Informational Memo Management Services - Memo No. 24-061 Date: January 30, 2024 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 Second Quarter Financial Report DLL MD Attached is the FY 2023-24 Second 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 second 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 second quarter, all General Fund revenue performance indicators are showing as positive except Franchise Fees which is a warning and License and Permits revenue which is negative. This is not uncommon due to timing of revenues between first and second quarter or fluctuations in historical trends. Since the General Fund second quarter reflected overall revenue growth of 9.6% over the prior year collections through December, with 50.5% of budgeted revenues received compared to the 53.1% historical average, expectations are to end the year in a positive position. Overall, second quarter General Fund expenditures and encumbrances combined are at 58.3% of budget expended compared to 54.7% 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. 24-061 January 30, 2024 Page 2 Should you have additional questions regarding this information, please contact me at x2256 or Dawn Lang at x2255. Attachment: FY 2023-24 Second Quarter Financial Report c: Tadd Wille, Assistant City Manager Andy Bass, Deputy City Manager Quarterly Financial Report 2nd Qtr FY 2023-24 Performance at a Glance General Fund Revenues Year to Date Compared Historical % Reference POSITIVE Page 2 Report Overview and Economic Indicators Revenue Analysis Overall General Fund Revenues Quarterly Analysis Performance Indicator* Positive Overall General Fund Revenue by Category Analysis Page 3 Page 3 Page 4 Sales Tax - Overall & by Taxable Activity Positive Franchise Fees Warning Page 5 Positive Page 5 Page 6 Revenue Primary Property Tax Detail by State Shared Revenues Positive Category Licenses & Permits Negative Page 6 Charges for Services Positive Page 7 Other Revenues Positive 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 General Fund Expenditures 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 1/30/2024 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 This table reflects the four most recent changes to the Federal Funds Rate by 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. First Quarter 2023 Second Quarter 2023 (advance estimate) Third Quarter 2023 (third estimate) Fourth Quarter 2023 (advance estimate) Source: U.S. Department of Commerce 2.2% 2.1% 4.9% 3.3% 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 State of Arizona Phoenix Metro Area* Sep-23 3.6% 4.3% Oct-23 3.6% 4.4% 3.8% 3.9% Nov-23 3.5% 4.0% 3.5% 3.8% 3.4% Dec-23 3.5% High unemployment rates typically result in a reduced demand for goods and services. *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 98.5 for Rate of Return is net of fees and includes interest earnings as well as both the 1st two quarters of FY 2023-24, up from the 14.5 average permits per realized and unrealized gains/(losses). Rate of Return is typically negative in quarter in FY 2022-23. FY 2021-22 averaged 115 per quarter. 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 2nd Quarter 2.15% 2.35% 3.10% 2.81% 2nd Quarter 0.78% -0.42% -0.68% -0.71% Fiscal Year 3.11% 3.40% 3.34% 3.17% Fiscal Year -0.22% -0.38% -0.69% -0.71% Quarter 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 Oct - Nov - Dec 2023 State of Arizona 10,001 13,383 10,929 7,735 5,339 6,525 8,799 9,858 9,164 Chandler 121 99 80 11 12 11 24 110 87 Source: Investment Advisors 2 1/30/2024 General Fund Revenue Analysis: Overall General Fund Revenues FY 2023-24 FY 23 FY 24 FY 24 % of *% of Adopted Actual Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 23 $ 83,454,062 2nd Qtr Oct - Dec 23 93,617,173 3rd Qtr Jan - Mar 24 90,791,216 4th Qtr Apr - Jun 24 Total $ FY 24 Actual Revenue 89,865,450 24.0% 23.9% 99,064,020 26.5% 29.2% $ 188,929,470 50.5% 53.1% 106,194,831 $ 374,057,282 Dollars in Millions Budget 1st Qtr Actual Revenue 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 $11.9M (6.7%) above the adopted budget, prorated based on historical trend, and $16.5M (9.6%) higher than actual collections through the second 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 one-time. The performance indicator would be a warning as the percentage of budget received through the second quarter is between two and five percentage points below the historical budget received through the same period, however it has been changed to positive as collections are coming in higher than budgeted for the quarter. 