CC 03-04-2025 Item No. 8. Fiscal Year 2024-25 Mid-Year Financial Report_Staff PresentationMarch 4, 2025
Fiscal Year 2024-25
Mid-Year Financial Report
10 Year Forecast Update
FY 2024-25 Mid-Year Update
Proposed Budget Adjustments
Proposed Budget Look Ahead
Budget Roadmap
Agenda
Budget Deficit Timeline
Highlights
CDTFA AUDIT
LETTER
City receives letter
notifying it of an audit
of one of its sales tax
payers.
2021
Dec
CDTFA
UPDATE
CDTFA advises City of
their decision verbally
with dollar impacts to
follow in 4-6 months.
2023
March
BUDGET
REDUCTIONS
City Council approved
staff recommended
reductions total almost
$23.8M across both
fiscal years.
2023 &
2024Jun
CDTFA
RESOLUTION
City Attorney
successfully negotiates
a settlement that
allows the City to keep
previously collected
sales tax.
2024
Oct
MID-YEAR
FINANCIAL
REPORT
Staff provides an
update to the 10-year
forecast.
2025
March
How did we get here?
FY24 and FY25 Budget Reductions ($23.8M)
Materials
&
Contracts
$5.5
Staffing
$2.4
Transfers1
$5.8
Capital
Outlays,
Special
Project,
etc.
$1.4
Community Benefits
$0.1 Fiscal
Accountability
$2.8
Infrastructure
$2.9
Operations and
Maintenance
$2.9
Budget Reductions ($23.8M1)
FY24 ($15.1M) FY25 ($8.7M)
1Transfers and Capital outlay, special projects etc. were not previously included as they did not result in a service level reduction, they have been added to show the
full budget reductions made, with exception of uses of fund balance. Fireworks funding (Community Benefits) was restored at the 2/4/2025 Council meeting
6
Category FY24 Summary
Materials & Contracts $5.5M Reductions across departments, most notably reductions to
street pavement maintenance and training and development
Staffing $2.4M 13 FTE positions
Transfers1 $5.8M Reduced Transfers out to other funds
Capital Outlays, Special Project,
Contingencies and Cost Allocations1
$1.4M Reduced all categories listed
FY24 Reductions $15.1M
FY25
Community Benefits $0.1M 4th of July Fireworks2
Fiscal Accountability $2.8M Align Law Enforcement costs with actuals, ERP, and legal costs
Infrastructure $2.9M No CIP reserve transfer and tree maintenance moved inhouse
Operations and Maintenance $2.9M Elimination of two Project Managers and reduction of part-
time staff. Incudes additional materials and contract
reductions.
Total FY25 Reductions $8.7M
FY24 and FY25 Budget Reductions ($23.8M)
1Transfers and Capital outlay, special projects etc. were not previously included as they did not result in a service level reduction, they have been added to show the
full budget reductions made, with exception of uses of fund balance. 2Fireworks funding was restored at the 2/4/2025 Council meeting
-$0.2M
$0.7M $1.1M
$0.3M
-$0.4M
-$2.8M -$3.1M
-$5.2M
-$6.2M
-$7.2M
General Fund Annual Operating Surplus/(Deficit)
7
Recession scenario
Sunset of Utility User Tax
in November 2030,
resulting in a loss of
revenue of over $4M
annually
Resumption of $2M
transfers
to Capital Reserve
Changes since FY25 Budget
Changes to the General Fund Forecast
Final Budget to Mid-Year FY25
FY25 Final
Budget 10 Year
Forecast
FY25 Mid-Year 10 Year Forecast Changes
FY25 Mid-Year
Budget
Outcome
$7.20 Million
Deficit
Expenditure
decreases
of ($1.77)
million
$0.52 million
Surplus
Revenue
increases of
$5.95 million
-=
Comparing the FY Final Budget Forecast with FY25 Mid-Year Forecast
– Change by Categories ($ in millions)
Expenditure Categories Changes in FY26 of the Forecast Changes in FY34 of the Forecast
Revenue Categories
Sales Tax (0.04)$ (0.05)$
Property Tax 1.11$ 1.40$
Transient Occupancy (0.46)$ (0.54)$
Franchise Fees 0.82$ 0.92$
Use of Money and Property 0.17$ 2.32$
Miscellaneous 1.85$ 1.84$
Total Revenue Changes 3.49$ 5.95$
Employee compensation & benefits (2.39)$ (1.77)$
Transfer out 2.00$ -$
Total Expenditure Changes (0.39)$ (1.77)$
Net Impact 3.88$ 7.72$
-$8.6M
$4.5M $5.2M
$4.0M $3.7M $3.5M $3.5M
$1.3M $1.0M $0.5M
General Fund Annual Operating Surplus/(Deficit)
Recession scenario Sunset of Utility User Tax
in November 2030,
resulting in a loss of
revenue of over $4M
annually
1x ADP for CalPERS
FY 2024-25 Mid-Year Update
General Fund
FY 2024-25
Adopted Budget
