City Council Staff Report Page 1 of 5 March 10, 2026
Staff Report
Agenda Item No. 5.2
DATE: March 10, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Receive the Second Quarter Financial Report for Fiscal Year 2025- 2026
EXECUTIVE SUMMARY
Staff recommends that the City Council receive the Second Quarter Financial Report for Fiscal Year 2025–2026.
STRATEGIC PLAN ALIGNMENT
This item aligns with Goal A: Financial Stability and Sustainability.
BACKGROUND
Quarterly Financial Reports provide early visibility into financial trends that may not otherwise be apparent until year-end. These reports help cities:
• Track budget performance in real time, including both revenues and expenditures • Increase transparency by providing a public accounting of how funds are being used
• Inform strategic decisions regarding staffing, capital projects, and service levels based on updated financial conditions
This report is intended for internal analysis and does not include all funds and accounts in the City’s operations. The information presented has not been audited. Staff reviewed seven months of transactions (July through January) rather than the typical six-month period (July through December), as including January provides a more complete financial picture and improves year-end projections.
Attachment 1, Revenue Details (Annual), demonstrates the irregular timing of revenue receipts, which can make projecting annual revenues challenging. Including January data improves the accuracy of the analysis.
DISCUSSION
Agenda Item No. 5.2
City Council Staff Report Page 2 of 5 March 10, 2026
General Fund Revenues
The chart below presents General Fund actual revenues for FY 2023 through FY 2025, along with an analysis of FY 2026. For FY 2026, the chart includes revenues received through January 31, 2026, the percentage of the budget collected, and staff’s projection for the fiscal year-end. Details of all General Fund revenues are also presented in the attachments.
As shown in the chart above, staff projects General Fund revenues for FY 2026 to be generally consistent with the adopted budget. Revenues from business license taxes and utility users’ taxes may exceed projections, while revenues from sales taxes, licenses and permits, and miscellaneous sources may fall short.
The charts below present stable or positive General Fund revenue categories. Through January 31, 2026 (58.3% of the fiscal year), the City has received 49.1% of projected property taxes, 64.7% of projected business license taxes, and 48.5% of projected UUT revenues.
Property taxes and utility users’ taxes are collected by outside entities and remitted to the City, resulting in a delay in receiving these funds. Business license taxes are collected at City Hall. Receiving 64.7% of the adopted business license tax revenues by 58.3% of the fiscal year indicates that this revenue category is currently exceeding the adopted budget projection.
110-GENERAL FUND Unaudited At 1/31/26 % of Year
Revenue by Category FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4A-Prop Tax-Sec & Unsec 15,914,320 17,080,802 17,671,499 18,745,700 8,691,109 46.4% 18,745,700 4B-Prop Tax-Supplementa 663,130 592,656 399,118 650,400 79,461 12.2% 650,400 4C-Prop Tax-VLF in Lieu 8,472,448 9,035,866 9,476,816 9,846,400 4,954,006 50.3% 9,846,400 4D-Prop Taxes-Other 3,310,915 3,442,021 3,785,157 3,597,700 2,407,023 66.9% 3,597,700 4E-Sales and Use Taxes 19,630,716 18,382,379 18,420,605 18,137,500 7,597,663 41.9% 18,137,500 4F-TransntOccupancy Tax 1,832,773 1,545,226 1,588,681 1,637,900 664,671 40.6% 1,637,900 4G-Franchises 5,825,882 6,389,901 6,448,735 6,839,564 3,034,275 44.4% 6,839,564 4H-Business Lic Taxes 1,897,354 2,359,898 3,283,776 4,800,000 3,104,910 64.7% 4,800,000 4L-Utility Users Taxes 6,295,863 6,596,476 7,033,443 7,246,800 3,512,657 48.5% 7,246,800 4M-Taxes-Other 1,011,629 691,176 938,929 993,000 303,436 30.6% 993,000 4O-Licenses & Permits 2,977,876 3,749,643 3,518,243 4,737,800 1,827,414 38.6% 4,737,800 4P-Fines & Forteitures 263,941 347,567 284,201 415,700 213,290 51.3% 415,700 4Q-Fees and Charges 2,638,319 2,571,553 3,555,390 3,158,250 1,455,817 46.1% 3,158,250 4R-Federal Revenues 14,007 179,134 30,255 - 6,041 0.0% - 4S-State Revenues 765,944 845,363 817,538 754,200 446,452 59.2% 754,200 4T-County & LocalGovRev 5,326 16,091 - - - 0.0% -
