Informational Memo Management Services - Memo No. 25-052 Date: November 7, 2024 To: Mayor and Council Thru: Joshua H. Wright, City Manager Dawn Lang, Deputy City Manager/CFO DLL From: Matt Dunbar, Budget & Policy Director MD Subject: Fiscal Year (FY) 2024-25 First Quarter Financial Report Attached is the FY 2024-25 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 2024-25 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 2020-21 to FY 2023-24), 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. The General Fund first quarter reflected an overall revenue increase of 10.1% over anticipated revenues based on budget, and a 1.2% decrease over the prior year collections through September, with 24.1% of budgeted revenues received compared to the 23.4% historical average. There are planned revenue reductions coming in Quarter 3 as the residential rental tax will no longer be collected starting in January 2025, however, the expectation, based on revenues thus far, is to end the year in a positive position. Overall, first quarter General Fund expenditures are at 34% of budget expended compared to 42.4% in the prior year. The percentage is lower this year primarily from the reduction in onetime Public Safety Personnel Retirement System (PSPRS) unfunded liability payment of $73M in the prior year, compared to $7M in the current year. Based on known spending expectations and considering the common practice of encumbering contracts in the first quarter, expenditures are expected to remain within budget based on the 1st quarter data. Memo No. 25-052 November 7, 2024 Page 2 Should you have additional questions regarding this information, please contact me at x2256 or Dawn Lang at x2255. Attachment: FY 2024-25 First Quarter Financial Report c: Tadd Wille, Assistant City Manager Andy Bass, Deputy City Manager Quarterly Financial Report 1st Qtr FY 2024-25 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 Overall General Fund Revenue by Category Analysis Revenue Detail by Category Performance Indicator* Positive Positive Positive Positive Positive Positive Positive 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 Sales Tax - Overall & by Taxable Activity Franchise Fees Primary Property Tax State Shared Revenues Licenses & Permits Charges for Services Other Revenues 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 11/7/2024 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 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. Third Quarter 2023 (third estimate) Fourth Quarter 2023 (third estimate) First Quarter 2024 Second Quarter 2024 (third estimate) Source: U.S. Department of Commerce 4.4% 3.2% 1.6% 3.0% 4.75%-5.00% 5.00%-5.25% 5.25%-5.50% 4.75%-5.00% March 23, 2023 May 4, 2023 July 27, 2023 September 19, 2024 Source: Federal Reserve Bank Unemployment National State of Arizona Phoenix Metro Area* Jun-24 4.3% 3.9% Jul-24 4.5% 4.4% 3.5% 3.9% Aug-24 4.4% 4.0% 3.5% 3.9% 3.4% Sep-24 3.9% 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 70 for FY Rate of Return is net of fees and includes interest earnings as well as both 2023-24, up from the 14.5 average permits per quarter in FY 2022-23. realized and unrealized gains/(losses). Rate of Return is typically negative in a rising rate environment. Fiscal Year 2024-25 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC* Fiscal Year 2023-24 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC 1st Quarter 2.87% 2.83% 0.88% 0.86% 1st Quarter 0.94% 1.02% 0.23% 0.35% Fiscal Year 2.87% 2.83% 3.39% 4.14% Fiscal Year 0.94% 1.02% 0.23% 0.35% Quarter Jul - Aug - Sep 2022 Oct - Nov - Dec 2022 Jan - Feb - Mar 2023 Apr - May - Jun 2023 Jul - Aug - Sep 2023 Oct - Nov - Dec 2023 Jan - Feb - Mar 2024 Apr - May - Jun 2024 Jul - Aug - Sep 2024 State of Arizona 7,735 5,339 6,525 8,799 9,858 9,164 11,192 10,967 10,380 Chandler 11 12 11 24 110 87 29 55 42 Source: Investment Advisors 2 12/2/2024 General Fund Revenue Analysis: Overall General