coordinator positions to 2.0 FTE Recreation Supervisor positions. The responsibilities of registration and facility booking currently assigned to Program Coordinator positions align with the duties of other Recreation Supervisors. The current staff supervises recurrent employees, processes over $3 million in customer transactions annually, and plays a key role in coordinating City-wide special events. Additionally, staff oversee the Adaptive Recreation Program, which serves Torrance residents as well as individuals from other cities, offering multi-sport activities in partnership with Special Olympics, local and state games, arts and entertainment excursions, and volunteer coordination for general assistance and coaching. Converting these positions to Recreation Supervisors will also enable formal cross-training in Ranger Supervisor duties. The annual fiscal impact will be $28,604 in the next budget cycle for fiscal year 2025-26 .

Delete 1.0 FTE Senior Program Specialist and Add 1.0 FTE Instructor II Expenditure: $6,486 (General Fund)
The Community Services Department is requesting the conversion of a 1.0 FTE Senior Program Specialist position to 1.0 FTE Instructor II position to allow the City to recruit and retain qualified personnel to serve for the curriculum responsibility with Torrance Unified School District to help provide their California Earth Science DOE requirements. The Instructor II position (California Earth Sciences) requires a science background and preferably an advanced degree (master’s or PhD) in a relevant science discipline such as Environmental Science, Water Chemistry, Botany, or Microbiology. This role supervises research projects with adult students at the undergraduate and graduate levels. Their students do fieldwork in the Madrona Marsh Preserve and other water basins in the City, and they do laboratory work in the Nature Center. Their research directly contributes to monitoring and maintaining the health of our wetland ecosystems. The annual fiscal impact will be $12,972 in the next budget cycle for fiscal year 2025-26. 4 City Council
December 17, 2024

Delete 1.0 FTE Assistant City Librarian and Add 1.0 FTE Senior Librarian Expenditure: $(32,200) (General Fund)
The Community Services Department is requesting to convert a vacant 1.0 FTE Assistant City Librarian position to 1.0 FTE Senior Librarian. Currently, the Library needs more support at the administrative level to provide direct coaching and guidance to supervisors and front counter team members. The new Senior Librarian position will oversee access and technology; focusing on long-term planning and organizational development, expanding technology improvements and innovations like automated materials handling, extended access library services, and other innovations. This position will provide responsive public facing services including enhanced offsite programming and outreach, increased staff and community engagement through social media, marketing, and fundraising campaigns with Foundation and Friends of Torrance Library. The annual fiscal impact will be $(64,399) in the next budget cycle for fiscal year 2025-26.

Delete 3.27 FTE Program Leader, Add 2.77 FTE Program Specialist, and Add 0.96 FTE Senior Program Specialist
Expenditure: $24,869 (General Fund)
The Community Services Department is requesting to convert 3.27 FTE Program Leader to 2.77 FTE Program Specialist and 0.96 FTE Senior Program Specialist positions to attract a stronger candidate pool, improve staff retention rates, and better align pay with the modern expectations and demands of the Park Ranger Program. The Park Ranger Program is comprised of recurrent, part-time staff (comprised of Program Specialist and Senior Program Specialist positions) on duty from 4:30 PM to 10:30 PM on weekdays and 7:00 AM to 5:00 PM on weekends. Park Rangers play a critical role in upholding proper park usage to ensure all parks are safe and secure for the community. Some of their responsibilities include deterring disruptive behavior, educating park users on rules and regulations, enforcing special event permits, and assisting the Police and Fire Departments during emergency and non-emergency situations. This proposed program modification will also create leadership opportunities for dedicated staff and allow cross-training to provide additional coverage for handling incidents that occur during the City’s afterhours. The annual fiscal impact will be $49,738 in the fiscal year 2025-26 budget cycle.

Finance Department
Delete 1.0 FTE Senior Business Manager and Add 0.5 FTE Deputy Finance Director Expenditure: $265 (General Fund)
The Finance Department is requesting to convert a vacant 1.0 FTE Senior Business Manager position to a 0.5 FTE Deputy Finance Director position to support the Budget Division. The Division, currently staffed with a Budget Supervisor and an Administrative Analyst, is responsible for all City-wide budget functions, including developing quarterly budget reports and the biennial City-wide budget, as well as monitoring and projecting financial performance. The addition of a Deputy Finance Director will strengthen the Division's ability to effectively manage and oversee the Budget Team. The annual fiscal impact will be $529 in the next budget cycle for fiscal year 2025-26.
5 City Council
December 17, 2024

General Services Department
Delete 1.35 FTE Box Office Attendant, Delete 1.2 FTE Senior Box Office Attendant, Delete

1.0 FTE Stage Manager, Delete 1.0 FTE Facility Operations Attendant, Senior Expenditure: $(88,071) (General Fund)
The General Services Department is requesting the elimination of four vacant positions (1.35 FTE Box Office Attendant, 1.2 FTE Senior Box Office Attendant, 1.0 FTE Stage Manager, and 1.0 Facility Operations Attendant, Senior) and reallocate those resources to fund wage adjustments to these positions, as well as Facility Operations Attendant position. With rising minimum wage requirements, the City must adjust compensation to remain compliant and ensure fair pay for employees. These adjustments will align wages with legal standards while offering competitive compensation in the labor market. The annual fiscal impact will be $(176,141) in the next budget cycle for fiscal year 2025-26.

Delete 1.2 FTE Theatre Tech Coordinator and Add 1.7 FTE Theater Technician Expenditure: $13,966 (General Fund)
The General Services Department is requesting the conversion of 1.2 FTE Theatre Tech Coordinator to 1.7 FTE Theater Technician I. The Theater Technician I is an entry-level positions focused on basic duties such as stagehand, house management, A2 audio support, and fly rail operation. This tier will serve as a development pathway for new staff. The City is hoping to attract and retain skilled employees, sustain community theater and event offerings, and achieve long- term cost savings. The annual fiscal impact will be $27,932 in the next budget cycle for fiscal year 2025-26.

Delete 1.0 FTE Intern and Add 1.0 FTE Staff Assistant
Expenditure: $27,439 (General Fund)
The General Services Department is requesting to eliminate 1.0 FTE Intern position and add 1.0 FTE Staff Assistant to support the Capital Projects Team. This position will enhance planning and procurement processes for capital projects, including bid preparation, policy and procedure maintenance, and identifying opportunities for process improvements. Additionally, the Staff Assistant will conduct research on industry best practices to ensure the timely execution and completion of the City’s capital projects. The annual fiscal impact will be $54,879 in the next budget cycle for fiscal year 2025-26.

Add 1.0 FTE Capital Projects Construction Superintendent Expenditure: $92,757 (General Fund)
The General Services Department is requesting the addition of 1.0 FTE Capital Projects Construction Superintendent to oversee construction activities and ensure successful project delivery. This position will ensure compliance with plans, codes, regulations, and safety standards while managing on-site operations, personnel, and schedules. The growing volume of capital projects, including the $35 million parking structure at the Transit Regional Center, underscores the need for this role. Current spending on Construction Management Services exceeds $1.4 million, highlighting the demand for enhanced on-site support. The annual fiscal impact will be $185,515 in the next budget cycle for fiscal year 2025-26. 6 City Council
December 17, 2024

Public Works Department
Add 1.0 FTE Maintenance Worker
Expenditure: $36,544 (General Fund)
The Public Works Department is requesting the addition of 1.0 FTE Maintenance Worker to support the Citywide Tree Planting Program. On June 6, 2023, Council approved adoption of the FY24-28 Capital Improvement Plan which included a project for OP83 – Citywide Tree Planting.

This project includes the planting of 7,000 street trees throughout City divided equally amongst the 6 Council districts in parkways and center medians. Approximately 1,750 trees will be planted per year, for the next four years. The planting of the first round of trees started in 2024. This position’s responsibility will be to water the newly planted trees until they are established, inspect the trees for insects, and re-stake trees as needed to assure that they grow straight. After the trees are established, the new staff member will switch to scheduled maintenance such as trimming. Public Works currently has over 37,000 street trees in our inventory that we maintain.

The annual fiscal impact will be $73,089 in the next budget cycle for fiscal year 2025-26.

Add 1.0 FTE Lead Maintenance Worker
Expenditure: $57,362 (General Fund)
The Public Works Department is requesting the addition of 1.0 FTE Lead Maintenance Worker to maintain the City Yard landscape. On July 1, 2024, City Yard maintenance obligations were transferred from the Community Services Department, Parks Services Division to the Public Works Department, Streetscape Division. This position will oversee approximately 72,000 sq. ft. of landscape maintenance at the City Yard. This includes the frontage along Madrona Blvd, the employee parking lot, bioswales that capture storm water runoff, and the grass area in front of the Public Works building. Daily duties will include tree trimming, weed abatement, irrigation inspection and repairs, debris clean-up, and mowing. The annual fiscal impact will be $114,723 in the next budget cycle for fiscal year 2025-26.

Add 1.0 FTE Recycling and Waste Management Coordinator
Expenditure: $71,034 (Sanitation Fund)
The Public Works Department is requesting the addition of 1.0 FTE Recycling and Waste Management Coordinator to assist the Sanitation Division in compliance with California’s Short-Lived Climate Pollutant Reduction Strategy (SB 1383). The addition of this new position will assist the City in complying with the many requirements of SB 1383, which set methane reduction targets for California in a statewide effort to reduce emissions of short-lived climate pollutants by reducing organic waste disposal by 75% by 2025 and rescue for people to eat at least 20% of currently disposed surplus food by 2025.

The Recycling and Waste Management Coordinator will be responsible for ensuring the commercial sector, including permitted commercial solid waste private haulers and commercial businesses, are compliant with SB 1383 requirements. The position will also be responsible for reviewing commercial solid waste hauler quarterly reports, verifying waiver and exemption requests from commercial accounts, providing technical assistance to edible food generator Tier 1 and Tier 2 businesses annually, investigating commercial complaints related to SB 1383, performing annual commercial account audits, and issuing notices of violation to commercial businesses not in compliance with SB 1383. This position will also provide public outreach support, grant administration support, and assist with identifying waste diversion opportunities within the City. The annual fiscal impact will be $142,067 in the next budget cycle for fiscal year 2025-26.
7 City Council
December 17, 2024

General Services Department
Increase Airport Capital Fund Revenue and Expenditure Budget by $2,500,000 The General Services Department is requesting to increase the Airport Capital Fund’s revenue and expenditure operating budgets, in relation to the Esterline Technologies settlement received, which will be utilized for properties remediation cost, as restricted by the settlement agreement, and the revenue and expenditure will be recorded in the Airport Capital Fund.

Public Works Department
Increase Sewer Fund Expenditure Budget by $200,000
The Public Works Department is requesting to increase the Sewer Fund expenditure operating budget by $200,000 in professional services classification for Underground Service Alert (DigAlert) services to mark underground sewer and stormwater utilities for safe excavation.

Currently, the City does not respond to sewer and stormwater DigAlert requests, and this funding would provide that service.

Founded in 1976 in response to a fatal accident, DigAlert serves nine Southern California counties. California law requires excavators to contact DigAlert before digging. As the City owns and operates subsurface utilities, including sanitary sewers and storm drains, the City is considered as a utility member and must comply with DigAlert regulations. Utility members are required to mark or locate their lines within two working days of excavation, use American Public Works Association (APWA) color codes, and ensure accuracy within 24 inches of the buried utility.

The Public Works Department manages over 300 miles of sewer and storm drain pipes and receives 400-500 DigAlert tickets per month, each of which requires an Electronic Positive Response (EPR) under state law. Failure to provide an EPR constitutes a violation of California Government Code 4126, and DigAlert is obligated to report noncompliance to the Underground Safe Excavation Board, which could result in financial penalties for the City.

In accordance with the information provided in this report, the City Council Finance and Governmental Operations Committee recommends that City Council accept and file the Fiscal Year 2024-25 First Quarter Budget Review Report and approve the proposed program modifications.

ATTACHMENTS

1. Fiscal Year 2024-25 First Quarter Budget Review Report (Document link:
https://www.torranceca.gov/government/finance/budget-documents )

2. Fiscal Year 2024-25 First Quarter Program Modifications Summary Table (Labor) 8 CITY OF TORRANCE • DEPARTMENT OF FINANCE

BUDGET REVIEW REPORT
FIRST QUARTER FY 2024 - 2025

SEE WHAT

TORRANCE IS DOING
ATTACHMENT 1
9 Table of Contents
Executive Summary .......................................................................................................... 1 Introduction .........................................................................................................................................

1 First Quarter Results

–

Citywide Revenues (All Major Funds)
............................................................

1 First Quarter Results

–

Citywide Expenditures (All Major Funds)
......................................................

2 First Quarter Results

–

General Fund
-Operating Fund

......................................................................

4 Areas of Focus ......................................................................................................................................

9 Economic Outlook .............................................................................................................................

14 Reserve Balances ...............................................................................................................................

18 Conclusion .........................................................................................................................................

20 Program Modifications and Other Updates ........................................................................ 22

Program Modifications ......................................................................................................................

22 Other Updates ...................................................................................................................................

29 General Fund .................................................................................................................. 30

Overall First Quarter Results .............................................................................................................

30 General Fund-Operating Fund First Quarter Results .......................................................................

32 General Fund-Measure SST Fund First Quarter Results ..................................................................

45 General Fund-Restricted/Assigned Fund First Quarter Results.......................................................

47 General Fund-Unassigned Fund (Reserves) First Quarter Results ..................................................

49 Internal Service Funds ..................................................................................................... 51

Self-Insurance Fund First Quarter Results .......................................................................................

51 Fleet Services Fund First Quarter Results .........................................................................................

53 Enterprise Funds ............................................................................................................ 56

Airport Fund First Quarter Results ....................................................................................................

56 Sanitation Fund First Quarter Results ..............................................................................................

58 Sewer Fund First Quarter Results .....................................................................................................

61 Transit Fund First Quarter Results ....................................................................................................

64 Water Fund First Quarter Results ......................................................................................................

66 Fiscal Year 2023

-
24 (Unaudited) Results ............................................................................ 69

10 First Quarter Budget Review Report

EXECUTIVE SUMMARY
11 1

Executive Summary
Introduction
The purpose of the Fiscal Year 2024 - 25 First Quarter Budget Review Report is to provide City Council and the public with a summary of the City’s overall financial performance

across all

major funds

(with
an emphasis on

the

General Fund
’s core revenues and expenditures)

through

the first three months
of the fiscal year ending September 30, 2024 . This report

also
provides an update on reserve
balances, projected year-end

figures
,

and

a

summary of economic trends.

In accordance with Council Policy 3, the City’s budget is amended throughout the course of the fiscal year under the discretion of

either
the City Manager or City Council

to
address additional
expenditures that occur after the public h earing process and formal budget adoption. For this reason, the amounts presented under

the
‘Amended Budget’ summary table

column
s may fluctuate
accordingly throughout the year. It is also important to note that certain major General Fund revenues are seasonal (e.g., property tax and business license tax); therefore, the majority of receipts in those revenue classifications

have not yet been collected as of September 30
.

This budget report is prepared in collaboration with City departments using actual (unaudited) activity for

f
iscal year 2024

-
25 (FY24-25). Moreover, s tatistical data and economic analyses

are

gathered from consultants and other

third
-party sources to project year

-
end revenue s. The
projections presented in this report

are
based on the most recent available

data at the time of
publication;

however
, data projections are subject to change.

As such,

staff will continue to monitor
actual activity and provide updates in subsequent quarterly budget reviews.

First Quarter Results – Citywide Revenues (All Major Funds) As of September 30, 2024 , City-wide revenues across all funds, including the General Fund, Internal Service Funds, and Enterprise Funds, totaled $100.3

million, achieving 19.9% of the

FY24
-25

revenue
budget. In comparison,

d
uring the same period

ending
September 30, 2023, the City realized

$

91.3 million in revenues, representing

18.6 %
of the

FY2
3-24 revenue budget. The following table provides
a

summary

comparison
of these

year
-over-year

figures
.

12 2

Citywide Revenues (All Major Funds )

First Quarter Results – Citywide Expenditures (All Major Funds) As of September 30, 2024 , across all major funds , the City realized expenditures of $153.1 million, achieving 31.4

%
of the

FY24
-25

citywide expenditure budget. During the same period ending September 30

, 202
3, the City expended

$
141.9

million or 30.2

%
of the

FY2
3-24 citywide expenditure
budget.

The following table provides a summary comparison of these year -over-year figures.

Citywide Expenditures

(All Funds)

and

Projected Net Surplus/(Deficit)

Revenues
Amended
Budget
July-Sept
Actuals
% Budget
Received
Amended
Budget
July-Sept
Actuals
% Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
GF-Operating 271,235,876$ 29,487,381$ 10.9% 286,824,553$ 39,224,358$ 13.7% 288,075,710$ 1,251,157$ GF-SST 22,942,288 1,908,679 8.3% 25,167,266 1,929,167 7.7% 25,413,072 245,806 GF-Rest&Assigned 25,763,426 21,804,990 84.6% 13,124,549 15,045,214 114.6% 15,496,971 2,372,422 GF-Unassigned 4,802,423 1,200,606 25.0% 5,000,000 5,000,000 100.0% 5,000,000 - Total General Fund 324,744,013$

54,401,656$

16.8% 330,116,368$

61,198,739$

18.5% 333,985,753$

3,869,385$

Self Insurance 20,668,500 5,274,220 25.5% 23,659,000 5,913,500 25.0% 23,646,640 (12,360) Fleet 12,121,697 2,302,802 19.0% 13,300,160 3,487,596 26.2% 13,806,660 506,500 Total Internal Service 32,790,197$

7,577,022$

23.1% 36,959,160$

9,401,096$

25.4% 37,453,300$

494,140$

Airport 17,024,729 3,907,521 23.0% 18,342,326 5,406,661 29.5% 19,620,410 1,278,084 Transit 37,254,922 11,872,512 31.9% 35,233,572 8,560,059 24.3% 33,647,700 (1,585,872) Sanitation 16,156,401 2,503,411 15.5% 18,918,815 2,880,827 15.2% 19,682,996 764,181 Sewer 8,313,366 1,329,720 16.0% 8,616,082 1,530,366 17.8% 8,348,609 (267,473) Water 54,827,481 9,738,331 17.8% 54,803,501 11,280,853 20.6% 56,159,573 1,356,072 Total Enterprise Fund 133,576,899$

29,351,495$

22.0% 135,914,296$

29,658,766$

21.8% 137,459,288$

1,544,992$

Total Revenues 491,111,109$

91,330,173$

18.6% 502,989,824$

100,258,601$

19.9% 508,898,341$ 5,908,517$

Prior Year FY2023-24 Current FY2024-25
Expenses
Amended
Budget
July-Sept
Actuals
% Budget
Expended
Amended
Budget
July-Sept
Actuals
% Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
GF-Operating 271,237,554$ 84,752,232$ 31.2% 287,233,764$ 88,332,454$ 30.8% 282,546,250$ 5,529,460$ GF-SST 22,942,288 8,685,680 37.9% 27,495,124 16,705,211 60.8% 26,665,286 (1,252,214) GF-Rest&Assigned 1,842,085 410,748 22.3% 1,602,087 141,207 8.8% 1,551,241 13,945,730 GF-Unassigned - - 0.0% 5,000,000 5,000,000 100.0% 5,000,000 - Total General Fund 296,021,927$

93,848,660$

31.7% 321,330,975$

110,178,872$

34.3% 315,762,777$

18,222,976$

Self Insurance 28,494,290 7,220,972 25.3% 23,514,888 7,176,461 30.5% 22,449,152 1,197,488$

Fleet 8,807,257 2,328,204 26.4% 8,650,840 2,349,729 27.2% 8,570,827 5,235,833 Total Internal Service 37,301,547$

9,549,176$

25.6% 32,165,728$

9,526,190$

29.6% 31,019,979$

6,433,321$

Airport 14,456,513 3,073,332 21.3% 16,458,142 5,332,938 32.4% 17,351,805 2,268,605$

Transit 38,490,413 7,448,150 19.4% 40,146,302 8,514,902 21.2% 38,291,000 (4,643,300) Sanitation 20,155,560 3,752,846 18.6% 20,062,665 3,744,392 18.7% 19,364,734 318,262 Sewer 6,581,954 3,257,378 49.5% 5,698,593 2,149,883 37.7% 5,377,493 2,971,116 Water 56,507,977 20,937,559 37.1% 51,905,219 13,691,333 26.4% 51,912,705 4,246,868 Total Enterprise Fund 136,192,417$

38,469,265$

28.2% 134,270,921$

33,433,448$

24.9% 132,297,737$

5,161,551$

Total Expenses 469,515,891$

141,867,101$

30.2% 487,767,624$

153,138,510$

31.4% 479,080,493$

29,817,847$

Revenues Less Expenditures 21,595,218$

(50,536,928)$

15,222,200$

(52,879,909)$

29,817,847$

Prior Year FY2023-24 Current FY2024-25
13 3

As shown under the “ Projected Surplus/(Deficit) ” column in the previous table , the following year - end

results are projected

for

FY24
-25:
• The General Fund -Operating Fund is expected to operate at a projected surplus of $5.5 million, primarily driven by vacancies. As of September 30 , 2024 , the General Fund-Operating Fund has 138

.1
full-time equivalent ( FTE) vacant positions , a decrease from

145

.6
FTE
vacancies as of September 30, 2023

.

A portion of the projected salary savings is expec ted to be used to fund

the
Recruitment and Retention Incentive Pilot program for the Police Department, approved by City Council in July 2024.
•

Th e General Fund-Measure SST Fund will operate at a projected deficit of $1.3 million. This fund’s budget was originally adopted with a deficit of $2.3 million due to planned use of fund balance to support the City’s Capital Improvement Plan.

•

Th e General Fund-Restricted/Assigned Fund will operate at a projected surplus of $13.9 million, primarily driven by a $9.4 million contribution to the City’s California Employers’ Pension Prefunding Trust ( CEPPT

)
Section 115 Fund and contributions to various
replacement funds for planned

future

equipment

purchase
s.
•

Th e General Fund-Unassigned Fund is projected to operate as planned with no projected surplus or deficit . The $5.0 million contribution from General Fund -Measure SST Fund to rebuild the City’s rese

rve
s is offset by

a
$5.0 million

transfer

to the General Fund -Operating
Fund to help maintain a balanced budget and support planned increases in public safety salaries and benefits to address two of the City’s

Areas of Focus
pertaining to labor relations.
•

Th e Self-Insurance Fund will operate at a projected surplus of $1.2 million due to a decrease in projected expenditures related to liabilities and settlements. •

Th e Fleet Services Fund will operate at a $5.2 million projected surplus, primarily driven by contributions to the Fleet Services Replacement Fund and partially offset by an operating deficit in the Fleet Services Operating Fund.

•

Th e Enterprise Funds will operate at a projected surplus of $5.2 million overall, led by the Water Fund, Sewer Fund and Airport Fund, partially offset by projected deficit in the Transit Fund.

The forthcoming sections will provide greater detail of the above results with particular focus on the General Fund-Operating Fund, which constitutes

89.4 % of the General Fund budget and

58.9 % of the
citywide budget. Additional information is also included in the

Areas of Focus
section of this
document to elaborate on important topics that need to be addressed and are being closely monitored by staff.

14 4

First Quarter

Results
– General Fund-Operating Fund
General Fund-Operating Fund Revenues and Expenditure s

As of September 30, 2024 the General Fund -Operating Fund realized revenues of

$39.2 million
,
achieving 13.7% of the

FY24
-25

revenue budget. During the same period in the prior year, the fund realized

$29.5 million
in revenues, representing

10.9%

of the

FY23
-24

revenue budget. As shown in
the table below, the General Fund-Operating Fund’s FY24-25 revenue budget is projected to operate at a surplus of

$1.3 million
, mainly driven by expected increases

from the City’s
investment portfolio
and transfers from the Airport Fund’ s non-aeronautical (land lease s) division, partially offset by expected shortfalls

in plan check fees, energy inspection fees and building permit fees.

The General Fund -Operating Fund realized expenditures of

$

88.3 million, achieving

30.8 %
of the
FY24-25

expenditure budget as of

September 30, 2024

. During the same period ending

September
30 ,
2023

, the

fund
expended $84.8

million or 31.2

%
of the

FY23
-24

expenditure budget. Currently, it
is projected that expenditures will fall below budget by

$

4.7 million at the end of the fiscal year.

Th
is
is primarily the result of departmental vacancies across the General Fund. As of

September 30,

202
4,
the General Fund had 138.1

FTE vacant positions. While this represents a decrease of

7.5 FTE
vacancies from the same period in the year prior, the City continues to experience challenges in attracting

and retaining
qualified candidates and currently has many recruitments underway.

At the end of FY24-25, it is projected that revenues will exceed expenditures by

$5.5 million
.