FY 2024-25
Amended Budget
as of Sept. 30, 2024
FY 2024-25
Amended Budget
as of Dec. 31, 2024
Revenues $89.8 $122.1 $122.1
Expenditures $90.0 $119.1 $129.8
Estimated use of
Fund Balance ($0.2)$3.0 ($7.7)
FY 2024-25 Amended Budget – General Fund
($ in Millions)
Fund Balance in General Fund ($ in millions)
Includes unrealized revenues from The Rise approximately, $10.7 million
Classification
Actual
2022-23
Actual
2023-24
Adopted Budget
2024-25
1st Quarter
Projection
2024-25
Mid-Year Year
End Projection
2024-25
Non Spendable 0.9$ 3.4$ 0.4$ 4.7$ 3.4$
Restricted 20.7 23.3 20.7 20.7 20.7
Committed 34.1 108.6 99.0 31.1 98.6
Assigned 9.7 4.7 7.0 7.0 4.7
Unassigned 73.1 26.0 23.6 106.2 25.3
TOTAL FUND BALANCE 138.6$ 166.1$ 150.8$ 169.8$ 152.8$
Proposed Mid-Year
Budget Adjustments
Proposed Mid-Year Budget Adjustments
Fund Department Revenue Expenditure
Change in Fund
Balance Proposal
GENERAL FUND
100 General Fund Innovation & Technology - (31,564) 31,564 I&T - Admin - PT Admin Assistant
100 General Fund Administrative Services - 25,000 (25,000)Exec recruitment - Assistant City
Manager & City Attorney
100 General Fund Parks & Recreation 13,619 11,188 2,431 Hidden Treasures Proceeds
100 General Fund Non-Departmental - 4,101,564 (4,101,564)Transfer out to meet minimum
capital reserve levels per policy,
resume annual $2 million transfer to
capital reserve and IT salary savings
to Internal Service Funds
100 General Fund Innovation & Technology - (3,481) 3,481 Partial Defund of Redesign of City
Website
TOTAL GENERAL FUND 13,619 4,102,707 (4,092,569)
Proposed Mid-Year Budget Adjustments
Fund Department Revenue Expenditure
Change in Fund
Balance Proposal
CAPITAL FUNDS
429 Capital Reserve Non-Departmental 4,070,000 - 4,070,000 Transfer in to meet minimum
reserve levels per policy & resume
annual $2 million transfer
TOTAL CAPITAL FUND 4,070,000 - 4,070,000
INTERNAL SERVICE
FUNDS
610 Innovation & Technology Innovation & Technology 31,564 31,564 - I&T - Admin - PT Admin Assistant
fund by GF Transfer
610 Innovation & Technology Innovation & Technology - (6,079) 6,079 Partial Defund of City Facilities
Video Capture
630 Vehicle/Equip
Replacement
Public Works - 33,700 (33,700)Mower Replacement
TOTAL INTERNAL
SERVICE FUND 31,564 59,185 (27,621)
TOTAL ALL FUNDS $ 4,115,183 $ 4,161,892 $ (50,190)
•No changes recommended
Staffing
•As of December 31, 2024, no funds have been
spent.
•Staff will continue to report on the use of this fund.
City Manager Discretionary Fund
Next Steps and Recommendations
Proposed Budget Preview
•Vacancy Reporting (AB2561)
•Budget Format Changes
•Capital Improvement Program (CIP)
•Council Work Program (CWP)
•Funding Request - Tax Measures
•Other Items
•Festival and Fee Waivers included in
Proposed Budget
•Community Funding requests in Proposed
Budget
Roadmap to FY 2025-26 Budget Adoption and Balancing
Last Updated 2.26.25
Co
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Pr
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Budget Update
1st Quarter Report (sch
Nov, postponed to Dec
Budget Update
Study Session/Fireworks
FY 2025-26 Proposed
Budget Hearing & CIP
FY 2025-26 Adopted
Budget
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October 2024 November 2024
Ja
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2
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2
5
April 2025 June 2025
February 2025March 2025
Budget Update
3rd Quarter Report
May 2025
Community Budget
Meeting + Outreach
CDTFA Resolution
December 2024
Sales Tax Repayment
Reserve Discussion
City Work Program
Approach and Goal
Setting Memo
City Work Program
Approach and next
steps
City Work Program
Estimates on staffing &
budget costs
City Work Program
Review goals & select
top priorities
Budget Update
Budget Format &
Performance Measures
Budget Update
Capital Improvement
Program (CIP)
Budget Update
Mid-Year & Update
Financial Forecast
1.Accept the City Manager’s Mid-Year Financial
Report for Fiscal Year 2024-25
2.Adopt Resolution No. 25-XXX approving Budget
Modification No. 2425-383, increasing
appropriations by $4,161,892 and revenues by
$4,115,183.
Recommendations
Questions?