Fund Revenues FY 2024-25 3r FY 24 Actual Revenue Jul - Sep 24 $ 2nd Qtr Oct - Dec 24 FY 25 FY 25 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 80,607,440 $ 88,779,243 23.4% 91,151,241 3rd Qtr Jan - Mar 25 89,807,773 4th Qtr Apr - Jun 25 106,674,671 Total 24.1% Dollars in Millions 1st Qtr FY 25 Actual Revenue $ 368,233,801 $ 88,779,243 24.1% Historical Trend Actual to Budget 140 120 100 23.4% 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 2024-25 are $8.2M (10.1%) above the adopted budget, and $1.1M (1.2%) less than actual collections through the first quarter of FY 2023-24. Overall, General Fund revenue in the first quarter is led by continued higher collection of Sales Tax and Licenses, although slowing based on collections in September as residental rental tax elimination by January 2025 starts to show effects. These categories performed well due to level local consumer spending including related inflation, and development activity (although slowing in residential housing) in Chandler. The continued $20B expansion of Intel, the largest development during this time period, continue to affect revenues which are slightly coming in over budget in various categories. Some slowing of this project shows anticipated reductions in categories. Once the development is complete, revenues will stabalize in various categories, classifying much of this additional revenue as one-time. 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 2024-25 FY 25 % of Budget Adopted Actual Rec'd to Budget Revenue Date 197,908,400 $ 50,450,498 25.5% 85,527 2.3% FY 25 Revenue Categories Sales Tax $ Franchise Fees 3,650,000 Primary Property Tax 8,783,722 29,138 0.3% State Shared Sales Tax 116,408,000 26,203,146 22.5% Licenses & Permits 6,978,300 3,745,777 53.7% Charges for Services 15,707,789 3,152,083 20.1% Other Revenues 10,265,308 2,980,005 29.0% Indirect Cost Allocation 8,532,282 2,133,071 25.0% 88,779,243 24.1% Total $ 368,233,801 $ General Fund Collection History by Category % Indirect Costs 100% 80% Other Revenues 28% 29% 34% 30% 60% 40% 57% 55% 52% 57% FY22 $315M FY23 $373M FY24 $402M FY25 Q1 $88.8M 20% Voter Authorized Local Revenue Primary Property Taxes Franchise Fees Local Sales Taxes 0% Positive Charges for Services Licenses & Permits This chart summarizes General Fund revenue collections by revenue category for FY 2024-25. 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 11/7/2024 General Fund Revenue Analysis (continued): Sales Tax Revenue FY 2024-25 FY 24 Actual Revenue Jul - Sep 24 $ FY 25 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 46,982,983 $ 50,450,498 2nd Qtr Oct - Dec 24 49,913,208 3rd Qtr Jan - Mar 25 51,846,298 4th Qtr Apr - Jun 25 49,173,249 Total $ 197,908,400 $ 50,450,498 25.5% 29.2% 25.5% 29.2% FY 25 Actual Revenue Historical Trend Actual to Budget 60 Dollars in Millions 1st Qtr FY 25 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 2024-25 are $3.5M (7.4%) above adopted budget and $1.4M (2.8%) less than actual collections in the prior year through the first quarter of FY 2023-24. 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 4 Years Actual Sales Tax by Category (in millions) % Chg FY 25 % of Adopted Actual Actual to from Budget Revenue Budget Prior Yr. Retail/Mfd. Bldg/Jet Fuel $ Contracting 92,000,000 $ 22,517,546 24.5% -2.2% 23,700,000 5,055,074 21.3% -29.4% FY 21-22 Utilities 21,950,000 6,637,460 30.2% 14.5% Real Property Rentals 18,000,000 6,188,459 34.4% 3.1% FY 22-23 92 Restaurants & Bars 17,500,000 4,438,842 25.4% 4.6% FY 23-24 98 FY 25 FY 20-21 75 14 85 15 17 19 16 28 25 13 21 16 17 23 19 18 25 18 Telecommunications 1,550,000 527,465 34.0% 2.7% Personal Prop. Rentals Hotels/Motels 5,500,000 1,494,101 27.2% 5.5% 6,800,000 1,085,533 16.0% 2.0% Retail Contracting Publishing/Printing/Adv. Amusements 200,000 45,327 22.7% -4.1% Utilities Real Property Rentals 1,300,000 453,474 34.9% 19.0% Restaurants & Bars Telecommunications Use Tax 7,500,000 