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 $ General Fund Collection History by Category % Indirect Costs FY 24 Adopted Actual % of Budget Budget Revenue Rec'd to Date 196,858,400 $ 102,820,304 52.2% 3,471,000 734,426 21.2% Primary Property Tax 8,731,611 4,505,750 51.6% State Shared Sales Tax 127,100,000 64,546,484 50.8% Licenses & Permits 6,864,900 1,512,973 22.0% Charges for Services 13,932,139 6,699,762 48.1% Other Revenues 9,121,050 4,120,681 45.2% Indirect Cost Allocation 7,978,182 3,989,091 50.0% $ 374,057,282 $ 188,929,470 50.5% Total 100% 80% Other Revenues 29% 28% 29% 34% 60% 40% 55% 57% 55% 54% 20% Charges for Services Licenses & Permits Voter Authorized Local Revenue Primary Property Taxes Franchise Fees Local Sales Taxes 0% FY21 $281M FY22 $315M FY23 - FY24 - Q2 $373M $188.9M Positive 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 1/30/2024 General Fund Revenue Analysis (continued): Sales Tax Revenue FY 2023-24 Jul - Sep 23 % of *% of Budget Budget Budget Revenue Rec'd Hist. Rec'd 47,367,452 $ 51,878,813 26.4% 29.4% 2nd Qtr Oct - Dec 23 48,492,852 50,941,491 25.8% 30.0% 3rd Qtr Jan - Mar 24 50,216,071 4th Qtr Apr - Jun 24 50,782,025 Total $ FY 24 Actual $ 196,858,400 $ 102,820,304 52.2% 59.4% 60 Dollars in Millions 1st Qtr FY 24 Adopted FY 23 Actual Revenue FY 24 Actual Revenue 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 FY 2023-24 are $7M (7.3%) above adopted budget, prorated based on historical trend, and $3.4M (3.5%) higher than FY 2022-23 actual collections. The performance indicator would be negative as the percentage of budget received through the second quarter is five percentage points below the historical budget received through the same period, however it has been changed to positive as collections are coming in higher than budgeted for the quarter. Sales Tax Collection History 4 Years Actual Sales Tax by Category (in millions) % Chg FY 24 % of Adopted Actual Actual to from Budget Revenue Budget Prior Yr. FY 24 FY 19-20 14 64 5 12 18 14 Retail/Mfd. Bldg/Jet Fuel $ Contracting 93,000,000 $ 46,074,312 49.5% 2.6% 22,000,000 12,964,836 58.9% -2.3% FY 20-21 Utilities 18,100,000 10,620,487 58.7% Real Property Rentals 23,100,000 12,150,388 52.6% 8.2% FY 21-22 8.9% Restaurants & Bars 17,000,000 8,658,209 50.9% 5.4% Telecommunications 1,550,000 1,013,630 65.4% 27.3% Personal Prop. Rentals Hotels/Motels 5,000,000 3,712,195 74.2% 57.2% 5,700,000 2,601,210 45.6% -2.4% Retail Contracting Publishing/Printing/Adv. Amusements 200,000 92,446 46.2% -19.7% Utilities Real Property Rentals 1,300,000 746,599 57.4% 11.2% Restaurants & Bars Telecommunications Use Tax 8,000,000 870,007 10.9% -74.7% Personal Prop. Rentals Hotels/Motels Publishing/Printing Amusements Total Sales Tax $ 194,950,000 $ 99,504,317 51.0% 2.1% 14 75 85 FY 22-23 92 0 50 15 19 13 8 17 16 21 16 7 28 17 23 18 100 150 7 200 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 $4.5M (4.8%) above the adopted budget, prorated based on historical trend, and $2.0M (2.1%) higher than FY 2022-23 actual collections. It should be noted that most of the categories are positive, reflecting higher consumer spending and added tourism spending. Contracting/development collections are slightly down as residential construction slumped, but is picking back up based on the permits issued. Use tax is a highly fluctuating revenue category and significant swings in collection percentage are not abnormal. 4 1/30/2024 General Fund Revenue Analysis (continued): Franchise Fee Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 23 $ 2nd Qtr Oct - Dec 23 42,244 $ (26,103) -0.8% 1.3% 725,873 760,529 22.0% 22.9% 3rd Qtr Jan - Mar 24 1,517,478 4th Qtr Apr - Jun 24 1,185,405 Total $ 3,471,000 $ 734,426 21.2% 24.2% Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget Dollars in Thousands 1st Qtr *% of FY 24 FY 24 FY 23 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 second quarter of FY 2023-24 are $33,691 (4.4%) less than the adopted budget, prorated based on historical trend, and $17,116 (2.3%) less than FY 2022-23 actual collections through the second quarter. The negative revenue in the first quarter of FY 2023-24 reflects revenues accrued to the prior year when they were earned. Changes to the cable TV industry are having a slight impact on franchise fees in this area. The performance indicator is warning as the percentage of budget received through the second 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 Jul - Sep 23 $ 2nd Qtr Oct - Dec 23 51,582 $ 4,476,012 3rd Qtr Jan - Mar 24 837,974 4th Qtr Apr - Jun 24 3,366,043 Total $ 8,731,611 $ 53,780 0.6% 0.6% 4,451,969 51.0% 51.6% 4,505,750 51.6% 52.2% Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget Dollars in Millions 1st Qtr *% of FY 24 FY 24 FY 23 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 second quarter FY 2023-24 are $21,844 (0.5%) less than the adopted budget, prorated based on historical trend, and $11,423 (0.3%) less than FY 2022-23 actual collections through the second 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 second quarter is less then two percentage points below the historical budget received through the same period. 