Informational Memo Management Services - Memo No. 24-040 Date: November 22, 2023 To: Mayor and Council Thru: Joshua H. Wright, City Manager Dawn Lang, Deputy City Manager/CFO From: Matt Dunbar, Budget & Policy Assistant Director Subject: Fiscal Year (FY) 2023-24 First Quarter Financial Report DLL MD Attached is the FY 2023-24 First Quarter Financial Report, summarizing budget to actual performance of General Fund operating revenue and expenditures and additional summaries and analysis of Enterprise, System Development, Impact Fees, Highway User Revenue, and Grant funds. The analysis included in this report provides a snapshot at the end of the first quarter of FY 2023-24 by reflecting budget to actual compared to historical trends and the prior year. These historical comparisons are based on actual results compared to budget over the last four years (FY 2019-20 to FY 2022-23), and an explanation has been provided in those areas where there are significant deviations from the historical trend or the prior year’s results. When reviewing revenue trends over the first quarter, all General Fund revenue performance indicators are showing as positive except Franchise Fees which is a warning and License and Permits and Other Revenues which are negative. This is not uncommon due to timing of revenues between first and second quarter or fluctuations in historical trends. Since the General Fund first quarter reflected overall revenue growth of 9.8% over the prior year collections through September, with 24% of budgeted revenues received compared to the 23.9% historical average, expectations are to end the year in a positive position. Overall, first quarter General Fund expenditures are at 42.4% of budget expended compared to 38.5% in the prior year. This includes an increased one-time Public Safety Personnel Retirement System (PSPRS) unfunded liability payment of $73M, which was $23M more than the prior year payment. Based on known spending expectations, anticipated increases, and additional inflation impacts, expenditures will continue to be monitored throughout the year to remain within budget. Memo No. 24-040 November 22, 2023 Page 2 Should you have additional questions regarding this information, please contact me at x2256 or Dawn Lang at x2255. Attachment: FY 2023-24 First Quarter Financial Report c: Tadd Wille, Assistant City Manager Andy Bass, Deputy City Manager Quarterly Financial Report 1st Qtr FY 2023-24 Performance at a Glance General Fund Revenues Year to Date Compared Historical % Reference POSITIVE Performance Indicator* Page 2 Report Overview and Economic Indicators Revenue Analysis Overall General Fund Revenues Quarterly Analysis Overall General Fund Revenue by Category Analysis Sales Tax - Overall & by Taxable Activity Franchise Fees Primary Property Tax Revenue Detail by State Shared Revenues Category Licenses & Permits Charges for Services Other Revenues General Fund Expenditures Positive Warning Positive Positive Negative Positive Negative Page 3 Page 3 Page 4 Page 5 Page 5 Page 6 Page 6 Page 7 Page 7 Year to Date Compared Budget % Reference Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Positive Page 8 Page 8 Page 9 Page 9 Page 10 Page 10 Page 11 Page 11 Page 12 Page 12 Page 13 Page 13 Page 14 Page 14 Page 15 Page 15 Page 16 Page 16 Year to Date Compared Budget % Reference Positive Positive Positive Positive Positive Positive Informational Informational Page 17 Page 17 Page 18 Page 18 Page 19 Page 19 Page 20 Page 21 Positive General Fund Expenditure + Encumbrance Analysis by Function and by Expenditure Category Mayor & Council City Clerk Law City Magistrate City Manager & Organizational Support Communications & Public Affairs Cultural Development Expenditure Community Services Detail by Information Technology Department Management Services Neighborhood Resources Non-Departmental Development Services Public Works & Utilities Fire Police Enterprise / Other Funds Water Fund Analysis Wastewater Fund Analysis Reclaimed Water Fund Analysis Solid Waste Fund Analysis Airport Fund Analysis Highway User Revenue Fund Analysis System Development Fee Analysis Grants PERFORMANCE INDICATORS (At year-end, revenues performance indicators default to positive when 100% or more of budget is collected and expenditures performance indicators default to positive when total spending is less than adjusted budget) * Positive Warning Negative = Rev: Variance is above or <2% below historical trend. Exp: Variance <= 2% compared to historical trend. = Rev: Variance of 2 - 5% below historical trends. Exp: Variance of 2 - 5% above historical trends. = Rev: Variance of > 5% below historical trends. Exp: Variance > 5% above historical trend. 1 11/22/2023 THE QUARTERLY FINANCIAL REPORT Report Objectives * Provide historical comparisons to identify trends or deviations from trends. * Develop performance benchmarks to measure positive and negative results. * Create an executive level report to highlight potential issues or concerns. What is Included in the Report The report emphasizes General Fund, with analysis of its revenue and each category of revenue, and the expenditures by department. Also included is a summary and analysis of Enterprise Funds, System Development Fee and Impact Fee Funds, the Highway User Tax Fund, and Grants. How to Read the Report * Page 1 serves as a table of contents and quick view of performance issues. * The benchmarks are Positive (navy colored), Warning (grey colored), and Negative (maroon colored), providing an initial indicator to determine if the category needs to be monitored closely in the upcoming period or if it is deviating from trends. * Performance indicators for General Fund revenues are comparing the percent of year-to-date actuals collected to total budget AND the budget prorated based on the historical trend (last four years) of average actual year-to-date collections to budget. * Performance indicators for General Fund expenditures are based on whether they are within budget for the percent of year-to-date actuals expended plus encumbrances compared to the total budgeted expenditures. * Performance indicators for Enterprise Funds focus on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. ECONOMIC INDICATORS Gross Domestic Product (GDP) Interest Rates Real gross domestic product - the output of goods and services produced by This table reflects the four most recent changes to the Federal Funds Rate labor and property located in the US. Reflects spending for households, by the Federal Reserve Board. business, government, and trade. The change to the GDP is an indicator of the general direction of the Lowering the Federal Funds Rate is a way for the Federal Reserve Board to economy. Slow or negative growth will likely mean lower revenues for the make it less expensive for banks to borrow money for loans and City. investments and (in theory) pumping additional dollars into the economy. Fourth Quarter 2022 (third estimate) First Quarter 2023 Second Quarter 2023 (advance estimate) Third Quarter 2023 (advance estimate) Source: U.S. Department of Commerce 2.6% 2.2% 2.1% 4.9% 4.50%-4.75% 4.75%-5.00% 5.00%-5.25% 5.25%-5.50% February 2, 2023 March 23, 2023 May 4, 2023 July 27, 2023 Source: Federal Reserve Bank Unemployment National Jun-23 3.8% Jul-23 3.8% Aug-23 3.9% Sep-23 3.6% High unemployment rates typically result in a reduced demand for goods and services. State of Arizona Phoenix Metro Area* 4.4% 4.7% 4.6% 4.3% 3.9% 4.2% 4.0% 3.8% *Source: Arizona Office of Economic