1,572,284 21.0% 366.0% Personal Prop. Rentals Hotels/Motels 50,015,566 25.5% 0.1% Publishing/Printing Amusements Total Sales Tax $ 196,000,000 $ 0 70 140 210 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 2024-25 were $3.4M (7.4%) above the adopted budget and $39,428 (0.1%) higher than actual collections through the first quarter of FY 2023-24. It should be noted that most of the categories are positive, reflecting higher consumer spending, although slowing from prior year and continued strong local economy as Intel continues thier project. Contracting/development collections are down as residential construction slumped and we are starting to see construction revenues decrease from slowing development in all areas. Use tax is a highly fluctuating revenue category and significant swings in collection percentage are not abnormal. 4 11/7/2024 General Fund Revenue Analysis (continued): Franchise Fee Revenue FY 2024-25 Jul - Sep 24 $ 2nd Qtr Oct - Dec 24 FY 25 % of *% of Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 38,748 $ 2.3% 1.1% 743,734 3rd Qtr Jan - Mar 25 1,622,522 4th Qtr Apr - Jun 25 1,244,996 Total 85,527 $ 3,650,000 $ 85,527 2.3% 1.1% Actual Revenue FY 25 Actual Revenue 3r Historical Trend Actual to Budget Dollars in Thousands 1st Qtr FY 25 Adopted 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 Positive 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 for FY 2024-25 are $46,779 (120.7%) higher than the adopted budget and $111,630 (427.7%) more than actual collections through the first quarter of FY 2023-24. 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. Primary Property Tax Revenue FY 2024-25 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 24 $ 57,547 $ 2nd Qtr Oct - Dec 24 1,801,695 3rd Qtr Jan - Mar 25 3,916,497 4th Qtr Apr - Jun 25 3,007,983 Total $ 8,783,722 $ 29,138 29,138 0.3% 0.7% 0.3% 0.7% Actual Revenue FY 25 Actual Revenue Historical Trend Actual to Budget Dollars in Millions 1st Qtr *% of FY 25 FY 25 FY 24 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 $0.2126 per $100 of assessed valuation and a secondary tax rate of $0.87 per $100 of assessed valuation for a total rate of $1.0826, 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 4.7% related to appreciation, which resulted in a small net tax increase for the median value homeowner. Primary property tax collections for FY 2024-25 are $28,410 (49.4%) less than the adopted budget and $24,642 (45.8%) less than actual collections through the first quarter of FY 2023-24. 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 11/7/2024 General Fund Revenue Analysis (continued): 1st Qtr Jul - Sep 24 $ 2nd Qtr Oct - Dec 24 FY 25 FY 25 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 25,866,242 $ 26,203,145 22.5% 25.4% 26,203,145 22.5% 25.4% 28,550,584 3rd Qtr Jan - Mar 25 29,150,314 4th Qtr Apr - Jun 25 32,840,860 Total $ 116,408,000 $ Dollars in Millions State Shared Sales Tax Revenues FY 2024-25 * Pro-rated based upon a four year historical trend of actual year-to-date collections FY 24 Actual Revenue FY 25 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 for FY 2024-25 are $190,263 (2.3%) above adopted budget and $370,821 (4.3%) less than actual collections through the first quarter of FY 2023-24. -- 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 revenue based on the number of employees enrolled in PSPRS. The tax is distributed December and June of each year. -- 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 for FY 2024-25 are $151,524 (5.4%) above adopted budget and $108,740 (3.8%) more than actual collections through the first quarter of FY 2023-24. -- Urban Revenue Sharing: Eighteen percent (18%) of the 2022 State income tax collection is distributed to cities and towns as urban revenue sharing based upon estimated population. Collections for FY 2024-25 are $4,884 (0.0%) below the adopted budget and $3.7M (19.9%) less than actual collections