General Fund-Operating Fund Revenues
The three core revenue sources of the General Fund -Operating Fund are Sales and Use Tax , Property Tax , and

Utility Users’ Tax
. These three tax classifications cumulatively represent approximately 55

% of the City’s total General Fund
-Operating Fund revenue budget. Combined with
Business License Tax

and

Occupancy
Tax, these five revenue sources make up approximately 63

%
of the City’s total General Fund -Operating Fund revenue budget. However, it should be noted that certain receipts are seasonally collected, such as Property Tax

(December through April), Business
License Tax renewals (January through February), and Sales and Use Tax from the holiday season (Black Friday, Cyber Monday, Christmas). Thus, revenue receipts for the first quarter do not provide Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 271,235,876$ 29,487,381$ 10. 9% 286,824,553$ 39,224,358$ 13.7% 288,075,710$ 1,251,157$ 100.4% Total Expenses 271,237,554 84,752,232 31.2% 287,233,764 88,332,454 30.8% 282,546,250 4,687,514 98.4% Revenues Less Expenditures (1,678)$

(55,264,851)$

(409,211)$

(49,108,096)$

5,529,460$

5,938,671$

Prior Year FY2023-24 Current FY2024-25
15 5

a “ clear” representation of projected fiscal year -end results since they are not received until the second and third quarters of each fiscal year.

The table below represents a summary of all General Fund-Operating Fund revenue sources, but only the Sales and Use Tax , Property Tax, Utility Users’ Tax , Business License Tax , and

Occupancy
Tax

classifications will be examined for the purposes of this section. All classifications are examined in greater detail in the

General Fund
-Operating Fund Revenue Analysis

section of this document.

General Fund
-Operating Fund Revenue

s

by Classification

Sales and Use Tax
Sales and Use Tax (sales tax) receipts of $ 4.9 million for the

first
fiscal quarter are tracking

above
prior year actuals by $

148,000
or 3.1% higher. Subsequent to the 2020 pandemic, s ales tax receipts peaked in

FY
2021

-
22 at $63.6 million

, fell to

$62.6 million in

FY22
-23

, $

61.9 million

in FY23-24, and are
projected to generate $ 62.4 million in FY24-25. This forecast project s a flattening trend , or

an
increase

of 0.8% from prior-year actuals and a 0.2% decrease below budgeted figures in the current fiscal year.

With sales tax revenues trending downward, staff continue to be cautious with economic forecasts.

In November 2024

, the Federal Reserve (Fed)

decreased
the Federal Funds Rate to a range of

4.50 %
- 4.75

%.

Only one Federal Reserve meeting remains this year,

and
it is still unclear

whether the Fed
will lower rates further or

keep them unchanged.

The Fed’s policy to slow inflation has affected sales
trends across various industries.

As of the latest available data from the California Department of Tax & Fee Administration (CDTFA), a sharp drop in auto sales and leasing activity

was largely responsible
for the overall decline

due to softening demand as higher financing rates

adversely
impact buyers’
spending power.

Many other general consumer categories were also down

compared to

the

2023

quarter, confirming
consumers are pulling back on purchases. Home furnishings , appa rel, and electronic appliances could not escape the change in shopper’s preferences for lower priced items from

large retailers like
discount department stores.

Despite the

decrease

in the Federal Funds Rate helping temper the cost
Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Taxes 209,861,473$ 14,918,455$ 7. 1% 214,595,854$ 17,488,127$ 8.1% 214,406,574$ (189,280)$ 99.9% Licenses, Fees and Permits 5,773,777 1,154,179 20.0% 5,429,133 1,754,383 32.3% 4,541,610 (887,523) 83.7% Fines, Forfeitures and Penalties 760,672 63,950 8.4% 642,774 86,885 13.5% 756,240 113,466 117.7% Use of Money and Property 4,527,970 2,006,601 44.3% 7,154,388 2,241,883 31.3% 9,447,010 2,292,622 132.0% Intergovernmental 349,501 5,000 1.4% 490,127 3,361 0.7% 309,780 (180,347) 63.2% Charges for Services 23,560,796 4,851,535 20.6% 25,217,466 4,791,469 19.0% 24,318,930 (898,536) 96.4% Other Revenues 105,570 197,803 187.4% 299,604 48,517 16.2% 189,570 (110,034) 63.3% Operating Transfers In 26,296,117 6,289,858 23.9% 32,995,207 12,809,733 38.8% 34,105,996 1,110,789 103.4% Total Revenues 271,235,876$

29,487,381$

10.9% 286,824,553$

39,224,358$

13.7% 288,075,710$

1,251,157$

100.4%
Prior Year FY2023-24 Current FY2024-25
16 6

of financing, personal consumption forecasts remain insipid through the remainder of 2024 .

Consumers are more likely to wait for greater improvement of household economic conditions before extending themselves again.

Despite challenges, the Business and Industry sector remained a bright spot in the economy. Both IT services and clothing fulfillment industry saw

growth compared to

the

previous

year.

The below chart is based on the latest available data from the CDTFA and illustrates quarter -over- quarter (3-month) results as of September 30,

2024
. It should be noted that quarterly data typically
becomes available after a four -month period and staff adjusts budgetary forecasts accordingly throughout the fiscal year.

Source: HdL Companies

Property Tax, Property Transfer Tax, and Vehicle License Fee (VLF) Swap & Repayment Tax The City’s property tax base consists of a healthy mix of residential, commercial, and industrial properties, with the residential category comprising most of the total assessed value in Torrance.

Property Tax revenues, which collectively includes property tax, property transfer tax, and VLF swap & repayment tax, are primarily received in

December

and

April each year.

As of

September 30
, 2024, property tax receipts of $1.5 million are tracking $140,000

higher, or

10 .0%,
compared to the same period last year. Presently, the City projects total year -end revenues to be slightly higher than budget by approximately $888,000 or 1.3% across the three combined property tax categories. The table below

indicates
that as of

September 2024

(202

4 Q3), the median sales price
17 7

of a detached single-family residential (SFR) home in Torrance was $1,300,000, a 8.8 % increase from the same period in 2023 (Q3), and a

2.0 % increase from $1,275,000 from the second calendar quarter of

2024

(
Q2). This is an important variable to monitor as transfer of ownership is the largest driver in assessed value changes.

Source: HdL Companies

Utility

U
sers’

T
ax
Utility users’ tax (UUT) receipts

of
$8.3 million

translate to

a

14.5 % increase from the prior year.

Electricity experienced an increase from the prior year, while cable experienced a slight decrease.

The Torrance Refinery experienced a decrease in both electricity and gas as production continues to normalize following planned maintenance in the second fi scal quarter of 2024

.

Reclaimed water
consumption is down, offset by an increase in the consumption of potable water.

Presently, the City
projects that tot

al year
-end UUT revenue will fall short of budget by

approximately $

2.7 million or

5.8%, primarily due to the reduction in Torrance Refinery receipts.

Other Major Revenue Sources
Other major revenue sources of the General Fund-Operating Fund include

Business License Tax
and
Occupancy Tax. As of

September 30, 2024

,
Business License Tax receipts are higher than the prior year by $

190
,000 and are expected to

fall short of
budget by

0.3 %. Moreover, the

City’s
Occupancy
Tax receipts have increased by $ 554

,000 compared to September 30, 2023

. Based on the latest
information from data and analytics company STR, LLC, the City’s occupancy rate increased

slightly
from 84.2

% in

September 2023

to 84.8

% in

September 2024

. Additionally, the average daily rate per
room increased by $

8.47 or 5.3% during this same twelve-month period. Overall, it is projected that Occupancy Tax

receipts

will

fall short of

budget by approximately $
707,000 or

5.1 %.

18 8

General Fund-Operating Fund Expenditures
As of September 30 , 202 4, the General Fund -Operating Fund’s expenditures increased by $3.6 million or 4.2% from the

same period in year prior
, primarily driven by

the
planned increase

s
in
Salaries and Employee Benefits for renewed labor contracts and salary grid modifications, as well as the Police Department’s recruitment and

retention
incentive package which was funded by salary
savings. These increases were offset by a reduction in Other Operating Transfers Out, due to reduced contributions to the Section 115 CEPPT fund.

General Fund-Operating Fund

Expenditures by Department

As shown in the table above, most departments are expected to remain within budget with the overall General Fund-Operating Fund projected to operate at a surplus of

$4.7 million

by fiscal year
-
end. This is primarily the result of departmental vacancies across the General Fund. As of September 30, 2024, the General Fund had 138.1 FTE vacant positions. While this represents a decrease of 7.5 FTE vacancies from the same period in the year prior, the City continues to experience challenges in attracting and retaining qualified candidates and currently has many recruitments underway. As part of efforts to overcome this challenge, City Council approved an

e
nhanced Recruitment and Retention
Incentive Pilot program for the Police Department in July 2024

, to be funded by salary savings in the
Police Department.

Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
City Council 580,611$ 147,332$ 25.4% 577,734$ 151,683$ 26.3% 557,679$ 20,055$ 96.5% City Manager 6,436,700 1,442,094 22.4% 7,449,881 1,517,693 20.4% 7,206,725 243,156 96.7% City Attorney 3,108,064 692,523 22.3% 3,397,091 713,012 21.0% 3,179,989 217,102 93.6% City Clerk 1,359,558 284,979 21.0% 1,664,355 258,890 15.6% 1,506,267 158,088 90.5% City Treasurer 343,088 91,008 26.5% 483,686 94,518 19.5% 475,196 8,490 98.2% Finance 6,251,439 1,171,822 18.7% 6,253,088 1,222,523 19.6% 6,195,363 57,725 99.1% Human Resources 2,355,177 482,540 20.5% 3,244,183 590,123 18.2% 3,222,872 21,311 99.3% Civil Service 701,129 185,400 26.4% 1,144,051 209,659 18.3% 1,091,831 52,220 95.4% Community Development 9,643,676 2,087,600 21.6% 10,600,313 2,332,439 22.0% 10,104,586 495,727 95.3% CIT 8,782,395 2,188,713 24.9% 9,344,118 2,461,520 26.3% 8,821,682 522,436 94.4% General Services 10,493,231 2,190,145 20.9% 11,978,778 2,735,179 22.8% 11,729,753 249,025 97.9% Non-Departmental 22,778,700 29,395,535 129.0% 12,011,799 21,724,059 180.9% 12,955,974 (944,175) 107.9% Police 95,374,934 20,919,638 21.9% 101,924,799 26,813,125 26.3% 100,940,019 984,780 99.0% Fire 59,244,214 14,110,510 23.8% 69,295,045 17,396,151 25.1% 68,248,810 1,046,235 98.5% Public Works 19,211,947 3,854,605 20.1% 21,122,469 4,229,120 20.0% 20,340,435 782,034 96.3% Community Services 24,572,691 5,507,784 22.4% 26,742,376 5,882,760 22.0% 25,969,071 773,305 97.1% Total Expenses 271,237,554$

84,752,228$

31.2% 287,233,766$

88,332,454$

30.8% 282,546,252$

4,687,514$

98.4%
Prior Year FY23-24 Current Year FY24-25
19 9

Citywide-Vacancies by Department

The table above shows a summary of departmental vacanc ies as of September 30, 2024 . The estimated annual cost shows projected cost savings if these vacancies

were to remain vacant
throughout the fiscal year , which differ s from projected savings in this rep ort. When the City experiences vacancies

increased overtime costs are experienced with current staff needing to provide the same level of service to the community, which deteriorate the above amounts. Another reason for the difference is the enhanced Recruitment and Retention Pilot Program in the Police Department. These two factors are key in explaining why the amounts above are not fully real ized when positions

are

vacant
.

These vacancies are examined in greater detail in the

appropriate fund’s
sections of this document.

Areas of Focus
There are multiple areas that staff are tracking closely that will require attention in the near term and over the coming budget cycles, including:
•

Self-Insurance Fund, which

is

underfunded by approximately

$

51.9 million

•

Cash Balances by Fund
•

Labor Trends
•

Expiring Labor Agreements
•

Aging Infrastructure and City Facilities/Parks
•

Pension/OPEB Benefits Liability Management

Department
General
Fund
Non-Major
Governmental
Funds

Enterprise
Fund
Internal
Service
Fund Total
General
Fund
Non-Major
Governmental
Funds
Enterprise
Fund
Internal
Service
Fund Total
CIT 7.0 - - - 7.0 870,946 - - - 870,946 City Attorney 2.0 - - - 2.0 264,891 - - - 264,891 City Clerk 2.0 - - - 2.0 245,098 - - - 245,098 City Manager 6.6 - - - 6.6 588,704 - - - 588,704 Community Development 5.5 0.5 - - 6.0 474,745 64,371 - - 539,116 Community Services 8.5 - - - 8.5 940,756 - - - 940,756 Finance 2.0 - - 1.0 3.0 236,697 - - 92,951 329,648 Fire 13.5 - - - 13.5 2,608,637 - - - 2,608,637 General Services 3.5 - 1.0 2.0 6.5 258,434 - 105,666 234,202 598,303 Human Resources 2.0 - - - 2.0 171,975 - - - 171,975 Police 67.0 - - - 67.0 12,300,898 - - - 12,300,898 Public Works 18.5 - 6.5 - 25.0 1,827,502 - 696,742 - 2,524,244 Transit - - 31.3 - 31.3 - - 2,900,953 - 2,900,953 Total 138.1 0.5 38.8 3.0 180.4 20,789,284$

64,371$

3,703,361$ 327,154$ 24,884,169$
Vacant Fulltime Equivalents (FTE's) Estimated Annual Cost 20 10

Self-Insurance Fund
The City’s Self -Insurance Fund covers expenditures associated with non -litigated claims, liability claims and settlements, workers’ compensation cases, and unemployment insurance payments.

This fund generates its revenues by allocating costs to the General Fund, Enterprise Funds, and Internal Service Funds. As of June 30,

2024

(unaudited), this fund was

underfunded by approximately
$51.9 million. This is driven by existing outstanding liabilities in workers’ compensation totaling $52.7 million and liability claims of $14.8

million.

This shows slight improvements, when comparing
to the fund balance of $54.0

milli
on

as of June 30, 2023.

As of

June 30, 2024

(unaudited), the cash balance in this fund stands at only $21.5 million. As a result, the Self-Insurance Fund is approximately 29.6% funded, which continues to place it in the High-Risk Category of the City’s Key Performance Indicator tracking. Given these trends,

the City may
recommend one-time contributions from the General Fund -Operating Fund’s

projected
operating
surplus to help restore the Self -Insurance Fund’s overall position. This will be a continued

Area of
Focus in future quarterly budget updates and budget cycles to ensure the City is adequately prepared for funding its exposure.

Cash Balances by Fund
Although cash balances are currently sufficient to manage overall day -to-day operations, the table below shows the cash balances distribution as of

June 30, 202

4 (unaudited) and highlights the fund
categories that are relatively low for operations of their sizes.

As shown above, the City’s General Fund only sits at a cash balance of $ 68.2 million. This represents a small portion of the City’s pooled cash utilized for investments during the fiscal year. For reference, the current General Fund cash balance represents 19.5% of all cash on hand, while the total General Fund expenditure budget represents 6 5.9% of the City’s total FY24 -25 Amended Budget. As the City Fund Category
End Cash Balance
FY2023-24 Example Funds
Enterprise Funds 116,383,863$ Airport; Sanitation; Sewer; Water; Transit Nonmajor Governmental Funds 76,792,232 Meaure M; Prop A; Prop C; Measure W; Gas Tax General Fund 68,171,608
Fiduciary Funds 8,726,148 INSB; Area G; Low Mod/RDA/Succesor Internal Svc - Fleet Services Fund 37,932,268
Internal Svc - OPEB Fund 5,937,267
Internal Svc - Self-Insurance Fund 20,511,204
Capital Improvement Fund 15,518,120 General Fund CIP Grand Total 349,972,711$

21 11

focuses on replenishing fund balances in the General Fund and Self -Insurance Fund, this will also help to improve the overall distribution of its cash balances.

Labor Trends
As of

October 31

, 202
4, 243

employees are eligible for retirement (based 55 years of age; Employee Classification A). As the workforce ages, City staff will continue to monitor retirement eligibility for proper succession planning. Beginning in FY21

-
22, the City sustained a significant spike in
retirements and voluntary resignations. The most cited reasons for recent departures have been better salaries, benefits, flexibility and advancement opportunit

y
. As negotiations

have
settled
and progressed across the different groups, labor agreements aimed to align salaries and benefits to comparable cities within budgeted levels

have been
a primary focus to address these departure
reasons. As part of that effort, City Council approved an Enhanced Recruitment and Retention Incentive Pilot program in 2024 for the Police Department, w hich has been heavily impacted by consistently

higher vacancy rate
s.

The number of retirements and voluntary resignations

has improved since the peak of FY21
-22 and
FY22-23

, however we are experiencing increases
compared to the same period during the year prior.

As of the

four
-month period ending

October
31, 202

4 , there have been

16 retirements and

32 voluntary resignations, compared to

4 and
25 during the prior year, respectively.

Expiring Labor Agreements
The City’s agreements with the various labor groups follow different terms.

Below is a table that
summarizes the current status of the City’s eleven unions and/or associations:

FY20-21 FY21-22 FY22-23 FY23-24
4 Months of
FY24-25
Retirement 57 72 59 33 16
Voluntary Resignation 42 133 121 96 32
Departure or Death 11 13 21 18 9
Total 110 218 201 147 57
22 12
T
he City has put an emphasis on negotiating labor agreements designed to address gaps with the city’s compensation and the labor market. These efforts are aimed at improving the elevated vacancy rates that have been sustained for multiple years.

The City anticipates settling the remaining
labor agreements in the near term and will continue to be diligent in ensuring pay and benefits are competitive and that the City can attract top talent to deliver services for the community . For reference, it is estimated that across all funds, it costs the city approximately $ 2.1 million for every 1% in negotiated wage increase for all of the City’s various bargaining units.

A
ging Infrastructure and City Facilities/Parks
The City owns and operates over $500 million worth of buildings, public facilities, and infrastructure.

With each passing year, these buildings age and deteriorate, many of which are still in their original condition. Currently, the City’s capital assets h ave reached their half -life mark, requiring heavy maintenance, upgrades, and repairs. During

FY23
-24

,
the City completed a

Facility
Index Study and
assess

ed
the current state of the City’s building and park assets. The FY24-25 Capital Improvement Plan was designed to better address the ongoing and recurring maintenance at City facilities every year. Measure SST will provide a dedicated stream of funding to improve City parks and other areas throughout the community. For FY24 -25

, $

7.8 million of Measure SST funds

was
dedicated towards
capital improvements.

With that said, the FY24
-25 budget identified an approximate $ 13.0 million
funding gap each year between the needed investment in building and park assets and the amount the budget can sustain each year. This will be of continued focus in coming budget cycles to ensure the City’s assets are properly maintained.

Pe
nsion/OPEB Benefits Liability Management
In FY2 3-24, the California Public Employees’ Retirement System (CalPERS)

reported preliminary

investment gains of

9.3%,

2.5% higher than the 6.8% discount rate. This

will
translate to

a decrease

in unfunded actuarial liability (UAL) and the amortized repayment over the next 20 years, beginning Labor Group
Expiration
Date Status
Crossing Guards 6/30/2024 Pe nding Negotiations
Engineers & Torrance Fiscal Employees Association (Engineers & TFEA) 6/30/2028 Settled Torrance City Employees Association (TCEA) 6/30/2028 Tentative Agreement Torrance Fire Fighters Association (TFFA) 12/31/2027 Settled Torrance Library Employees Association (TLEA) 6/30/2024 Pending Negotiations Torrance Municipal Employees (AFSCME) 6/30/2024 Pending Negotiations Torrance Police Commanders Association (TPCA) 12/31/2025 Settled Torrance Police Officers Association (TPOA) 12/31/2025 Settled Torrance Professional & Supervisory Association (TPSA) 6/30/2028 Settled Torrance Professional Park & Recreation Employees Organization (TPPREO) 6/30/2024 Pending Negotiations Torrance Recurrent Recreational Employees Organization (TRREO) 6/30/2024 Pending Negotiations 23 13

in FY26-27. To elaborate, citywide, the annual UAL payment will range from $6.2 million in FY24-25 to approximately $ 36.5 million in FY3 3-34. The impact of these recent returns will be incorporated into the City’s 10-year forecast

during the coming budget cycle
.

To help mitigate the impacts of UAL
costs ramping up in the coming ten -year period, the City established a Section 115 Trust with CalPERS (CEPPT). This restricted fund serves as a supplemental reserve to the City’s Unassigned Fund Balance, specifically dedicated to pension costs.

It is anticipated that the City will need to make
its first drawdown from the

CEPPT Fund
in FY25-26

to smooth the rising pension costs

previously
mentioned.

24 14

Economic Outlook
Federal Funds Rate
The Federal Funds Rate is the benchmark borrowing rate set by the U.S. Federal Reserve System (Fed) from which fixed income instruments, auto loans, mortgages, and credit card rates are based.

As a result of spikes in inflation nationwide, the Fed began leveraging policy decisions in March 2022 and implemented

many rate hikes through July 2023

to try and temper the economy and “cool”
inflation.

The Fed had kept the federal funds rate at the 5.25%

-

5.50 % range for over a year after the last
increase in July 2023. With inflation recently moderating, the Fed lowered the federal funds rate in both September and November of this year. Federal Reserve Chair Jerome Powell said officials were focused on bringin

g rates dow
n, from a two

-
decade high, to a level that neither spurs nor slows
economic activity; instead focusing on maintaining

solid economic growth.

Below is a

summary of
the

three most recent actions

to the federal funds rate
:

Federal Reserve Meeting Action Taken Fed Fund Rate
November 8, 2024 -25 basis points 4.50% - 4.75%
September 19, 2024 -50 basis points 4.75% - 5.00%
July 27, 2023 +25 basis points 5.25% - 5.50%

Consumer Price Index (Inflation)
The Consumer Price Index (CPI -U) tracks the cost increase of goods, with the chart below more specifically focusing on our local region. As seen below, the CPI -U (CPI for All Urban Consumers) climbed to a peak of 8.6% in June 2022. The federal funds rate increases through July 2023 had a positive effect slowing economic activity and returning CPI to more “normal” levels reaching 3.0% as of September 2024. Consumer prices edged up in October 2024

,
and Fed Chair Jerome Powell
noted “That’s just a catch

-
up pro blem. It’s not really reflecting current inflationary pressures. It’s reflecting past inflationary pressures.”

Powell
indicated that the residual stickiness of some prices
are consistent with inflation continuing to come down on a “bumpy”

path
.
25 15

Real Gross Domestic Product (Real GDP)
Real GDP is a measure that reflects the value of all goods and services produced by an economy in a given year and controlled for annual inflation figures. Essentially, it measures a country's total economic output. Real GDP metrics are used for analyzing economic growth over time. According to the most recent data available from the U.S. Bureau of Economic Analysis, the national GDP increased by

2.9 % in the first calendar quarter of 202

4 when compared to the same period during the
year prior, followed by

a

3.0% increase in the second calendar quarter, and

2.7 % in the third calendar
quarter. These increases in real GDP reflect increases in consumer spending, exports,

and
federal
government spending.

Moreover, the increase in consumer spending reflected increases in both goods and services. Within goods, the leading contributors were other nondurable goods (led by prescription drugs) and motor vehicles and parts. Within services, the leading contributo rs were health care (led by outpatient services) as well as food services and accommodations. The increase in exports primarily reflected an increase in goods (led by capital goods, excluding automotive). The increase in federal government spending was led

by defense spending.

26 16

Source: Bureau of

Economic Analysis

Labor Market

As of September 2024, the U.S. unemployment rate was 3.7%; California’s was

5.3 %; and Los Angeles
(L.A.) County’s was

6 .0%. Like national, state, and county results, local unemployment rates have started to tick upwards in April 2024 and showed slight decrease in

September.

Many economists
anticipate unemployment to rise

moderately
, indicating a gradual cooling of the labor market
without a significant job market downturn.

The Employment Development Department reports that
California has added

265,300 non

fa
rm jobs, or 22

,
108 jobs a month on average since September
2023

,
with private educ ation and health services as the industry with the largest change in both September and October in 2024.

However,
California’s severe

housing shortage
and other factors
continue to

have a significant impact on job growth

.

27 17

Source: National Conference of State Legislatures, State of California

-

EDD

While California and L.A. County unemployment rates are higher than the national level, Torrance unemployment levels fare better with an unemployment rate of

3.8 % at the end of calendar year
2023

and 4.9% at the end of the third quarter in calendar year 2024

.

Although Torrance had a higher
local unemployment rate in Q3 2024

than the national average, Torrance’s unemployment rate remains lower in comparison to other

nearby cities.