5 1/30/2024 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 $ 28,690,718 2nd Qtr Oct - Dec 23 31,207,188 3rd Qtr Jan - Mar 24 31,586,286 4th Qtr Apr - Jun 24 35,615,807 Total $ 127,100,000 $ 30,724,399 24.2% 25.4% 33,822,085 26.6% 28.2% $ 64,546,483 50.8% 53.6% 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 second quarter of FY 2023-24 are $2.1M (12.5%) above adopted budget, proratred based on historical trend, and $997,704 (5.5%) higher than FY 2022-23 actual collections through the second 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 fiscal year end $1.5M was recorded. Collections through the second quarter are $717,994. --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 on a quarterly basis. Total received in the first and second quarter was $1,125,000. -- 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 second quarter of FY 2023-24 were $377,483 (6.5%) more than adopted budget, prorated based on historical trend, and $233,017 (3.9%) higher than FY 2022-23 actual collections through the second 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 fiscal year as the flat tax will go into full effect over the next two years. Collections through the second quarter of FY 2023-24 were $290,612 (0.8%) above adopted budget, prorated based on historical trend, and $10.7M (40.3%) higher than FY 2022-23 actual collections through the second quarter. The overall State Shared revenue performance indicator would be a warning because the percentage of budget received through the second quarter is between two to five percentage points of historical budget recieved through the same period, however it has been changed to positive as collections are coming in higher than budgeted for the quarter. 1st Qtr Jul - Sep 23 $ FY 24 FY 24 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 962,056 2nd Qtr Oct - Dec 23 1,606,465 3rd Qtr Jan - Mar 24 2,140,344 4th Qtr Apr - Jun 24 2,156,035 Total $ 6,864,900 $ $ 569,574 8.3% 15.8% 943,399 13.7% 26.3% 1,512,973 22.0% 42.1% * 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 second quarter of FY 2023-24 are $1.1 M (41.1%) less than adopted budget, prorated based on historical trend, and $2.1M (57.9%) less than FY 2022-23 actual collections through the second quarter. Lower collections for FY 2023-24 was anticipated as large industrial permits inflate the historical comparison, however, we are seeing a slowing of other permit related revenues and therefore the performance indicator is negative as the percentage of budget received through the second quarter is more than five percentage points below the historical budget received through the same period. 6 1/30/2024 General Fund Revenue Analysis (continued): Charges for Services Revenue FY 2023-24 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 23 2,420,572 $ 3,064,866 22.0% 19.4% 2nd Qtr Oct - Dec 23 3,073,445 3,634,896 26.1% 24.7% 3rd Qtr Jan - Mar 24 3,295,373 4th Qtr Apr - Jun 24 5,142,749 Total $ $ 13,932,139 $ 6,699,762 48.1% FY 23 Actual Revenue FY 24 Actual Revenue Historical Trend Actual to Budget Dollars in Millions 1st Qtr *% of FY 24 FY 24 44.1% 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 second quarter of FY 2023-24 were $1.2M (21.9%) above adopted budget, prorated based on historical trend, and $562,999 (9.2%) higher than FY 2022-23 actual collections through the second quarter. The performance indicator is positive as the percentage of budget received through the second 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 Jul - Sep 23 1,924,890 $ 1,605,574 17.6% 24.1% 2nd Qtr Oct - Dec 23 2,040,795 2,515,107 27.6% 20.5% 3rd Qtr Jan - Mar 24 1,626,527 4th Qtr Apr - Jun 24 3,528,838 Total $ $ 9,121,050 $ 4,120,681 45.2% 44.6% Dollars in Millions 1st Qtr *% 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 - * Pro-rated based upon a four year historical trend of actual year-to-date collections 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive 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 second quarter of FY 2023-24 are $154,996 (3.9%) above adopted budget, prorated based on historical trend, and $777,395 (23.0%) higher than FY 2022-23 actual collections through the second quarter. The performance indicator is positive as the percentage of budget received through the second quarter is higher than the percentage of historical budget received through the same period. 