Opportunity Monthly Employment Report (not seasonally adjusted) City Investment Portfolio Building Permits The City splits its investment portfolio between two investment firms with a Single-family building permits are an indicator of the general economy. different mix of holdings at each firm to reduce risk. Current Earning Higher numbers of permits indicate an active construction market and Benchmarks are as follows: resultant home sales. Fewer building permits generally equates to less new Allspring benchmark is ICE BofA 0-3 year U.S. Treasury Index construction, and permit fees and construction sales tax revenues. PFM's benchmark is ICE BofAML 1-5 year U.S. Treasury Index Chandler's quarterly average for single family building permits is down from Rate of Return is net of fees and includes interest earnings as well as both 115 permits per quarter in FY 2021-22 to 14.5 permits per quarter in FY 2022- realized and unrealized gains/(losses). Rate of Return is typically negative in 23. FY 2020-21 averaged 205 per quarter and FY 2019-20 averaged 170 a rising rate environment. Fiscal Year 2023-24 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC Fiscal Year 2022-23 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC 1st Quarter 0.94% 1.02% 0.23% 0.35% 1st Quarter -0.79% -0.79% -2.28% -1.97% Fiscal Year 0.94% 1.02% 0.23% 0.35% Fiscal Year -0.79% -0.79% -2.28% -1.97% permits per quarter. Quarter Jul - Aug - Sep 2021 Oct - Nov - Dec 2021 Jan - Feb - Mar 2022 Apr - May - Jun 2022 Jul - Aug - Sep 2022 Oct - Nov - Dec 2022 Jan - Feb - Mar 2023 Apr - May - Jun 2023 Jul - Aug - Sep 2023 State of Arizona 10,883 10,001 13,383 10,929 7,735 5,339 6,525 8,799 9,858 Chandler 161 121 99 80 11 12 11 24 110 Source: Investment Advisors 2 11/22/2023 General Fund Revenue Analysis: Overall General Fund Revenues FY 2023-24 *% of FY 24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 $ 83,454,062 95,042,145 93,935,577 109,339,195 $ 89,865,450 Total $ 374,057,282 $ 89,865,450 24.0% 23.9% 24.0% FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 23.9% Dollars in Millions FY 24 120 100 80 60 40 20 * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive General Fund revenue collections for FY 2023-24 are $6.4M (7.7%) above the adopted budget and $8.0M (9.8%) higher than actual collections through the first quarter of FY 2022-23. Overall, General Fund revenue, led by continuing strong Sales Tax and Licenses collections, is performing well due to higher local consumer spending including related inflation, and a steady stream of development activity (although slowing in residential housing) in Chandler. The continued $20B expansion of Intel is the largest development during this time period, continues to cause revenues to come in over budget with in various categories. It is anticipated that once the development is completed, revenues will stabalize in various categories, classifying much of this additional revenue as onetime. The performance indicator is positive as the percentage of budget received through the first quarter is higher than the historical budget received through the same period. The following charts provide more detail regarding the various sources of General Fund revenues and provide more detail on the performance indicators. Overall General Fund Revenues by Category FY 2023-24 FY 24 Revenue Categories Sales Tax Franchise Fees Primary Property Tax State Shared Sales Tax Licenses & Permits Charges for Services Other Revenues Indirect Cost Allocation Total $ FY 24 % of Budget Adopted Actual Rec'd to Budget Revenue Date 196,858,400 3,471,000 8,731,611 127,100,000 6,864,900 13,932,139 9,121,050 7,978,182 $ 51,878,813 (26,103) 53,780 30,724,399 569,574 3,064,866 1,605,574 1,994,546 26.4% -0.8% 0.6% 24.2% 8.3% 22.0% 17.6% 25.0% $ 374,057,282 $ 89,865,450 24.0% General Fund Collection History by Category % Indirect Costs 100% 80% Other Revenues 29% 28% 29% 34% 60% 40% 55% 57% 55% 58% 20% Charges for Services Licenses & Permits Voter Authorized Local Revenue Primary Property Taxes Franchise Fees Local Sales Taxes 0% FY21 $281M Positive FY22 $315M FY23 - FY24 - Q1 $373M $89.8M This chart summarizes General Fund revenue collections by revenue category for FY 2023-24. The graph helps us visualize what percentage each revenue category is to the total General Fund. The percentage spread of revenue sources are relatively consistent over the years with local sales taxes and State Shared Sales Tax Revenues being the largest General Fund revenue sources. The next several pages provide an analysis of each revenue category except Indirect Cost Allocation (payments by the Water, Wastewater, Reclaimed Water, Solid Waste, and Airport Enterprise Funds to the General Fund for City services provided for their operations). The performance indicator is positive as actual collections continue to come in higher than budget. 3 11/22/2023 General Fund Revenue Analysis (continued): Sales Tax Revenue FY 2023-24 *% of % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 $ Total $ 196,858,400 47,367,452 $ 51,878,813 48,352,243 50,286,376 50,852,329 $ 51,878,813 26.4% 29.4% 26.4% 29.4% Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 60 Dollars in Millions FY 24 FY 24 FY 23 50 40 30 20 10 * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Figures above include General Fund local sales tax collections and the related revenues of license fees, audit assessments, penalties, and interest. Sales tax collections for 2023-24 are $4.5M (9.5%) above adopted budget and $2.6M (5.3%) higher than 2022-23 actual collections. The performance indicator is a warning as the percentage of budget received through the first quarter is between two to five percentage points below the historical budget received through the same period, however it has been changed to positive due to collections coming in higher than budgeted for the quarter. Sales Tax Collection History Retail/Mfd. Bldg/Jet Fuel $ Contracting Utilities Real Property Rentals Restaurants & Bars Telecommunications % of Adopted Actual Actual to from Budget Revenue Budget Prior Yr. Personal Prop. Rentals Hotels/Motels Publishing/Printing/Adv. Amusements Use Tax Total Sales Tax 93,000,000 $ 23,013,477 22,000,000 7,162,295 18,100,000 5,795,966 23,100,000 5,999,984 17,000,000 4,244,209 1,550,000 513,774 5,000,000 1,416,371 5,700,000 1,064,426 200,000 47,284 1,300,000 380,956 8,000,000 337,395 $ 194,950,000 $ 49,976,138 24.7% 32.6% 32.0% 26.0% 25.0% 33.1% 28.3% 18.7% 23.6% 29.3% 4.2% 25.6% 4 Years Actual Sales Tax by Category (in millions) % Chg FY 24 FY 24 FY 19-20 64 14 14 18 12 5 3.8% 75 14 15 19 13 8 9.9% FY 20-21 6.6% FY 21-22 85 17 16 21 16 7 12.4% 28 17 23 18 7 92 FY 22-23 3.3% 0 50 100 150 200 31.5% 25.2% Retail Contracting -6.3% Utilities Real Property Rentals -17.2% Restaurants & Bars Telecommunications 11.0% Personal Prop. Rentals Hotels/Motels -81.2% Publishing/Printing Amusements 3.2% Use Tax The above figures reflect General Fund sales tax collections by category and exclude the related revenues of license fees, audit assessments, penalties, and interest. Sales tax collections for FY 2023-24 were $2.9M (6.3%) above the adopted budget and $1.5M (3.2%) higher than FY 2022-23 actual collections. It should be noted that most of the categories are positive, reflecting higher consumer spending, increased contracting/development collections, and added tourism spending. Use tax is a highly fluctuating revenue category and significant swings in collection percentage are not abnormal. 