Source: National Conference of State Legislatures, State of California

–
EDD

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Unemployment Rate
U.S. California L.A. County
2022
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
National 3.5% 3.5% 3.6% 3.7% 3.8% 3.8% 4.1% 3.7%
California 4.1% 4.3% 4.5% 4.6% 4.9% 5.3% 5.2% 5.3%
Los Angeles County 4.7% 5.3% 4.9% 5.0% 5.0% 5.4% 5.3% 6.0% Carson 4.9% 5.4% 4.7% 5.3% 4.9% 5.3% 5.9% 6.0%
Gardena 4.5% 5.0% 4.8% 5.4% 4.7% 4.8% 5.7% 6.1%
Glendale 4.2% 5.2% 4.7% 5.7% 4.9% 5.0% 5.7% 5.8%
Hawthorne 4.3% 5.2% 4.8% 5.3% 4.7% 5.2% 5.7% 5.8%
Inglewood 5.0% 5.8% 5.3% 6.1% 5.5% 5.9% 6.8% 7.1%
Santa Monica 4.4% 5.4% 5.1% 5.9% 5.0% 5.4% 5.8% 5.8%
Torrance 3.4% 4.1% 3.8% 4.3% 3.8% 4.2% 4.9% 4.9%
Local Unemployment Rate Trends
20242023
28 18

Consumer Confidence Index
The Consumer Confidence Index

is a critical driver of the U.S. and local economy which measures consumer confidence levels regarding their financial situation, sentiment about the general economic situation, unemployment, and capability of savings. According to the Conference Board Consumer Confidence Index survey, consumer confidence rose in October 2024 to 108

.7, up from

99.2 in September
, 97.8

in

June,

and

103.1

in

January

202

4 .

“Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the

narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positiv e. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained pos itive about future income. Also, for the first time since July 2023, they showed some cautious optimism about future job availability.”

Reserve Balances
The City’s adopted fiscal policy sets a 20% unassigned fund balance which translates to approximately $ 57

.4 million based on the currently approved expenditure appropriation for the General Fund -Operating Fund. The total unassigned fund balance of the City’s General Fund is projected to end at $ 83.5 million for FY24 -25. By reaching the 2 9.1% mark, the key performance indicator for the City’s General Fund Reserves will now be in the Low -Risk category. Although the 29 19

State Auditor’s High - Risk Dashboard was discontinued as of October 2023, staff continues to benchmark against the State Auditor’s previous recommendations.

The State Auditor’s High

-
Risk Dashboard previously recommended greater than nine months of operating costs, which translates to 75% or $2 15.4

million of

the General Fund -Operating Fund’s
current expenditure appropriation. To be considered “Low -Risk” on the State Auditor’s High

-
Risk
Dashboard would require six months of operating costs, which translates to 50% or $ 143.6 million.

In the future, staff may recommend adjustments to increase the City’s General Fund reserve goals and fund balance levels to further

improve fiscal resiliency.

General Fund-Unassigned Fund Overall Fund Balance Projections

In addition to the above reserves, the City established a Section 115 Fund through CalPERS

(CEPPT)

in June 2021 and began making annual contributions in FY21

-

22. This is a separate reserve dedicated
specifically to pension costs and

is another
valuable tool in addition to the City’s unassigned fund balance shown above. Below is a summary table that highlights the current and projected balance of this fund as of FY24-25.

Annual contributions

to this fund

represent a minimum

amount equivalent to 20%
of the projected
savings from the issuance of the 2020 Lease Revenue Bonds that were used to pay down a majority of the City’s CalPERS Unfunded Actuarial Liability (UAL).

In recent years, the City has been able to
accelerate contributions due to one

-
time savings realized from CalPERS outperforming its discount rate in FY20

-
21 .

The projected balance above

is available for future budget cycles to smooth the
increases in CalPERS cost experienced by the City.

Unassigned Fund Balance
Beg Bal -
FY23-24
Additions/
(Uses)
End Bal -
FY23-24
(unaudited)
Projected
Additions/
(Uses)
Proj End Bal
FY24-25
Reserve Fund - Economic Anomaly 8,081,847$ 4,802,423$ 12,884,270$ -$ 12,884,270$ Reserve Fund - Litigation -

-

-

-

-

Other Unassigned 55,338,919

11,015,588

66,354,507

4,277,246

70,631,752

Total 63,420,766$ 15,818,011$ 79,238,777$ 4,277,246$

83,516,023$
Beg Bal -
FY23-24
Additions/
(Uses)
End Bal -
FY23-24
(unaudited)
Projected
Additions/
(Uses)
Proj End Bal
FY24-25
Restricted Fund - Section 115 Trust (CEPPT) 3,668,763$ 24,123,084$ 27,791,847$ 11,871,307$ 39,663,154$ 30 20

Conclusion
As of late 2024, the US economy is showing moderate growth with a projected real GDP increase of around 2.7%

in the third calendar quarter of 2024
, mainly supported by steady consumer spending
and a relatively health

y

labor market.

While the unemployment rate

has decreased slightly over the
last few months , economists are anticipating the rate to rise moderately,

which indicate gradual
cooling of labor market

and slower job growth

through the

end
of 2024.

The increase

s
in the Federal
Funds Rate through July 2023

had positive effect slowing economic activity and returning the CPI to more “normal” levels reaching 3.0% as of September 2024.

As the inflation has started to moderate,
the Fed recently reduced the rate twice (in September and November 2024), focusing on maintaining solid economic growth . Inflation is expected to remain relatively stable at around 2.5% with a downward trend from earlier highs through the rest of 2024. Consumer spending is expected to remain a key driver of economic growth. The Consumer Confidence Index

rose in October 2024 from
September 2024

with moderate increases projected.

In their latest report, the UCLA Anderson Forecast is anticipating that California will experience a full year of sub-par growth in 2024, followed by 2025 and 2026 to be banner years for the GDP growth, driven in part by growth in residential investment, as the housing market is unlocked from its current state, wherein many homeowners have delayed moving to a

void giving up their previously acquired
low, fixed-rate mortgages.

The City continues to prioritize efforts with respect to development across the City to ensure continued growth in the City’s revenue base

. In 2023, the

Community Development Department
issued over 8,400 permits with

a
job valuation

for
permits submitted totaling $157.2 million. To date,
through the

t
hird quarter of calendar year 2024 the job valuation of permits submitted to the City has topped

$189.7 million

.

Below are a handful of developments in Torrance,

at various stages
:
 Anastasi/4501 Torrance Blvd – This multi-family residential project on Torrance Boulevard was recently approved by the Planning Commission and will add 50 units

for rent
.
 Del Amo Circle Apartments/21507 Hawthorne Blvd

–

This multi
-family apartment building
will add

200 units and a multi
-story parking structure.

 Gable House

/
22501 Hawthorne Blvd – This multi-family residential project on Hawthorne Boulevard is currently under construction and will add 218 units for rent (17 very low income affordable units).
 Lennar Fashion /21405 Madrona Ave

– This multi -family residential project on Madrona
Avenue is currently proposed to

add 2
74 units for

sale
.
 Rose Equities/2325 Crenshaw Blvd – This multi -family residential project on Crenshaw Boulevard was recently approved by City Council and will

add 272 units for rent.

31 21

Given the levels of development interest, on January 23, 2024, Staff recommended to City Council the creation of a community facilities district (CFD) to mitigate the additional costs associated with private developments. On September 10, 2024, City Council conducted a public hearing, and Staff

is
currently moving

forward with the next steps in creating a CFD in the upcoming months.

Recommendation
Based on the information provided in this summary, it is the recommendation of the Finance Director that the Finance and Governmental Operations Committee accept and file the Fiscal Year 2024 -25 First Quarter Budget Review Report and authorize staff to bri ng forward to City Council at a future date.

Respectfully submitted,

_______________________
Sheila Poisson
Finance Director
CONCUR:

_______________________
Aram Chaparyan
City Manager

32 First Quarter Budget Review Report

PROGRAM MODIFICATIONS
33 22

Program Modifications and Other
Updates

Program Modifications
This section provides a summary of Program Modifications that will be presented to City Council for consideration and approval. The below table is pro -rated to denote the financial impacts of these changes for the balance of the fiscal year. The annual impacts of each program modification are provided in the explanation sections.

Positions
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation Fund
Expenditure
Increase/
(Decrease)
Measure SST Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Councilperson & Mayor 7.00 - 7.00 141,908$ -$ -$ 141,908 $ Staff Assistant 9.50 2.00 11.50 - - 102,447 102,447 P
rogram Coordinator 6.00 (2.00) 4.00 (85,819) - - (85,819) Recreation Supervisor 5.00 2.00 7.00 100,121 - - 100,121 Instructor II 0.43 1.00 1.43 34,188 - - 34,188 Assistant City Librarian 2.00 (1.00) 1.00 (94,093) - - (94,093) Senior Librarian 5.00 1.00 6.00 61,893 - - 61,893 Program Leader 30.21 (3.27) 26.94 (62,392) - - (62,392) Program Specialist 18.00 2.77 20.77 60,668 - - 60,668 Senior Program Specialist 13.25 (0.04) 13.21 (1,108) - - (1,108) Senior Business Manager 2.00 (1.00) 1.00 (69,235) - - (69,235) Deputy Finance Director 1.00 0.50 1.50 69,500 - - 69,500 Box Office Attendant** 2.10 (1.35) 0.75 (26,507) - - (26,507) Senior Box Office Attendant*** 1.60 (1.20) 0.40 (27,245) - - (27,245) Facility Operations Attendant** 5.00 - 5.00 12,565 - - 12,565 Facility Operations Attendant, Sr** 4.00 (1.00) 3.00 (15,521) - - (15,521) Stage Manager 1.10 (1.00) 0.10 (31,363) - - (31,363) Theater Technician*** 1.30 1.70 3.00 54,353 - - 54,353 Theater Technician Coordinator 1.20 (1.20) - (40,387) - - (40,387) Intern II 1.00 (1.00) - (23,784) - - (23,784) Staff Assistant 1.00 1.00 2.00 51,223 - - 51,223 Capital Projects Construction Superintendent 1.00 1.00 2.00 92,757 - - 92,757 Maintenance Worker 40.00 1.00 41.00 36,544 - - 36,544 Lead Maintenance Worker 15.00 1.00 16.00 57,362 - - 57,362 Recycling and Waste Management Coordinator* - 1.00 1.00 - 71,034 - 71,034 Total 173.69 1.91 175.60 295,628$

71,034$

102,447$

469,108 $

*Used Salary Costing from Sr. Administrative Analyst
**Increase per FTE amount by 11%
***Increase per FTE amount by 10%
34 23

Council
Mayor and City Council Compensation
Expenditure: $141,908

(General Fund)
On November

4, 2024, the residents of Torrance

voted
to approve Measure TC,

an
amendment to the
City Charter. This amendment modifies Section 604 (now renumbered as Section 404 ) to

set
City
Council compensation equal to the current minimum wage of the State of California

,
which is $16
per hour. Measure TC further stipulates that City Council

members be considered full
-time
employees, with

compensation

based on 2,080 hours annually.

Previously, the compensation for City Council members was set at $100 per month, or $1,200 per year. Under the new provisions of Measure TC, Council members will receive

$2,773 per

month, or
$33,280 per year.

This change in compensation is anticipated to take effect on December 1, 2024 , and
this program modification amends the current fiscal year ’s budget for the additional cost through June 30, 2025. The

annual
fiscal impact

will be
$243,271

in the next budget cycle for fiscal year 2025-

26. City Manager’s Office
Add 2 .0 FTE Staff Assistant
Expenditure:

$
102,447

(General Fund-Measure SST

Fund
)
The City

Manager’s Office is requesting the addition of 2
.0 Full-Time Equivalent (FTE) Staff Assistants
to support the interim housing site

(
3290 Temporary Housing Village ), which is currently operating at full capacity with 40 residents in 40 available units. The Outreach Team maintains a waitlist of 10 individuals seeking access to the site, and while they are on the waitlist, the team continues to provide essential servic es, such as assisting with documentation and connecting individuals to medical, mental health

, and subsidized income resources. These tasks are resource intensive .

Additionally, the Outreach Team is experiencing an increasing number of non -Torrance residents seeking assistance. While the interim housing site is restricted to Torrance residents, the team provides basic services to non -residents and transports them to

their current service providers,
sometimes as far as Oceanside or Perris. For safety reasons, two Outreach Coordinators are required to transport individuals outside the city, adding to the team's workload.

The team also notes a growing complexity in client needs, including an increase in seniors experiencing homelessness. Coordinators are also engaged in both preventative services related to rent increases and intervention services for those who become unhou sed. Moreover, with heightened public awareness of how to report homeless individuals, the team's administrative workload has increased, including logging requests and providing updates. 35 24

Another factor contributing to the request is the turnover of homeless services professionals in other agencies, which places additional responsibilities on Torrance staff to ensure continuity of care. For instance, a recent Social Services Commission meet ing highlighted the high turnover of mental health professionals, requiring Torrance staff to become more involved in client care to bridge this gap.

With the addition of two budgeted

Staff Assistant
positions (one of which will be filled), the City will
pilot Saturday coverage for outreach services to assess the effectiveness of weekend operations.

Furthermore, one existing Outreach Coordinator will assume administrative responsibilities, ensuring cr

oss
-training within the team. This request aims to address the increasing demands on the Outreach Team and ensure continued service delivery to the Torrance community. The annual

fiscal
impact will be

$204,893

in the next budget cycle for fiscal year 2025
-26.

Community Services Department
Delete 2 .0 FTE Program Coordinator and Add 2 .0 FTE Recreation Supervisor Expenditure: $

1 4,302

(
General Fund)
The Community Services Department is requesting the conversion of

2.0 FTE

Program Coordinator
positions to

2.0 FTE

Recreation Supervisor positions. The responsibilities of registration and facility booking currently assigned to

Program Coordinator positions
align with the duties of other
Recreation Supervisors. The current staff supervises recurrent employees, processes over $3 million in customer transactions annually, and plays a key role in coordinating City

-
wide special events.

Additionally, staff oversee the Adaptive Recreation Program, which serves Torrance residents as well as individuals from other cities, offering multi

-
sport activities in partnership with Special Olympics,
local and state games, arts and entertainment excursions, and volunteer coor dination for general assistance and coaching. Converting these positions to Recreation Supervisors will also enable formal cross-training in Ranger Supervisor duties. The annual fiscal impact will be

$
28,604 in the next
budget cycle for fiscal year 2025

-
26 .

Delete 1.0 FTE Senior Program Specialist

and Add 1.0 FTE I
nstructor II
Expenditure:

$
6,486

(
General Fund)
The Community Services Department is requesting

the conversion of

a

1.0 FTE Senior Program
Specialist position to 1 .0 FTE Instructor II position

to
allow the City to recruit and retain qualified
personnel to serve for the curriculum responsibility with Torrance Unified School District to help provide their California Earth Science DOE requirements . The

Instructor II position (
California Earth
Sciences) requires a science background and preferably an advanced degree ( master’s

or PhD) in a
relevant science di

scipline such as Environmental Science, Water Chemistry, Botany, or Microbiology. This role supervises research projects with adult students at the undergraduate and 36 25

graduate levels. Their students do fieldwork in the Madrona Marsh Preserve and other water basins in the City, and they do laboratory work in the Nature Center. Their research directly contributes to monitoring and maintaining the health of our wetland ecosystems. The annual fiscal impact will be $12,972

in the next budget cycle for fiscal year 2025
-26.

Delete

1 .0 FTE

Assistant City Librarian

and Add

1 .0 FTE Senior Librarian
Expenditure: $

(
32,200

)

(
General Fund)
The Community Services Department is requesting to convert

a vacant 1.0 FTE
Assistant City
Librarian position to 1.0 FTE

Senior Librarian.

Currently, the Library needs more support at the
administrative level to provide direct coaching and guidance to supervisors and front counter team members. The new Senior Librarian

position
will oversee access and

t
echnology; focusing on long-
term planning and organizational development , expanding technology improvements and innovations like automated materials handling, extended access library services, and other innovations. This position wi

ll provide
responsive public facing services including enhanced offsite programming and outreach

,
increased staff and community engagement through social media, marketing, and fundraising campaigns with Foundation and Friends of Torrance Library. The annual fiscal impact will be $(64,399) in the next budget cycle for fiscal year 2025-26.

Delete

3.27 FTE Program Leader, Add 2.77 FTE Program Specialist, and Add

0.96 FTE Senior
Program Specialist
Expenditure: $24,869

(
General Fund)
The Community Services Department is requesting to convert 3.27 FTE Program Leader to 2.77 FTE Program Specialist and 0.96 FTE Senior Program Specialist positions to attract a stronger candidate pool, improve staff retention rates, and better align pay with the modern expectations and demands of the Park Ranger Program. The Park Ranger Pro gram is comprised of recurrent, part -time staff (comprised of Program Specialist and Senior Program Specialist positions) on duty from 4:30 PM to 10:30 PM on weekdays and 7:00 AM to 5:00 PM on weekends. Park Rangers play a critical role in upholding proper park usage to ensure all parks are safe and secure for the community. Some of their responsibilities include deterring disruptive behavior, educating park users on rules

and
regulations, enforcing special event permits, and assisting the Police and Fire Departments during emergency and non

-
emergency situations. This proposed program modification will also create leadership opportunities for dedicated staff and allow cross-training to provide additional coverage for handling incidents that occur during the City’s afterhours. The annual fiscal impact will be $49,738

in the fiscal year 2025

-
26 budget cycle.

37 26

Finance Department
Delete 1.0 FTE Senior Business Manager and Add 0.5 FTE Deputy Finance Director Expenditure: $265

(
General Fund)
The Finance Department is requesting to convert a vacant

1.0 FTE

Senior Business Manager position
to a

0.5 FTE

Deputy Finance Director position

to support the Budget Division. The Division, currently staffed with a Budget Supervisor and an Administrative Analyst, is responsible for all

C
ity-wide
budget functions, including developing quarterly budget reports and the biennial

C
ity-wide

budget,
as well as monitoring and projecting financial performance. The addition of a Deputy Finance Director will strengthen the Division's ability to effectively manage and oversee the Budget Team .

The annual fiscal impact will be $529 in the next budget cycle for fiscal year 2025-26.

General Services Department
Delete 1.35 FTE Box Office Attendant, Delete 1.2 FTE Senior Box Office Attendant, Delete 1.0 FTE Stage Manager,

Delete

1.0 FTE Facility Operations Attendant, S
enior
Expenditure: $(88,071

)

(
General Fund)
The General Services Department is requesting the

elimination
of four vacant positions (1.35 FTE Box
Office Attendant, 1.2 FTE Senior Box Office Attendant, 1.0 FTE Stage Manager, and 1.0 Facility Operations Attendant , Senior) and reallocate those resources to fund wage adjustments

to t
hese

positions, as well as Facility Operations Attendant position. With rising minimum wage requirements, the City must adjust compensation to remain compliant and ensure fair pay for employees. These adjustments will align wages with legal standards while offering competitive compensation in the labor market. The annual fiscal impact will be $(176,141) in the next budget cycle for fiscal year 2025-26.

Delete

1.2 FTE Theatre Tech Coordinator and Add 1.7 FTE Theater Technician

Expenditure: $13,966

(
General Fund)
The General Services Department is requesting the conversion of 1.2 FTE Theat re Tech Coordinator to 1.7 FTE Theater Technician I. The Theater Technician I is an entry

-
level positions focused on basic
duties such as stagehand, house management, A2 audio support, and

fly rail
operation. This tier will
serve as a development pathway for new staff. The C ity is hoping to attract and retain skilled employees, sustain community theater and event offerings, and achieve long-term cost savings.

The
annual fiscal impa

ct will be $
27,932

in the next budget cycle for fiscal year 2025
-26.

38 27

Delete 1.0 FTE Intern and Add 1.0 FTE Staff Assistant Expenditure:

$
27,439

(
General Fund)
The General Services Department is requesting to eliminate 1.0 FTE Intern position and add 1.0 FTE Staff Assistant to support the Capital Projects Team. This position will enhance planning and procurement processes for capital projects, including bid prepa ration, policy and procedure maintenance, and identifying opportunities for process improvements. Additionally, the Staff Assistant will conduct research on industry best practices to ensure the timely execution and completion of the City’s capital projects.

The annual fiscal impact will be $
54,879

in the next budget
cycle for fiscal year 2025-26.

Add 1.0

FTE

Capital Projects Construction Superintendent

Expenditure:

$
92,757

(
General Fund)
The General Services Department is requesting the addition of 1.0 FTE Capital Projects Construction Superintendent to oversee construction activities and ensure successful project delivery. This position will ensure compliance with plans, codes, regulations, and safety standards while managing on-site operations, personnel, and schedules. The growing volume of capital projects, including the $35 million parking structure at the Transit Regional Center, underscores the need for this role.

Current spending on

Construction Management Services exceeds $1.4 million, highlighting the demand for enhanced on

-
site support.

The annual fiscal impact will be $ 185,515

in the next budget
cycle for fiscal year 2025-26.

Public Works Department
Add 1.0 FTE Maintenance Worker
Expenditure

: $
36,544

(
General Fund)
The Public Works Department is requesting the addition of 1.0 FTE Maintenance Worker to support the Citywide Tree Planting Program.

On June 6, 2023, Council approved adoption of the FY24

-
28 Capital Improvement Plan which included a project for

OP83
– Citywide Tree Planting. This project
includes the planting of 7,000 street trees throughout City divided equally amongst the 6 Council districts in parkways and center medians. Approximately 1,750 trees will be planted per year, for the next four years.

The pla
nting of the first round of trees started in 2024. This position’s responsibility will be to water the newly planted trees until they are established, inspect the trees for insects, and re-stake trees as needed to assure that they grow straight. After the

trees are established, the new
staff member will switch to scheduled maintenance such as trimming. Public Works currently has over 37,000 street trees in our inventory that we maintain.

The annual fiscal impact will be $73,089
in the next budget cycle for

fiscal year 2025

-

26. 39

28 Add 1.0 FTE Lead Maintenance Worker
Expenditure: $57,362

(
General Fund)
The Public Works Department is requesting the addition of 1.0 FTE Lead Maintenance Worker to maintain the City Yard landscape. On July 1, 2024, City Yard maintenance obligations were transferred from the Community Services Department, Parks Services Division to the Public Works Department, Streetscape Division. This position will oversee approxima tely 72,000 Sq. Ft. of landscape maintenance at the City Yard. This includes the frontage along Madrona Blvd, the employee parking lot, bioswales that capture stor m water runoff, and the grass area in front of the Public Works building. Daily duties will include tree trimming, weed abatement, irrigation inspection and repairs, debris clean -up, and mowing.

The annual fiscal impact will be $
114,723

in the next
budget cycle for fiscal year 2025

-

26. Add 1.0 FTE Recycling and Waste Management Coordinator Expenditure

: $
71,034

(
Sanitation

Fund
)
The Public Works Department is requesting the addition of 1.0 FTE Recycling and Waste Management Coordinator to assist

the Sanitation Division
in compliance with California’s Short -Lived Climate
Pollutant Reduction Strategy (SB 1383). The addition of this new position will assist the City in complying with the many requirements of SB 1383

, which

set methane reduction targets for
California in a statewide effort to reduce emissions of short -lived climate pollutants by reducing organic waste disposal by 75% b y 2025 and rescue for people to eat at least 20% of currently disposed surplus food by 2025.

The Recycling and Waste Management Coordinator will be responsible for ensuring the commercial sector, including permitted commercial solid waste private haulers and commercial businesses, are compliant with SB 1383 requirements. The position will also be responsible for reviewing commercial solid waste hauler quarterly reports, verifying waiver and exemption requests from commercial accounts, providing technical assistance to edible food generator Tier 1 and Tier 2 businesses annually, investigating co mmercial complaints related to SB 1383, performing annual commercial account audits, and issuing notices of violation to commercial businesses not in compliance with SB 1383.

T
his position will also provide public outreach support, grant administration support, and assist with identifying waste diversion opportunities within the City. The annual fiscal impact will be $142,067

in the next budget cycle for fiscal year 2025-26.

40 29

Other Updates
This section provides a summary of recommended budget adjustments resulting from anticipated budget outcomes

that will be presented to the full City Council for consideration and approval.

General Services Department
Increase Airport Capital Fund Revenue and Expenditure Budget by $2,500,000 The General Services Department is requesting to

increase
the Airport Capital Fund’s revenue and
expenditure

operating budgets, in

relation to
the

Esterline Technologies settlement

received
,

which
will be utilized for

properties remediation cost,
as restricted by the

settlement agreement
, and the
revenue and expenditure will be

recorded

in the Airport Capital Fund.

Public Works Department
Increase Sewer Fund Expenditure Budget by $200,000
The Public Works Departmen t is requesting to increase the Sewer Fund expenditure operating budget by $200,000 in professional services

classification
for Underground Service Alert (DigAlert)
services to mark underground sewer and stormwater utilities for safe excavation. Currently, the City does not respond to sewer and stormwater DigAlert requests, and this funding would provide that service.

Founded in 1976 in response to a fatal accident, DigAlert serves nine Southern California counties.