through the first quarter of FY 2023-24, which reflects the known reduction as the flat tax goes into effect. The overall State Shared revenue performance indicator is warning because 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, and the reduction was anticipated. Licenses & Permits Revenue FY 2024-25 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 24 $ 875,785 $ 2nd Qtr Oct - Dec 24 1,936,458 3rd Qtr Jan - Mar 25 1,972,410 4th Qtr Apr - Jun 25 2,193,647 Total $ 6,978,300 $ 3,745,777 3,745,777 53.7% 13.3% 53.7% 13.3% * Pro-rated based upon a four year historical trend of actual year-to-date collections Dollars in Thousands 1st Qtr FY 24 Actual Revenue FY 25 Actual Revenue Historical Trend Actual to Budget *% of FY 25 FY 25 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 1st Qtr Positive 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 for FY 2024-25 are $2.9M (327.7%) above adopted budget and $3.2M (557.6%) more than actual collections through the first quarter of FY 2023-24. Lower collections for FY 2023-24 was anticipated as large industrial permits inflate the historical comparison, however, we are also seeing a slowing of other permit related revenues. Higher collections in the first quarter of FY 2024-25 reflects a large reciept recorded for an Intel permit. 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. 6 11/7/2024 General Fund Revenue Analysis (continued): Charges for Services Revenue FY 2024-25 Jul - Sep 24 $ FY 25 % of *% of Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 2,612,176 $ 2nd Qtr Oct - Dec 24 3,268,215 3rd Qtr Jan - Mar 25 4,037,491 4th Qtr Apr - Jun 25 5,789,907 Total $ 15,707,789 $ 3,152,083 3,152,083 20.1% 19.9% 20.1% Actual Revenue FY 25 Actual Revenue 3r Historical Trend Actual to Budget Dollars in Millions 1st Qtr FY 25 Adopted FY 24 7 6 5 4 3 2 19.9% 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 for FY 2024-25 were $539,908 (20.7%) above adopted budget and $87,217 (2.8%) more than actual collections through the first quarter of FY 2023-24. 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. Other Revenue FY 2024-25 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd Jul - Sep 24 $ 2,040,885 $ 2nd Qtr Oct - Dec 24 2,024,574 3rd Qtr Jan - Mar 25 2,527,308 4th Qtr Apr - Jun 25 3,672,541 Total $ 10,265,308 $ 2,980,005 2,980,005 29.0% 21.4% 29.0% 21.4% Dollars in Millions 1st Qtr *% of FY 25 FY 25 FY 24 Actual Revenue FY 25 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 for FY 2024-25 are $939,119 (46.0%) above adopted budget and $1.3M (85.6%) more than actual collections through the first quarter of FY 2023-24. Higher collections in the first quarter of FY 2024-25 reflects interest income due to higher balances and rates. 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. 7 11/7/2024 General Fund Expenditure Analysis: General Fund Expenditures + Encumbrances for FY 2024-25 by Function Dollars in Millions * Dept. Operating General Government $ FY 25 FY 25 % of % of Adjusted Q1 Budget Budget Budget Exp+Enc Exp'd Prior Yr. Development Services 3 12 1 Community Services 86,205,952 $ 30,494,017 35.4% 32.3% Community Services 37,771,791 12,390,805 32.8% 34.0% 3 Development Services 13,994,538 3,376,299 24.1% 22.5% Public Safety 157,644,951 51,452,841 32.6% 29.3% 12 3 Public Works & Utilities 11,929,517 6,015,865 50.4% 48.9% Neighborhood Resources Non-Dept. Pers. & O&M 10,052,377 3,029,170 30.1% 10.6% 21,344,501 Subtotal $ 338,943,627 Non-Dept. Reserves $ Non-Dept. Contingencies Total $ 8,567,468 40.1% 80.0% 115,326,466 34.0% 42.4% 3,750,592 $ - 0.0% 0.0% 45,827,131 - 0.0% 0.0% 29.7% 37.2% $ 388,521,350 $ 115,326,466 * Excluding Interfund Transfers 25 74 30 9 Neighborhood Resources General Government Non-Dept. Pers. & O&M Public Safety 43 51 6 6 FY 24 Q1 Exp+Enc FY 25 Q1 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 for FY 2023-24 and FY 2024-25. Non-Dept. The Personnel and O&M (maroon category) decrease