4 11/22/2023 General Fund Revenue Analysis (continued): Franchise Fee Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd $ Total $ 42,244 $ 725,873 1,517,478 1,185,405 (26,103) 3,471,000 (26,103) $ 1.3% -0.8% -0.8% 1.3% FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 *% of FY 24 FY 24 1,800 1,500 1,200 900 600 300 - * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Warning Franchise fees are paid by Arizona Public Service (2% of commercial and residential sales), Southwest Gas Corporation (2% of commercial and residential sales), Cox Communications (5% of gross revenue), Air Products (2% of gross sales), and Western Broadband (5% of gross sales). Franchise fee collections through the first quarter of FY 2023-24 are $68,347 (161.8%) less than the adopted budget and $103,730 (133.6%) less than FY 2022-23 actual collections through the first quarter. The negative revenue in the first quarter of FY 2023-24 reflects revenues accrued to the prior year when they were earned. The performance indicator is warning as the percentage of budget received through the first quarter is between two to five percentage points below the historical budget received through the same period. Primary Property Tax Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd $ Total $ 51,582 $ 4,476,012 837,974 3,366,043 53,780 8,731,611 53,780 $ 0.6% 0.6% 0.6% 0.6% Dollars in Millions 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 *% of FY 24 FY 24 FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 5 4 3 2 1 - * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive This presentation only includes primary property taxes (supporting General Fund operations) and does not include secondary property taxes (supporting debt service on capital projects and recorded in the General Obligation Debt Service Fund). Property tax collections are due starting October 1st and March 1st each year. For FY 2023-24, Chandler is collecting a primary tax rate of $0.2226 per $100 of assessed valuation and a secondary tax rate of $0.87 per $100 of assessed valuation for a total rate of $1.0926, representing a $0.01 cent decrease from the rates adopted in the prior year. This reduction helps offset some of the City's assessed valuation increase of 5.3% (majority was new property), which resulted in a small net tax increase for the median value homeowner. Primary property tax collections through the first quarter FY 2023-24 are $2,198 (4.3%) more than the adopted budget and $14,391 (21.1%) less than FY 2022-23 actual collections through the first quarter. The majority of collections come in the second and fourth quarters since the first half of the property tax bills are due in October and the second half are due in March. The performance indicator is positive as the percentage of budget received through the first quarter is less then 2% below the historical budget received through the same period. 5 11/22/2023 General Fund Revenue Analysis (continued): FY 24 FY 24 % of *% of Adopted Actual Budget Budget Revenue Rec'd Hist. Rec'd Budget 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 $ Total $ 127,100,000 28,690,718 31,023,378 31,678,191 35,707,713 $ 30,724,399 24.2% 25.4% $ 30,724,399 24.2% 25.4% Dollars in Millions State Shared Sales Tax Revenues FY 2023-24 * Pro-rated based upon a four year historical trend of actual year-to-date collections FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 45 40 35 30 25 20 15 10 5 1st Qtr Positive 2nd Qtr 3rd Qtr 4th Qtr -- State Shared Sales Tax Revenue: The State sales tax rate is currently 5.6%, of which a portion of the various categories of sales tax are distributed to cities and towns based on population as State Shared Sales Tax Revenue. Collections through the first quarter of FY 2023-24 are $1.1M (15.3%) above adopted budget and $316,663 (3.8%) higher than FY 2022-23 actual collections through the first quarter. -- Smart and Safe (State Shared Revenue): Prop 207 was approved by voters in 2020 and created a 16% excise tax on the sale of recreational marijuana effective 2021. Fire and Police departments receive 31.4% of the revenue based on the number of enrolled employees in PSPRS. The tax is distributed December and June of each year. In FY 2022-23, at fical year end $1.5M was recorded. --Public Safety State Allocation (State Shared Revenue): State Senate Bill 1720 provides for revenues to local public safety jurisdictions of cities and towns, for costs associated with Human Smuggling, Drug trafficking, and other illegal activity. Proceeds are to be distributed to the city quarterly basis. $562,500 was received in the first quarter. -- Vehicle License Tax: Cities and towns receive 25% of the net revenues collected for vehicle licensing within their county from the State, as well as surcharges from vehicle rentals. The respective city share's are determined by the proportion of city population to total incorporated population of the county. Collections through the first quarter of FY 2023-24 were $75,194 (2.7%) more than adopted budget and $81,698 (2.9%) higher than FY 2022-23 actual collections through the first quarter. -- Urban Revenue Sharing: Eighteen percent (18%) of the 2021 State income tax collection is distributed to cities and towns as urban revenue sharing based upon estimated population. A known one-time revenue increase will be reflected this FY as the flat tax will go into full effect over the next two years. Collections through the first quarter of FY 2023-24 were $242,900 (1.3%) above adopted budget and $5.3M (40.3%) higher than FY 2022-23 actual collections through the first quarter. The overall State Shared revenue performance indicator is positive because the percentage of budget received through the first quarter is less than two percentage points below the historical budget received through the first quarter. 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 $ Total $ FY 24 FY 24 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 962,056 1,606,465 2,140,344 2,156,035 $ 6,864,900 $ 569,574 569,574 8.3% 8.3% 15.8% 15.8% * Pro-rated based upon a four year historical trend of actual year-to-date collections Dollars in Thousands Licenses & Permits Revenue FY 2023-24 FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 3,000 2,500 2,000 1,500 1,000 500 1st Qtr Negative 2nd Qtr 3rd Qtr 4th Qtr This category includes revenue for various licenses: transaction privilege (sales) tax, alcoholic beverages, transient merchants, peddlers and solicitors, secondhand and junk dealers, amusements, business registrations, and professional/occupational licenses, as well as cable license application fees. In addition, revenue from building, alarm, and fiber optic permits are included. License and permit collections through the first quarter of FY 2023-24 are $392,481 (40.8%) less than adopted budget and $1.1M (67.6%) less than FY 2022-23 actual collections through the first quarter. Lower collections for the first quarter of FY 2023-24 reflects revenues accrued to the prior year when they were earned. The performance indicator is negative as the percentage of budget received through the first quarter is more than five percentage points below the historical budget received through the same period. 