7 1/30/2024 General Fund Expenditure Analysis: General Fund Expenditures + Encumbrances for FY 2023-24 by Function Dollars in Millions * Dept. Operating General Government FY 24 FY 24 % of % of Adjusted Q2 YTD Budget Budget Exp+Enc Exp'd Prior Yr. 36,627,991 48.2% 44.8% Budget $ 76,061,182 $ Community Services 35,901,907 19,709,965 54.9% 55.0% Development Services 11,432,340 4,720,200 41.3% 41.9% Public Safety 148,816,125 76,797,111 51.6% 50.7% Public Works & Utilities 12,283,156 8,071,142 65.7% 54.3% Neighborhood Resources Non-Dept. Pers. & O&M 10,195,105 4,285,543 42.0% 27.1% 91,661,906 74,850,284 81.7% 78.1% Subtotal $ 386,351,721 $ 225,062,236 58.3% 54.7% Non-Dept. Reserves $ $ - 0.0% 0.0% - 0.0% 0.0% 51.1% 48.9% Non-Dept. Contingencies Total 3,430,000 50,662,927 $ 440,444,648 $ 225,062,236 * Excluding Interfund Transfers 5 20 4 4 18 2 29 37 75 52 Development Services Community Services Neighborhood Resources General Government Non-Dept. Pers. & O&M Public Safety 69 77 6 8 FY 23 Q2 YTD Exp+Enc FY 24 Q2 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 mainly 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 mainly reflects higher personnel related costs. All other areas remained fairly consistent. FY 2023-24 operating expended and encumbered through the second quarter is 58.3% of the adjusted budget compared to 54.7% of adjusted budget spent and encumbered in the prior year. As shown on the following pages, departments (excluding non-departmental) have expended between 39% and 65.7% of their General Fund adjusted budgets halfway through FY 2023-24. General Fund Expenditures + Encumbrances for FY 2023-24 by Category FY 24 *Dept. Operating Personnel FY 23 % Change Adjusted Q2 YTD Q2 YTD from Prior Budget Exp+Enc Exp+Enc Yr. Actual $ 300,238,449 Operations & Maint. 86,113,272 Reserves/Contingencies 54,092,927 Total FY 24 $ 440,444,648 $ 173,999,062 $ 141,969,426 22.6% 51,063,174 40,114,676 27.3% $ 225,062,236 - FY 2023-24 General Fund Actual Expenditures + Encumbrances Operations & Maint. 23% 0.0% $ 182,084,102 23.6% Personnel 77% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Personnel spending through the second quarter of FY 2023-24 is 22.6% 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 27.3% more than spending for FY 2022-23. Some of the increase reflects higher spending and encumbrances for Fire, IT, and Public Works contracted services. 8 1/30/2024 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 23 337,713 $ 256,418 19.7% 23.8% 2nd Qtr Oct - Dec 23 324,725 250,515 19.3% 22.1% 3rd Qtr Jan - Mar 24 298,747 4th Qtr Apr - Jun 24 337,714 Total $ $ 1,298,899 $ 506,933 39.0% 45.9% 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 39.0% of their FY 2023-24 adjusted budget and has historically spent 45.9% of their adjusted budget through the second quarter of the fiscal year. 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 23 259,538 $ 288,178 26.7% 22.7% 2nd Qtr Oct - Dec 23 254,165 212,222 19.7% 22.3% 3rd Qtr Jan - Mar 24 247,510 4th Qtr Apr - Jun 24 316,333 Total $ $ 1,077,546 $ 500,400 46.4% 45.0% 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 46.4% of their FY 2023-24 adjusted budget and has historically spent 45% of their adjusted budget through the second quarter of the fiscal year. Higher spending in the first quarter of FY 2022-23 was due to the General Election costs. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 9 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Law Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 1,406,991 $ 1,246,641 25.9% 24.4% 2nd Qtr Oct - Dec 23 1,420,556 1,115,277 23.2% 24.7% 3rd Qtr Jan - Mar 24 1,387,930 4th Qtr Apr - Jun 24 600,380 Total $ $ 4,815,857 $ 2,361,917 49.0% 49.1% Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands FY 24 FY 23 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 Law spent 49.0% of their FY 2023-24 adjusted budget and has historically spent 49.1% of their adjusted budget through the second 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 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr. Budget 1,424,296 $ 1,356,538 24.1% 21.7% 2nd Qtr Oct - Dec 23 1,422,668 1,147,365 20.4% 21.6% 3rd Qtr Jan - Mar 24 1,351,839 4th Qtr Apr - Jun 24 1,419,011 Total $ $ 5,617,814 $ 2,503,903 44.6% 43.3% Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands FY 24 FY 23 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 44.6% of their FY 2023-24 adjusted budget and has historically spent 43.3% 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. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 10 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Operating Only 1st Qtr Jul - Sep 23 FY 24 % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 6,930,071 $ 6,779,403 31.4% 28.4% 2nd Qtr Oct - Dec 23 5,387,016 3,705,019 17.2% 22.1% 3rd Qtr Jan - Mar 24 4,185,074 4th Qtr Apr - Jun 24 5,059,402 Total $ FY 24 $ 21,561,565 $ 10,484,422 48.6% Dollars in Millions City Manager & Organizational Support Expenditure FY 2023-24 Comparison FY 23 Actual Expend FY 24 Actual Exp+Enc Historical Trend Actual to Budget 7 6 5 4 3 2 1 50.4% 1st Qtr * Historical Trend represents the average of the past 4 years % of actual to budget 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 a portion of the Community Development Cost Center, which was renamed to Diversity, Equity, & Inclusion (DEI) to City Manager & Organizational Support. Combined, these divisions spent 48.6% of their FY 2023-24 adjusted budget and have historically spent 50.4% of their adjusted budget through the second quarter of the fiscal year. Higher spending in the first quarter of FY 202324 reflects encumbrances recorded at the beginning of the year for contract services, machinery and equipment, and buildings maintenance as well as increased utility expenses. This results in a positive performance indicator, with the expectation to be within budget 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 $ 1,574,176 37.1% 26.3% 2nd Qtr Oct - Dec 23 975,095 593,292 13.9% 18.8% 3rd Qtr Jan - Mar 24 876,840 4th Qtr Apr - Jun 24 1,033,937 Total $ $ 4,248,337 $ 2,167,468 51.0% 45.1% 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 51.0% of their FY 2023-24 adjusted budget and have historically spent 45.1% of their adjusted budget through the second 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 second quarter are more than five percentage points of historical budget spent through the first quarter, however it has been changed to positive as higher expenses were planned for in these first two quarters, with remaining spending expected to be within budget by fiscal year end. 11 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Cultural Development Expenditure 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 1,431,533 $ 1,462,261 30.6% 28.4% 2nd Qtr Oct - Dec 23 1,097,508 1,021,346 21.4% 22.0% 3rd Qtr Jan - Mar 24 1,097,508 4th Qtr Apr - Jun 24 1,145,226 Total $ $ 4,771,774 $ 2,483,607 52.0% 50.4% Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands FY 24 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 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 52.0% of their FY 2023-24 adjusted budget and have historically spent 50.4% of their adjusted budget through the second quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. Community Services Expenditure 2023-24 Comparison % of Budget *Hist. Adjusted Actual Expended Trend % of 14 Budget Exp+Enc by Qtr Budget 12 12,924,687 $ 12,221,223 34.0% 33.3% 2nd Qtr Oct - Dec 23 7,539,400 7,488,742 20.9% 20.0% 3rd Qtr Jan - Mar 24 6,821,362 4th Qtr Apr - Jun 24 8,616,458 Operating Only 1st Qtr Jul - Sep 23 Total $ $ 35,901,907 $ 19,709,965 54.9% 53.3% 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 54.9% of their FY 2023-24 adjusted budget and have historically spent 53.3% of their adjusted budget through the second quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 12 1/30/2024 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 7,246,041 $ 9,465,709 39.2% 26.8% 2nd Qtr Oct - Dec 23 4,347,626 2,453,717 10.1% 16.3% 3rd Qtr Jan - Mar 24 4,589,159 4th Qtr Apr - Jun 24 7,970,645 11,919,426 49.3% 43.1% Total $ $ 24,153,471 $ 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 49.3% of their FY 2023-24 adjusted budget and have historically spent 43.1% of their adjusted budget through the second quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 is related to encumbrances related to planned 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 FY 24 % of Budget *Hist. Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 2,599,313 $ 2,090,985 24.6% 27.0% 2nd Qtr Oct - Dec 23 1,948,839 1,608,930 18.8% 20.3% 3rd Qtr Jan - Mar 24 1,975,367 4th Qtr Apr - Jun 24 1,992,400 Total $ $ 8,515,919 $ 3,699,915 43.4% 47.3% 3 2,500 Dollars Millions Dollars in in Thousands Operating Only 1st Qtr Jul - Sep 23 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 43.4% of their FY 2023-24 adjusted budget and have historically spent 47.3% of their adjusted budget through the second quarter of the fiscal year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 13 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Neighborhood Resources Expenditure 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 2,956,580 $ 1,075,551 10.5% 19.4% 2nd Qtr Oct - Dec 23 3,058,532 3,209,992 31.5% 20.7% 3rd Qtr Jan - Mar 24 1,835,119 4th Qtr Apr - Jun 24 2,344,874 Total $ $ 10,195,105 $ 4,285,543 42.0% 40.1% Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget Dollar in Thousands FY 24 FY 24 FY 23 3,000 2,400 1,800 1,200 600 - * 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, Neighborhood Preservation, and Community Development. As of FY 2022-23, a reorganization occurred transferring a portion of the Community Development cost center to City Manager & Organizational Support. Historical spending for Community Development remains with Neighborhood Resources. The second quarter actuals are higher due to large encumbrances that will be spent over the remaining fiscal year. The department spent 42.0% of their FY 2023-24 adjusted budget and have historically spent 40.1% of their adjusted budget through the second 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. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 67,161,771 $ 73,946,094 80.7% 62.4% 2nd Qtr Oct - Dec 23 2,242,904 904,190 1.0% 2.1% 3rd Qtr Jan - Mar 24 21,030,201 4th Qtr Apr - Jun 24 1,227,031 Operating Only 1st Qtr Jul - Sep 23 Total** $ $ 91,661,906 $ 74,850,284 81.7% 64.5% 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 81.7% of the adjusted budget and has historically spent 64.5% 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. Reflecting the 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, and the expectation is to be within budget. 14 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Development Services Expenditure FY 2023-24 Comparison % of Budget *Hist. Operating Only 1st Qtr Jul - Sep 23 Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 2,972,408 $ 2,577,892 22.5% 22.6% 2nd Qtr Oct - Dec 23 2,743,762 2,142,308 18.8% 21.3% 3rd Qtr Jan - Mar 24 2,858,085 4th Qtr Apr - Jun 24 2,858,085 4,720,200 41.3% 43.9% Total $ $ 11,432,340 $ Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 3 Dollars in Millions FY 24 FY 24 FY 23 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 in from Public Works and Utilities in FY 2021-22, and this reorganization is not reflected in the historical trend. The department spent 41.3% of their FY 2023-24 adjusted budget and have historically spent 43.9% of their adjusted budget through the second 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 Adjusted Actual Expended Trend % of 7 Budget Exp+Enc by Qtr Budget 6 5,527,420 $ 6,006,794 48.9% 39.1% 2nd Qtr Oct - Dec 23 2,579,463 2,064,348 16.8% 18.7% 3rd Qtr Jan - Mar 24 2,825,126 4th Qtr Apr - Jun 24 1,351,147 Total $ $ 12,283,156 $ 8,071,142 65.7% 57.8% 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 to Development Services from Public Works and Utilities in FY 2021-22. This reorganization is not reflected in the historical trend. The department spent 65.7% of their FY 2023-24 adjusted budget and have historically spent 57.8% of their adjusted budget through the second 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 1/30/2024 General Fund Expenditure Analysis (continued / department summaries): Fire Expenditure FY 2023-24 Comparison % of Budget *Hist. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 13,805,562 $ 14,097,044 29.6% 28.0% 2nd Qtr Oct - Dec 23 11,425,294 10,709,099 22.5% 23.6% 3rd Qtr Jan - Mar 24 11,425,294 4th Qtr Apr - Jun 24 10,949,240 Operating Only 1st Qtr Jul - Sep 23 Total $ $ 47,605,390 $ 24,806,143 52.1% 51.6% Actual Exp+Enc FY 24 Actual Exp+Enc Historical Trend Actual to Budget 15 Dollars in Millions FY 24 FY 24 FY 23 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 52.1% of their FY 2023-24 adjusted budget and have historically spent 51.6% of their adjusted budget through the second 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. Adjusted Actual Expended Trend % of Budget Exp+Enc by Qtr Budget 27,326,897 $ 29,354,958 29.0% 25.5% 2nd Qtr Oct - Dec 23 25,302,686 22,636,010 22.4% 23.8% 3rd Qtr Jan - Mar 24 24,290,576 4th Qtr Apr - Jun 24 24,290,576 Operating Only 1st Qtr Jul - Sep 23 Total $ $ 101,210,735 $ 51,990,968 51.4% 49.3% 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 51.4% of their FY 2023-24 adjusted budget and have historically spent 49.3% of their adjusted budget through the second 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 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 second quarter is between two to five percentage points of historical budget spent through the second quarter, however it has been changed to positive as expenses are expected to even out by fiscal year end, and the expectation is to be within budget. 