TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY STARKEY, FINANCE DIRECTOR
DATE: NOVEMBER 10, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
QUARTERLY FINANCIAL UPDATE - SEPTEMBER 30, 2026
Body
SUMMARY
Staff provides the City Council with quarterly updates to apprise them and the community of the status of the current fiscal year’s budget.
This update focuses on financial results through September 30, 2026, the end of the first quarter of the 2026-27 fiscal year.
The next quarterly report will be provided for the quarter ending December 31, 2026.
RECOMMENDATION
Recommended Action
Staff recommends the City Council receive and file the Quarterly Financial Update dated September 30, 2026.
Body
ALTERNATIVE TO RECOMMENDATION
In addition to the staff recommendation, there is the following alternative:
• Request additional information.
FINANCIAL REVIEW
While first quarter financial information may not be a reliable indicator of annual financial performance, preliminary financial data through September 30, 2026 suggests that for the full-year, revenues are likely to meet or exceed budgetary estimates, and that expenditures are expected to remain within the constraints of the budget. Any significant variances from the budget will be reviewed at mid-year for budget amendments where applicable.
The staff cost to prepare this report and administer this project is estimated at $1,500 and is included in the operating budget of the Financial Services Department.
ANALYSIS
In June 2026, the City Council adopted an operating and capital improvement budget for 2026-27 that included $72,596,059 in revenues and transfers in from other funds. The amended revenue budget of $72,882,114 includes transfers between funds for a project to repair the basketball courts at various parks.
The total revenue budget is spread across several fund categories, representing more than thirty distinct funds that are used to account for a wide variety of programs and activities. Total City revenues by fund category are shown in the figure below.
Through September 30, 2026, $9,449,961 in total revenues and transfers in had been received, representing 12.97% of the full-year budget. This is typical for this point in the fiscal year as much of the City’s revenue is received towards the end of the fiscal year.
Total expenditures and transfers out to other funds reflected in the original adopted budget amounted to $78,222,996. The amended budget of $79,891,061 includes appropriations for the Successor Housing funded rental assistance program, various capital improvement projects, and repairs for the CNG fueling station at the City Yard.
Expenditures through September 30, 2026 totaled $19,914,198 or 24.93% of the full-year budget. Given the status of expenditures, it is expected that the City will remain within the constraints of the current budget.
The figure below shows total expenditures and transfers out to other funds as of September 30, 2026.
General Fund
General Fund revenues and transfers in for 2026-27 were originally budgeted at $41,276,472.
As of September 30, 2026, $4,507,876 of budgeted revenues had been received, representing 10.92% of adjusted budget for the year. This is typical for General Fund revenues, as most of the major sources of revenue are received in the latter part of the fiscal year.
The figure below shows 2026-27 General Fund revenues and transfers in as of September 30, 2026.
The major General Fund revenues, and their budgetary highlights as of September 30, 2026, are as follows:
1. Property Tax - Property taxes received during the first quarter of the fiscal year relate to the prior year and were accrued to June 30 of 2026; therefore, no property tax revenues are recognized for the current fiscal year in the first quarter. The bulk of property tax revenues are received during the second and fourth quarters of the fiscal year.
2. Utility User Tax (UUT) - As of September 30, 2026, UUT revenues totaled $1,148,906. Through the first quarter of the prior fiscal year, these revenues totaled $1,039,308. Revenues reflect an increase of approximately 10.5% over the same period in the prior year.
3. Sales Tax - Sales tax revenues received during the first quarter of the fiscal year amounted to $893,700. During the same quarter in the prior fiscal year, $785,494 in sales tax revenues were received. Year-to-date revenues reflect an increase of approximately 13.8% over the prior year.
4. Charges for Services - Revenues through the end of the first quarter totaled $544,699, compared with prior year revenues for the same period of $307,850. These revenues represent an increase $236,849 over the prior year. This increase is attributed to higher plan check and development review fees collected in the current year compared with the same period in the prior fiscal year.
5. Transient Occupancy Tax (TOT) - TOT revenues through September 30, 2026 were $344,554 compared with $156,255 through the first quarter of 2025-26. This represents an increase of $188,299 over the prior year for the same period. This increase can be attributed to timely remittances of TOT from our lodging facilities, the addition of the Residence Inn by Marriott, and the new Short Term Rental TOT tax being collected.
6. Other Taxes - Other taxes include franchise fees and property transfer taxes. Through September 30, 2026, these revenues amounted to $38,900. Much of this revenue comes from franchise taxes paid by utility companies, which is typically received in the latter part of the fiscal year.
7. Fines and Forfeitures - Revenues from parking, traffic, and code enforcement citations amounted to $35,363 as of September 30, 2026. Current year revenues reflect a decrease of 49.9% over the prior year, due primarily to the reduction in code enforcement citations on short-term rental properties now compliant with our ordinance.
8. Business License Tax - With first quarter revenues of $278,412, business license tax revenues for the current year are 23.2% higher than the $225,914 received in the first quarter of the prior fiscal year.