6 11/22/2023 General Fund Revenue Analysis (continued): Charges for Services Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd $ Total $ 2,420,572 $ 3,073,445 3,295,373 5,142,749 13,932,139 $ 3,064,866 3,064,866 19.4% 22.0% 22.0% FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget Dollars in Millions 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 *% of FY 24 FY 24 19.4% 6 5 4 3 2 1 - * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Charges for Services includes revenue from various engineering, recreation, and library fees, police and fire miscellaneous service reimbursements, and public school reimbursements. Charges for services collections through the first quarter of FY 2023-24 were $644,294 (26.6%) above adopted budget and $379,762 (14.1%) higher than FY 2022-23 actual collections through the first quarter. The performance indicator is positive as the percentage of budget received through the first quarter is higher than the percentage of historical budget received through the same period. Other Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 $ 1,924,890 $ 1,107,046 2,093,402 3,995,712 1,605,574 17.6% 24.1% Total $ 9,121,050 1,605,574 17.6% 24.1% $ * Pro-rated based upon a four year historical trend of actual year-to-date collections Dollars in Millions *% of FY 24 FY 24 FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget 9 8 7 6 5 4 3 2 1 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Negative Other revenue captures interest income, fines and forfeitures, court fees, sale of land and fixed assets, and other miscellaneous items. Revenue streams in this category are not constant. Other revenue collections through the first quarter of FY 2023-24 are $319,316 (16.6%) less than adopted budget and $9,043 (0.6%) less than FY 2022-23 actual collections through the first quarter. The performance indicator is negative as the percentage of budget received through the first quarter is more than five percentage points below the historical budget received through the same period, although the expectation is still to be with-in budget by fiscal year end. 7 11/22/2023 General Fund Expenditure Analysis: General Fund Expenditures + Encumbrances for FY 2023-24 by Function Dollars in Millions FY 24 FY 24 % of % of Adjusted Q1 YTD Budget Budget 3 Exp+Enc Development Services 12 1 Community Services Exp'd Prior Yr. $ Neighborhood Resources Non-Dept. Pers. & O&M Subtotal Non-Dept. Reserves Non-Dept. Contingencies 76,031,632 35,913,763 11,432,340 148,071,464 12,282,432 10,191,069 92,447,397 $ 386,370,097 $ 3,430,000 50,687,927 24,520,309 12,221,223 2,577,892 43,452,002 6,006,794 1,075,551 73,946,094 $ 163,799,865 $ - 32.3% 34.0% 22.5% 29.3% 48.9% 10.6% 80.0% 42.4% 0.0% 0.0% 27.7% 35.8% 22.5% 28.3% 38.4% 15.4% 76.1% 38.5% 0.0% 0.0% Total $ 440,488,024 $ 163,799,865 37.2% 34.2% * Dept. Operating General Government Community Services Development Services Public Safety Public Works & Utilities Budget $ * Excluding Interfund Transfers 25 2 12 1 18 74 51 Neighborhood Resources General Government Non-Dept. Pers. & O&M Public Safety 38 43 5 6 FY 23 Q1 YTD Exp+Enc FY 24 Q1 YTD Exp+Enc Public Works & Utilities Total General Fund operating expenditures and encumbrances are reflected by City function, along with budgeted non-departmental reserves (encumbrance and unencumbered carryforward, utility, fuel, and downtown redevelopment) and contingencies (15% of revenues and Council Contingency). Since General Obligation debt and General Fund capital expenditures are reflected in the General Obligation Debt and General Capital Projects Funds, this presentation only includes General Fund operating expenditures to more clearly reflect the results of operations. The chart reflects actual spending and encumbrances in FY 2022-23 and FY 2023-24. Non-Dept. Personnel and O&M (maroon category) increase reflects the difference in the amount of the prior year's payment of $50M towards the Public Safety Personnel Retirement System (PSPRS) unfunded liability paydown, to the current year's payment of $73M. Public Safety's (blue category) increase reflects higher personnel related costs. All other areas remained fairly consistent. FY 2023-24 operating expended and encumbered through through the first quarter is 42.4% of the adjusted budget compared to 38.5% of adjusted budget spent and encumbered in the prior year. As shown on the following pages, departments (excluding non-departmental) have expended between 10.6% and 48.9% of their General Fund adjusted budgets for FY 2023-24. General Fund Expenditures + Encumbrances for FY 2023-24 by Category FY 24 *Dept. Operating Personnel FY 23 % Change Adjusted Q1 YTD Q1 YTD from Prior Budget Exp+Enc Exp+Enc Yr. Actual $ 299,753,023 Operations & Maint. 86,617,074 Reserves/Contingencies 54,117,927 Total FY 24 $ 440,488,024 $ 126,746,641 37,053,224 - $ 163,799,865 $ 99,112,415 27.9% 28,033,664 32.2% - FY 2023-24 General Fund Actual Expenditures + Encumbrances Operations & Maint. 23% 0.0% $ 127,146,079 28.8% Personnel 77% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Personnel spending through the first quarter of FY 2023-24 is 27.9% more than spending for FY 2022-23. The majority of the increase is due the $73M payment to the Public Safety Personnel Retirement System (PSPRS) unfunded liability, versus $50M in the prior year. Operations and maintenance for FY 2023-24 is 32.2% more than spending for FY 202223. Some of the increase reflects higher spending and encumbrances for Fire, IT, and Public Works contracted services. 8 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): FY 24 % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget FY 24 Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Total $ $ 337,713 $ 324,725 298,747 337,714 1,298,899 $ 256,418 256,418 23.8% 19.7% 19.7% 23.8% Dollars in Thousands Mayor & Council Expenditure FY 2023-24 Comparison FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 400 350 300 250 200 150 100 50 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive The Mayor and Council division spent 19.7% of their FY 2023-24 adjusted budget and has historically spent 23.8% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the third quarter of FY 2022-23 reflects a fully staffed department and personnel increases related to the class and compensation study. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. FY 24 % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget FY 24 Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Total $ $ 259,538 $ 254,165 247,510 316,333 1,077,546 $ 288,178 288,178 26.7% 22.7% 26.7% 22.7% Dollars in Thousands City Clerk Expenditure FY 2023-24 Comparison FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 500 400 300 200 100 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive The City Clerk spent 26.7% of their FY 2023-24 adjusted budget and has historically spent 22.7% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2022-23 was due to the General Election costs. The performance indicator is a warning as expenses through the first quarter are between two to five percentage points of historical budget spent through the first quarter, however this was changed to positive since the expectation is to be within budget by fiscal year end. 9 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): Law Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of 1,600 Budget Exp+Enc by Qtr Budget Total $ 1,400 $ 1,404,030 $ 1,417,565 1,385,009 599,116 1,246,641 4,805,720 1,246,641 $ 24.5% 25.9% 25.9% 24.5% Dollars in Thousands FY 24 FY 23 FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,200 1,000 800 600 400 200 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Law spent 25.9% of their FY 2023-24 adjusted budget and has historically spent 24.5% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the third quarter of FY 2022-23 reflects personnel increases related to the class and compensation study and vacation payouts. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. City Magistrate Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr. Budget Total $ $ 1,424,271 $ 1,422,643 1,351,814 1,418,985 1,356,538 5,617,712 1,356,538 $ 24.1% 21.7% 24.1% 21.7% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands FY 24 FY 23 1,400 1,200 1,000 800 600 400 200 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive City Magistrate spent 24.1% of their FY 2023-24 adjusted budget and has historically spent 21.7% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the third quarter of FY 2022-23 compared to historical trend reflects personnel increases related to the class and compensation study and vacation payouts. Higher spending in the first quarter of FY 2023-24 reflects encumbrances recorded at the beginning of the year for court security and temporary staff. The performance indicator is warning as expenses through the first quarter is between two to five percentage points of historical budget spent through the first quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end. 10 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): FY 24 % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget FY 24 Operating Only 1st Qtr Jul - Sep 23 $ 6,926,667 $ 2nd Qtr Oct - Dec 23 5,384,370 3rd Qtr Jan - Mar 24 4,183,019 4th Qtr Apr - Jun 24 5,056,917 Total $ 21,550,974 $ 6,779,403 6,779,403 31.5% 28.4% 31.5% Dollars in Millions City Manager & Organizational Support Expenditure FY 2023-24 Comparison 28.4% FY 23 Actual Expend FY 24 Actual Exp+Enc Historical Trend Actual to Budget 7 6 5 4 3 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive City Manager & Organizational Support includes the following divisions budgeted in the General Fund: Administration, Buildings & Facilities, Diversity, Equity, & Inclusion, Economic Development, Fleet Services, Human Resources, Transportation Policy, as well as Cultural Development which is shown separately. As of FY 2022-23, a reorganization occurred transferring the Community Development Cost Center, which was renamed to Diversity, Equity, & Inclusion (DEI) to City Manager & Organizational Support. Combined, these divisions spent 31.5% of their FY 2023-24 adjusted budget and have historically spent 28.4% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 reflects encumbrances recorded at the beginning of the year for contract services, machinery and equipment, and buildings maintenance as well as increased utility expenses. The performance indicator is warning as expenses through the first quarter is between two to five percentage points of historical budget spent through the first quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end. Communications & Public Affairs Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 1st Qtr Jul - Sep 23 $ 1,362,465 $ 2nd Qtr Oct - Dec 23 975,095 3rd Qtr Jan - Mar 24 876,840 4th Qtr Apr - Jun 24 1,033,937 Total $ 4,248,337 $ 1,574,176 1,574,176 37.1% 26.3% 37.1% 26.3% FY 23 Actual Expend FY 24 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 24 FY 24 1,600 1,400 1,200 1,000 800 600 400 200 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Communications and Public Affairs (CAPA) spent 37.1% of their FY 2023-24 adjusted budget and have historically spent 26.3% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 was for planned one-time expenses for marketing/promotional and talent recruitment campaigns. This resulted in a negative performance indicator as expenses through the first quarter is between more than five percentage points of historical budget spent through the first quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end. 11 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): Cultural Development Expenditure 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget Total $ $ 1,430,061 $ 1,096,379 1,096,379 1,144,048 1,462,261 4,766,867 1,462,261 $ 28.5% 30.7% 30.7% 28.5% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands FY 24 FY 24 1,400 1,200 1,000 800 600 400 200 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Cultural Development includes the following cost centers: Administration, Center for the Arts, Downtown Redevelopment, Museum, and Special Events, and is considered part of City Manager, Organizational Support. The department spent 30.7% of their FY 2023-24 adjusted budget and have historically spent 28.5% of their adjusted budget through the first quarter of the fiscal year. The performance indicator is warning as expenses through the first quarter is between two to five percentage points of historical budget spent through the first quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end. Community Services Expenditure 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of 14 Budget Exp+Enc by Qtr Budget Total $ 12 12,928,955 $ 7,541,890 6,823,615 8,619,303 12,221,223 $ 35,913,763 12,221,223 $ 34.0% 33.3% 34.0% 33.3% Dollars in Millions FY 24 FY 24 FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 10 8 6 4 2 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Community Services includes the following divisions budgeted in the General Fund: Administration, Aquatics, Library, Nature & Recreation Facilities, Park Maintenance & Operations, Recreation, and Sports & Fitness Facilities. The department spent 34.0% of their FY 2023-24 adjusted budget and have historically spent 33.3% of their adjusted budget through the first quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 12 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): FY 24 % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget FY 24 Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Total $ $ 7,245,520 $ 4,347,312 4,588,829 7,970,072 24,151,733 $ 9,465,709 39.2% 26.9% 9,465,709 39.2% 26.9% Dollars in Millions Information Technology Expenditure 2023-24 Comparison * Historical Trend represents the average of the past 4 years % of actual to budget FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 10 9 8 7 6 5 4 3 2 1 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Information Technology spent 39.2% of their FY 2023-24 adjusted budget and have historically spent 26.9% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quater of FY 2023-24 is related to planned increased contracted services dedicated to various projects, which was not typical in the first quarter of the historical trend. This resulted in a negative performance indicator, however it has been changed to positive with the expectation to be within budget by fiscal year end. Management Services Expenditure FY 2023-24 Comparison FY 23 Total $ $ FY 24 % of Budget *Hist. Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 2,598,680 $ 1,948,364 1,974,885 1,991,915 2,090,985 8,513,844 2,090,985 $ 24.6% 27.0% 24.6% 27.0% 3 2,500 Dollars Millions Dollars in in Thousands Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 FY 24 Adjusted Actual Exp+Enc FY 24 Actual Exp+Enc Series1 Series2 Series3 Historical Trend Actual to Budget 2,000 2 1,500 1,000 1 500 0- * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Management Services Department includes the following divisions budgeted in the General Fund: Administration, Accounting, Budget, Central Supply, Purchasing, Tax & License, and Utility Services (reimbursed by the Public Works & Utilities Department through the Indirect Cost Allocation). These divisions spent 24.6% of their FY 2023-24 adjusted budget and have historically spent 27.0% of their adjusted budget through the first quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 13 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): Neighborhood Resources Expenditure 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget Total $ $ 2,955,410 $ 3,057,321 1,834,392 2,343,946 10,191,069 $ 1,075,551 1,075,551 19.5% 10.6% 10.6% 19.5% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 2,400 Dollar in Thousands FY 24 FY 24 2,100 1,800 1,500 1,200 900 600 300 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Neighborhood Resources includes the following cost centers budgeted in the General Fund: Administration, Housing & Redevelopment, and Neighborhood Preservation. As of FY 2022-23, a reorganization occurred transferring the Community Development cost center to City Manager & Organizational Support. Historical spending for Community Development remains with Neighborhood Resources. The department spent 10.6% of their FY 2023-24 adjusted budget and have historically spent 19.5% of their adjusted budget through the first quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. Non-Departmental Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget Total** $ 67,737,309 $ 2,262,124 21,210,418 1,237,546 73,946,094 $ $ 73,946,094 92,447,397 80.0% 61.9% 80.0% 61.9% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions FY 24 FY 24 70 60 50 40 30 20 10 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr ** Excludes Reserves and Contingencies 2nd Qtr 3rd Qtr 4th Qtr Positive Non-Departmental includes citywide costs that do not belong to a specific department or are infrequent/unusual (i.e., memberships, legal fees, studies, strategic economic development opportunities, and miscellaneous downtown redevelopment expenses). Spending in this category fluctuates due to changing one-time needs from year to year. Non-departmental planned spending for FY 2023-24 is 80.0% of the adjusted budget and has historically spent 61.9% of the adjusted budget for the fiscal year. Higher spending compared to the historical trend in the first quarter of FY 2022-23 and FY 202324 is due to the payments towards the Public Safety Personnel Retirement System (PSPRS) unfunded liability. The majority of the increase in the first quarter of FY 2023-24 reflects a planned increased payment amount of $73M, which was $23M more than the prior year. This results in a negative performance indicator, however it has been changed to positive as the remaining expenses will even out by fiscal year end. 14 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): Development Services Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget Total $ $ 2,972,408 $ 2,743,762 2,858,085 2,858,085 11,432,340 $ 2,577,892 2,577,892 22.6% 22.5% 22.5% 22.6% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 3 Dollars in Millions FY 24 FY 24 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Development Services includes the following cost centers: Administration, Building Safety, Transportation Engineering, Engineering, and Planning. The Transportation Engineering Division moved from Public Works and Utilities in FY 2021-22, and this reorganization is not reflected in the historical trend. The department spent 22.5% of their FY 2023-24 adjusted budget and have historically spent 22.6% of their adjusted budget through the first quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. Public Works & Utilities Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 2nd Qtr Oct - Dec 23 3rd Qtr Jan - Mar 24 4th Qtr Apr - Jun 24 Adjusted Actual Expended Trend % of 7 Budget Exp+Enc by Qtr Budget Total $ 6 $ 5,527,094 $ 2,579,311 2,824,959 1,351,068 12,282,432 $ 6,006,794 6,006,794 48.9% 39.1% 48.9% 39.1% Dollars in Millions FY 24 FY 24 FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 5 4 3 2 1 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Public Works & Utilities includes the following divisions budgeted in the General Fund: Administration, Capital Projects, Traffic Engineering, Streets, and Street Sweeping. The Transportation Engineering Division moved from Public Works and Utilities in FY 2021-22. This reorganization is not reflected in the historical trend. The department spent 48.9% of their FY 2023-24 adjusted budget and have historically spent 39.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 reflects an encumbrance recorded at the beginning of the year for landscape maintenance contracts. This resulted in a negative performance indicator, however it has been changed to positive with the expectation to be within budget by fiscal year end. 15 11/22/2023 General Fund Expenditure Analysis (continued / department summaries): Fire Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 1st Qtr Jul - Sep 23 $ 13,705,101 $ 14,097,044 2nd Qtr Oct - Dec 23 11,342,154 3rd Qtr Jan - Mar 24 11,342,154 4th Qtr Apr - Jun 24 10,869,564 Total $ 47,258,973 $ 14,097,044 29.8% 28.2% 29.8% 28.2% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 15 Dollars in Millions FY 24 FY 24 12 9 6 3 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Fire includes the following cost centers: Administration, Health & Medical Services, Operations, Prevention & Preparedness, and Support Services. The department spent 29.8% of their FY 2023-24 adjusted budget and have historically spent 28.2% of their adjusted budget through the first quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. Police Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 1st Qtr Jul - Sep 23 $ 27,219,372 $ 29,354,958 2nd Qtr Oct - Dec 23 25,203,123 3rd Qtr Jan - Mar 24 24,194,998 4th Qtr Apr - Jun 24 24,194,998 Total $ 100,812,491 $ 29,354,958 29.1% 25.6% 29.1% 25.6% FY 23 Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 30 Dollars in Millions FY 24 FY 24 25 20 15 10 5 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive Police includes the following cost centers: Administration, Communications, Criminal Investigations, Detention Services, Field Operations, Forensic Services, Operational Support, Planning & Research, Professional Standards, Property & Evidence, Records, and Technology. The department spent 29.1% of their FY 2023-24 adjusted budget and have historically spent 25.6% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 reflects encumbrances recorded at the beginning of the year for for detention services and for repair and maintenance of equipment, as well as an increase in operating supplies and personnel related expenses. The performance indicator is warning as expenses through the first quarter is between two to five percentage points of historical budget spent through the first quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end. 16 11/22/2023 Enterprise Funds Enterprise Fund Analysis: Water Fund Analysis FY 2023-24 Comparison $ Transfers In FY 24 Actual % of Budget % of Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 55,655,073 $ 14,088,694 6,162,168 25% 23% 0% 0% - Total Revenues $ 61,817,241 $ 14,088,694 23% 23% Operating Expenses Major Capital Expenses Debt Service Transfers Out $ 42,540,202 $ 32,562,942 15,749,298 5,874,358 22,072,027 10,120,144 1,532,763 1,673,186 52% 31% 10% 28% 40% 40% 0% 22% Total Expenses $ 96,726,800 35,398,119 37% 33% Net Rev / Exp $ (34,909,559) $ (21,309,425) Positive $ Water Fund Analysis Revenues Expenses 100 Dollars in Millions Water Fund Revenues