mainly reflects the difference in the amount of the prior year's payment of $73M towards the Public Safety Personnel Retirement System (PSPRS) unfunded liability payoff, to the current year's payment of $7M. Public Safety's (blue category) increase mainly reflects higher personnel related costs. All other areas remained fairly consistent. FY 2024-25 operating expended and encumbered through the first quarter is 34.0% of the adjusted budget compared to 42.4% of adjusted budget spent and encumbered in the prior year. As shown on the following pages, departments (excluding non-departmental) have expended between 19.7% and 50.4% of their General Fund adjusted budgets through through the first quarter of FY 2024-25. General Fund Expenditures + Encumbrances for FY 2024-25 by Category FY 25 *Dept. Operating Personnel Operations & Maint. Reserves/Contingencies Total $ FY 25 FY 24 % Change Adjusted Q1 Q1 from Prior Budget Exp+Enc Exp+Enc Yr. Actual FY 2024-25 General Fund Actual Expenditures + Encumbrances 243,747,800 $ 70,683,187 $ 126,746,641 -44.2% Operations 95,195,827 44,643,278 20.5% 49,577,723 $ 388,521,350 $ 115,326,465 37,053,224 - 0.0% $ 163,799,865 -29.6% & Maint. 39% Personnel 61% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Personnel spending through the first quarter of FY 202425 is 44.2% less than spending for FY 2023-24. The majority of the decrease is due the $7M payment to the Public Safety Personnel Retirement System (PSPRS) unfunded liability, versus $73M in the prior year and also includes other citywide personnel cost increases and additional FTEs. Operations and maintenance spending through the first quarter of FY 2024-25 is 20.5% more than spending for FY 2023-24. Some of the increase reflects higher spending and encumbrances for Fire, Police, Neighborhood Resources, and IT professional services. 8 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Mayor & Council Expenditure FY 2024-25 Comparison Operating Only 1st Qtr Jul - Sep 24 FY 25 % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 300,310 $ 2nd Qtr Oct - Dec 24 320,587 3rd Qtr Jan - Mar 25 362,916 4th Qtr Apr - Jun 25 372,490 Total $ 1,356,303 $ 324,241 324,241 23.9% 22.1% 23.9% 22.1% Dollars in Thousands *Avg Hist. FY 24 Actual Exp+Enc FY 25 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 23.9% of their FY 2024-25 adjusted budget and has historically spent 22.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in personnel costs. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. City Clerk Expenditure FY 2024-25 Comparison Operating Only 1st Qtr Jul - Sep 24 FY 25 % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 432,399 $ 2nd Qtr Oct - Dec 24 348,251 3rd Qtr Jan - Mar 25 382,083 4th Qtr Apr - Jun 25 361,686 Total $ 1,524,419 $ 353,897 353,897 23.2% 28.4% 23.2% 28.4% Dollars in Thousands *Avg Hist. FY 24 Actual Exp+Enc FY 25 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 City Clerk includes the following cost centers: City Clerk and Records Management. The department spent 23.2% of their FY 2024-25 adjusted budget and has historically spent 28.4% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 compared to FY 2023-24 reflects election expenses. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 9 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Law Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 1,269,110 $ 2nd Qtr Oct - Dec 24 1,209,211 3rd Qtr Jan - Mar 25 1,286,097 4th Qtr Apr - Jun 25 1,243,833 Total $ 5,008,251 $ 1,302,529 1,302,529 26.0% 26.0% 25.3% 25.3% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 1,600 Dollars in Thousands Operating Only 1st Qtr Jul - Sep 24 FY 25 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 Law spent 26.0% of their FY 2024-25 adjusted budget and has historically spent 25.3% 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. City Magistrate Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 1,346,866 $ 2nd Qtr Oct - Dec 24 1,604,876 3rd Qtr Jan - Mar 25 1,555,318 4th Qtr Apr - Jun 25 1,590,839 Total $ 6,097,899 $ 1,780,679 1,780,679 29.2% 29.2% 22.1% 22.1% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 2,000 Dollars in Thousands Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 1,600 1,200 800 400 - * 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 29.2% of their FY 2024-25 adjusted budget and has historically spent 22.