16 1/30/2024 Enterprise Funds Enterprise Fund Analysis: 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. 55,655,073 $ 6,162,168 28,515,079 51% 47% 0% 0% - Total Revenues $ 61,817,241 $ 28,515,079 46% 46% Operating Expenses $ 42,543,424 $ 31,767,179 75% 68% Major Capital Expenses 34,882,081 11,930,401 34% 41% Debt Service 15,749,298 2,814,003 18% 11% Transfers Out 5,874,358 2,631,872 45% 40% 49,143,454 50% 49% Total Expenses $ 99,049,161 Net Rev / Exp $ (37,231,920) $ (20,628,375) Positive $ Water Fund Analysis Revenues Expenses 120 Dollars in Millions Water Fund FY 24 Adjusted 100 80 60 40 20 0 FY 23 Actual Q2 YTD FY 24 Actual Q2 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 $37.2M 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 second quarter are 51% compared to 47% for FY 2022-23, while Operating Expenses through the second quarter are 75% compared to 68% for FY 2022-23. The second 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. The performance indicator is positive since percentage of operating revenues received to date (51%) exceeds the percentage of operating expenses spent to date (45%, including indirect cost allocation and adjusting out encumbrances). Wastewater 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. 300 44% 45% 250 0% 0% 54,216,700 $ 11,200,392 23,708,770 - Total Revenues $ 65,417,092 $ 23,708,770 36% 37% Operating Expenses $ 25,658,401 $ 15,960,418 62% 71% Major Capital Expenses 192,565,704 98,768,441 51% 45% Debt Service 18,429,783 5,259,396 29% 15% Transfers Out 3,873,314 1,345,731 35% 37% 240,527,202 $ 121,333,985 50% 45% Total Expenses Net Rev / Exp Positive $ $ (175,110,110) $ (97,625,215) Wastewater Fund Analysis Revenues Dollars in Millions Wastewater Fund FY 24 Adjusted Expenses 200 150 100 50 0 FY 23 Actual Q2 YTD FY 24 Actual Q2 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 $175M 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 second quarter are 44% compared to 45% for FY 2022-23, while Operating Expenses through the second quarter are 62% compared to 71% for FY 2022-23. The second 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. The performance indicator is positive since percentage of operating revenues received to date (44%) exceeds the percentage of operating expenses spent to date (38%, after adjusting out encumbrances and including indirect cost allocation). 17 1/30/2024 Enterprise Funds Enterprise Fund Analysis (continued): Reclaimed Water Fund Analysis FY 2023-24 Comparison Revenues $ Transfers In FY 24 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 1,725,500 $ 2,650,232 943,161 55% 47% - 0% 0% Total Revenues $ 4,375,732 $ 943,161 22% 18% Operating Expenses $ 1,644,173 $ 1,022,849 62% 71% 65,412 2% 2% 25% 29% Transfers Out 2,716,946 Total Expenses $ 4,361,119 $ 1,088,261 Net Rev / Exp $ 14,613 $ (145,100) Positive Revenues Dollars in Thousands Reclaimed Water Reclaimed Water Fund Analysis FY 24 Expenses 4,000 3,000 2,000 1,000 FY 23 Actual Q2 YTD FY 24 Actual Q2 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 second quarter are 55% of budget compared to 47% for FY 2022-23, while Operating Expenses through the second quarter are 62% of budget as compared to 71% for FY 2022-23. The second quarter of the fiscal year includes large encumbrances ($2.3M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. The performance indicator is positive since percentage of operating revenues received to date (55%) exceeds the percentage of operating expenses spent to date (48%, including indirect cost allocation and excluding out ecumbrances). 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 Budget Solid Waste Fund Analysis Revenues 24 $ 19,039,994 $ 8,668,431 46% 46% 21 Total Revenues $ 19,039,994 $ 8,668,431 46% 46% Operating Expenses $ $ 16,490,653 85% 87% Solid Waste 19,407,284 Major Capital Expenses 3,370,919 249,120 7% 10% Transfers Out 1,068,549 568,267 53% 53% Total Expenses $ 23,846,752 $ 17,308,041 73% 78% Net Rev / Exp $ Positive (4,806,758) $ Dollars in Millions Prior Yr. Revenues 18 15 12 9 6 3 FY 23 Actual Q2 YTD (8,639,610) Expenses FY 24 Actual Q2 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 $4.8M 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 second quarter are 46% compared to 46% for FY 2022-23, while Operating Expenses through the second quarter are 85% compared to 87% for FY 2022-23. The second 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. The performance indicator is positive since percentage of operating revenues received to date (46%) exceeds the percentage of operating expenses spent to date (44%, including indirect cost allocation and excluding out encumbrances). 