TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY STARKEY, FINANCE DIRECTOR
DATE: APRIL 22, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
QUARTERLY FINANCIAL UPDATE - MARCH 31, 2025
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SUMMARY
At the end of each quarter, staff provides the City Council with updates to apprise them and the community of the status of the current year’s budget. This update will focus on financial results through March 31, 2025, the end of the third quarter of the 2024-25 fiscal year.
The next quarterly report will be provided for the quarter ending June 30, 2025.
RECOMMENDATION
Recommended Action
Staff recommends the City Council receive and file the Quarterly Financial Update for the quarter ending March 31, 2025.
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ALTERNATIVE TO RECOMMENDATION
In addition to the staff recommendation, there is the following alternative:
• Request additional information.
FINANCIAL REVIEW
Financial data through March 31, 2025, indicates that for the full year, revenues are likely to meet or exceed budgetary estimates and that expenditures are generally expected to remain within the constraints of the budget. Any significant variances from the budget are discussed further in this report.
The staff cost to prepare this report and administer this project is estimated at $1,650 and is included in the operating budget of the Financial Services Department.
ANALYSIS
In June 2024, the City Council adopted an operating and capital improvement budget for 2024-25 that included $69,143,176 in revenues and transfers-in from other funds. Subsequent amendments have been made to the budget to account for grant revenues that have yet to be received, resulting in an adjusted total revenue budget of $70,507,642.
This total revenue budget is spread across a number of fund categories, representing more than thirty distinct funds used to account for a wide variety of programs and activities. Total City revenues by fund category are shown in the table below:
Through March 31, 2025, $44,67,643 in total revenues and transfers-in had been received, representing 63.37% of the full-year budget. This figure is in line with typical revenue receipts for the first nine months of the fiscal year.
Total expenditures and transfers-out to other funds reflected in the original adopted budget amounted to $75,940,164. Subsequent amendments to the budget for capital projects, equipment acquisitions, grants, and the carryover of funds from the prior year for projects that were not completed have resulted in an adjusted total budget of $100,668,056.
Expenditures through March 31, 2025 totaled $52,077,590, or 51.73% of the full year adjusted budget. Given the current 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 March 31, 2025:
General Fund
General Fund revenues and transfers-in for 2024-25 were originally estimated at $35,870,061. The budgeted revenues have been adjusted to account for additional grant funding to be received for 2024-25 and stand at $36,448,599 through the third quarter of the fiscal year.
At March 31, 2025, $23,929,420 of budgeted revenues had been received, representing 65.65% of the full-year budget. This is typical of General Fund revenues as most of the major sources of revenue are received in the latter part of the fiscal year. At the same point in 2023-24, $22,345,887 in General Fund revenues had been received, which amounted to approximately 70.33% of the full-year revenues.
The figure below shows 2024-25 General Fund revenues and transfers-in as of March 31, 2025:
The major General Fund revenues, and their budgetary highlights at March 31, 2025, are as follows:
1. Property Tax - To date, $7,124,832 in property tax revenues have been received from Los Angeles County, representing approximately 54.70% of the full-year budget. At the same time last year, approximately 55.86% of full-year actual revenues were received by March 31.
2. Sales Tax - Sales tax revenues received through the third quarter of the fiscal year amounted to $5,616,988. In the prior year, $4,924,051 in sales tax revenue had been received by the end of the third quarter of the fiscal year. The percentage increase over the prior year amounts to approximately 14.07%. This increase is due to increases in automobile sales and the allocation of additional sales tax to the City via the County pool for online sales compared to the prior year.
3. Transient Occupancy Tax (TOT) - TOT revenues through March 31, 2025, were $1,034,772 compared with revenues of $957,787 through the third quarter of 2024-25. TOT revenues in the third quarter reflect a slight increase as these revenues continue to recover from the pandemic.
4. Business License Tax - With revenues of $728,578, business license tax revenues at the end of the third quarter are 1.5% higher than at the same point in the prior fiscal year. Year-to-date revenues are in line with the amount budgeted for this fiscal year.
5. Utility User Tax (UUT) - At March 31, 2025, UUT revenues totaled $4,107,937. Through the third quarter of 2023-24, these revenues totaled $3,341,591. Revenues reflect an increase of approximately 22.9% over the same period in the prior year, primarily due to higher UUT related to electricity and water services.
6. Other Taxes - Other taxes include franchise fees and property transfer taxes. Through March 31, 2025, these revenues amounted to $314,936, representing 34.38% of the full-year budget. At the same point in the prior fiscal year, $291,808 in revenues had been received. Much of this revenue comes from franchise taxes paid by utility companies, which are typically received in the latter part of the fiscal year.
7. Licenses and Permits - Revenues from public works, grading, and building permits totaled $1,319,708 at March 31, 2025. Current year revenues reflect an decrease of 27.85% when compared to revenues of $1,828,991 through the third quarter of the prior year. These revenues fluctuate based on the level of growth in residential and college development. Year-to-date revenues are in line with the amount budgeted for this fiscal year.