California law requires excavators to contact DigAlert before digging. As the City owns and operates subsurface utilities, including sanitary sewers and sto rm drains,

the City is considered as

a utility
member and must comply with DigAlert regulations.

Utility members are required to mark or locate
their lines within two working days of excavation, use American Public Works Association (APWA) color codes, and ensure accuracy within 24 inches of the buried utility. The Public Works Department manages over 300 miles of sewer and storm

drainpipes
and receives 400

-
500 DigAlert tickets per
month, each of which requires an Electronic Positive Response (EPR) under state law. Failure to provide an EPR constitutes a violation of California Government Code 4126, and DigAlert is obligated to report noncompliance to the Underground Safe Excavation Board, which could result in financial penalties for the City.

41 First Quarter Budget Review Report

GENERAL FUND
42 30

General Fund
Overall First Quarter Results
The City’s General Fund, as reported annually in the Annual Comprehensive Financial Report (Annual Report) , is comprised of multiple sub -f unds within its overall structure. This includes the City’s General Fund-Operating Fund, the City’s General Fund-Measure SST Fund, the City’s General Fund - Restricted/Assigned sub-funds, and the City’s

General Fund
-Unassigned sub-funds. All of these areas
are consolidated under the General Fund umbrella

in
the City’s

Annual Report
. The activities in

each
of these

funds
impact the overall performance of the General Fund,

so this is reviewed in total and
then broken down by each

of its components.

This portion of the report

will

be broken

down into four

main sections:

•

General Fund-Operating Fund

–

Focuses on the

City’s

main

o
perating

f
und.
o

General Fund-Operating Fund

Revenue
Analysis

– Focuses on the

revenues of the
General Fund-Operating Fund.
o

General Fund-Operating Fund

Expenditure

Analysis

–

Focuses on the
expenditures
of the

General Fund
-Operating Fund.
•

General Fund-Measure SST Fund – Focuses on the revenues and expenditures related to the

0.50% transaction and use tax (sales tax) approved by Torrance voters in June 2022. •

General Fund -Restricted/Assigned Fund

– Focuses mainly on the City’s various General
Fund Replacement Funds, the City’s CEPPT

Section
115 Fund (pension prefunding), Cable’s
PEG Funds, and other assigned/restricted sub-funds of the overall General Fund. •

General Fund-Unassigned Fund

– Focuses mainly on the City’s General Fund Reserve Fund and any other

unassigned sub
-funds as reported in the Annual Report of the overall General Fund.

The General Fund’s adopted FY24-25 operating

b
udget was balanced

with
planned contributions to
increase the fund balances for the other sub-funds. The budgeted additions to the fund balance of the General Fund are driven by contributions to the City’s replacement funds and contributions to the City’s CalPERS CEPPT Section 115 Fund.

The City’s General Fund performance, including all sub -funds, for the first quarter of FY24-25

is
summarized

in the subsequent table
.

43 31

General Fund Revenues and Expenditure s Summary

When comparing

the FY
24 -
25 first quarter results to the same period the year prior, the percentage of budgeted revenues received to date

has in creased. As of

September 30, 2024

, a total of

$

61.2 million or 18.5% of

FY24-25

budgeted revenues were received . During the same period ending September 30, 2023

, the City realized

$

54.4 million, representing 16.8% of

FY23-24 budgeted
revenues. Overall, year-to-date revenues are up $6.8 million when comparing year-over-year figures.

As a result, the General Fund , including all sub -funds, is projected to operate at a surplus of

$

18.2 million due to the following main factors:
•

Contribution to the City’s

CEPPT

Section 115 Fund

of

$

9.4 million
.
•

Revenue surplus of $3.9 million ($1.3 million surplus in General Fund-Operating Fund, $0.2 million surplus in

General Fund
-Measure SST Fund, and $2.4 million surplus in

General Fund
-
Restricted/Assigned Fund).
•

Expenditure surplus of $

5. 6 million ($4.7 million surplus in General Fund-Operating Fund, $0.8 million surplus in General Fund-Measure SST Fund, and $0.1 million surplus in General Fund- Restricted/Assigned Fund).

It is projected that

year
-end General Fund

r
evenues will be $ 334.0

million, which is a $ 3.9 million
surplus of

FY24-25

budgeted figures. This is driven by surpluses in the Use of Money and Property and Operating Transfers In

and partially offset by shortfalls in the Charges for Services and Licenses, Fees and Permits classifications. This is examined further in the General Fund-Operating Fund Revenue Analysis

section of the document
,

broken down by
the four main categories

discussed earlier
.

On the opposite side of the budget, the percentage

of FY24-25

expenditures relative to budget ed
amounts has

also
increased. As of

September
30, 2024

, a total of

$
110.2

million or 34.3

%
of FY24-
25 budgeted expenditures were utilized . During the same period ending

September 30, 2023

, the
General Fund

utilized
$93.8

million or 31.7% of FY23-24

budgeted expenditures. Overall, it is
projected that

year
-end General Fund expenditures will total $315.8

million, generating a $5.6 million
budget surplus. The details of these expenditure impacts

are
examined further in the General Fund-
Operating Fund

Expenditure
Analysis

section of the document, also broken down by the four main sections

discussed earlier
.

Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 324,744,013$ 54,401,656$ 16. 8% 330,116,368$ 61,198,739$ 18.5% 333,985,753$ 3,869,385$ 101.2% Total Expenses 296,021,927 93,848,660 31.7% 321,330,975 110,178,872 34.3% 315,762,777 5,568,198 98.3% Revenues Less Expenditures 28,722,086$

(39,447,004)$

8,785,393$

(48,980,133)$

18,222,976$

9,437,583$

Prior Year FY2023-24 Current FY2024-25
44 32

General Fund-Operating Fund First Quarter Results
This section highlight s the City’s main operating fund , which represents the largest portion under the overall structure of the General Fund as reported in the

Annual Report
. Below is a summary of
this

f
und as of the

first

quarter

of FY
24 -
25 :

General Fund-Operating Fund

Revenue
s

and Expenditure
s

Summary

Year-to-date revenues are up by $9.7 million when comparing year to year. As of September 30, 2024

,
the General Fund-Operating Fund realized revenues of

$
39 .2
million, achieving

13.7 % of the

FY
24 -
25 revenue budget. During the same period ending

September 30, 2023

, the City realized

$

29.5 million

in revenues, representing

10.9% of the FY23-24 revenue budget.

Overall
, the General Fund-
Operating Fund ’s revenue budget is projected to operate at a

surplus
of $ 1.3 million due to the
following main factors:
•

Use of Money and Property above budgeted expectations by $2.3 million.

•

Operating Transfers In above budgeted expectations by $1.1 million. •

Charges for Services below budgeted expectations by $0.9 million

.
•

Licenses, Fees, and Permits below budgeted expectations by $0.9 million.

As of September 30, 2024, the General Fund -Operating Fund expended $88.3 million, or

30.8%
of
the FY24-25

expenditure budget. For the same period in

FY23
-24

, expenditures totaled
$84.8

million,
or 31.2% of the budget. The current spending rate aligns with expectations and will be further discussed in the

General Fund
-Operating Fund Expenditure Analysis section. Originally adopted as a balanced budget, General Fund -Operating Fund is now projected to end the year

with
a $5.5
million

surplus.

General Fund-Operating Fund Revenue Analysis
This section highlights the revenues of the main General Fund -Operating Fund. The City’s General Fund-Operating Fund revenue budget for FY24

-
25 increased by $15.6 million or 5.8% for a total
$286.8 million. This is largely due to steady growth in Taxes, Use of Money and

P
roperty, and
Charges for

S
ervices.

Details
of

revenue activity

as of

the
first

quarter
of FY24

-
25 are covered in the
following section. It is also important to note that

the enacted Measure SST transaction and use tax
starting October 1,

2022

,
benefits the General Fund -Operating Fund Revenue through Operating Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 271,235,876$ 29,487,381$ 10.9% 286,824,553$ 39,224,358$ 13.7% 288,075,710$ 1,251,157$ 100.4% Total Expenses 271,237,554 84,752,232 31.2% 287,233,764 88,332,454 30.8% 282,546,250 4,687,514 98.4% Revenues Less Expenditures (1,678)$

(55,264,851)$

(409,211)$

(49,108,096)$

5,529,460$

5,938,671$

Prior Year FY2023-24 Current FY2024-25
45 33

Transfers In to support public safety and CIT operations . Overall, the City’s General Fund-Operating Fund

revenue budget is projected to

generate a year
-end

surplus

of $

1.3 million.

General Fund-Operating Fund Revenues

by Classification

As of

September 30, 2024

,
the General Fund -Operating Fund realized re venues of

$
39 .2
million,
achieving 13.7% of the

FY
24 -
25 revenue budget. During the same period ending

September 30, 2023

,
the City realized

$

29.5 million

in revenues, representing

10.9%

of the

FY2
3-24

revenue budget.

It is
important to note that certain General Fund -Operating Fund revenues are not realized until after December, including property tax, business license taxes and most franchise fees. The timing of these receipts and current economic factors

results
in variances from the annual budget which are
discussed in more detail below.

Most General Fund -Operating Fund revenues are generated from the Taxes classification, which include sales & use

taxes,
property taxes, utility users’ taxes, occupancy taxes, and business license taxes. The

Taxes
classification accounts for approximately

74.8 % of the City’s

General Fund
-
Operating Fund

revenue budget for FY24
-25

.

General Fund-Operating Fund

Tax Revenues by

Type

Overall, the City ’s tax revenues are expected to fall short

of
the FY24 -25

amended budget by
$189,000

, primarily driven by a
shortfall in utility users’

tax of $ 2.7 million, offset by

a surplus
in
construction tax of $ 1.4 million and franchise taxes of $1. 1 million. Details of the increases

and
decreases are discussed in the following sections.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Taxes 209,861,473$ 14,918,455$ 7. 1% 214,595,854$ 17,488,127$ 8.1% 214,406,574$ (189,280)$ 99.9% Licenses, Fees and Permits 5,773,777 1,154,179 20.0% 5,429,133 1,754,383 32.3% 4,541,610 (887,523) 83.7% Fines, Forfeitures and Penalties 760,672 63,950 8.4% 642,774 86,885 13.5% 756,240 113,466 117.7% Use of Money and Property 4,527,970 2,006,601 44.3% 7,154,388 2,241,883 31.3% 9,447,010 2,292,622 132.0% Intergovernmental 349,501 5,000 1.4% 490,127 3,361 0.7% 309,780 (180,347) 63.2% Charges for Services 23,560,796 4,851,535 20.6% 25,217,466 4,791,469 19.0% 24,318,930 (898,536) 96.4% Other Revenues 105,570 197,803 187.4% 299,604 48,517 16.2% 189,570 (110,034) 63.3% Operating Transfers In 26,296,117 6,289,858 23.9% 32,995,207 12,809,733 38.8% 34,105,996 1,110,789 103.4% Total Revenues 271,235,876$

29,487,381$

10.9% 286,824,553$

39,224,358$

13.7% 288,075,710$

1,251,157$

100.4%
Prior Year FY2023-24 Current FY2024-25
Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Business License Tax 10,197,549$ 193,015$ 1.9% 11,314,294$ 382,817$ 3.4% 11,277,180$ (37,114)$ 99.7% Construction Tax 2,033,484 228,803 11.3% 1,572,665 849,082 54.0% 2,950,426 1,377,761 187.6% Franchise Taxes 9,831,080 403,826 4.1% 11,507,535 278,065 2.4% 12,586,330 1,078,795 109.4% Occupancy Tax 13,126,729 747,211 5.7% 13,815,048 1,301,078 9.4% 13,108,030 (707,018) 94.9% Oil Severance Tax 14,041 - 0.0% 7,000 - 0.0% 5,000 (2,000) 71.4% Property Taxes 47,137,917 1,139,102 2.4% 48,288,709 1,263,612 2.6% 48,945,310 656,601 101.4% Real Prop Transfer Tax 828,540 221,305 26.7% 1,016,060 233,389 23.0% 948,080 (67,980) 93.3% Sales and Use Tax 64,400,972 4,768,790 7.4% 62,525,957 4,917,256 7.9% 62,405,820 (120,137) 99.8% Utility Users Tax 44,465,104 7,216,402 16.2% 46,002,866 8,262,827 18.0% 43,335,220 (2,667,646) 94.2% VLF Swap & Repayment 17,826,057 - 0.0% 18,545,720 - 0.0% 18,845,178 299,458 101.6% Total Revenues 209,861,473$

14,918,454$

7.1% 214,595,854$

17,488,126$

8.1% 214,406,574$ (189,280)$

99.9%
Prior Year FY2023-24 Current FY2024-25
46 34

Sales

and

Use Tax

Sales and use tax (sales tax) is the City’s largest General Fund -Operating Fund revenue source, derived from point-of

-
sale transactions

(Bradley
-Burns 1% allocation) and Los Angeles County pool
allocations. The City receives sales tax revenue

from a wide range

of industries, as shown below.

Receipts of $ 4.9 million through the first fiscal quarter are tracking

above
prior year actuals by
$148,000

or 3.1%, and the projected annual amounts

falling short of

budget by $
120,000

is mainly
due to

decreased
consumer demand after the economy rebounded significantly from the COVID -19 pandemic

.

Sales tax receipts peaked in

FY
2021

-
22 at $63.6 million and is projected to pull back to
$62.4

million in FY24-25

.

The forecast is projecting an increase of 0.8% from prior year

actuals or 0.2%
below budgeted figures in the current fiscal year . As of the latest available data from the California Department of Tax & Fee Administration, sales tax revenues are experiencing

declines
in Autos and
Transportation

and General Consumer Goods , while Business and Industry is experiencing an increase

.

With sales tax revenues

remaining relatively flat
, s

taff
continue to be cautious with

forecasts
. The Fed
decreased the Federal Funds Rate to a range of

4.50 -4.75% in November 2024

and the

Fed’s
policy to
slow inflation has affected sales across industries.

For instance, the Autos and Transportation and
General Consumer Goods categories have experienced a decrease over the past year. In addition, the September 2024

year-over-year change in Consumer Price Index for All Urban Consumers (CPI-U) was

2.4%. The in flation rate continues to drive up the cost of many taxable products and

consumer
spending is anticipated to remain

stagnant

through the

end of the

202

5 calendar year.

Autos &
Transportation 23%
Building &
Construction 7%
Business & Industry
10%
Food & Drugs 3%
Fuel & Service
Stations 4%
General Consumer
Goods 23%
Restaurants &
Hotels 11%
State and County
Pool 18%
Transfers 0%
Sales Tax by Industry Group
47 35

Property Tax, Property Transfer Tax, and Vehicle License Fee (VLF) Swap & Repayment Tax The City’s property tax base consists of a healthy mix of residential, commercial , and industrial properties, with the residential

category
comprising most of the total assessed value in Torrance.

Based on

calendar year 202

3 data from
property tax consultants,

HdL Coren & Cone,

the City’s

FY24
-
25 net taxable assessed value increased

to $

40.2 billion or 5.3% when compared to the same period
during the prior year, keeping Torrance in the top 10 highest value cities in Los Angeles County

at
eighth

place.

Property tax revenues are primarily received in December and April each year. As of September 30 , 2024

,
$1.3 million in property tax receipts

were received
compared to $1.1 million received during
the same period last year. Presently, the City projects the total year-end revenue to be

slightly higher
than the property tax budget by $888,000 for FY24-25, including property

transfer tax and vehicle
license

f
ee

s
wap & repayment.

In

2004,

the

California

Legislature

approved
a

property
tax

swap

of

v
ehicle license

f
ees (VLF) as part
of a state and local government budget agreement. As a result of the swap, more than 90% of the City’s Motor License Vehicle Fund was swapped for property taxes. The centerpiece of this legislation was the permanent reduction of the VLF rate. This revenue is received from the Los Angeles

County
Assessor

twice a year in January and May, and therefore not realized in the

first

fiscal

quarter
.

Utility Users’ Tax
Utility users’ tax (UUT), the City’s

third
largest revenue source, is a 6.5% consumption tax applied on the usage of utilities such as electricity and gas, and a 6.0% tax applied to water.

Residential, 67%
Commercial,
16%
Industrial, 9%
All Other, 8%
Land Use Composition by Taxable Value
48 36

Utility Users’ Tax by Type

Current period receipts of

$8.3
million are higher by 14.5%

compared to

last year
. Electricity
experienced an increase from the prior year, while cable experienced a slight decrease. The Torrance Refinery experienced a decrease in both electricity and gas as production

continues to normalize

following planned maintenance in the second fiscal quarter of 2024. Presently, the City projects that total year-end revenue will fall short of budget by approximately

$

2.7 million

, or

5.8 %.

Business License

Tax

The City serves approximately

13,954

businesses, including outside contractors. Annual renewals for this revenue source are billed in December, due on January 1 , and delinquent on February 1. As of September 30, 2024

, business license tax receipts are

higher than
prior year

by $190,000 or

98 .3%
and are expected to

be within the

budget
by 1.0% at year -end. The increase in the year -to-date receipts is due to the City’s compliance collection efforts

which began in December 2023.

Occupancy Tax
Occupancy tax is an 11% tax on room charges to guests staying at

hotels
, motels, and short-term
rentals. As of

September 30, 2024

, the City has received $

1.3 million, a n increase of $ 554

,000

compared to

September 30, 2023

,
receipts of $ 747,000

.

The increase in the current

year actuals is
due to timing of monthly receipts being recognized earlier compared to the prior year.

Based on
information from data and analytics company STR, LLC,

the
City’s occupancy rate for the

twelve
months ending September 30

incre

ased
slightly from 84.2% in 202

3 to 84.8% in 202

4 . Additionally,
the average daily rate per room increased by $ 8.47

or 5.3% during this same period. Overall, it is
projected that

occupancy tax receipts will

fall short of

budget b
y

approximately $
707,000.

Franchise

Tax

Franchise tax is

assessed to

entities
for the

privilege to operate within the

right
-of

-
way throughout
the City. The franchise taxes

collected
by the City are mainly from utility service providers, private waste haulers, and

the Enterprise Funds for

sanitation
, sewer, and water services . As of

September
30, 2024

, the City has received $
278,000, which is

slightly lower
compared to

September 30, 2023
,
receipts of

$404,000

.

Projected year-end receipts are expected to be $1. 1 million above budgeted Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Cable 1,575,385$ 268,274$ 17. 0% 1,737,373$ 211,992$ 12.2% 1,364,060$ (373,313)$ 78.5% Cellular 1,296,803 219,040 16.9% 1,298,908 400,203 30.8% 2,062,520 763,612 158.8% Electricity 20,912,992 3,927,656 18.8% 21,080,357 5,372,492 25.5% 22,536,300 1,455,943 106.9% Gas 5,401,540 628,283 11.6% 6,003,793 745,830 12.4% 5,794,320 (209,473) 96.5% Refinery: Co-Gen 757,698 235,108 31.0% 893,601 59,710 6.7% 757,390 (136,211) 84.8% Refinery: Gas 8,304,467 891,333 10.7% 8,650,211 225,329 2.6% 4,500,000 (4,150,211) 52.0% Telecom 2,052,774 376,125 18.3% 2,578,565 393,047 15.2% 2,410,750 (167,815) 93.5% Water 4,163,445 670,583 16.1% 3,760,058 854,226 22.7% 3,909,880 149,822 104.0% Total Revenues 44,465,104$

7,216,402$

16.2% 46,002,866$

8,262,829$

18.0% 43,335,220$

(2,667,646)$

94.2%
Prior Year FY2023-24 Current FY2024-25
49 37

revenues mainly due to increasing remittances from SoCal Edison , SoCal Gas and private waste haulers. Receipts from utility service providers are typically received during the fourth fiscal quarter.

Licenses, Fees &

Permits

This revenue source accounts primarily for development -related fees such as building and inspection fees. As of

September 30, 2024

, actual receipts of $

1.8 million represent a

52 .0
%

increase
from prior year receipts , and is primarily attributable to

the Gable House development.

Overall,
revenues are projected to fall short of

budget expectations
by $888,000

or 16.3

%
due to decreased
energy inspection fees and building

permits fees
. This revenue source is cyclical and can fluctuate
based on the

timing of payments for individual projects
.

Use of Money and Property
This revenue source includes investment earnings, interest income

,
and rental income. As of
September 30, 2024

, actual receipts of $

2.2 million represent a

10.0 %
increase

from prior year
receipts of $ 2.0 million. This is due to

increases in
investment income from steadily rising interest
rates. It is anticipated that this revenue source will

exceed
budget expectations by $2.3 million or

32.0 %

by

fiscal year
-end.

Fines,

Forfeitures

& Penalties

This revenue source includes general court fees, traffic fines, and citation revenues. As of

September
30, 2024

, actual receipts of $
87 ,
000 represent a slight increase from last year’s

receipts of $ 64

,
000.

This classification is

expected to exceed

budget by about $
113

,
000

or

17.7 %.

Charges for Services
This revenue source includes

various
user fees, construction -related fees (e.g. , plan checks), engineering fees,

recreation
fees, emergency transport fees , and fire inspection fees. As of September

30, 2024
, actual receipts of $4.8

million

remain relatively flat compared to last

year.

50 38

Charges for Services by Department

As shown in the table above,

the
decrease of $60

,000
is mainly due to decreased receipts collected
by the

Fire Department for
Emergency Transport Fees and

Annual Fire Inspection Fees
; and by the
Community Development

D
epartment for Planning and Zoning F ees; partially offset by

increases

collected by the other departments. Overall, this classification is expected to fall short of

budget by
$899,000

or

3.6%

by fiscal year
-end.

Operating Transfers In
This revenue source includes transfers from other funds

to
help support operations of the General
Fund-Operating Fund, with the main sources being the Airport Fund, Measure SST Fund, and Gas Tax Funds. As of

September 30, 2024

, actual receipts of $

12.8 million exceeded the prior year by $ 6.5
million. The increase in the year -to-date transfers of $6.3 million is

mainly
due to

$5.0 million from
the Reserve Fund and $1.5 million from the Airport Fund ’s non-aeronautical operations

revenues in
excess of expenses.

The
Operating Transfers I n classification is expected to exceed budgeted expectations by $1.1

million

or

3.4%

by fiscal

year
-end.

General Fund-Operating Fund Expenditure Analysis
This section highlight s the expenditures of the main General Fund -Operating Fund . The City’s General Fund-Operating Fund

expenditure budget

for FY
24 -
25 increased by $16

.0
million or 5.9%
for a total of

$
287.2

million from the year prior. This was a result of

planned increases in salaries and
employee benefits and UAL payment . This increase is partially offset by reduced transfer

s to the
City’s

CEPPT

Section 115

Fund
.

Overall, the

City’s General Fund Operating Fund expenditure budget
is projected to generate a year-end surplus of

$4.7 million.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
City Manager 846,330$ 159,736$ 18.9% 765,661$ 159,736$ 20.9% 638,940$ (126,721)$ 83.4% City Clerk 4,430 1,157 26.1% 16,117 2,470 15.3% 4,280 (11,837) 26.6% Community Development 6,174,902 1,276,696 20.7% 6,220,288 1,188,231 19.1% 5,372,510 (847,778) 86.4% General Services 1,222,919 247,679 20.3% 1,136,049 266,375 23.4% 939,350 (196,699) 82.7% Non-Departmental 14,899 2,849 19.1% 16,491 4,394 26.6% 17,650 1,159 107.0% Police 434,468 56,402 13.0% 448,673 77,845 17.4% 402,020 (46,653) 89.6% Fire 10,084,175 1,282,580 12.7% 11,139,044 1,174,295 10.5% 11,119,960 (19,084) 99.8% Public Works 242,177 - 0.0% 267,151 - 0.0% 543,800 276,649 203.6% Community Services 4,536,496 1,824,436 40.2% 5,207,992 1,918,124 36.8% 5,280,420 72,428 101.4% Total Revenues 23,560,796$

4,851,535$

20.6% 25,217,466$

4,791,470$

19.0% 24,318,930$

(898,536)$

96.4%
Prior Year FY2023-24 Current FY2024-25
51 39

General Fund-Operating Fund Expenditures by Classification

As of September 30, 2024

,

the General Fund
-Operating Fund realized expenditures of

$

88.3 million
,
achieving 30.8% of the

FY24
-25

expenditure budget. During the same period ending

September 30
,
2023

, the City

expended
$84.8

million or 31.2

%
of the

FY23
-24 expenditure budget. The main driver

s
for this year-over-year increase of

$

3.5 million were the planned increases in Salaries and Employee Benefits for renewed labor contracts and salary grid modifications, as well as

the
Police
Department’s retention incentive package

which was funded by salary savings. These increases were partially offset by a reduction in Other Operating Transfers Out,

due to
the reduced contribution to
the Section 115 CEPPT fund. Expenditures to date are expected to be higher than the percentage of the fiscal year completed due to the timing of the annual contributions to the CEPPT Section 115 Fund and

Debt Service payments associated with the 2020 Lease Revenu e Bonds that were used to
pay down a majority of the City’s Ca lPERS UAL that are paid in July and September (included in the Non-Departmental expenditures), respectively.

Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 196,422,034$ 44,837,059$ 22.8% 212,059,082$ 54,224,260$ 25.6% 207,458,388$ 4,600,694$ 97.8% Salaries and Benefits Reimb. (1,446,294) (277,347) 19.2% (1,820,500) (584,958) 32.1% (1,947,872) 127,372 107.0% Materials, Supplies & Maintenance 15,767,500 2,502,347 15.9% 16,978,412 3,142,673 18.5% 16,431,652 546,760 96.8% Materials Reimbursements (342,751) (63,975) 18.7% (370,142) (95,932) 25.9% (370,154) 12 100.0% Professional/Contract Services 14,668,402 2,265,199 15.4% 18,470,002 2,528,936 13.7% 18,242,601 227,401 98.8% Training, Travel & Membership Dues 1,466,186 511,641 34.9% 2,040,261 573,750 28.1% 1,991,307 48,954 97.6% Liabilities, Settlements & Insurance 169,581 42,218 24.9% 221,680 44,265 20.0% 218,480 3,200 98.6% Utilities 4,676,364 1,100,547 23.5% 4,932,602 1,076,014 21.8% 4,849,887 82,715 98.3% Interdepartmental Charges 19,310,111 4,610,923 23.9% 24,230,403 5,994,141 24.7% 24,220,419 9,984 100.0% Debt Service 22,855,281 13,452,477 58.9% 23,369,441 14,030,290 60.0% 23,369,441 - 100.0% Debt Service Reimbursements (18,832,766) (4,643,491) 24.7% (19,341,206) (5,020,407) 26.0% (19,053,086) (288,120) 98.5% Capital Acquisitions 483,050 46,215 9.6% 658,758 110,182 16.7% 654,858 3,900 99.4% Bad Debts and Other Losses 1,000 - 0.0% 1,000 4 0.4% 1,000 - 100.0% Reimbursements-Indirect Costs (8,557,193) (1,840,246) 21.5% (9,147,553) (2,117,165) 23.1% (8,472,195) (675,358) 92.6% Other Operating Transfers Out 24,597,049 22,208,665 90.3% 14,951,524 14,426,401 96.5% 14,951,524 - 100.0% Total Expenses 271,237,554$

84,752,232$

31.2% 287,233,764$

88,332,454$

30.8% 282,546,250$

4,687,514$

98.4%
Prior Year FY23-24 Current Year FY24-25
52 40

General Fund-Operating Fund Expenditures by Department

As shown in the table above, most General Fund -Operating Fund departments are projected to remain within budgeted expectations. However, the Non -Departmental expenditure budget is expected to show a deficit of

$0.9 million
, primarily due to a

$
675,000

reduction in Indirect Cost
Reimbursements resulting from lower salary projections. Overall, the

FY24
-25 General Fund -
Operating Fund expenditure budget is projected to generate

$4.7 million
in savings, largely due to
departmental vacancies.

As of September 30, 2024, there were

138.1 FTE
vacant positions in the General Fund, a decrease of

7.4 FTE from the previous year. Despite this reduction, City departments continue to face challenges in attracting qualified candidates and have numerous recruitments underway.

Significant portion of
these vacancies are in the Police Department , with

67.0 FTE

vacant positions as of September 30,
2024

,
and e fforts to fill vacancies and retain existing staff are ongoing . A s part of that effort , City Council approved an Enhanced Recruitment and Retention

I
ncentive Pilot program for the Police
Department in July 2024.

To better understand the trends driving the General Fund -Operating Fund expenditure budget, it is useful to analyze its two main components: 1)

Salaries & Salary Reimbursements
, and 2) Non-
Wage (Materials) expenditures.

As of September 30, 2024, the

City
ha

s
expended $53.6 million , or

25.5%
of the

FY24
-25 salary
budget, compared to

$44.6 million,

or

22.9% for the same period in

FY23
-24. These expenditures
are generally in line with the fiscal year’s timing ( 25.2% of the year has elapsed ). As shown in the table below, FY24 -25 salary expenditures are higher than the previous year, reflecting reduced vacancies and planned increases in salaries and employee benefits due to labor contract renewals, Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
City Council 580,611$ 147,332$ 25.4% 577,734$ 151,683$ 26.3% 557,679$ 20,055$ 96.5% City Manager 6,436,700 1,442,094 22.4% 7,449,881 1,517,693 20.4% 7,206,725 243,156 96.7% City Attorney 3,108,064 692,523 22.3% 3,397,091 713,012 21.0% 3,179,989 217,102 93.6% City Clerk 1,359,558 284,979 21.0% 1,664,355 258,890 15.6% 1,506,267 158,088 90.5% City Treasurer 343,088 91,008 26.5% 483,686 94,518 19.5% 475,196 8,490 98.2% Finance 6,251,439 1,171,822 18.7% 6,253,088 1,222,523 19.6% 6,195,363 57,725 99.1% Human Resources 2,355,177 482,540 20.5% 3,244,183 590,123 18.2% 3,222,872 21,311 99.3% Civil Service 701,129 185,400 26.4% 1,144,051 209,659 18.3% 1,091,831 52,220 95.4% Community Development 9,643,676 2,087,600 21.6% 10,600,313 2,332,439 22.0% 10,104,586 495,727 95.3% CIT 8,782,395 2,188,713 24.9% 9,344,118 2,461,520 26.3% 8,821,682 522,436 94.4% General Services 10,493,231 2,190,145 20.9% 11,978,778 2,735,179 22.8% 11,729,753 249,025 97.9% Non-Departmental 22,778,700 29,395,535 129.0% 12,011,799 21,724,059 180.9% 12,955,974 (944,175) 107.9% Police 95,374,934 20,919,638 21.9% 101,924,799 26,813,125 26.3% 100,940,019 984,780 99.0% Fire 59,244,214 14,110,510 23.8% 69,295,045 17,396,151 25.1% 68,248,810 1,046,235 98.5% Public Works 19,211,947 3,854,605 20.1% 21,122,469 4,229,120 20.0% 20,340,435 782,034 96.3% Community Services 24,572,691 5,507,784 22.4% 26,742,376 5,882,760 22.0% 25,969,071 773,305 97.1% Total Expenses 271,237,554$

84,752,228$

31.2% 287,233,766$

88,332,454$

30.8% 282,546,252$

4,687,514$

98.4%
Prior Year FY23-24 Current Year FY24-25
53 41

salary grid adjustments, and newly approved Police Department’s retention incentive. The salary budget is expected to yield $4.7 million in savings, primarily due to vacancies across departments.

General Fund-Operating Fund –

Salar
y

&

Employee Benefit

Expenditures by
Department

City Manager’s Office
The City Manager’s Office has a total of

6.6 FTE vacancies, of which

3 .6 FTE are expected to remain
unfilled through the end of the fiscal year. Bas ed on currently approved

recruitment requests,

this
department is projected

to

generate

$31
6,000

in budgetary savings.

City Attorney’s

Office

The City Attorney’s Office has 2.0 FTE vacancies , of which

1.0 FTE

is
expected to

remain un
filled by
the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $197,000

in budgetary savings.

City Clerk’s Office
The City Clerk’s Office has 2.0 FTE

vacancies, which are expected to fill by the end of the fiscal year.

Based on currently approved recruitment requests, this department is projected to generate $145,000

in budgetary savings.

Community

Services Department

The Community

Services
Department has a total of 8.5 FTE vacancies, of which 6.3 FTE in 3 positions are currently being proposed as program modification, and

all
vacancies are expected to fill by the
end of the fiscal year.

Based on currently approved recruitment requests, this department is projected to generate $615,000

in budgetary savings.

Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
City Council 198,102$ 43,795$ 22.1% 177,968$ 43,342$ 24.4% 176,451$ 1,517$ 99.1% City Manager 4,937,891 1,148,523 23.3% 5,191,494 1,185,177 22.8% 4,875,954 315,540 93.9% City Attorney 2,721,579 616,828 22.7% 2,933,694 667,584 22.8% 2,737,024 196,670 93.3% City Clerk 943,350 249,741 26.5% 1,126,334 207,667 18.4% 981,183 145,151 87.1% City Treasurer 295,742 76,491 25.9% 334,159 78,204 23.4% 328,135 6,024 98.2% Finance 4,297,541 1,014,966 23.6% 4,531,193 1,010,795 22.3% 4,449,250 81,943 98.2% Human Resources 1,443,488 306,130 21.2% 1,998,080 442,865 22.2% 1,990,140 7,940 99.6% Civil Service 534,350 135,434 25.3% 741,998 169,862 22.9% 698,139 43,859 94.1% Community Development 8,377,936 1,900,191 22.7% 9,182,801 2,118,680 23.1% 8,875,637 307,164 96.7% CIT 5,985,691 1,223,136 20.4% 6,046,087 1,343,905 22.2% 5,608,238 437,849 92.8% General Services 6,790,819 1,441,983 21.2% 7,329,570 1,673,173 22.8% 7,037,847 291,723 96.0% Non-Departmental 199,717 49,590 24.8% 199,717 52,299 26.2% 199,717 - 100.0% Police 82,440,570 18,033,449 21.9% 86,546,900 23,647,704 27.3% 85,595,463 951,437 98.9% Fire 50,192,578 12,481,352 24.9% 57,086,588 14,768,901 25.9% 56,243,407 843,181 98.5% Public Works 9,341,724 2,052,309 22.0% 9,427,865 2,125,349 22.5% 8,945,280 482,585 94.9% Community Services 16,274,662 3,785,797 23.3% 17,384,134 4,103,797 23.6% 16,768,650 615,484 96.5% Total Expenses 194,975,740$ 44,559,715$

22.9% 210,238,582$ 53,639,304$

25.5% 205,510,515$ 4,728,067$

97.8%
Prior Year FY23-24 Current Year FY24-25
54 42

Community Development Department
The Community Development Department has a total of

5 .5 FTE vacancies,

which are expected to fill
by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $307,000

in budgetary savings.

Communications and Information Technology (CIT)

Department

The CIT Department has a total of

7 .0 FTE vacancies, of which

1 .0 FTE is

expected to remain unfilled
by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $43

8 ,000

in budgetary savings.

Human Resources Department
The Human Resources Department has a total of

2 .0 FTE

vacanc
y, of which 1.0 FTE

is expected to
remain unfilled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $ 8,000 in budgetary savings. It is important to note that the Human Resources Department has

already
used some of their budgeted savings and transferred
them to their non-wage budget.

General Services

Department

The General Services

Department
(excluding seasonal/recurrent positions) has a total of

3. 5 FTE
vacancies, which are expected to fill by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $292,000

in budgetary savings.

Finance Department
The Finance Department has a total of 2.0 FTE vacancies, of which 1.0 FTE is currently

being
proposed
as a program modification, and all are expected to fill by the end of the fiscal year. Based on

currently
approved recruitment requests, this department is projected to generate $8

2 ,000 in budgetary
savings.

Police Department
The Police Department has a total of 67.0 FTE vacancies , of which

38.0 FTE are expected
to remain
unfilled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $951, 000

in budgetary savings. It is important to note that
Council recently

approved a new

Enhanced
Recruitment and Retention

Incentive Pilot
program,
which is reflected in the projected expenditures.

55 43

Fire Department
The Fire Department has a total of

13 .5 FTE vacancies, of which 1.0 FTE is expected to remain unfilled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $843,000

in budgetary savings.

Public Works

Department

The Public Works

Department
has a total of

18.5 FTE vacancies, of which

9.0 FTE are

expected to
remain unfilled by the end of the fiscal year.

$394,000 of expected surplus

in Salary
and Employee
Benefit expenditure budget

was transferred to non

-
wage professional services budget to fund
emergent temporary traffic signal

and other service

requirements
. After transfers and b ased on
currently approved recruitment requests , this department is projected to generate $48

3,
000 in
budgetary salary

savings
.

General Fund-Operating Fund

Non
-Wage (Materials) Expenditures by Department

Non-wage expenditures (materials) account for

26.8%
of General Fund -Operating Fund
expenditures budget. The table above summarizes these expenses by department. Compared to the first quarter of the previous year, non

-
wage expenditures have decreased by

$5.5 million
. As of
September 30, 2024,

$34.7 million
or 45.1% of the FY24-25 budgeted expenditures had been used, compared to

$40.2 million

or

52.7% during the same period in FY23-24. The decrease is primarily due to reduced contributions from Non-Departmental to the City’s CEPPT Section 115 Fund by $10.4 million. After excluding Non -Departmental activity, the adjusted

rate of
non-wage departmental
expenditure as of September 2024 is

20.0%
, compared to

20.2%
as of September 2023. Overall, non

-
wage expenditures are expected to

generate deficit of $41,000.

Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
City Council 382,509$ 103,538$ 27.1% 399,766$ 108,341$ 27.1% 381,228$ 18,538$ 95.4% City Manager 1,498,809 293,571 19.6% 2,258,387 332,515 14.7% 2,330,771 (72,384) 103.2% City Attorney 386,485 75,696 19.6% 463,397 45,428 9.8% 442,964 20,433 95.6% City Clerk 416,208 35,238 8.5% 538,021 51,223 9.5% 525,083 12,938 97.6% City Treasurer 47,346 14,517 30.7% 149,527 16,314 10.9% 147,061 2,466 98.4% Finance 1,953,898 156,857 8.0% 1,721,895 211,728 12.3% 1,746,113 (24,218) 101.4% Human Resources 911,689 176,410 19.3% 1,246,103 147,259 11.8% 1,232,732 13,371 98.9% Civil Service 166,779 49,966 30.0% 402,053 39,797 9.9% 393,692 8,361 97.9% Community Development 1,265,740 187,409 14.8% 1,417,512 213,760 15.1% 1,228,949 188,563 86.7% CIT 2,796,704 965,578 34.5% 3,298,031 1,117,615 33.9% 3,213,443 84,588 97.4% General Services 3,702,412 748,162 20.2% 4,649,208 1,062,006 22.8% 4,691,906 (42,698) 100.9% Non-Departmental 22,578,983 29,345,946 130.0% 11,812,082 21,671,760 183.5% 12,756,257 (944,175) 108.0% Police 12,934,364 2,886,190 22.3% 15,377,899 3,165,421 20.6% 15,344,556 33,343 99.8% Fire 9,051,636 1,629,158 18.0% 12,208,457 2,627,250 21.5% 12,005,403 203,054 98.3% Public Works 9,870,223 1,802,297 18.3% 11,694,604 2,103,771 18.0% 11,395,155 299,449 97.4% Community Services 8,298,029 1,721,987 20.8% 9,358,242 1,778,963 19.0% 9,200,421 157,821 98.3% Total Expenses 76,261,814$

40,192,520$

52.7% 76,995,184$

34,693,151$

45.1% 77,035,734$

(40,550)$

100.1%
Prior Year FY23-24 Current Year FY24-25
56 44

City Manager’s Office
The City Manager's Office is currently projecting a deficit of $ 72,000

, primarily
due to higher -than-
anticipated costs associated with legal

services and consulting expenditures.

Finance

Department

The Finance Department is

projecting
a deficit

of $24,
000, attributed to various consulting services
required for rate and fee studies, as well as tax revenue recovery initiatives.

Fire Department
The Fire Department is

projecting a surplus of $203,000.

The Fire Department's first -quarter
expenditures are

$1.0 million
higher than last year, driven by increased contributions to the Self Insurance

for

Workers
’

Compensation
claims, which was already reflected in the FY24-25 budget.

General Services

Department

The General Services Department is project ing a deficit of

$42,698, driven

by the need for
professional services in theater technician support and construction estimating, due to current staffing vacancies.

Non-Departmental
Non-Departmental expenditures are expected to exceed the budget by approximately $0.9 million.

This variance is primarily due to a $0.7 million reduction in Indirect Cost Reimbursements, resulting from lower-than-expected salary projections.

57 45

General Fund-Measure SST Fund First Quarter Results
The General Fund-Measure SST Fund (Measure SST Fund) is a sub-fund within the overall structure of the

General Fund
as reported in the Annual Report.

The Measure SST Fund separately accounts for
the 0.50% transaction and use tax (sales tax) approved by Torrance voters in June 2022. This measure, titled Safe , Strong Torrance, included four main funding priorities:

(1)
Quality of Life;

(2)
Fiscal Sustainability;

(3)
Deferred Maintenance & Community Services/Programs; and

(4)

Emergency
Responsiveness. City Council approved the budgeted use of these funds and authorized the newly established Measure SST Committee

(Committee) to provide public oversight . The Committee will ensure funds are utilized in accor dance with the spending plans approved by City Council

and
annually

review

the Measure SST Fund’s completed financial audits.

General Fund-Measure SST Fund

Revenues

and

Expenditures

by Classification

As of

September 30, 2024
, the Measure SST Fund

realized re
venues of

$1.9
million, achieving

7. 7%
of the

FY24
-25 budget, compared to

$1.9
million or 8.3% for the same period in the year prior. As shown in the table above, it is projected that a total of

$25.4

million will be recognized by fiscal

year
-
end, exceeding

budgeted estimates

by

$24
6,

000

or

1.0%
.

Based on the analysis provided by the City’s third -party consultant, Hinderliter de Llamas & Associates,

Measure SST remittances have been approximately 43% of the Bradley Burns sales tax remittances for the trailing twelve months.

D
ue to the timing of

when
revenues and expenditures are
actualized, this fund typically operates at a negative cash position during the year , which is why a negative Use of Money and Property projection is

shown in the above summary table. The budget
will

continue to be adjusted to better

align with projected actuals

in future

budget

cycles
.

On the expenditure

side
, the Measure SST Fund realized expenditures of

$

16.7 million or 60.8

%
of
the FY24-25

budget. Currently, it is projected that the

expenditure
budget will be

fully
expended at
year-end except for

$
94 8,500

allocated for homelessness reduction efforts in

Torrance
. The City has
Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Taxes 22,917,288$ 1, 962,558$ 8.6% 25,345,116$ 1,988,784$ 7.8% 25,562,642$ 217,526$ 100.9% Use of Money and Property 25,000 (53,879) -215.5% (177,850) (59,617) 33.5% (149,570) 28,280 84.1% Total Revenues 22,942,288$

1,908,679$

8.3% 25,167,266$

1,929,167$

7.7% 25,413,072$

245,806$

101.0%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Materials, Supplies & Maintenance 1,000,000$ -$ 0.0% 948,500$ -$ 0.0% -$ 948,500$ 0.0% Professional/Contract Services 825,000 32,078 3.9% 876,500 48,460 5.5% 876,500 - 100.0% Capital Acquisitions - - 0.0% - - 0.0% - - 0.0% Other Operating Transfers Out 21,117,288 8,653,602 41.0% 25,670,124 16,656,751 64.9% 25,788,786 (118,662) 100.5% Total Expenses 22,942,288$

8,685,680$

37.9% 27,495,124$

16,705,211$

60.8% 26,665,286$

829,838$

97.0%
Revenues Less Expenditures -$

(6,777,001)$

(2,327,858)$

(14,776,044)$

(1,252,214)$

1,075,644$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
58 46

been able to identify various grant funding sources to mitigate the need to use general fund resources to support these activities . Overall, it is

anticipated
that this fund will operate at a

$

1.3 million fiscal year-end deficit when comparing

projected revenues against projected expenditures.

It is important to note that this

fund’s budget was originally adopted with a deficit of $2.3 million due to planned use of fund balance

to support the City’s Capital Improvement Plan.

59 47

General Fund-Restricted/Assigned Fund First Quarter Results The General Fund -Restricted/Assigned Fund (Restricted/Assigned Fund) is a series of sub-funds within the overall

structure
of the

General Fund

as
reported in the City’s Annual Report.

This
fund
separately track s balances under the different areas that are deemed restricted by the source or assigned for a particular purpose. It should be noted that

this does not include the City’s
Unassigned
(Reserve)

Fund
.

For example,

there are
multiple replacement funds that were created by the City to set aside

funding
each year for

planned
future equipment purchases. This helps smooth

spending
across multiple
years and creates a dedicated

source

for these different replacement activities
, which include:
•

Defibrillator Replacement Fund
•

Drone/ALPR Replacement Fund
•

IT

Replacement Fund

In addition to the

above
-mentioned

replacement funds, the Restricted/Assigned

Fund
also includes
the City’s CalPERS

CEPPT

Section 115 Fund and Cable’s various Public, Educational, and Governmental Access (PEG)

Funds
.

General Fund-Restricted/Assigned Fund

Revenues

and

Expenditures
by Classification

As of

September 30, 2024

, the

Restricted
/Assigned Fund realized re venues of

$

15.0 million,
achieving 114.6% of the

FY24
-25

revenue budget. During the same period ending

September 30,
2023

, the City realized
$21.8

million in revenues, representing

84.6 % of the

FY23
-24 revenue
budget. This variance was largely driven by the

$
13 .0
million reduction in contribution to the City’s
CEPPT Section 115 Fund. Overall, it is projected that revenues

in this fund

will total $

15.5 million

by

fiscal year-end, exceeding

budget by

$

2.4 million or 18.1

%.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 458,058$ (1,264,882)$ - 276.1% 598,058$ 2,554,447$ 427.1% 2,970,480$ 2,372,422$ 496.7% Operating Transfers In 25,305,368 23,069,872 91.2% 12,526,491 12,490,767 99.7% 12,526,491 0 100.0% Total Revenues 25,763,426$

21,804,990$

84.6% 13,124,549$

15,045,214$

114.6% 15,496,971$

2,372,422$

118.1%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Professional/Contract Services 256,172$ -$ 0. 0% -$ -$ 0.0% -$ -$ 0.0% Debt Service 5,000 3,659 73.2% 15,000 6,958 46.4% 15,000 - 100.0% Capital Acquisitions 800,913 - 0.0% 1,558,587 120,769 7.7% 1,507,741 50,846 96.7% Other Expenditures 5,000 7,089 141.8% 28,500 13,480 47.3% 28,500 - 100.0% Other Operating Transfers Out 775,000 400,000 51.6% - - 0.0% - - 0.0% Total Expenses 1,842,085$

410,748$

22.3% 1,602,087$

141,207$

8.8% 1,551,241$

50,846$

96.8%
Revenues Less Expenditures 23,921,341$

21,394,242$

11,522,462$

14,904,007$

13,945,730$

2,423,268$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
60 48

As of September 30, 2024 , the Restricted/Assigned Fund has incurred expenditures of $141,000 , representing 8.8% of the

FY24
-25

budget. In comparison, for the same period in

FY23
-24

, the City
spent $411,000

, or

22.3%
of the FY23-24

budget, which included a

$400,000

transfer from the Radio
Comm Replacement Fund to

a
capital project. Projected expenditures for the Restricted/Assigned Fund primarily involve the purchase of essential computer and data communication equipment.

Overall, it is expected that revenues will exceed expenditures by

$13.9 million
by the end of the fiscal
year.

61 49

General Fund-Unassigned Fund (Reserves) First Quarter Results The General Fund-Unassigned Fund (Reserve Fund) is a sub-fund within the overall structure of the General Fund

which
does not qualify for the restricted/assigned category

as reported

in the City’s
Annual Report. The Reserve Fund includes the Economic

Anomaly
and Litigation categories which
help plan for economic downturns , allows the City to set

aside funds for natural disasters such as
earthquakes, and to ensure financial stability during times of need. The Other Unrestricted category pertains to the fund balances

of the

General Fund
-Operating Fund and the

Measure
SST Fund. The
table below

provides a summary of the overall budget for this sub
-fund.

General Fund-Unassigned Fund

Revenues

and

Expenditures

by Classification

As shown in the summary table, the Reserve Fund realized revenues of

$5.0
million, achieving
100

.0%
of budget through the first quarter of FY24-25

.

This represents contributions from the
General Fund-Measure SST Fund, which

demonstrate
s the Measure’s impact on fiscal sustainability
by affording the ability to rebuild the City’s reserves. The Reserve Fund also realized expenditures of $5.0 million , achieving 100

.0%
of budget through the first quarter of FY24-25

due to

Operating
Transfers Out to the General Fund-Operating Fund to help

maintain
a balanced budget and support
planned increases in public safety salaries and benefits to address

two
of the City’s

Areas of Focus

pertaining to labor relations. It is important to note that

the nature of the Reserve Fund is unique

in
that funds are often set aside to plan

for
the City’s

future
needs during economic downturns, and
large sums of expenditures can occur in a given fiscal year to ensure the City maintains a balanced General Fund-Operating Fund

budget
.