4U-Investment Income 412,729 4,428,959 2,612,158 2,656,800 135,779 5.1% 2,656,800 4V-MiscellaneousRevenue 351,811 236,550 666,052 1,053,100 142,572 13.5% 1,053,100 4X-OthrFinancingSources 511,078 690,861 - - - 0.0% -
4Y-Procd frSaleCapAsset 2,137 9,781 - 2,000 - 0.0% 2,000 4Z-Transfer In 7,049,913 818,000 943,000 18,000 - 0.0% 18,000 Total GF Revenues 79,848,113 80,009,902 81,473,596 85,290,814 38,576,576 45.2% 85,290,814 % Change from Prior Year 3.8% 0.2% 1.8% 4.7%
Agenda Item No. 5.2
City Council Staff Report Page 3 of 5 March 10, 2026
The voter approval of the Utility Users’ Tax in 2020 and the Business License Tax restructuring in 2024 account for approximately 14% of General Fund revenues in FY 2026. These locally controlled voter-approved revenues help ensure continuing budget stability. Property taxes constitute 39% of the General Fund, the 1% Bradley-Burns Sales Tax constitutes 14%, and the local one-half cent transactions and use tax (most recently renewed by voter-approved Measure AA in 2022) constitutes 7% of General Fund revenues. The chart below shows the percentage of UUT revenue by industry.
The charts below show the annual revenues for sales tax, licenses and permits, and fees and charges. The year-over-year decrease in transactions and use taxes is concerning, as the City relies on revenue growth to keep pace with rising expenses. Union City is not unique in facing downward pressure on sales taxes, as economic uncertainty may be slowing consumer spending.
General Fund Unaudited At 1/31/26 % of Year
Property Taxes FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4A-Prop Tax-Sec & Unsec 15,914,320 17,080,802 17,671,499 18,745,700 8,691,109 46.4% 18,745,700 4B-Prop Tax-Supplementa 663,130 592,656 399,118 650,400 79,461 12.2% 650,400 4C-Prop Tax-VLF in Lieu 8,472,448 9,035,866 9,476,816 9,846,400 4,954,006 50.3% 9,846,400 4D-Prop Taxes-Other 3,310,915 3,442,021 3,785,157 3,597,700 2,407,023 66.9% 3,597,700 Total Property Tax Revenues 28,360,813 30,151,345 31,332,589 32,840,200 16,131,599 49.1% 32,840,200 % Change from Prior Year 8.6% 6.3% 3.9% 4.8%
General Fund Unaudited At 1/31/26 % of Year
Business Lic Taxes FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4H-Business Lic Taxes 1,897,354 2,359,898 3,283,776 4,800,000 3,104,910 64.7% 4,800,000 % Change from Prior Year 6.1% 24.4% 39.1% 46.2%
General Fund Unaudited At 1/31/26 % of Year
Utility Users Taxes (UUT) FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4L-Utility Users Taxes 6,295,863 6,596,476 7,033,443 7,246,800 3,512,657 48.5% 7,246,800 % Change from Prior Year 19.1% 4.8% 6.6% 3.0%
Agenda Item No. 5.2
City Council Staff Report Page 4 of 5 March 10, 2026
Licenses, permits, fees, and charges are primarily revenue sources for services offered by the Economic & Community Development, Public Works, and Community & Recreation Services departments. Examples include plan check and inspection fees, as well as gym memberships. Licenses and permits revenue projection for FY 2026 includes anticipated building permit fees from the Station East development project. This project may not obtain the anticipated building permits by the end of FY 2026 as initially expected, and the associated permit revenues may shift into FY 2027.
General Fund Expenditures
July 2025 through January 2026 represents 58.3% of the fiscal year, and reported yearto-date expenditures are almost the same at 58.8%. Staff reviewed the detailed expenditures and projects General Fund expenditures will total approximately $85,089,400 by the end of FY 2026.