8. Fines and Forfeitures - Revenues from parking, traffic, and code enforcement citations amounted to $557,662 at March 31, 2025. At the same point in the prior year, revenues totaled $442,050. Current year revenues reflect an increase over the prior year of $115,612 or 26.15%.
9. Charges for Services - Revenues through the end of the third quarter totaled $1,094,241 compared with prior year revenues for the same period of $1,174,716. These revenues represent a decrease of 6.85% over the prior year. Year-to-date revenues are in line with the amount budgeted for this fiscal year.
General Fund expenditures and transfers-out for 2024-25 were originally budgeted at $35,865,510. The adjusted budget of $38,598,748 represents amendments to the budget for the carryover of funds from the prior year for projects that were not completed, as well as amendments made through council-approved appropriations during the fiscal year.
The figure below shows 2024-25 General Fund expenditures and transfers-out as of March 31, 2025:
At March 31, 2025, the total General Fund expenditures and transfers-out amounted to $27,182,696, or 70.42% of the adjusted budget for the year. Given that one would reasonably expect 75% of the budget to have been expended at this point in the fiscal year, results to date show that the City is generally on track to remain within budgetary constraints.
Of the City’s operating departments, General Services’ expenditures (99.92%) exceeded the 75% threshold for the first three quarters of the fiscal year. This was primarily due to the full annual payment in July of approximately $3.9 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.
All other departments expended between 57.72% and 82.81% of their General Fund budgets through the third quarter of 2024-25. 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 twenty-two Special Revenue Funds that provide funding for a variety of activities, including supplemental public safety services, the operation of the City’s impound lot, street repairs and upgrades, transportation programs, landscaping and streetlight maintenance, the senior meal program, housing rehabilitation, and economic development.
Revenues for the City’s Special Revenue Funds totaled $8,118,886 compared with a full-year budget of $13,494,862. Receipts through March 31, 2025, represent 60.16% of the budget for the full year.
Expenditures for the Special Revenue Funds total $12,451,553 against a full year adjusted budget of $31,538,958. These figures represent 39.48% of the 2024-25 adjusted budget, expended through March 31, 2025. The budget for the Special Revenue Funds was increased from the original adopted budget of $14,187,253 to $31,538,958 due to carryovers for contributions related to unspent capital project budgets from prior fiscal year and allocations of ARPA funds approved by the City Council. Other major Special Revenue Funds that contributed to the increase in adjusted budget include State Gas Tax (resurfacing of non-residential streets), Measure R (sidewalk mitigation and damaged pavement repairs), Drainage Fund, and Park Dedication Fund (improvements to city parks). Year-to-date expenditures for Special Revenue Funds are expected to remain within budgeted amounts for the full year.
Capital Projects Funds
Capital Projects Funds are restricted in use to the funding of capital projects. The City has four active capital projects funds.
Revenues to date in the City’s Capital Projects Funds totaled $716,059 at March 31, 2025. These revenues represent 38.37% of the full-year budget of $1,866,418. Much of the budgeted revenue relates to grants for capital projects for which reimbursement will be received later in the fiscal year.
Expenditures in the Capital Projects Funds totaled $429,583 at March 31, 2025, out of a total adjusted budget of $4,221,213, representing approximately 10.18%. Given year-to-date expenditures, it is anticipated that the Capital Projects Funds expenditures will end the year within the constraints of the current budget.
The adjusted expenditure budget for Capital Project Funds amounts to $4,221,213 and is higher than the original budget of $1,376,785 mostly due to the carryover of the unspent budget and allocations approved by the City Council in the amount of $2,844,428 for energy conservation improvements, the improvements to the facilities at the Police Department and Blaisdell Kitchen, park playground improvements, and the City Hall’s roof replacement. It is anticipated that the Capital Projects Funds expenditures will end the year within the constraints of the current budget.
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.
At March 31, 2025, the City’s Enterprise Funds generated revenues of $8,768,335 versus a budget for 2024-25 of $12,700,647. These revenues represent 69.04% of the full-year budgeted revenues for the year. All 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 $7,496,992 as of March 31, 2025. This represents 40.28% of the full year adjusted budget of $18,611,565. The adjusted budget includes carryovers for vehicle replacements and the cemetery expansion. 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.
At March 31, 2025, Internal Service Fund revenues totaled $2,854,371 out of a total revenue budget of $4,079,169. This amounted to 69.97% of the full-year budget.
Expenditures through the end of the third quarter of the fiscal year totaled $3,380,571, representing 62.84% of the full-year budget of $5,379,624. 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.
Revenues in Successor Agency/Debt Service Funds amounted to $290,572 at March 31, 2025, representing 15.15% of the full-year budget of $1,917,948. Expenditures totaled $1,136,196 of a budgeted $1,917,949, representing 59.24% 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 that it applies to the following: Council Priorities, General Plan, and the 2024-26 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