General Fund-Unassigned Fund

Balance

Summary

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Operating Transfers In 4,802,423$ 1,200,606$ 25. 0% 5,000,000$ 5,000,000$ 100.0% 5,000,000$ -$ 100.0% Total Revenues 4,802,423$

1,200,606$

25.0% 5,000,000$

5,000,000$

100.0% 5,000,000$

-$

100.0%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Other Operating Transfers Out -$ -$ 0. 0% 5,000,000 $ 5,000,000$ 100.0% 5,000,000$ -$ 100.0% Total Expenses -$

-$

0.0% 5,000,000$

5,000,000$

100.0% 5,000,000$

-$

100.0%
Revenues Less Expenditures 4,802,423$

1,200,606$

-$

-$

-$

-$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
Unassigned Fund Balance
Beg Bal -
FY23-24
Additions/
(Uses)
End Bal -
FY23-24
(unaudited)
Projected
Additions/
(Uses)
Proj End Bal
FY24-25
Reserve Fund - Economic Anomaly 8,081,847$ 4,802,423$ 12,884,270$ -$ 12,884,270$ Reserve Fund - Litigation - - - - - Other Unrestricted 55,338,919 11,015,588 66,354,507 4,277,246 70,631,752 Total 63,420,766$ 15,818,011$ 79,238,777$ 4,277,246$ 83,516,023$ 62 50

As shown in the table above, the City's unrestricted reserve balance is projected to total $83.5 million

at fiscal year
-end. This represents an excess of

$26.1 million

above the City’s adopted fiscal
policy, which sets a target unassigned fund balance of at least

20%
of the General Fund -Operating
Fund's approved expenditure appropriations, or approximately

$57.4 million
based on the currently
approved expenditure appropriation

.

As of October 2023,

The State Auditor’s

High

-
Risk Dashboard was discontinued. However, the City
continues to monitor its reserve balances as one of our

Key Performance Indicator
s. The State
Auditor’s High

-
Risk Dashboard previously recommended maintaining reserves greater than nine months of operating costs,

or
75% of the General Fund -Operating Fund’s current expenditure appropriation, which would amount to

$215.4 million
. To be considered "Low-Risk" designation,
reserves should equal at least

six

months of operating costs, or

50%

of the current appropriation,
or
$143.6

million
. In the future, staff may recommend adjustments to the City’s fiscal

policy to further
strengthen fiscal resilience

.

63 First Quarter Budget Review Report

INTERNAL SERVICE FUNDS
64 51

Internal Service Funds
Internal Service Funds are used to account for the financing of goods or services provided by one City department to other departments and to other governmental units on a cost -reimbursement basis.

The City currently has two Internal Service Funds:

(1)

Self
-Insurance;

and

(2)

Fleet Services.

Self-Insurance Fund First Quarter Results
The Self-Insurance Fund is a sub-fund used to finance and account for City expenditures associated with n on-litigated claims, l iability claims and settlements, w orkers’ c ompensation cases , and unemployment insurance

p
ayments.

Self-Insurance

Fund

Revenues

and

Expenditures

by

Classification

As of September 30, 2024, the City has received

$5.9 million
or 25.0% of the FY24 -25 budgeted
revenues, compared to

$5.3 million
or 25.5% in the prior year. The

$0.6 million
increase in revenues
is attributed to higher budgeted contributions to the Self -Insurance Fund, aimed at addressing its underfunded position, an identified Area of Focus . Overall, revenues are projected to come in approximately

on

budget

by year

-
end.

Regarding expenditures, $7.2 million or 30.5% of FY24-25

budgeted expenditures have been spent,
compared to

$7.2 million
or 25.3% in the prior year. While the expenditure amount is consistent with last year, the higher percentage has been spent due to a

smaller
budget for actuarial
adjustments budgeted in the

current
year. The City transitioned to a third-party claims administrator for workers' compensation claims in

FY22
-23

, which has altered claims processing and made year
-
end actuarial adjustments more difficult to project.

In FY23

-
24, the actuarial adjustment was
recorded for $(1.3 million) at the end of the fiscal year.

For FY24
-25, due to uncertainty, it is

currently
Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Charges for Services 20,668,500$ 5,156,818$ 25.0% 23,659,000$ 5,906,513$ 25.0% 23,640,850$ (18,150)$ 99.9% Other Revenues - 117,402 0.0% - 6,987 0.0% 5,790 5,790 0.0% Operating Transfers In - - 0.0% - - 0.0% - - 0.0% Total Revenues 20,668,500$

5,274,220$

25.5% 23,659,000$

5,913,500$

25.0% 23,646,640$

(12,360)$

99.9%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 1,022,902$ 210,765$ 20.6% 1,083,179$ 199,529$ 18.4% 927,668$ 155,511$ 85.6% Materials, Supplies & Maintenance 25,725 1,643 6.4% 24,000 568 2.4% 23,989 11 100.0% Professional/Contract Services 660,030 45,755 6.9% 505,000 45,826 9.1% 504,940 60 100.0% Training, Travel & Membership Dues 8,500 993 11.7% 11,600 - 0.0% 11,600 - 100.0% Liabilities, Settlements & Insurance 18,344,252 6,909,468 37.7% 18,654,469 6,880,873 36.9% 17,781,921 872,548 95.3% Utilities - 94 0.0% 750 94 12.5% 750 - 100.0% Interdepartmental Charges 228,527 51,165 22.4% 235,890 49,571 21.0% 198,284 37,606 84.1% Bad Debts and Other Losses 8,200,000 - 0.0% 3,000,000 - 0.0% 3,000,000 - 100.0% Other Operating Transfers Out 4,354 1,089 25.0% - - 0.0% - - 0.0% Total Expenses 28,494,290$

7,220,972$

25.3% 23,514,888$

7,176,461$

30.5% 22,449,152$

1,065,736$

95.5%
Revenues Less Expenditures (7,825,790)$

(1,946,752)$

144,112$

(1,262,961)$

1,197,488$

1,053,376$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
65 52

projected at budgeted amount of $3.0 million. Staff is working with the actuary to finalize the report later in the year, and it will be reflected in the future projection when available.

The Self -Insurance Fund has one vacant Claims Technician position, which is expected to remain unfilled through the end of the fiscal year, resulting in an estimated budgetary savings of $0.2 million.

Overall expenditure

is
projected to result in a

$1.
2 million

surplus at year
-end.

66 53

Fleet Services Fund First Quarter Results
The City’s Fleet Services Fund is comprised of multiple sub-funds, including the Fleet Services Fund- Operating Fund and the

Fleet Services
Fund-Replacement Fund, which are used to fi nance and
account for the maintenance, repair, and replacement of the City’s vehicular assets. However, it should be noted

that this fund

does not
include the replacement of the City’s

Sanitation, Sewer,
Water, and Transit

vehicular assets
.

Fleet Services

Fund

Overall Revenue

s

and Expenditure
s

As shown above, the Fleet Services Fund’s

overall revenues
have increased when compared with the
year prior.

As of

September 30, 2024

, a total of

$3.5
million or 26.2% of the FY24-25

revenue budget
ha

s
been collected.

During the same period ending

September 30
, 2023

, the City realized

$2.3
million in revenues, representing

19 .0
%

of the

FY23
-24

revenue budget
.

On the expenditure side,

this fund
realized overall expenditures of

$2.3

million
, achieving

27.2 % of
the FY24-25

budget as of

September 30
, 2024. During the same period ending

September 30

, 202
3,
the City

expended
$2.3

million
or 26.4% of the FY23-24

expenditure budget. Overall, it is projected
that revenues will exceed expenditures by $ 5.2 million by fiscal year-end. This will be examined in more detail in the following sections.

Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 12,121,697$ 2,302,802$ 19.0% 13,300,160$ 3,487,596$ 26.2% 13,806,660$ 506,500$ 103.8% Total Expenses 8,807,257 2,328,204 26.4% 8,650,840 2,349,729 27.2% 8,570,827 80,013 99.1% Revenues Less Expenditures 3,314,440$

(25,402)$

4,649,320$

1,137,867$

5,235,833$

586,513$

Prior Year FY2023-24 Current FY2024-25
67 54

Fleet Services Fund -Operating Fund Revenue s and Expenditure s by Classification

When examining the Fleet Services

Fund
-Operating Fund, we get a better sense of

day
-to-day
operations. As of

September 30, 2024

,
the Fleet Services

Fund
-Operating Fund

realized re
venues of
$1.6 million or 23.3% of the

FY24
-25 revenue budget. During the same period ending September 30, 2023

, the City realized

$1.1
million in revenues, representing 17.1% of the

FY23
-24 revenue
budget. This year -over-year increase is primarily due to continued efforts

in adjusting

labor rate
s
charges citywide

to cover the

full

costs

of

maintenance
.

In the

FY22
-23 budget, labor rates were increased by 85

%,
then increased another 40% during the
second half of FY23-24

.

Fleet Services has improved its financial performance by filling vacancies, which has led to an increase in billable hours and allowed the department to more effectively meet its budget. Staff will continue to monitor the department closely to assess wheth er labor rate adjustments are necessary.

As of

September 30, 2024

, it is projected that revenues in the

Charges for
Services

classification will realize a shortfall of $
80,000

.

On the expenditure side, the Fleet Services

Fund
-Operating Fund realized expenditures of

$

2.0 million, achieving

27.7 % of the

FY24
-25 expenditure budget as of

September
30, 2023

. During the
same period ending

September 30

, 202
3, the City expended

$

2.0 million or 27.8

%
of the

FY23
-24
expenditure budget. The overall expenditures remained relatively consistent, while Interdepartmental Charges and Salaries and Employee Benefits slightly increased, which were partially offset by decrease in Material, Supplies & Maintenance and Other Operating Transfers Out

classification
.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property (28,196)$ (39,288)$ 139.3% (28,196)$ (32,649)$ 115.8% (96,790)$ (68,594)$ 343.3% Charges for Services 6,693,324 1,177,475 17.6% 6,896,676 1,635,099 23.7% 6,816,520 (80,156) 98.8% Total Revenues 6,665,128$

1,138,187$

17.1% 6,868,480$

1,602,450$

23.3% 6,719,730$

(148,750)$

97.8%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 3,822,706$ 729,773$ 19.1% 4,069,608$ 919,672$ 22.6% 3,976,771$ 92,837$ 97.7% Materials, Supplies & Maintenance 1,518,195 325,122 21.4% 269,487 97,930 36.3% 507,741 (238,254) 188.4% Materials Reimbursements - - 0.0% - - 0.0% (250,000) 250,000 0.0% Parts, Fuel & Lubricants Purchases 2,938,693 434,425 14.8% 3,085,628 633,773 20.5% 3,085,628 - 100.0% Parts, Fuel & Lubricants Contra (2,938,693) (434,425) 14.8% (3,085,628) (633,773) 20.5% (3,085,628) - 100.0% Professional/Contract Services 91,350 62,386 68.3% 208,334 84,893 40.7% 201,990 6,344 97.0% Training, Travel & Membership Dues 51,809 5,252 10.1% 54,075 1,884 3.5% 51,500 2,575 95.2% Depreciation and Amortization - 81 0.0% 2,379 244 10.3% 2,379 - 100.0% Liabilities, Settlements & Insurance 16,880 - 0.0% 16,880 - 0.0% 16,880 - 100.0% Utilities 2,730 157 5.8% 2,600 73 2.8% 2,600 - 100.0% Interdepartmental Charges 1,065,142 231,337 21.7% 2,237,427 546,484 24.4% 2,199,637 37,790 98.3% Debt Service - - 0.0% - - 0.0% (13,778) 13,778 0.0% Capital Acquisitions - - 0.0% 62,208 - 0.0% 62,208 - 100.0% Other Operating Transfers Out 674,580 657,201 97.4% 268,205 339,418 126.6% 353,262 (85,057) 131.7% Total Expenses 7,243,392$

2,011,309$

27.8% 7,191,203$

1,990,598$

27.7% 7,111,190$

80,013$

98.9%
Revenues Less Expenditures (578,264)$

(873,122)$

(322,723)$

(388,148)$

(391,460)$

(68,737)$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
68 55

Salaries and Employee Benefits increased as the vacancy rate has improved from 8.5 FTE to 2.0 FTE as of September 31, 2023 and 2024, respectively.

The increase in

Interdepartmental Charges
and
decrease in

Material, Supplies &
Maintenance was primarily due to

reclassification o
f rental
charges for the fleet warehouse . Other Operating Transfers Out decreased due to reduced contribution to the Fleet Services Capital Fund related to the Capital Improvement Plan.

Fleet Services fund has 2.0 FTE vacancies, for which all positions are expected to be filled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $93,000 in budgetary savings.

Overall, the Fleet Services Fund
-Operating Fund is projected
to operate at a $391,000 deficit

at fiscal year
-end.

Another main component of the

overall
Fleet Services Fund is the

Fleet Services Fund
-Replacement
Fund which is responsible for collecting the charges assessed to departments for the replacement costs of vehicles and accounts for expenditures made to replace these vehicles.

Fleet Services

Fund
-Replacement Fund Revenues and Expenditures by Classification

As shown in the table above,

r
evenue

s
collected within these sub -funds have increased relative to budget when

compared to the year prior
.

As of

September 30, 2024

, a total of

$1.9

million

or

29.3 %

of FY24-25

budgeted revenues have been collected.

During the same period ending

September 30,
2023

, the City realized

$1
.2 million in revenues, representing

21.3 %
of the

FY23
-24 revenue budget.

The increase

from prior year

is mainly due to

increased contributions

from departments of $
490,000
and

allocated investment earnings of $247,000

.

On the expenditure side, the Fleet Services Fund-Replacement Fund

realized expenditures of
$359,000

, achieving

24.6 %
of the

FY24
-25

expenditure budget as of

September 30
, 2024. During the
same period ending

September 30

, 202
3, the City expended

$
317,000 or 20.3

%
of the

FY23
-24
expenditure budget. The Fleet Services Fund -Replacement Fund is projected to operate at surplus of $5.6 million at year

-
end, and it is

projected that

$

25.9 million worth of vehicles will be purchased
and capitalized for depreciation in future budget

cycles
.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 5,376,105$ 1,164,615$ 21. 7% 6,351,216$ 1,813,736$ 28.6% 7,006,930$ 655,714$ 110.3% Other Revenues 80,464 - 0.0% 80,464 71,410 88.7% 80,000 (464) 99.4% Total Revenues 5,456,569$

1,164,615$

21.3% 6,431,680$

1,885,146$

29.3% 7,086,930$

655,250$

110.2%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Depreciation and Amortization 1,468,460$ 316,895$ 21. 6% 1,459,637$ 359,131$ 24.6% 1,459,637$ -$ 100.0% Capital Acquisitions 11,956,197 475,521 4.0% 25,907,433 2,767,499 10.7% 25,907,433 - 100.0% Asset Contra Account (11,860,792) (475,521) 4.0% (25,907,433) (2,767,499) 10.7% (25,907,433) - 100.0% Total Expenses 1,563,865$

316,895$

20.3% 1,459,637$

359,131$

24.6% 1,459,637$

-$

100.0%
Revenues Less Expenditures 3,892,704$

847,720$

4,972,043$

1,526,015$

5,627,293$

655,250$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
69 First Quarter Budget Review Report
ENTERPRise funds
70 56

Enterprise Funds
Enterprise Funds are used to account for fee - supported business activities operated by the City. The net activity of these funds

provides
working capital for maintenance and betterment of the
equipment and fixed assets of the business. This section of the

report
will cover these enterprise
funds alphabetically.

Airport Fund First Quarter Results
The Airport Fund accounts for airfield operations and leasing of commercial property outside of the airfield.

Airport

Fund Revenues and Expenditures by Classification

As of

September 30, 2024

, a total of

$5.4
million or 29.5

%
of FY24-25

budgeted revenues have been
collected. During the same period ending

September 30, 2023

, the City realized

$

3.9 million or
23 .0%
of FY23-24 budgeted revenues. Overall, it is

projected that the revenue budget will operate
at a surplus at year -end of $1.3 million. This is driven by surpluses from miscellaneous revenues of $1.0 million

related to litigation reimbursements
and

investment earnings of $

0.3 million.

On the expenditure side, the

Airport
Fund realized expenditures of

$5.3
million or 32.4% of the

FY24
-
25 budget as of

September 30
, 2024. During the same period ending

September 30

, 202
3, the City
expended $3.1 million or 21.3

%
of the

FY23
-24

expenditure budget . The Other Operating
Transfers Out

classification is

higher than the

prior year due to increased

litigation reimbursement
s
received as mentioned in the Revenue section above, which led to the increase in Operating Transfers Out to General Fund as the reimbursement relates to

the
non-aeronautical division’s
Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 341,485$ 155,761$ 45.6% 482,000$ 330,772$ 68.6% 793,500$ 311,500$ 164.6% Charges for Services 16,433,244 3,751,760 22.8% 17,360,326 3,911,255 22.5% 17,326,910 (33,416) 99.8% Other Revenues 250,000 - 0.0% 500,000 1,164,634 232.9% 1,500,000 1,000,000 300.0% Total Revenues 17,024,729$

3,907,521$

23.0% 18,342,326$

5,406,661$

29.5% 19,620,410$

1,278,084$

107.0%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 1,449,532$ 333,797$ 23.0% 1,556,604$ 328,867$ 21.1% 1,510,394$ 46,210$ 97.0% Materials, Supplies & Maintenance 199,928 7,158 3.6% 144,887 22,418 15.5% 144,887 - 100.0% Professional/Contract Services 1,189,914 43,377 3.6% 1,021,300 38,214 3.7% 1,006,844 14,456 98.6% Training, Travel & Membership Dues 10,815 10 0.1% 11,923 3,164 26.5% 11,356 567 95.2% Depreciation and Amortization 283,250 65,145 23.0% 260,582 67,980 26.1% 260,582 - 100.0% Utilities 207,699 41,573 20.0% 220,946 56,890 25.7% 223,434 (2,488) 101.1% Interdepartmental Charges 601,947 139,861 23.2% 624,115 141,000 22.6% 584,395 39,720 93.6% Bad Debts and Other Losses 15,000 - 0.0% 15,000 - 0.0% 15,000 - 100.0% Other Operating Transfers Out 10,483,892 2,442,411 23.3% 12,602,785 4,674,405 37.1% 13,594,913 (992,128) 107.9% Total Expenses 14,441,977$

3,073,332$

21.3% 16,458,142$

5,332,938$

32.4% 17,351,805$

(893,663)$

105.4%
Revenues Less Expenditures 2,582,752$

834,189$

1,884,184$

73,723$

2,268,605$

384,421$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
71 57

operation. Additionally, the increase in the Other Operating Transfers Out was also caused by the higher transfers to

Airport Capital Fund projects
in the current year . Overall, the Airport Fund is
projected to operate at a

$

2.3 million

surplus.

The Airport Fund has 1.0 FTE vacancy for Lead Airport Worker , which is expected to be filled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $46,00

0 in budgetary savings.
72 58

Sanitation Fund First Quarter Results
The City’s Sanitation Fund is comprised of multiple sub -funds, including the Sanitation Fund- Operating Fund and the

Sanitation
Fund-Vehicle Replacement Fund,

and
accounts for the refuse,
recycling, and green waste programs

as well as
the maintenance and replacement of vehicles used
within the Sanitation Division of the Public Works Department. This fund is supported by user fees and operating transfers from the General Fund -Operating Fund to support the senior discount program. Additionally,

City
Council approved a series of annual rate increases over a five-year period, and beginning July 1, 2023, fees increased by 16% and by 9% annually starting July 1, 2024 through June 2028.

Sanitation

Fund

Overall Revenues and Expenditures

As shown in the summary table above, the

Sanitation
Fund overall realized revenues of

$2.9
million,
achieving 15.2

%
of the FY24-25

revenue budget as of September 30, 2024

. During the same period
ending September 30, 2023

, this fund realized

$2.5
million in revenues, representing

15.5 %
of the
FY23-24

revenue budget.

On the expenditure side,

the Sanitation

Fund

overall

realized

expenditures of

$3.7

million

or

18.7 %
of the

FY24
-25

expenditure budget as of

September 30
, 2024. During the same period ending
September 30

, 202

3 , the City expended $3.8 million or 18.6

%
of the

FY23
-24

expenditure budget.

Overall, it is projected

that

this fund

will

operate at a
$318,000

surplus at
fiscal year-end.

This will be
examined in more detail in the following sections.

Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 16,156,401$ 2,503,411$ 15.5% 18,918,815$ 2,880,827$ 15.2% 19,682,996$ 764,181$ 104.0% Total Expenses 20,155,560 3,752,846 18.6% 20,062,665 3,744,392 18.7% 19,364,734 697,931 96.5% Revenues Less Expenditures (3,999,159)$

(1,249,435)$

(1,143,850)$

(863,565)$

318,262$

1,462,112$

Prior Year FY2023-24 Current FY2024-25
73 59

Sanitation

Fund
-Operating Fund Revenues and Expenditures by Classification

When examining the

Sanitation Fund -Operating Fund , we

get a

better sense of the day -to-day
operations. As of

September 30

, 202
4, a total of

$2.3
million or 13.8

%
of FY24-25

budgeted revenues
have been collected. During the same period ending

September 30, 2023

, the City realized
$2.0
million in revenues, representing 14.1%

of the

FY23
-24 revenue budget. This is primarily due to

the

annual rate increases approved by City Council . Overall, it is projected that the revenue budget will operate at a surplus at year-end of $0.8 million.

On the expenditure side,

this fund
realized expenditures of $3.5 million or 18.5

%
of the

FY
24-25
expenditure budget as of

September 30
, 2024. During the same period ending September 30 , 2023, the City expended

$3.5
million or 18.6% of the FY23-24

expenditure budget. When examining actual
year-over-year expenditures, the overall expenditures remained relatively consistent . When comparing at classification level, th e Professional/Contract Services & Utilities

classification

showed increase

in year
-to-date actuals, which is primarily due to timing of invoice collection. On the other hand,

Interdepartmental Charges
related to self-insurance contributions decreased

due
to

the

recalculation of the Sanitation Division’s contributions to the Self -Insurance Fund.

The Sanitation Fund has 3.0 FTE vacancies for Sanitation Equipment Operator, for which all positions are expected to be filled by the end of the fiscal year. Based on currently approved recruitment requests, this department is projected to generate $380,000 in budgetary savings.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property (20,950)$ (47,052)$ 224. 6% (261,000)$ (90,117)$ 34.5% (408,350)$ (147,350)$ 156.5% Charges for Services 13,927,864 1,970,265 14.1% 16,467,469 2,293,062 13.9% 17,535,570 1,068,101 106.5% Other Revenues 50,000 - 0.0% 125,000 20 0.0% - (125,000) 0.0% Operating Transfers In 351,768 87,942 25.0% 382,321 95,582 25.0% 382,321 - 100.0% Total Revenues 14,308,682$

2,011,155$

14.1% 16,713,790$

2,298,547$

13.8% 17,509,541$

795,751$

104.8%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 4,127,511$ 975,829$ 23. 6% 4,716,434$ 977,244$ 20.7% 4,336,261$ 380,173$ 91.9% Salaries and Benefits Reimb. - (116) 0.0% - - 0.0% - - 0.0% Materials, Supplies & Maintenance 3,717,132 576,951 15.5% 3,886,729 732,414 18.8% 3,883,604 3,125 99.9% Materials Reimbursements (50,000) (6,515) 13.0% (150,000) (1,513) 1.0% (150,000) - 100.0% Professional/Contract Services 4,977,374 382,513 7.7% 5,022,008 654,975 13.0% 4,782,365 239,643 95.2% Training, Travel & Membership Dues 33,471 618 1.8% 82,300 41,567 50.5% 82,300 - 100.0% Depreciation and Amortization 31,930 11,444 35.8% 227,337 12,637 5.6% 227,337 - 100.0% Liabilities, Settlements & Insurance 48,083 25,715 53.5% 60,000 - 0.0% 60,000 - 100.0% Utilities 3,990 287 7.2% 4,190 472 11.3% 3,990 200 95.2% Interdepartmental Charges 3,272,232 816,297 24.9% 2,067,676 455,996 22.1% 1,992,886 74,790 96.4% Debt Service 90,000 - 0.0% 90,000 - 0.0% 90,000 - 100.0% Capital Acquisitions - - 0.0% 25,000 - 0.0% 25,000 - 100.0% Asset Contra Account - - 0.0% (25,000) - 0.0% (25,000) - 100.0% Bad Debts and Other Losses 98,860 97,014 98.1% 52,860 30,803 58.3% 52,860 - 100.0% Other Operating Transfers Out 2,682,174 659,153 24.6% 3,134,975 644,250 20.6% 3,134,975 - 100.0% Total Expenses 19,032,757$

3,539,190$

18.6% 19,194,509$

3,548,845$

18.5% 18,496,578$

697,931$

96.4%
Revenues Less Expenditures (4,724,075)$

(1,528,035)$

(2,480,719)$

(1,250,298)$

(987,037)$

1,493,682$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
74 60

Overall, the Sanitation Fund’s operating fund is projected to

operate at
a $1.0 million deficit. To
address this operating deficit, City Council approved a series of rates increases using the Proposition 218 hearing process through June 2028 as mentioned above . The goal of these rate increases is to reverse the structural deficit and rebuild reserves to sufficient levels

by June 2028.