FY 24 Adjusted 80 60 40 20 0 FY 23 Actual Q1 YTD FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Water Operating Fund includes the following cost centers: Administration, Environmental Resources, Meter Services, San Tan Vista Water Treatment Plant, Water Capital, Water Distribution, Water Quality, Water Treatment Plant, and Water Systems Maintenance. The Water Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2023-24 reflects a $34.9M planned drawdown to fund balance due to increased pay as you go Capital spending, and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $6,162,168 includes $4,773,368 for System Development Fee (SDF) loan paybacks and $1,388,800 from Reclaimed Water to pay towards related capital costs. The budgeted Transfers Out totaling $5,874,358 includes indirect cost allocation to the General Fund of $3,781,500, payment of $214,501 to the Technology Replacement Fund, payment of $500,000 to the Insured Liability Self-Insurance Fund, payment of $31,288 to the Workers' Compensation Self-Insurance Trust, and a payment of $21,953 to the Uninsured Liability Self-Insurance Fund, as well as a subsidy of $1,325,116 to the Reclaimed Water Fund (reflects benefit received). Year-to-date Operating Revenues through the first quarter are 25% compared to 23% for FY 2022-23, while Operating Expenses through the first quarter are 52% compared to 40% for FY 2022-23. The first quarter of the fiscal year includes large encumbrances ($8.5M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund indicator is positive. Wastewater Fund Analysis FY 2023-24 Comparison $ Transfers In FY 24 Actual % of Budget % of Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 300 54,216,700 $ 10,685,662 20% 20% 250 0% 0% 11,200,392 - Total Revenues $ 65,417,092 $ 10,685,662 16% 17% Operating Expenses Major Capital Expenses Debt Service Transfers Out $ 25,658,401 $ 192,239,070 18,429,783 3,873,314 12,197,170 74,803,618 2,975,363 744,497 48% 39% 16% 19% 55% 44% 0% 21% Total Expenses $ 240,200,568 90,720,648 38% 42% Net Rev / Exp $ (174,783,476) $ (80,034,986) Positive $ Wastewater Fund Analysis Revenues Dollars in Millions Wastewater Fund Revenues FY 24 Adjusted Expenses 200 150 100 50 0 FY 23 Actual Q1 YTD FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Wastewater Operating Fund includes the following cost centers: Airport Water Reclamation Facility, Lone Butte Wastewater Treatment, Ocotillo Brine Reduction Facility, Ocotillo Water Reclamation Facility, Wastewater Capital, Wastewater Collection, and Wastewater Quality. The Wastewater Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2023-24 reflects an $174M planned drawdown (includes unspent capital carryforward from prior years) to fund balance due to increased pay as you go Capital spending, and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $11,200,392 includes $10M for System Development Fee (SDF) loan paybacks and $1,200,392 from Reclaimed Water towards related capital costs. The budgeted Transfers Out totaling $3,873,314 includes indirect cost allocation to the General Fund of $2,362,100, payment of $143,264 to the Technology Replacement Fund, payment of $20,881 to the Workers' Compensation Self-Insurance Trust, and a payment of $21,953 to the Uninsured Liability SelfInsurance Fund, as well as a subsidy of $1,325,116 to the Reclaimed Water Fund (reflects benefits received). Year-to-date Operating Revenues through the first quarter are 20% compared to 20% for FY 2022-23, while Operating Expenses through the first quarter are 48% compared to 55% for FY 2022-23. The first quarter of the fiscal year includes large encumbrances ($4.9M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund indicator is positive. 17 11/22/2023 Enterprise Funds Enterprise Fund Analysis (continued): Reclaimed Water Fund Analysis FY 2023-24 Comparison Revenues $ Transfers In FY 24 Actual % of Budget % of Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 1,725,500 $ 2,650,232 548,438 32% 27% - 0% 0% Total Revenues $ 4,375,732 $ 548,438 13% 10% Operating Expenses $ 1,644,173 $ 565,641 34% 58% 34,241 1% 1% 14% 23% Transfers Out 2,716,946 Total Expenses $ 4,361,119 $ 599,882 Net Rev / Exp $ 14,613 $ (51,444) Positive Revenues Dollars in Thousands Reclaimed Water Reclaimed Water Fund Analysis FY 24 Adjusted Expenses 4,000 3,000 2,000 1,000 FY 23 Actual Q1 YTD FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Reclaimed Water Operating Fund supports operating functions and now a portion of related capital costs. The Net Revenue/Expense for the FY 2023-24 budget reflects an increase to fund balance. The budgeted Transfers In totaling $2,620,232 includes subsidies from Water and Wastewater Funds of $1,310,116 each to reflect the benefit each fund receives by reclaiming water. The budgeted Transfers Out totaling $2,716,946 include an indirect cost allocation to the General Fund of $123,800, payment of $3,070 to the Technology Replacement Fund, and $844 to the Workers' Compensation Self-Insurance Trust, as well as a payment of $1,388,800 to the Water Fund and $1,200,392 to the Wastewater Fund to reflect contributions to reclaimed capital costs. Year-to-date Operating Revenues through the first quarter are 32% of budget compared to 27% for FY 2022-23, while Operating Expenses through the first quarter are 34% of budget as compared to 58% for FY 2022-23. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. Solid Waste Fund Analysis FY 2023-24 Comparison FY 24 FY 24 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Exp+Enc to Date Solid Waste Fund Analysis Revenues 24 $ 19,039,994 $ 3,908,590 21% 21% 21 Total Revenues $ 19,039,994 $ 3,908,590 21% 21% Operating Expenses $ $ 15,894,475 82% 78% Budget 19,407,284 Major Capital Expenses 3,153,163 229,219 7% 10% Transfers Out 1,068,549 318,126 30% 30% Total Expenses $ 23,628,996 $ 16,441,820 70% 69% Net Rev / Exp $ Positive Dollars in Millions Prior Yr. Revenues Solid Waste 18 15 12 9 6 3 FY 23 Actual Q1 YTD (4,589,002) $ (12,533,230) Expenses FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Solid Waste Operating Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2023-24 reflects a drawdown of $4.5M to fund balance. The budgeted Transfers Out totaling $1,068,549 include an indirect cost allocation to the General Fund of $985,600, payment of $67,985 to the Technology Replacement Fund, and payment of $14,964 to the Workers' Compensation Self-Insurance Trust. Year-to-date Operating Revenues through the first quarter are 21% compared to 21% for FY 202223, while Operating Expenses through the first quarter are 82% compared to 78% for FY 2022-23. The first quarter of the fiscal year includes large encumbrances ($11.1M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund indicator is positive. 