TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY STARKEY, FINANCE DIRECTOR
DATE: APRIL 28, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
QUARTERLY FINANCIAL UPDATE - MARCH 31, 2026
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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, 2026, the end of the third quarter of the 2025-26 fiscal year.
The next quarterly report will be provided for the quarter ending June 30, 2026.
RECOMMENDATION
Recommended Action
Staff recommends the City Council receive and file the Quarterly Financial Update for the quarter ending March 31, 2026.
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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, 2026, 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 $1,580 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 2025-26 that included $67,392,990 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 $70,057,056.
The revenue budget amendments included $2,315,270 in transfers to the Capital Projects Fund from General Fund reserves to fund costs related to the Police Department women’s locker room project, $79,296 in transfers to the Landscape & Lighting District (LLD) Fund from General Fund balance to fund costs related to janitorial services for park restrooms, $100,000 appropriated to the Community Development Block Grant (CDBG) Fund for the housing rehabilitation program, $40,000 for grant revenues to the Transportation Fund for bus stop enhancements, and $129,500 for grant revenues awarded to the General Fund. These revenues are offset by costs related to these projects and services.
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, 2026, $44,986,515 in total revenues and transfers-in had been received, representing 64.21% 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 $67,859,996. Subsequent amendments to the budget for energy efficiency projects, other 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 $102,371,609.
The expenditure budget amendments by fund type are explained in the following paragraphs.
General Fund
Adjustments to the General Fund budget included $556,469 for the carryover of funds encumbered in the prior year for a variety of projects and programs. Additional appropriations of $1,560,418 were approved by the City Council through the third quarter. These appropriations included $550,000 for professional building division services, $200,000 for special legal services, $194,000 for staffing changes in the Community Development Department, $243,328 for furniture replacements, and the remaining $373,090 for increased costs associated with traffic signal maintenance, animal control services, copier leases, HVAC repairs and maintenance, and janitorial contracted services. Another $1,500,000 was appropriated from 2024-25 surplus funds to reduce pension liabilities with an additional discretionary payment to CalPERS and a contribution to the City’s Section 115 Pension Trust. The remaining $2,530,631 is related to transfers from the General Fund to the Landscape and Lighting District (LLD) and Capital Projects Funds for appropriations listed below.
Special Revenue Funds
A total of $2,443,834 from the American Rescue Plan Act (ARPA) Fund was carried over from the prior year for obligated projects and programs that are allowed through the end of 2026. Capital improvement project budgets of $10,109,330 were carried over from various funds for projects that are planned but have not yet been completed. The adjusted budget also includes $648,283 for funds encumbered in the prior year for items such as $78,580 for a signage plan and parking lot study for the Claremont Hills Wilderness Park and our urban parks, $452,024 for professional engineering services, $41,670 for park custodial services and sports park lighting maintenance, and $76,009 for other professional or consulting services. Additional appropriations in the amount of $1,123,558 were approved by the City Council through the third quarter. These appropriations included $109,450 for design services for Claremont Boulevard improvements, $331,086 for Arrow Highway transit improvements, $42,697 for improvements to various bus stops, $541,029 for contract services related to the Police Department women’s locker room project, $79,296 for increased custodial costs for park restrooms, and $20,000 for conceptual design services for Larkin Park.
Capital Projects Funds
Budget carryovers from the prior year included $3,029,743 for various ongoing capital projects which included $845,785 for Arrow Highway undergrounding of utilities, $165,014 for various park and facility projects and $2,018,944 for energy conservation improvements. Additional appropriations of $2,631,210 were approved by the City Council through the third quarter which included $2,237,964 for the Police Department women’s locker room, $203,280 for the Garner House roof replacement, $56,595 to refurbish the Padua Hill Theater pergola, and $133,371 for the ABC’s For Me Preschool Playground projects.
Enterprise Funds
Budget carryovers from the prior year included $5,687,807 for various ongoing capital projects which included $896,910 for bus stop improvements, $807,080 for sewer system assessments and repairs, $2,257,369 for fleet vehicles ordered but not delivered, and $1,726,448 for cemetery expansion and related projects. Additional appropriations of $150,120 were approved by the City Council through the second quarter for contract services related to landfill airspace with San Bernardino County, custodial services for the cemetery, and general refuse service contracts. In the third quarter, appropriations to the Transportation Fund included $40,000 for bus stop enhancements funded through a grant and $718,172 in contracted services for Dial-A-Ride administered by the Pomona Valley Transportation Authority.
Internal Service Funds
Budget carryovers from the prior year included $1,439,958 for fleet vehicle replacements and $341,869 in encumbrances appropriated for the ERP financial system implementation.
Expenditures through March 31, 2026, totaled $53,050,135, or 51.82% 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, 2026:
General Fund
General Fund revenues and transfers-in for 2025-26 were originally estimated at $36,610,105. The budgeted revenues have been adjusted to account for additional grant funding to be received for 2025-26 and stand at $36,739,605 through the third quarter of the fiscal year.