18 1/30/2024 Enterprise / Other Funds Enterprise / Other Funds Analysis (continued): Airport Fund Analysis FY 2023-24 Comparison % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget $ Exp+Enc to Date Prior Yr. General Fund Subsidy 984,988 $ 5,863,023 608,964 62% 51% - 0% 0% Total Revenues $ 6,848,011 $ 608,964 9% 7% Operating Expenses $ 1,655,555 $ Major Capital Expenses Transfers Out Total Expenses $ Net Rev / Exp $ Positive 854,594 52% 41% 5,077,409 243,925 5% 14% 115,047 65,047 57% 57% $ 1,163,566 17% 23% $ (554,602) 6,848,011 - Revenues Expenses 8,000 Dollars in Thousands Revenues FY 24 Actual Budget Airport Fund Airport Fund Analysis FY 24 7,000 6,000 5,000 4,000 3,000 2,000 1,000 FY 23 Actual Q2 YTD FY 24 Actual Q2 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 2023-24 reflects no budgeted change in fund balance since the General Fund Subsidy of $5.9M 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 second quarter are 62% of budget compared to 51% for FY 2022-23, while year-to-date Operating Expenses through the second quarter are 52% of budget compared to 41% for FY 2022-23. The performance indicator is positive since percentage of operating revenues received to date (62%) exceeds the percentage of operating expenses spent to date (50%, including indirect cost allocation). Highway User Fund (HURF) Analysis FY 2023-24 Comparison % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget $ Exp+Enc to Date Prior Yr. Other 17,000,000 $ 606,000 Total Revenues $ Operating Expenses $ Major Capital Expenses 17,606,000 $ 9,949,080 $ 22,654,432 8,355,028 49% 46% 317,218 52% 63% 8,672,246 49% 46% 5,210,267 52% 55% 20,870,064 92% 47% Debt Service - - 0% 0% Transfers Out 123,665 122,624 99% 99% 26,202,955 80% 50% Total Expenses $ Net Rev / Exp $ (15,121,177) $ (17,530,709) Positive 32,727,177 $ Revenues Dollars in Millions FY 24 Actual Budget Highway Users Tax Highway User Fund Analysis FY 24 Expenses 33 30 27 24 21 18 15 12 9 6 3 0 FY 23 Actual Q2 YTD FY 24 Actual Q2 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 2023-24 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 second quarter are 49% of budget compared to 46% through the second quarter for FY 2022-23, while year-to-date Operating Expenses through the second quarter are 52% of budget compared to 55% through the second 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 as budgeted. 19 1/30/2024 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 $ 6,303,000 $ 1,489,313 24% Reclaimed Water 2,726,300 320,501 12% Wastewater 7,907,000 1,455,998 18% 3,265,812 19% Total SDF Revenue $ 16,936,300 $ 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 second quarter compared to the FY 2022-23 budget and year-to-date collections through the second quarter. Collections through the second quarter of FY 2023-24 were 19% of the budget as compared to the prior year's collections of 8% of budget through the second quarter. General System Development Fee Funds Analysis FY 2023-24 Comparison FY 24 Development Fee (SDF) Funds Arterial Streets % of Budget Adjusted Actual Rec'd to Budget Revenue Date 6,828,000 $ 1,072,825 16% Fire 553,000 74,280 13% Library 115,000 11,936 10% Parks 896,000 548,002 61% Police 316,000 41,794 13% Public Building 280,000 36,924 13% 1,785,761 20% Total SDF Revenue $ FY 24 $ 8,988,000 $ 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 second quarter compared for FY 2022-23 budget and year-to-date collections through the second quarter. Collections through the second quarter of FY 2023-24 were 20% of the budget as compared to the prior year's collections of 74% of the budget through the second quarter, which included significant development occuring at that time. 20 1/30/2024 Other Funds Other Funds Analysis (continued): Grant Funds Analysis FY 2023-24 Comparison Operating Grant Revenues $ FY 23 Actual Revenue Revenue 246,551 $ FY 23 Actual Revenue Community Services 254,596 253,943 Neighborhood Resources 256,244 - Neighborhood Res. - CDBG & HOME 207,104 459,052 Neighborhood Res. - HUD 7,404,262 5,436,991 Public Safety 1,486,643 916,945 Total Operating Grant Revenue $ General Government* $ 9,855,401 $ 9,309,000 760,003 $ 44,585 FY 24 Actual Revenue 7 2,242,069 6 5 4 Millions General Government* FY 24 Actual 3 2 1 Public Works & Utilities 3,583,609 - 2,446,476 Total Capital Grant Revenue $ 5,688,334 $ 2,491,062 Total Grant Revenue $ 15,543,735 $ 11,800,061 * 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 second quarter of FY 2023-24 are $15.5M as compared to $11.8M collected through the second quarter of FY 2022-23. 21 1/30/2024