General Fund Unaudited At 1/31/26 % of Year
Sales and Use Taxes FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4E-Sales and Use Taxes 19,630,716 18,382,379 18,420,605 18,137,500 7,597,663 41.9% 18,137,500 % Change from Prior Year 2.5% -6.4% 0.2% -1.5%
General Fund Unaudited At 1/31/26 % of Year
Property Taxes FY23 Actual FY24 Actual FY25 Actual FY26 Adopted FY26 YTD 58.3% FY26 YE Proj 4O-Licenses & Permits 2,977,876 3,749,643 3,518,243 4,737,800 1,827,414 38.6% 4,737,800 4Q-Fees and Charges 2,638,319 2,571,553 3,555,390 3,158,250 1,455,817 46.1% 3,158,250 Total Property Tax Revenues 5,616,195 6,321,196 7,073,633 7,896,050 3,283,231 41.6% 7,896,050 % Change from Prior Year 2.0% 12.6% 11.9% 11.6%
110-GENERAL FUND At 1/31/26 % of Year
Expenditure by Category FY26 Adopted FY26 YTD 58.3% FY26 YE Proj Note 5A-Salaries and Wages 29,809,316 18,458,874 61.9% 31,643,500 YE Proj based on YTD 5B-Employee Benefits 18,604,020 15,548,174 83.6% 17,725,200 YE Proj based on YTD 5C-Supplies 774,819 192,702 24.9% 371,900 YE Proj based on YTD 5D-Services 32,073,587 14,466,521 45.1% 30,617,000
5I-CapOutlay 1,712,579 244,912 14.3% 1,712,500 YE Proj = Adopted Budget 5G-Debt-LeaseObl 763,620 375,859 49.2% 763,500 YE Proj = Adopted Budget 5L-Transfer Out 2,255,815 1,315,895 58.3% 2,255,800 YE Proj = Adopted Budget Total Expenditures by Category 85,993,757 50,602,937 58.8% 85,089,400 110-GENERAL FUND At 1/31/26 % of Year
Expenditure by Department FY26 Adopted FY26 YTD 58.3% FY26 YE Proj Note 00-Non Dept-Citywide (515,000) 1,041,250 -202.2% 1,785,000 Transfers Out/Ant Sal Sav 11-City Council 885,618 426,726 48.2% 886,200
12-City Manager's Office 2,260,778 1,132,255 50.1% 2,012,000 13-City Attorney 659,205 236,151 35.8% 659,200
14-City Clerk 382,707 213,491 55.8% 338,000
15-Finance Department 3,443,924 2,191,361 63.6% 3,502,700 16-Human Resources Department 1,189,959 745,009 62.6% 1,233,300 17-Information Tech Services Dept 5,327,362 3,150,059 59.1% 5,191,000 21-Police Department 38,047,920 23,771,222 62.5% 36,456,800 22-Fire Department 14,679,142 7,270,807 49.5% 14,679,100 30-Public Works Department 5,818,805 3,437,376 59.1% 5,878,500 40-Economic & Community Dev Dept 5,623,185 2,966,856 52.8% 4,830,500 50-Community & Rec Services Dept 5,616,217 3,207,925 57.1% 5,061,700 60-Debt Service Programs 470,815 274,645 58.3% 470,800 POB Debt Service 80-Miscellaneous Programs 524,161 81,265 15.5% 525,700 Equipment Leases 90-Capital Projects (PW) 1,578,959 456,539 28.9% 1,578,900 Total Expenditures by Department 85,993,757 50,602,937 58.8% 85,089,400 Agenda Item No. 5.2
City Council Staff Report Page 5 of 5 March 10, 2026
FISCAL IMPACT
None.
RECOMMENDATION
Staff recommends that the City Council receive the Second Quarter Financial Report for Fiscal Year 2025–2026 and provide any questions or feedback.
Prepared by: Chu Thai, Finance Director
Submitted by: Chu Thai, Finance Director
Attachments
1. Revenue Details (FY26, by Month)
2. Revenue Details (Annual)
3. Expenditure by Object Code