At March 31, 2026, $24,161,680 of budgeted revenues had been received, representing 65.76% of the full-year budget. 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. At the same point in 2024-25, $23,929,420 in General Fund revenues had been received, which amounted to approximately 65.65% of 2024-25 full-year revenues.
The figure below shows 2025-26 General Fund revenues and transfers-in as of March 31, 2026:
The major General Fund revenues, and their budgetary highlights at March 31, 2026, are as follows:
1. Property Tax - To date, $7,059,600 in property tax revenues have been received from Los Angeles County, representing approximately 52.15% of the full-year budget. At the same time last year, approximately 54.70% 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 $5,624,998. In the prior year, $5,616,988 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 0.14%.
3. Transient Occupancy Tax (TOT) - TOT revenues through March 31, 2026, were $989,479 compared with revenues of $1,034,772 through the third quarter of 2024-25. TOT revenues in the third quarter reflect a slight decrease from the previous year.
4. Business License Tax - With revenues of $848,119, business license tax revenues at the end of the third quarter are 16.41% 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, 2026, UUT revenues totaled $3,718,935. Through the third quarter of 2024-25, these revenues totaled $4,107,937. Revenues reflect a decrease of approximately 9% over the same period in the prior year. Year-to-date revenues are still in line with the amount budgeted for this fiscal year.
6. Other Taxes - Other taxes include franchise fees and property transfer taxes. Through March 31, 2026, these revenues amounted to $313,813, representing 33.74% of the full-year budget. At the same point in the prior fiscal year, $314,936 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 $2,154,196 at March 31, 2026. Current year revenues reflect an increase of 63.23% over revenues of $1,319,708 through the third quarter of the prior year. Year-to-date revenues are 46.49% over the full-year budget.
8. Fines and Forfeitures - Revenues from parking, traffic, and code enforcement citations amounted to $423,030 at March 31, 2026. At the same point in the prior year, revenues totaled $557,662. Current year revenues are still in line with the current year’s budget.
9. Charges for Services - Revenues through the end of the third quarter totaled $1,477,958 compared with prior year revenues for the same period of $1,094,241. These revenues represent an increase of 35.07% over the prior year, representing an increase in revenues related to building and grading plan check activity in 2025-26.
General Fund expenditures and transfers-out for 2025-26 were originally budgeted at $36,607,209. The adjusted budget of $42,754,727 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. This increase of $6,147,518 is comprised of $556,469 for carryover of funds encumbered in the prior year, $1,560,418 for appropriations approved by the City Council through the third quarter, $1,500,000 that was appropriated from 2024-25 surplus funds to reduce pension liabilities with CalPERS and a contribution to the City’s Section 115 Pension Trust, and for transfers from the General Fund of $2,530,631 to the LLD Fund and Capital Projects Fund. These items were also described in more detail earlier in this report.
The figure below shows 2025-26 General Fund expenditures and transfers-out as of March 31, 2026:
At March 31, 2026, the total General Fund expenditures and transfers-out amounted to $29,889,208, or 69.91% 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 (104.14%) 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 $4.35 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 Community Services were higher than 75% due to increased utility costs and contract costs with custodial services for City facilities and concrete cutting and repairs on City streets.
All other departments expended between 62.10% and 75.69% of their General Fund budgets through the third quarter of 2025-26. 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 $7,835,477 compared with a full-year budget of $12,648,965. Receipts through March 31, 2026, represent 61.95% of the budget for the full year.
Expenditures for the Special Revenue Funds total $8,567,354 against a full-year adjusted budget of $26,153,064. These figures represent 32.76% of the 2025-26 adjusted budget, expended through March 31, 2026. All Special Revenue Funds’ expenditures through March 31 indicate that they will not exceed budgetary constraints by the end of the 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 $720,465 at March 31, 2026. These revenues represent 24.10% of the full-year budget of $2,989,270. Much of the budgeted revenue relates to grants and transfers for capital projects which will be received later in the fiscal year.
Expenditures in the Capital Projects Funds totaled $1,846,576 at March 31, 2026, out of a total adjusted budget of $6,216,953, representing approximately 29.70%. 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.
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, 2026, the City’s Enterprise Funds generated revenues of $8,989,408 versus a budget for 2025-26 of $11,884,774. These revenues represent 75,64% 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 $8,569,276 as of March 31, 2026. This represents 43.81% of the full-year adjusted budget of $19,560,392. 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, 2026, Internal Service Fund revenues totaled $2,782,000 out of a total revenue budget of $3,866,498. This amounted to 71.95% of the full-year budget.
Expenditures through the end of the third quarter of the fiscal year totaled $3,055,782, representing 53.07% of the full-year budget of $5,758,316. 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 $497,485 at March 31, 2026, representing 25.80% of the full-year budget of $1,927,944. Expenditures totaled $1,121,939 of a budgeted $1,928,156, representing 58.19% of the full-year budget. It is anticipated that the Debt Service Fund expenditures will end the year within the constraints of the current 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