9. Licenses and Permits - Revenues from public works, grading, and building permits totaled $686,004 as of September 30, 2026, reflecting a decrease of 4.2% in revenues over the first quarter of the prior year. Although revenues were lower, they still represent 33.61% of full-year budgeted revenues. Accordingly, staff is confident that the full-year budget of $2,040,800 for license and permits will be met or exceeded.
10. Use of Money & Property - Revenues from the rental or lease of city-owned facilities and interest received from investments totaled $362,962 as of September 30, 2026, reflecting an increase of 29.9% over the first quarter of the prior year. The increase can be attributed to the investment of available funds and the growth in interest earnings.
General Fund expenditures and transfers out for 2026-27 were originally budgeted at $41,004,916. The figure below shows 2026-27 General Fund expenditures and transfers out as of September 30, 2026.
As of September 30, 2026, total General Fund expenditures and transfers out amounted to $13,353,918 or 32.29% of the adjusted budget for the year. One would typically expect 25% of the budget to have been expended by this point in the fiscal year.
Of the City’s operating departments, General Services, with 110.10% of its budget expended, significantly exceeded the 25% threshold for the first quarter. This was primarily due to the payment in July of approximately $5.4 million towards the City’s general liability, workers’ compensation, and property insurance deposits for the year. These costs are distributed throughout the year to the City’s operating departments and it is expected that by the end of the fiscal year, General Services’ expenditures will be in line with the budget. Expenditures in Administrative Services were also higher than 25% due to the expenditure of rental assistance payments using proceeds from the sale of City-owned property that is administered by that department. Expenditures in Community Services were also higher than 25% due to increased spending in utility costs and contractual services, some of which are related to carryforward maintenance items from the prior year.
All other departments expended between 21.20% and 25.98% of their General Fund budgets through the first quarter of 2026-27. Given these year-to-date figures, General Fund expenditures appear likely to remain within budgeted amounts for the full year.
Special Revenue Funds
Special Revenue Funds include those funds whose revenues are committed to specific purposes or projects. The City has nineteen active Special Revenue Funds that provide funding for a variety of activities, including supplemental public safety services, street repairs and upgrades, transportation programs, landscaping and streetlight maintenance, senior meal program, housing rehabilitation, the operation of the City’s impound lot, and economic development.
Revenues for the City’s Special Revenue Funds totaled $1,279,789 compared with a full-year budget of $13,042,813. Receipts through September 30, 2026 represent 9.81% of the budget for the full year.
Expenditures for the Special Revenue Funds total $2,135,758 against a full-year budget of $13,029,497. These figures represent 16.39% of the 2026-27 budget expended through September 30, 2026. All Special Revenue Funds’ expenditures through September 30 indicate that they will not exceed budgetary constraints by the end of the year.
Capital Projects Funds
Capital Projects Funds, as their name suggests, are restricted in use to the funding of capital projects. The City has four active capital projects funds.
Capital Projects Funds received $100,230 in revenues as of September 30, 2026, against a full-year budget of $1,360,005. Expenditures in the first quarter of this fiscal year amounted to $559,864, compared with a full-year budget of $1,290,805.
Enterprise Funds
The City operates four Enterprise Funds to provide transportation, sewer, sanitation, and cemetery services. The activities of these funds are intended to be supported solely by revenues from fees charged for services provided.
As of September 30, 2026, the City’s Enterprise Funds had generated revenues of $2,571,684 versus estimated revenues for 2026-27 of $11,892,780. These revenues represent 21.62% of full-year budgeted revenues. All of the City’s Enterprise Funds are on track to meet budgetary revenue estimates by the end of the fiscal year.
Expenditures in the Enterprise Funds stand at $2,635,377 as of September 30, 2026. This figure represents 14.37% of the full-year budget of $18,344,644. Given year-to-date expenditures, it is anticipated that the Enterprise Fund expenditures will end the year within the constraints of the current budget.
Internal Service Funds
The City’s Internal Service Funds provide motor fleet and technology services to support each of the City’s operating departments. Revenues for Internal Service Funds come from fees charged internally to each department for services provided.
As of September 30, 2026, Internal Service Fund revenues totaled $990,382 out of a total revenue budget of $4,040,532. This amounted to 24.51% of the full-year budget.
Expenditures through the end of the first quarter of the fiscal year totaled $1,203,399, representing 26.21% of the full-year budget of $4,591,206. Internal Service Fund expenditures are expected to remain within budgeted amounts for the full year.
Successor Agency/Debt Service Funds
In addition to the funds already discussed, the City also operates a Debt Service Fund and a Successor Agency Fund. The Debt Service Fund, as its name suggests, is used to account for the expenditure of funds to make payments on outstanding debt obligations of the City. The Successor Agency Fund was established in the wake of the dissolution of redevelopment agencies in California to begin the wind down of the affairs of the former Claremont Redevelopment Agency.
No revenues in the Successor Agency/Debt Service Funds are recognized in the first quarter of the fiscal year. The bulk of the revenues in the Successor Agency/Debt Service Funds come from property tax remittances received in January and June of each fiscal year, and transfers in processed at the end of the fiscal year.
Expenditures totaled $25,882 of a budgeted $1,283,408 representing 2.02% of the full-year budget.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds the item is consistent with Council Priorities, the General Plan, and the 2026-28 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Jeremy Starkey
Finance Director