Sanitation

Fund
-Vehicle

Replacement

Fund

Revenues and Expenditures by Classification

The Sanitation Fund-Vehicle Replacement Fund

receives contributions
, generally from the
Sanitation Fund -Operating Fund , to purchase vehicles. It is also where current vehicles are depreciated each month. The funds transferred during FY24-25

a
re to fund the future purchase of
vehicles through vehicle replacement charges.

As shown in the summary table above, the

Sanitation
Fund-Vehicle Replacement Fund realized
revenues of

$
582,000

or 26.4

%
of the

FY24
-25

revenue budget as of

September 30, 2024

. During the
same period ending

September 30, 2023

, this fund realized

$
492,000 in revenues, representing

26.6 %

of the

FY23
-24 revenue budget.

On the expenditure side, this fund realized expenditures of

$
196,000 or 22.5

%
of the

FY24
-25
expenditure budget as of September 30 , 2024. During the same period ending September 30 , 2023, the City expended $214,000

or 19.0

%
of the

FY23
-24

expenditure budget. Overall, it is projected that
revenues will exceed expenditures by

$1.
3 million at fiscal year-end.

The projection above

i
ncludes
the purchase of

four
(4)

CNG
Refuse Collection Trucks as approved by Council on December 6, 2022

;
and four (4) CNG Refuse Collection Trucks as approved by Council on

November 28, 2023

; and
five (5)
CNG Refuse Collection Trucks as approved by Council on November 19, 2024

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 396,539$ 110,179$ 27. 8% 555,000$ 207,455$ 37.4% 523,430$ (31,570)$ 94.3% Operating Transfers In 1,451,180 382,077 26.3% 1,650,025 374,825 22.7% 1,650,025 - 100.0% Total Revenues 1,847,719$

492,256$

26.6% 2,205,025$

582,280$

26.4% 2,173,455$

(31,570)$

98.6%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Depreciation and Amortization 1,122,803$ 213,656$ 19. 0% 868,156$ 195,547$ 22.5% 868,156$ -$ 100.0% Capital Acquisitions 6,190,597 446,737 7.2% 9,357,966 - 0.0% 9,357,966 - 100.0% Asset Contra Account (6,190,597) (446,737) 7.2% (9,357,966) - 0.0% (9,357,966) - 100.0% Total Expenses 1,122,803$

213,656$

19.0% 868,156$

195,547$

22.5% 868,156$

-$

100.0%
Revenues Less Expenditures 724,916$

278,600$

1,336,869$

386,733$

1,305,299$

(31,570)$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
75 61

Sewer Fund First Quarter Results
The Sewer Fund is comprised of multiple sub -funds, including the Sewer Fund-Operating Fund and the Sewer Fund-Vehicle Replacement Fund, and

accounts for sewer discharge fees received for the
maintenance and capital improvement expenditures of the City’s sewer system

as well as the
maintenance and replacement of vehicles used within the

Sewer
Division of

the Public Works
Department. The City Council approved a series of annual sewer rate increases over a five

-
year
period starting in January 2023

through December 202

7. Additionally, this fund is supported by user
fees and operating transfers from the General Fund -Operating Fund to support the sen ior discount program.

Sewer

Fund

Overall

Revenues and Expenditures

As shown in the summary table above, the

Sewer
Fund overall realized re

venues of

$1.5
million,
achieving 17

.8%
of FY24-25

budget as of

September 30, 2024

. During the same period ending
September 30, 2023

, this fund realized

$

1.3 million

in revenues, representing

16 .0%

of the

FY23
-24
budget.

On the expenditure side,

the
Sewer Fund overall realized expenditures of

$2.2
million or 37.7% of
the FY24-25

budget as of

September 30
, 2024. During the same period ending

September
30 , 202
3,
the City

expended
$3.3 million or 49.5

%
of the

FY23
-24

budget. Overall, it is projected that revenues
will exceed expenditures by

$3.0
million at fiscal year-end. This will be examined in more detail in the following sections.

Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 8,313,366$ 1,329,720$ 16.0% 8,616,082$ 1,530,366$ 17.8% 8,348,609$ (267,473)$ 96.9% Total Expenses 6,581,954 3,257,378 49.5% 5,698,593 2,149,883 37.7% 5,377,493 321,100 94.4% Revenues Less Expenditures 1,731,412$

(1,927,658)$

2,917,489$

(619,517)$

2,971,116$

53,627$

Prior Year FY2023-24 Current FY2024-25
76 62

Sewer Fund -Operating Fund Revenues and Expenditures by Classification

When examining the

Sewer Fund-Operating Fund, we

get a

better sense of the day-to-day operations.

As of

September 30
, 2024, a total of

$1.4
million or 18.0

%
of FY24-25

budgeted revenues have been
collected. During the same period ending

September
30, 202

3 , the City realized

$1.2
million in
revenues, representing

16.0 %
of the

FY23
-24 revenue budget. This is primarily due to

the
annual
rate increase approved by City Council effective J anuary 2023 through January 2027 . Overall, staff expect the total projected revenue to be lower than the budget by

$
275,000

.

On the expenditure side,

this fund
realized expenditures of

$

2.1 million or 37.5

%
of the

FY24
-25
expenditure budget as of

September 30
, 2024. During the same period ending September 30 , 2023, the City

expended
$3.2 million or 50

.5%
of the FY23-24

expenditure budget.

When examining actual
expenditures year to year, we see

a
decrease of $1

.1
million. This is a result of

de
creased transfers to
the Vehicle Replacement and Capital Project Funds. Overall, the Sewer’s operating fund is projected to end the year operating at a $2.4 million

surplus
.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 216,234$ 63,526$ 29.4% 590,000$ 151,699$ 25.7% 341,670$ (248,330)$ 57.9% Charges for Services 7,495,161 1,166,044 15.6% 7,315,073 1,281,662 17.5% 7,328,800 13,727 100.2% Other Revenues 13,556 2,157 15.9% 50,000 - 0.0% 10,000 (40,000) 20.0% Operating Transfers In 22,212 5,553 25.0% 34,347 8,586 25.0% 34,347 - 100.0% Total Revenues 7,747,163$

1,237,280$

16.0% 7,989,420$

1,441,947$

18.0% 7,714,817$

(274,603)$

96.6%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 1,702,959$ 444,940$ 26.1% 1,956,558$ 429,889$ 22.0% 1,751,066$ 205,492$ 89.5% Materials, Supplies & Maintenance 332,840 58,985 17.7% 348,642 61,938 17.8% 341,642 7,000 98.0% Materials Reimbursements - - 0.0% - (341) 0.0% (1,597) 1,597 0.0% Professional/Contract Services 623,677 19,063 3.1% 509,250 29,762 5.8% 485,000 24,250 95.2% Training, Travel & Membership Dues 10,447 271 2.6% 15,246 - 0.0% 14,520 726 95.2% Depreciation and Amortization 1,127 - 0.0% - - 0.0% - - 0.0% Utilities 68,917 16,254 23.6% 97,557 6,455 6.6% 97,557 - 100.0% Interdepartmental Charges 736,093 195,119 26.5% 744,053 165,016 22.2% 662,018 82,035 89.0% Capital Acquisitions 6,906 - 0.0% 25,000 - 0.0% 25,000 - 100.0% Asset Contra Account (4,700) - 0.0% (25,000) - 0.0% (25,000) - 100.0% Bad Debts and Other Losses 26,000 30,486 117.3% 20,000 10,629 53.1% 20,000 - 100.0% Other Operating Transfers Out 2,902,588 2,469,854 85.1% 1,917,662 1,400,340 73.0% 1,917,662 - 100.0% Total Expenses 6,406,854$

3,234,972$

50.5% 5,608,968$

2,103,688$

37.5% 5,287,868$

321,100$

94.3%
Revenues Less Expenditures 1,340,309$

(1,997,692)$

2,380,452$

(661,741)$

2,426,949$

46,497$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
77 63

Sewer Fund -Vehicle Replacement Fund Revenues and Expenditures by Classification

The Sewer Fund-Vehicle Replacement Fund receives contributions, generally from

the
Sewer Fund-
Operating Fund, to purchase vehicles. It is also where current vehicles are depreciated each month.

The funds transferred in

FY
24 -
25 will fund future vehicle replacement costs . As shown in the summary table above, the

Sewer
Fund-Vehicle Replacement Fund realized re

venues of

$
88,000 or

14.1 %
of the

FY24
-25

revenue budget as of

September 30, 2024

. During the same period ending
September 30, 2024

, this fund realized

$
92 ,00

0 in revenues, representing

16.3 %
of the FY23-24
revenue budget.

On the expenditure side, this fund realized expenditures of

$46
,000 or 51.5

%
of the

FY24
-25
expenditure budget

as of

September 30
, 2024. During the same period ending September 31 , 2023, the City

expended
$22

,000
or 12.8

%
of the

FY23
-24

expenditure budget.

Overall, it is projected
that
revenues will exceed expenditures by $544

,000
at

fiscal year
-end. The projection above includes

the
purchase of two (2) CNG Vactor Sewer Cleaner Trucks, one (1) CNG Ramjet Jet Rodder Truck and two (2)

Ford F

-
350 Dump Trucks which were all approved by Council on December 20, 2022

, and
one (1)
Ford

F-
450 Crane Truck approved

by City Manager

a
ppropriation.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 63,615$ 22,586$ 35. 5% 109,000$ 32,856$ 30.1% 116,130$ 7,130$ 106.5% Operating Transfers In 502,588 69,854 13.9% 517,662 55,563 10.7% 517,662 - 100.0% Total Revenues 566,203$

92,440$

16.3% 626,662$

88,419$

14.1% 633,792$

7,130$

101.1%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Depreciation and Amortization 175,100$ 22,406$ 12. 8% 89,625$ 46,195$ 51.5% 89,625$ -$ 100.0% Capital Acquisitions 1,644,574 - 0.0% 4,398,355 1,338,196 30.4% 4,398,355 - 100.0% Asset Contra Account (1,644,574) - 0.0% (4,398,355) (1,338,196) 30.4% (4,398,355) - 100.0% Total Expenses 175,100$

22,406$

12.8% 89,625$

46,195$

51.5% 89,625$

-$

100.0%
Revenues Less Expenditures 391,103$

70,034$

537,037$

42,224$

544,167$

7,130$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
78 64

Transit Fund First Quarter Results
The Transit Fund is used to finance and account for the City’s fixed route transit system and Torrance Community Transit Program.

Transit

Fund Revenues and Expenditures by Classification

As of

September 30, 2024

, a total of

$8.6
million or 24.3

%
of FY24-25

budgeted revenues have been
collected. During the same period ending

September 30, 2023

, the City realized

$

11.9 million in
revenues, representing 31.9

%

of the

FY23
-24

revenue budget
. This

decrease

is driven by
a

decrease

in the

Intergovernmental
classification and is partially offset by

an
increase in the Charges for
Services classification. As shown above, year -to-date receipts in the

Intergovernmental

classification are

down
$3.7 million primarily due to decreases from Measure R , Measure M , and Proposition

A

totaling $3.0 million

.

As of this Budget Review Report, the Transit Department has

$

29.9 million in unspent Federal
Transit Administration grants dating back to 2009 .

Additionally, the Transit Department ha

s
a
total of $75.5 million in

unspent grants

from other sources
.

On the expenditure side, the Transit Fund realized expenditures of

$8.5
million or 21.2

%
of the

FY24
-
25 budget as of

September 30
, 2024. During the same period ending

September 30

, 202
3, the City
expended $7.4 million or 19.4

%
of the

FY23
-24 expenditure budget. This is primarily driven by an Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 1,029,127$ 342,973$ 33. 3% 1,718,000$ 547,265$ 31.9% 1,570,960$ (147,040)$ 91.4% Intergovernmental 31,869,767 10,594,658 33.2% 29,545,571 6,943,746 23.5% 27,872,880 (1,672,691) 94.3% Charges for Services 1,326,028 179,046 13.5% 940,001 312,933 33.3% 1,203,620 263,619 128.0% Other Revenues 30,000 2,835 9.5% 30,000 115 0.4% 240 (29,760) 0.8% Operating Transfers In 3,000,000 753,000 25.1% 3,000,000 756,000 25.2% 3,000,000 - 100.0% Total Revenues 37,254,922$

11,872,512$

31.9% 35,233,572$

8,560,059$

24.3% 33,647,700$

(1,585,872)$

95.5%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 22,490,772$ 4,247,935$ 18. 9% 23,152,327$ 4,860,143$ 21.0% 21,749,309$ 1,403,018$ 93.9% Materials, Supplies & Maintenance 2,653,113 667,171 25.1% 3,593,905 642,766 17.9% 3,584,508 9,397 99.7% Materials Reimbursements (250,000) (7,601) 3.0% (250,000) (5,128) 2.1% (250,000) - 100.0% Parts, Fuel & Lubricants Purchases 1,019,991 335,167 32.9% 1,811,250 310,026 17.1% 1,725,000 86,250 95.2% Parts, Fuel & Lubricants Contra (1,019,991) (335,167) 32.9% (1,811,250) (310,026) 17.1% (1,725,000) (86,250) 95.2% Professional/Contract Services 2,018,063 229,815 11.4% 2,593,196 568,924 21.9% 2,470,233 122,963 95.3% Training, Travel & Membership Dues 159,022 11,462 7.2% 125,037 23,865 19.1% 125,037 - 100.0% Depreciation and Amortization 4,314,089 779,294 18.1% 3,238,219 641,845 19.8% 3,238,219 - 100.0% Liabilities, Settlements & Insurance 217,639 20,085 9.2% 217,639 - 0.0% 217,639 - 100.0% Utilities 144,845 26,754 18.5% 233,466 55,482 23.8% 269,315 (35,849) 115.4% Interdepartmental Charges 6,666,292 1,454,092 21.8% 7,172,359 1,704,147 23.8% 6,816,586 355,773 95.0% Capital Acquisitions - - 0.0% 50,000 - 0.0% 50,000 - 100.0% Asset Contra Account - - 0.0% (50,000) - 0.0% (50,000) - 100.0% Other Operating Transfers Out 76,578 19,143 25.0% 70,154 22,858 32.6% 70,154 - 100.0% Total Expenses 38,490,413$

7,448,150$

19.4% 40,146,302$

8,514,902$

21.2% 38,291,000$

1,855,302$

95.4%
Revenues Less Expenditures (1,235,491)$

4,424,362$

(4,912,730)$

45,157$

(4,643,300)$

269,430$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
79 65

increase in the Salaries and Employee Benefits classifications. The change in the Salaries and Employee Benefits classification is

a result of filling

29.5 vacancies since September 30, 2023 . The
Transit Fund has 31.3 FTE vacancies as of September 30, 2024, for which 8.0 FTE is expected to remain unfilled by the end of the fiscal year. While the

d
epartment has seen progress in filling these
vacancies, it is still projected that $1.4 million in salary savings will be realized

at
fiscal year-end.

Overall, the Transit

F
und is projected to end the year with a

$

4.6 million

deficit
.

80 66

Water Fund First Quarter Results
The Water Fund is comprised of multiple sub -funds, including the Water Fund-Operating Fund and the Water Fund-Vehicle Replacement Fund, and

accounts for water fees received to support the
City’s water system

as well as
the maintenance and replacement of vehicles used within

the Water
Division of

the Public Works Department. City Council approved a series of annual water rate increases over a five

-
year period, and the fees will increase

annually
by 6.5% as of January 1, 2025
and 20

26,
and 6% as of January 1, 2027, 2028 and 2029.

A
s the rate increase was approved by City
Council after September 30, 20

24, it is not reflected in the FY24
-25 projection.

In addition,

this fund

is supported by user fees and operating transfers from the General Fund-Operating Fund

to support
the senior discount program.

Water

Fund

Overall Revenues and Expenditures

As shown in the summary table above, the Water Fund overall realized revenues of

$

11.3 million,
achieving 20.6

%
of the FY24-25

revenue budget as of

September 30, 2024

. During the same period
ending September 30, 2023

, this fund realized

$9.7
million in revenues, representing

17.8 %
of the
FY23-24

revenue budget.

On the expenditure side,

the
Water Fund overall realized expenditures of

$

13.7 million or 26.4

%
of
the FY24-25

expenditure budget as of

September 30
, 202 4. During the same period ending
September 30

, 202
3, the City

expended
$20.9

million or 37.1

%
of the

FY23
-24

expenditure budget.

Overall, it is

projected
that this fund will operate at a

$

4.3 million surplus at fiscal year-end. This will
be examined in more detail in the following sections.

Amended
Budget
July-Sept
Actuals

Budget
Realized
Amended
Budget
July-Sept
Actuals

Budget
Realized
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Total Revenues 54,827,481$ 9,738,331$ 17.8% 54,803,501$ 11,280,853$ 20.6% 56,159,573$ 1,356,072$ 102.5% Total Expenses 56,507,977 20,937,559 37.1% 51,905,219 13,691,333 26.4% 51,912,705 (7,486) 100.0% Revenues Less Expenditures (1,680,496)$

(11,199,228)$

2,898,282$

(2,410,480)$

4,246,868$

1,348,586$

Prior Year FY2023-24 Current FY2024-25
81 67

Wat er Fund -Operating Fund Revenues and Expenditures by Classification

When examining the Water

Fund
-Operating

F
und, we can get a

better
sense of the day-to-day
operations. The Water Fund-Operating

Fund realized revenues of $11.2 million or 20.5% of the FY24-25

revenue budget as of

September 30, 2024

.

During the same period ending

September 30,
2023

, the City

realized revenues of
$9.6 million or 17.7% of the

FY23
-24 revenue budget. I n the
Charges for Services

classification,
revenues

are

up
$1.2

million

or

13.4 %

from

the same period the
year prior. This is

primarily
a result of increased potable water consumption at the Torrance Refinery (Refinery), coupled with

slightly
reduced consumption for reclaimed water sales . At the Refinery, consumption for potable water sales is

up

49.6 % while rates remain consistent with the prior year.

For potable water sales (non-Refinery), the rate charged remains flat,

and
consumption is

up

2.5%
when compared to the same period the year prior.

Finally
, consumption for reclaimed water at the
Refinery is down 12.6

%;
however, rates are up 11.5% partially offsetting the reduction experienced in potables sales.

On the expenditure side,

this fund
realized expenditures of

$

13.7 million or 26.4

%
of the

FY24
-25

expenditure budget as of

September 30
, 2024. During the same period ending September 30 , 2023, the City expended $20.9

million or 37.1% of the

FY23
-24

expenditure budget.

This is primarily
driven by decreases in the Other Operating Transfer Out classification. The Operating Transfers Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 1,287,643$ 329,862$ 25.6% 1,197,000$ 606,890$ 50.7% 1,503,260$ 306,260$ 125.6% Charges for Services 53,070,586 9,291,292 17.5% 53,095,000 10,538,349 19.8% 54,142,160 1,047,160 102.0% Other Revenues - 13,441 0.0% 5,000 8,727 174.5% 20,000 15,000 400.0% Operating Transfers In 12,430 3,108 25.0% 18,284 4,572 25.0% 18,284 - 100.0% Total Revenues 54,370,659$

9,637,703$

17.7% 54,315,284$

11,158,538$

20.5% 55,683,704$

1,368,420$

102.5%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Salaries and Employee Benefits 5,732,781$ 1,194,936$ 20.8% 5,949,210$ 1,346,187$ 22.6% 5,495,406$ 453,804$ 92.4% Materials, Supplies & Maintenance 1,973,066 362,671 18.4% 1,938,160 156,198 8.1% 1,904,480 33,680 98.3% Materials Reimbursements 5,000 - 0.0% - (60) 0.0% (366) 366 0.0% Parts, Fuel & Lubricants Purchases 583,495 47,565 8.2% 612,670 100,935 16.5% 612,670 - 100.0% Parts, Fuel & Lubricants Contra (583,495) (47,565) 8.2% (612,670) (100,935) 16.5% (612,670) - 100.0% Stored Water Rights Inv. Purchases 471,699 - 0.0% - - 0.0% - - 0.0% Stored Water Rights Contra (471,699) - 0.0% - - 0.0% - - 0.0% Professional/Contract Services 1,676,431 117,000 7.0% 2,031,344 291,336 14.3% 1,937,886 93,458 95.4% Water Supply Costs 33,350,000 8,673,975 26.0% 34,785,000 8,349,965 24.0% 35,434,467 (649,467) 101.9% Training, Travel & Membership Dues 49,955 4,341 8.7% 52,453 583 1.1% 49,955 2,498 95.2% Depreciation and Amortization 15,000 2,723 18.2% 12,445 2,723 21.9% 12,445 - 100.0% Liabilities, Settlements & Insurance 91,479 16,008 17.5% 16,008 - 0.0% 16,008 - 100.0% Utilities 164,950 32,847 19.9% 205,820 42,756 20.8% 208,223 (2,403) 101.2% Interdepartmental Charges 2,858,400 682,394 23.9% 3,650,457 866,903 23.7% 3,598,747 51,710 98.6% Debt Service 1,567,288 - 0.0% 644,517 - 0.0% 644,517 - 100.0% Debt Service Reimbursements (1,279,515) - 0.0% (580,744) - 0.0% (580,744) - 100.0% Capital Acquisitions 56,201 - 0.0% 110,000 - 0.0% 110,000 - 100.0% Asset Contra Account (56,200) - 0.0% (110,000) - 0.0% (110,000) - 100.0% Bad Debts and Other Losses 150,000 135,297 90.2% 150,000 8,940 6.0% 150,000 - 100.0% Other Operating Transfers Out 10,005,676 9,685,275 96.8% 2,906,903 2,591,411 89.1% 2,898,035 8,868 99.7% Total Expenses 56,360,512$

20,907,467$

37.1% 51,761,573$

13,656,942$

26.4% 51,769,059$

(7,486)$

100.0%
Revenues Less Expenditures (1,989,853)$

(11,269,764)$

2,553,711$

(2,498,404)$

3,914,645$

1,360,934$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
82 68

Out decreased by $ 7.1 million, as the prior year included transfers to the Water Capital Fund to implement an automated

meter reading project
.

The Water Fund has 2.0 FTE vacancies, for which all positions are expected to remain unfilled by the end of the fiscal year. Based on approved recruitment requests as of September 2024, this department is projected to generate $454,000 in budgetary savings . Overall, the Water’s operating fund is projected to operate at a

$

3.9 million surplus, driven by the projected increase in Charges for Services

mainly

from

Re
finery

potable water.

Wat

er

Fund
-Vehicle

Replacement

Fund Revenues and Expenditures by Classification

The Water Fund-Vehicle Replacement Fund receives contributions , generally from

the Water
Fund-
Operating Fund, to purchase vehicles. It is also where assets are depreciated

each month

.

The funds
transferred in FY 24

-
25 are to fund the future purchase of vehicles through vehicle replacement charges.

As shown in the summary table above, the

Water
Fund-Vehicle Replacement Fund realized revenues
of $122,000

or 25

.1%
of the

FY24
-25

revenue budget as of

September 30, 2024

. During the same
period ending September 30, 2023

, this fund realized

$
101

,000
in revenues, representing 22.0% of
the

FY23
-24

revenue budget.

On the expenditure side, this fund realized expenditures of

$
34,000 or 23.9

%
of the

FY24
-25
expenditure budget as of September 30 , 2024. During the same period ending September 30 , 2023, the City expended

$
30 ,000
or 20.4

%
of the

FY23
-24

expenditure budget.

Overall, it is projected that
revenues will exceed expenditures by $332,000 at

fiscal year
-end. The projection above

includes

the

purchase of

two
(2) Ford F

-
350

trucks with Pacific Body Utility Bodies as approved by Council on December 20, 2022

.