18 11/22/2023 Enterprise / Other Funds Enterprise / Other Funds Analysis (continued): Airport Fund Analysis FY 2023-24 Comparison Airport Fund Analysis FY 24 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Exp+Enc to Date Prior Yr. Budget Airport Fund Revenues General Fund Subsidy $ 984,988 5,862,682 $ 300,681 - 31% 0% 26% 0% Total Revenues $ 6,847,670 $ 300,681 4% 4% Operating Expenses Major Capital Expenses Transfers Out $ 1,655,214 5,077,409 115,047 $ 527,348 263,592 40,047 32% 5% 35% 29% 9% 35% Total Expenses $ 6,847,670 $ 830,987 12% 15% Net Rev / Exp $ $ (530,306) Positive - Revenues Expenses 8,000 Dollars in Thousands FY 24 7,000 6,000 5,000 4,000 3,000 2,000 1,000 FY 23 Actual Q1 YTD FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for Enterprise Funds focuses on the relationship between Operating Revenues and Operating Expenses (including debt service and indirect cost allocation) and the percentage of budget received/expended. The Airport Fund supports operating functions and major capital costs that can be paid without borrowing. The Net Revenue/Expense for FY 2022-23 reflects no budgeted change in fund balance since the General Fund Subsidy of $5.8M is budgeted from the General Fund to make up the funding needed to support operations and/or Major Capital Expenses. The budgeted Transfers Out totaling $115,047 includes indirect cost allocation to the General Fund of $100,000 and a payment of $15,047 to the Technology Replacement Fund. Year-to-date Operating Revenues through the first quarter are 31% of budget compared to 26% for FY 2022-23, while year-to-date Operating Expenses through the first quarter are 32% of budget compared to 29% for FY 2022-23. The performance indicator is positive since percentage of operating revenues received to date (31%) exceeds the percentage of operating expenses spent to date (29%, including indirect cost allocation). Highway User Fund (HURF) Analysis FY 2023-24 Comparison $ Other FY 24 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 17,000,000 $ 606,000 3,266,477 19% 18% 75,045 12% 26% Total Revenues $ 17,606,000 $ 3,341,522 19% 18% Operating Expenses Major Capital Expenses Transfers Out $ $ 3,252,635 8,180,437 122,104 33% 36% 99% 35% 11% 99% Total Expenses $ 32,727,177 $ 11,555,176 35% 20% Net Rev / Exp $ (15,121,177) $ Positive 9,949,080 22,654,432 123,665 (8,213,654) Highway User Fund Analysis Revenues Dollars in Millions Highway Users Tax FY 24 Expenses 33 30 27 24 21 18 15 12 9 6 3 0 FY 23 Actual Q1 YTD FY 24 Actual Q1 YTD FY 24 Budget The performance indicator for this Special Revenue Fund focuses on the relationship between Operating Revenues and Operating Expenses (including debt service) and the percentage of budget received/expended. Highway Users Tax is collected by the state on all gasoline sales. It is combined with other state-level vehicle related revenues, and distributed to cities and towns by using two formulas based upon population. Funds are restricted for use on streets and related projects. The Net Revenue/Expense for FY 2022-23 reflects a planned drawdown of $15M to fund balance. The budgeted Transfers Out totaling $123,665 include a payment to the General Fund of $2,082 for miscellaneous charges, a payment of $26,583 to the Technology Replacement Fund, and a payment of $95,000 to the Uninsured Liability Self-Insurance Fund for stormwater oversight. Year-to-date Operating Revenues through the first quarter are 19% of budget compared to 18% through the first quarter for FY 2022-23, while year-to-date Operating Expenses through the first quarter are 33% of budget compared to 35% through the first quarter for FY 2022-23. The performance indicator is positive after recognizing revenues are received on a one-month lag, so first quarter revenues only reflect two receipts, while the fourth quarter of each fiscal year reflects four receipts. On an annual basis, this fund is anticipated to perform on a positive indicator. 19 11/22/2023 Other Funds Other Funds Analysis (continued): Enterprise System Development Fee Funds Analysis FY 2023-24 Comparison FY 24 FY 24 % of Budget Development Fee Adjusted Actual Rec'd to Budget Revenue Date (SDF) Funds Water Reclaimed Water Wastewater $ Total SDF Revenue $ 6,303,000 $ 2,726,300 7,907,000 16,936,300 $ 919,830 197,408 868,524 15% 7% 11% 1,985,762 12% 10 Dollars in Millions Enterprise System Note: Budget and Actual amounts reflect SDF revenues and the interest earned FY 23 Adjusted Budget FY 24 Adjusted Budget FY 23 Actual FY 24 Actual 8 6 4 2 0 on fund balances, and excludes loan transfers in/out or proceeds from bond Water sales. Reclaimed Water Wastewater Enterprise (Water, Wastewater, and Reclaimed Water) System Development Fees (SDFs) are assessed on building permits based on the meter size. Enterprise SDF's are assessed on all residential, but may or may not be assessed on Commercial. Commercial properties are assessed if a Water Meter Permit (WMI) is needed. Enterprise SDFs are based on development and fluctuate quarterly as well as from year to year. The graph shows the FY 2023-24 budget and year-to-date collections through the first quarter compared to the FY 2022-23 budget and year-to-date collections through the first quarter. Collections through the first quarter of FY 2023-24 were 12% of the budget as compared to the prior year's collections of 3% of budget through the first quarter. General System Development Fee Funds Analysis FY 2023-24 Comparison FY 24 Development Fee (SDF) Funds Arterial Streets Fire Library Parks Police Public Building $ Total SDF Revenue $ FY 24 % of Budget Adjusted Actual Rec'd to Budget Revenue Date 6,828,000 $ 553,000 115,000 896,000 316,000 280,000 391,679 39,167 8,209 221,719 21,916 19,440 6% 7% 7% 25% 7% 7% 8,988,000 702,130 8% $ FY 23 Adjusted Budget FY 23 Actual FY 24 Adjusted Budget FY 24 Actual 8,000 7,000 Dollars in Thousands General System 6,000 5,000 4,000 3,000 2,000 1,000 0 Arterial Streets Note: Budget and Actual amounts reflect Impact Fee revenues and the interest Fire Library Parks Police Public Building earned on fund balances, and excludes loan transfers in/out or proceeds from bond sales. General (Arterial Streets, Fire, Library, Parks, Police, and Public Building) System Development Fees (SDFs) are charged on all commercial and residential building permits and is based on square footage and land use. General SDF fees are based on development and will fluctuate quarterly as well as annually. The graph shows the FY 2023-24 budget and year-to-date collections through the first quarter compared for FY 2022-23 budget and year-to-date collections through the first quarter. Collections through the first quarter of FY 2023-24 were 8% of the budget as compared to the prior year's collections of 56% of the budget through the first quarter. 20 11/22/2023 Other Funds Other Funds Analysis (continued): Grant Funds Analysis FY 2023-24 Comparison Operating Grant Revenues FY 24 FY 23 Actual Actual Revenue Revenue FY 23 Actual Revenue FY 24 Actual Revenue 4 General Government* $ Community Services Neighborhood Resources Neighborhood Res. - CDBG & HOME Neighborhood Res. - HUD Public Safety 126,044 $ 192,715 77,412 489 3,810,375 221,072 2,121,266 237,948 53,607 2,803,813 301,469 Total Operating Grant Revenue $ 4,428,107 $ 5,518,103 1 General Government* Public Works & Utilities $ 189,431 $ 3,229,962 24,947 837,260 - Total Capital Grant Revenue $ 3,419,393 $ 862,207 Total Grant Revenue $ 7,847,500 $ 6,380,310 Millions 3 2 * Includes Airport, CAPA, City Manager, Economic Development, Law, Magistrate, Transportation Policy, and Non-Departmental non-entitlement programs. Grants are an additional source of funds for major capital projects and certain operating programs. Grant sources include federal, state, and county governments as well as donations from businesses, organizations, or individuals to support particular programs. In most cases, grant revenues for many programs are received on a reimbursable basis, so the revenue on a large capital project may lag a fiscal year after the project is initiated. Actual collections through the first quarter of FY 2023-24 are $7.8M as compared to $6.3M collected through the first quarter of FY 2022-23. 21 11/22/2023