Revenues
Amended
Budget
July-Sept
Actuals

Budget
Received
Amended
Budget
July-Sept
Actuals

Budget
Received
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Use of Money and Property 60,014$ 17,570$ 29. 3% 84,000$ 31,576$ 37.6% 80,520$ (3,480)$ 95.9% Operating Transfers In 396,808 83,058 20.9% 404,217 90,739 22.4% 395,349 (8,868) 97.8% Total Revenues 456,822$

100,628$

22.0% 488,217$

122,315$

25.1% 475,869$

(12,348)$

97.5%
Expenses
Amended
Budget
July-Sept
Actuals

Budget
Expended
Amended
Budget
July-Sept
Actuals

Budget
Expended
Annual
Projected Total
Projected
Surplus/(Deficit)
j
% of
Budget
Depreciation and Amortization 147,465$ 30,092$ 20. 4% 143,646$ 34,391$ 23.9% 143,646$ -$ 100.0% Capital Acquisitions 918,213 - 0.0% 774,109 - 0.0% 774,109 - 100.0% Asset Contra Account (918,213) - 0.0% (774,109) - 0.0% (774,109) - 100.0% Total Expenses 147,465$

30,092$

20.4% 143,646$

34,391$

23.9% 143,646$

-$

100.0%
Revenues Less Expenditures 309,357$

70,536$

344,571$

87,924$

332,223$

(12,348)$

Prior Year FY2023-24 Current FY2024-25
Prior Year FY2023-24 Current FY2024-25
83 First Quarter Budget Review Report
fiscal year 2023-24
(unaudited) results
84 69

Fiscal Year 2023-24 (Unaudited) Results
This section provides citywide summary tables relating to FY23 -24 results. The Finance Department is currently undergoing its annual financial statement audit in preparation for the publication of the Annual Report. The FY23-24

Annual Report will be available by the end of calendar year 202

4. The table below summarizes, the unaudited results for

FY23
-24

compared with FY22-23

for Revenues:

Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
GF-Operating 271,375,162$ 279,771,398$ 103.1% 271,764,866$ 278,125,855$ 102.3% GF-SST 17,550,521 18,064,595 102.9% 23,027,688 25,577,251 111.1% GF-Rest&Assigned 4,509,841 4,648,221 103.1% 25,763,426 30,881,303 119.9% GF-Unassigned - - 0.0% 4,802,423 4,802,423 100.0% Total General Fund 293,435,524$

302,484,214$

103.1% 325,358,403$

339,386,832$

104.3%
Self Insurance 17,347,600 24,309,720 140.1% 20,668,500 23,070,807 111.6% Fleet 9,628,182 25,854,359 268.5% 12,121,697 13,976,328 115.3% Total Internal Service 26,975,782$

50,164,079$

186.0% 32,790,197$

37,047,135$

113.0%
Airport 23,364,106 23,886,882 102.2% 17,024,729 20,292,508 119.2% Transit 45,232,700 35,962,667 79.5% 37,254,922 32,367,583 86.9% Sanitation 15,680,878 16,649,110 106.2% 16,156,401 26,869,751 166.3% Sewer 6,165,910 6,569,642 106.5% 8,622,923 8,050,200 93.4% Water 52,170,884 55,377,877 106.1% 54,827,481 56,262,311 102.6% Total Enterprise Fund 142,614,478$

138,446,178$

97.1% 133,886,456$

143,842,353$

107.4%
Total Revenues 463,025,784$

491,094,471$

106.1% 492,035,056$

520,276,320$

105.7%
Prior Year FY2022-23 Prior Year FY2023-24
85 70

The table below summarizes the unaudited results for FY23 -24 compared with FY22 -23 for Expenditures:

Expenses
Amended
Budget
July-June
Actuals

Budget
Expended
Amended
Budget
July-June
Actuals

Budget
Expended
GF-Operating 265,006,259$ 261,591,949$ 98.7% 271,906,428$ 271,219,954$ 99.7% GF-SST 17,550,521 17,550,521 100.0% 23,027,688 21,467,564 93.2% GF-Rest&Assigned 2,305,522 299,909 13.0% 2,515,039 4,812,262 191.3% GF-Unassigned - - 0.0% - - 0.0% Total General Fund 284,862,302$

279,442,379$

98.1% 297,449,155$

297,499,780$

100.0%
Self Insurance 32,351,985 16,210,165 50.1% 28,494,290 20,519,641 72.0% Fleet 1,022,157 5,270,328 515.6% 8,870,144 8,182,546 92.2% Total Internal Service 33,374,142$

21,480,493$

64.4% 37,364,434$

28,702,187$

76.8%
Airport 24,657,035 23,675,160 96.0% 17,451,719 17,581,262 100.7% Transit 38,373,837 28,721,634 74.8% 38,491,381 32,986,308 85.7% Sanitation 15,936,198 14,811,383 92.9% 20,115,386 26,428,864 131.4% Sewer 6,175,601 5,230,481 84.7% 6,851,338 6,170,049 90.1% Water 52,114,173 47,410,975 91.0% 56,427,720 55,702,193 98.7% Total Enterprise Fund 137,256,844$

119,849,633$

87.3% 139,337,544$

138,868,676$

99.7%
Total Expenses 455,493,288$

420,772,505$

92.4% 474,151,133$

465,070,643$

98.1%
Revenues Less Expenditures 7,532,496$

70,321,966$

17,883,923$

55,205,677$

Prior Year FY2022-23 Prior Year FY2023-24
86 71

The table below summarizes the General Fund -Operating Fund unaudited results for FY23 -24 compared with

FY22
-23

for Revenues and Expenditures (broken down by

classification
):

Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
Taxes 200,180,678$ 202,796,702$ 101. 3% 209,861,473$ 205,018,175$ 97.7% Licenses, Fees and Permits 4,923,246 6,030,909 122.5% 5,773,777 5,572,251 96.5% Fines, Forfeitures and Penalties 735,144 676,656 92.0% 760,672 727,156 95.6% Use of Money and Property 4,200,594 4,677,227 111.3% 4,527,970 8,898,762 196.5% Intergovernmental 559,241 521,909 93.3% 349,501 368,968 105.6% Charges for Services 21,994,195 21,010,365 95.5% 23,965,796 25,460,614 106.2% Other Revenues 521,598 4,638,131 889.2% 229,560 676,712 294.8% Operating Transfers In 38,260,466 38,361,683 100.3% 26,296,117 26,367,219 100.3% Other Financing Sources - 1,057,816 0.0% - 5,035,998 0.0% Total Revenues 271,375,162$ 279,771,398$ 103.1% 271,764,866$ 278,125,855$ 102.3% Expenses
Amended
Budget
July-June
Actuals

Budget
Expended
Amended
Budget
July-June
Actuals

Budget
Expended
Salaries and Employee Benefits 194,373,220$ 181,083,668$ 93. 2% 192,259,229$ 185,530,020$ 96.5% Salaries and Benefits Reimb. (51,294) (738,235) 1439.2% (1,446,294) (963,531) 66.6% Materials, Supplies & Maintenan 12,720,243 10,964,026 86. 2% 14,911,536 13,320,075 89.3% Materials Reimbursements (221,351) (432,584) 195.4% (362,751) (324,623) 89.5% Professional/Contract Services 12,860,105 12,132,703 94.3% 19,073,905 13,822,642 72.5% Training, Travel & Membership D 1,355,853 1,296,268 95. 6% 1,719,941 1,652,226 96.1% Liabilities, Settlements & Insura 922,343 679,787 73. 7% 186,581 148,684 79.7% Utilities 4,804,667 4,616,160 96.1% 4,582,772 4,647,391 101.4% Interdepartmental Charges 16,459,489 15,835,772 96.2% 19,314,421 19,134,445 99.1% Debt Service 22,360,355 22,646,081 101.3% 22,855,281 23,578,848 103.2% Debt Service Reimbursements (18,337,744) (18,337,743) 100.0% (18,832,766) (18,832,766) 100.0% Capital Acquisitions 368,774 1,360,558 368.9% 829,942 5,672,519 683.5% Asset Contra Account - (300,812) 0.0% - (740,544) 0.0% Bad Debts and Other Losses 1,000 - 0.0% 1,000 43 4.3% Reimbursements-Indirect Costs (7,813,890) (6,320,271) 80.9% (8,557,193) (7,901,694) 92.3% Other Operating Transfers Out 25,204,489 37,106,571 147.2% 25,370,824 32,476,219 128.0% Total Expenses 265,006,259$

261,591,949$

98.7% 271,906,428$

271,219,954$

99.7%
Revenues Less Expenditures 6,368,903$

18,179,449$

(141,562)$

6,905,901$

Prior Year FY2022-23 Prior Year FY2023-24
Prior Year FY2022-23 Prior Year FY2023-24
87 72

The table below summarizes the General Fund -Operating Fund unaudited results for FY23 -24 compared with

FY22
-23 for Revenues and Expenditures (broken down by department):

Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
City Council 6,000$ 6,210$ 103.5% -$ -$ 0.0% City Manager 2,641,080 2,344,119 88.8% 2,730,496 2,130,251 78.0% City Attorney - 24,609 0.0% - - 0.0% City Clerk 16,004 10,920 68.2% 4,430 4,291 96.9% Finance - - 0.0% - 9,390 0.0% Community Development 9,807,883 11,025,424 112.4% 11,728,562 12,004,879 102.4% CIT - - 0.0% 175,000 175,000 100.0% General Services 907,220 981,678 108.2% 1,222,919 982,431 80.3% Non-Departmental 227,571,879 236,517,988 103.9% 224,375,640 229,709,686 102.4% Police 9,057,157 9,336,197 103.1% 9,568,102 9,511,155 99.4% Fire 11,280,018 10,545,122 93.5% 12,118,811 12,929,835 106.7% Public Works 3,796,368 3,729,702 98.2% 4,525,325 4,551,487 100.6% Community Services 6,291,553 5,249,429 83.4% 5,315,581 6,117,449 115.1% Total Revenues 271,375,162$ 279,771,398$ 103.1% 271,764,866$ 278,125,854$ 102.3% Expenses
Amended
Budget
July-June
Actuals

Budget
Expended
Amended
Budget
July-June
Actuals

Budget
Expended
City Council 464,713$ 485,730$ 104.5% 621,134$ 528,700$ 85.1% City Manager 6,165,100 6,338,430 102.8% 6,585,668 6,179,282 93.8% City Attorney 2,815,838 2,796,410 99.3% 3,133,064 2,985,977 95.3% City Clerk 1,102,135 877,876 79.7% 1,389,558 1,349,619 97.1% City Treasurer 364,841 338,794 92.9% 366,088 343,136 93.7% Finance 5,989,884 5,389,530 90.0% 6,251,439 5,645,754 90.3% Human Resources 2,192,036 2,110,570 96.3% 2,494,941 2,387,931 95.7% Civil Service 629,901 737,818 117.1% 1,038,510 1,013,371 97.6% Community Development 9,815,615 8,341,425 85.0% 9,815,788 8,639,775 88.0% CIT 9,084,137 7,486,252 82.4% 8,741,967 7,496,901 85.8% General Services 10,442,460 9,456,227 90.6% 10,846,593 10,006,878 92.3% Non-Departmental 20,553,902 36,248,874 176.4% 21,807,177 34,503,838 158.2% Police 93,794,113 86,678,251 92.4% 95,529,919 87,910,845 92.0% Fire 59,097,842 56,677,235 95.9% 59,354,384 60,478,362 101.9% Public Works 18,179,445 16,270,511 89.5% 19,689,161 18,570,272 94.3% Community Services 24,314,298 21,358,015 87.8% 24,241,037 23,179,315 95.6% Total Expenses 265,006,260$

261,591,948$

98.7% 271,906,428$

271,219,956$

99.7%
Revenues Less Expenditures 6,368,902$

18,179,450$

(141,562)$

6,905,898$

Prior Year FY2022-23 Prior Year FY2023-24
Prior Year FY2022-23 Prior Year FY2023-24
88 73

The table below summarizes the General Fund -Operating Fund unaudited results for FY23 -24 compared with

FY22
-23

for Tax Revenues:

The table below summarizes for the

General Fund
-Operating Fund the unaudited results for

FY23
-24
compared with

FY22
-23

for Utility Users Tax Revenues:

Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
Business License Tax 8,837,266$ 10,067,200$ 113.9% 10,197,549$ 10,763,541$ 105.6% Construction Tax 1,745,904 1,082,781 62.0% 2,033,484 1,308,065 64.3% Franchise Taxes 9,328,324 10,750,647 115.2% 9,831,080 12,045,565 122.5% Occupancy Tax 12,601,755 12,058,112 95.7% 13,126,729 12,580,760 95.8% Oil Severance Tax 5,857 6,675 114.0% 14,041 4,998 35.6% Property Taxes 44,427,885 44,156,785 99.4% 47,137,917 46,285,305 98.2% Real Prop Transfer Tax 1,469,471 943,943 64.2% 828,540 911,613 110.0% Sales and Use Tax 63,940,625 62,610,106 97.9% 64,400,972 61,931,074 96.2% Utility Users Tax 41,207,940 44,115,724 107.1% 44,465,104 41,289,435 92.9% VLF Swap & Repayment 16,615,651 17,004,729 102.3% 17,826,057 17,897,819 100.4% Total Revenues 200,180,678$ 202,796,702$ 101.3% 209,861,473$ 205,018,175$ 97.7% Prior Year FY2022-23 Prior Year FY2023-24
Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
Cable 2,258,709$ 1,666,102$ 73.8% 1,575,385$ 1,440,882$ 91.5% Cellular 1,219,291 1,245,623 102.2% 1,296,803 2,014,882 155.4% Electricity 19,855,858 20,215,594 101.8% 20,912,992 21,800,381 104.2% Gas 5,013,915 5,757,504 114.8% 5,401,540 4,771,722 88.3% Refinery: Co-Gen 530,230 856,944 161.6% 757,698 605,914 80.0% Refinery: Gas 6,537,410 8,295,360 126.9% 8,304,467 4,532,115 54.6% Telecom 2,198,935 2,472,785 112.5% 2,052,774 2,364,045 115.2% Water 3,593,592 3,605,812 100.3% 4,163,445 3,759,495 90.3% Total Revenues 41,207,940$

44,115,724$

107.1% 44,465,104$

41,289,436$

92.9%
Prior Year FY2022-23 Prior Year FY2023-24
89 74

The table below summarizes for the General Fund -Operating Fund the unaudited results for FY23 -24 compared with

FY22
-23

for Charges for Services Revenues:

The table below summarizes the

General Fund
-Operating Fund unaudited results for

FY23
-24

compared with

FY22
-23 for Salaries and Employee Benefits Expenditures broken down by Department:

Revenues
Amended
Budget
July-June
Actuals

Budget
Received
Amended
Budget
July-June
Actuals

Budget
Received
City Manager 888,099$ 806,164$ 90.8% 846,330$ 696,740$ 82.3% City Clerk 16,004 10,815 67.6% 4,430 4,186 94.5% Finance - - 0.0% - 9,390 0.0% Community Development 5,316,824 5,730,923 107.8% 6,474,902 7,011,427 108.3% General Services 907,220 981,678 108.2% 1,222,919 982,431 80.3% Non-Departmental 22,175 15,389 69.4% 14,899 19,282 129.4% Police 247,341 304,754 123.2% 539,468 368,818 68.4% Fire 9,312,233 8,513,144 91.4% 10,084,175 10,846,381 107.6% Public Works 268,044 230,762 86.1% 242,177 252,073 104.1% Community Services 5,016,255 4,416,736 88.0% 4,536,496 5,269,886 116.2% Total Revenues 21,994,195$

21,010,365$

95.5% 23,965,796$

25,460,614$

106.2%
Prior Year FY2022-23 Prior Year FY2023-24
Expenses
Amended
Budget
July-June
Actuals

Budget
Expended
Amended
Budget
July-June
Actuals

Budget
Expended
City Council 93,497$ 152,330$ 162.9% 198,102$ 181,082$ 91.4% City Manager 4,835,342 4,917,649 101.7% 4,924,703 4,567,975 92.8% City Attorney 2,498,585 2,436,514 97.5% 2,652,979 2,623,689 98.9% City Clerk 942,396 871,566 92.5% 943,350 950,271 100.7% City Treasurer 281,782 262,000 93.0% 318,742 312,521 98.0% Finance 4,521,806 3,844,220 85.0% 4,297,541 3,999,138 93.1% Human Resources 1,474,767 1,376,018 93.3% 1,469,752 1,395,430 94.9% Civil Service 506,633 562,970 111.1% 593,066 598,654 100.9% Community Development 8,728,520 7,362,504 84.3% 8,550,048 7,698,121 90.0% CIT 6,279,206 5,235,686 83.4% 5,972,691 5,239,041 87.7% General Services 6,772,903 6,053,965 89.4% 6,754,045 6,126,049 90.7% Non-Departmental 199,717 92,273 46.2% 199,717 130,040 65.1% Police 82,709,949 75,842,122 91.7% 78,986,468 75,031,126 95.0% Fire 49,759,228 49,210,686 98.9% 50,192,578 51,902,504 103.4% Public Works 8,522,389 8,265,567 97.0% 8,775,992 8,595,618 97.9% Community Services 16,195,206 13,859,364 85.6% 15,983,162 15,215,230 95.2% Total Expenses 194,321,926$ 180,345,434$ 92.8% 190,812,936$ 184,566,489$ 96.7% Prior Year FY2022-23 Prior Year FY2023-24
90 75

The table below summarizes the General Fund -Operating Fund unaudited results for FY23 -24 compared with

FY22
-23

for

Materials (non
-wage)

Expenditures broken down by Department:

Expenses
Amended
Budget
July-June
Actuals

Budget
Expended
Amended
Budget
July-June
Actuals

Budget
Expended
City Council 371,216$ 333,400$ 89.8% 423,032$ 347,617$ 82.2% City Manager 1,329,758 1,420,781 106.8% 1,660,965 1,611,307 97.0% City Attorney 317,253 359,896 113.4% 480,085 362,289 75.5% City Clerk 159,739 6,311 4.0% 446,208 399,348 89.5% City Treasurer 83,059 76,793 92.5% 47,346 30,615 64.7% Finance 1,468,078 1,545,309 105.3% 1,953,898 1,646,617 84.3% Human Resources 717,269 734,553 102.4% 1,025,189 992,502 96.8% Civil Service 123,268 174,848 141.8% 445,444 414,716 93.1% Community Development 1,087,095 978,921 90.0% 1,265,740 941,654 74.4% CIT 2,804,931 2,250,566 80.2% 2,769,276 2,257,860 81.5% General Services 3,669,557 3,402,263 92.7% 4,092,548 3,880,829 94.8% Non-Departmental 20,354,185 36,156,602 177.6% 21,607,460 34,373,797 159.1% Police 11,084,164 10,836,129 97.8% 16,543,451 12,879,718 77.9% Fire 9,338,614 7,466,550 80.0% 9,161,806 8,575,858 93.6% Public Works 9,657,056 8,004,943 82.9% 10,913,169 9,974,653 91.4% Community Services 8,119,092 7,498,651 92.4% 8,257,875 7,964,085 96.4% Total Expenses 70,684,334$

81,246,516$

114.9% 81,093,492$

86,653,465$

106.9%
Prior Year FY2022-23 Prior Year FY2023-24
91 ATTACHMENT 1
Citywide Fiscal Year 2024 - 25 Program Modifications Summary (Labor)

Positions
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation Fund
Expenditure
Increase/
(Decrease)
Measure SST Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Councilperson & Mayor 7.00 - 7.00 141,908$ -$ -$ 141,908$ Staff Assistant 9.50 2.00 11.50 - - 102,447 102,447 Program Coordinator 6.00 (2.00) 4.00 (85,819) - - (85,819) Recreation Supervisor 5.00 2.00 7.00 100,121 - - 100,121 Instructor II 0.43 1.00 1.43 34,188 - - 34,188 Assistant City Librarian 2.00 (1.00) 1.00 (94,093) - - (94,093) Senior Librarian 5.00 1.00 6.00 61,893 - - 61,893 Program Leader 30.21 (3.27) 26.94 (62,392) - - (62,392) Program Specialist 18.00 2.77 20.77 60,668 - - 60,668 Senior Program Specialist 13.25 (0.04) 13.21 (1,108) - - (1,108) Senior Business Manager 2.00 (1.00) 1.00 (69,235) - - (69,235) Deputy Finance Director 1.00 0.50 1.50 69,500 - - 69,500 Box Office Attendant** 2.10 (1.35) 0.75 (26,507) - - (26,507) Senior Box Office Attendant*** 1.60 (1.20) 0.40 (27,245) - - (27,245) Facility Operations Attendant** 5.00 - 5.00 12,565 - - 12,565 Facility Operations Attendant, Sr** 4.00 (1.00) 3.00 (15,521) - - (15,521) Stage Manager 1.10 (1.00) 0.10 (31,363) - - (31,363) Theater Technician*** 1.30 1.70 3.00 54,353 - - 54,353 Theater Technician Coordinator 1.20 (1.20) - (40,387) - - (40,387) Intern II 1.00 (1.00) - (23,784) - - (23,784) Staff Assistant 1.00 1.00 2.00 51,223 - - 51,223 Capital Projects Construction Superintendent 1.00 1.00 2.00 92,757 - - 92,757 Maintenance Worker 40.00 1.00 41.00 36,544 - - 36,544 Lead Maintenance Worker 15.00 1.00 16.00 57,362 - - 57,362 Recycling and Waste Management Coordinator* - 1.00 1.00 - 71,034 - 71,034 Total 173.69 1.91 175.60 295,628$ 71,034$ 102,447$ 469,108$ *Used Salary Costing from Sr. Administrative Analyst
**Increase per FTE amount by 11%
***Increase per FTE amount by 10%
ATTACHMENT 2
92 ATTACHMENT 1
Council’s Fiscal Year 2024 - 25 Program Modification

City Manager’s Fiscal Year 2024 - 25 Program Modification

Council
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General
Fund
Expenditure
Increase/
(Decrease)
Sanitation
Fund
Expenditure
Increase/
(Decrease)
Measure
SST Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Councilperson & Mayor 7.00 - 7.00 141,908 - - 141,908$ Total 7.00 - 7.00 141,908$ -$ -$ 141,908$ City Manager's Office
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General
Fund
Expenditure
Increase/
(Decrease)
Sanitation
Fund
Expenditure
Increase/
(Decrease)
Measure
SST Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Staff Assistant 9.50 2.00 11.50 - - 102,447 102,447 Total 9.50 2.00 11.50 -$ -$ 102,447$ 102,447$ 93 ATTACHMENT 1
Community Services Department’s Fiscal Year 2024 - 25 Program Modifications

Finance Department’s Fiscal Year 2024 - 25 Program Modification

Community Services
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation
Fund
Expenditure
Increase/
(Decrease)
Measure SST
Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Program Coordinator 6.00 (2.00) 4.00 (85,819) - - (85,819) Recreation Supervisor 5.00 2.00 7.00 100,121 - - 100,121 Instructor II 0.43 1.00 1.43 34,188 - - 34,188 Assistant City Librarian 2.00 (1.00) 1.00 (94,093) - - (94,093) Senior Librarian 5.00 1.00 6.00 61,893 - - 61,893 Program Leader 30.21 (3.27) 26.94 (62,392) - - (62,392) Program Specialist 18.00 2.77 20.77 60,668 - - 60,668 Senior Program Specialist 13.25 (0.04) 13.21 (1,108) - - (1,108) Total 79.89 0.46 80.35 13,458$ -$ -$ 13,457$ Finance
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation
Fund
Expenditure
Increase/
(Decrease)
Measure SST
Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Senior Business Manager 2.00 (1.00) 1.00 (69,235) - - (69,235) Deputy Finance Director 1.00 0.50 1.50 69,500 - - 69,500 Total 3.00 (0.50) 2.50 265$ -$ -$ 265$ 94 ATTACHMENT 1

General Services Department’s Fiscal Year 2024 - 25 Program Modifications

Public Works Department’s

Fiscal Year 2024

-
25 Program Modifications

General Services
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation Fund
Expenditure
Increase/
(Decrease)
Measure SST
Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Box Office Attendant** 2.10 (1.35) 0.75 (26,507) - - (26,507) Senior Box Office Attendant*** 1.60 (1.20) 0.40 (27,245) - - (27,245) Facility Operations Attendant** 5.00 - 5.00 12,565 - - 12,565 Facility Operations Attendant, Sr** 4.00 (1.00) 3.00 (15,521) - - (15,521) Stage Manager 1.10 (1.00) 0.10 (31,363) - - (31,363) Theater Technician*** 1.30 1.70 3.00 54,353 - - 54,353 Theater Technician Coordinator 1.20 (1.20) - (40,387) - - (40,387) Intern II 1.00 (1.00) - (23,784) - - (23,784) Staff Assistant 1.00 1.00 2.00 51,223 - - 51,223 Capital Projects Construction Superintendent 1.00 1.00 2.00 92,757 - - 92,757 Total 19.30 (3.05) 16.25 46,092$ -$ -$ 46,091$ **Increas e per FTE amount by 11%
***Increas e per FTE amount by 10%
Public Works
FY24-25
Amended
Budget
FY24-25
Proposed
Increase/
(Decrease)
FY24-25
Q1 Proposed
Budget
General Fund
Expenditure
Increase/
(Decrease)
Sanitation
Fund
Expenditure
Increase/
(Decrease)
Measure SST
Fund
Expenditure
Increase/
(Decrease)
Total
Fiscal
Impact
Maintenance Worker 40.00 1.00 41.00 36,544 - - 36,544 Lead Maintenance Worker 15.00 1.00 16.00 57,362 - - 57,362 Recycling and Waste Management Coordinator* - 1.00 1.00 - 71,034 - 71,034 Total 55.00 3.00 58.00 93,906$ 71,034$ -$ 164,940$ *Us ed Salary Cos ting from Sr. Adminis trative Analys t 95