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in professional services (a large encumbrance for public defender services in the 1st quarter that will be spent down throughout the year) and personnel costs. The performance indicator is negative as expenses through the first quarter are more than five percentage points of historical budget spent through the first quarter, however it has been changed to positive as the expectation is to be within budget by fiscal year end. 10 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): City Manager & Organizational Support Expenditure FY 2024-25 Comparison Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 6,628,623 $ 2nd Qtr Oct - Dec 24 5,987,662 3rd Qtr Jan - Mar 25 5,386,217 4th Qtr Apr - Jun 25 5,125,014 Total Actual Exp+Enc Historical Trend Actual to Budget % of Budget $ 23,127,516 $ 8,680,550 8,680,550 37.5% 28.7% 37.5% Dollars in Millions Jul - Sep 24 Actual Expend FY 25 FY 25 Operating Only 1st Qtr FY 24 *Avg Hist. 9 8 7 6 5 4 3 2 28.7% 1 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. Combined these divisions spent 37.5% of their FY 2024-25 adjusted budget and have historically spent 28.7% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in professional services (a large encumbrance in Transportation Policy in the 1st quarter that will be spent down throughout the year), higher utilities citywide reflected in Building & Facilities, and personnel costs. The performance indicator is negative as expenses through the first quarter are more than five percentage points of historical budget spent through the first quarter, however it has been changed to positive since the expectation is to be within budget by fiscal year end. Communications & Public Affairs Expenditure FY 2024-25 Comparison FY 25 % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr Operating Only 1st Qtr Jul - Sep 24 $ 1,163,571 $ 2nd Qtr Oct - Dec 24 925,786 3rd Qtr Jan - Mar 25 917,707 4th Qtr Apr - Jun 25 994,481 Total $ 4,001,545 $ 1,157,820 1,157,820 28.9% 29.1% 28.9% 29.1% Dollars in Thousands *Avg Hist. FY 24 Actual Expend FY 25 Actual Exp+Enc Historical Trend Actual to Budget 1,800 1,500 1,200 900 600 300 1st Qtr * Historical Trend represents the average of the past 4 years % of actual to budget 2nd Qtr 3rd Qtr 4th Qtr Positive Communications and Public Affairs (CAPA) spent 28.9% of their FY 2024-25 adjusted budget and have historically spent 29.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2023-24 compared to FY 2024-25 was for planned one-time expenses for marketing/promotional and talent recruitment campaigns. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 11 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Cultural Development Expenditure 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 1,592,524 $ 2nd Qtr Oct - Dec 24 1,263,179 3rd Qtr Jan - Mar 25 1,304,895 4th Qtr Apr - Jun 25 1,390,399 Total $ 5,550,997 $ 1,503,507 1,503,507 27.1% 28.7% 27.1% 28.7% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 2,000 Dollars in Thousands Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 1,600 1,200 800 400 - * 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 27.1% of their FY 2024-25 adjusted budget and have historically spent 28.7% 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. Community Services Expenditure 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 12,975,074 $ 12,390,805 $ 2nd Qtr Oct - Dec 24 8,133,348 3rd Qtr Jan - Mar 25 7,681,836 4th Qtr Apr - Jun 25 8,981,533 Total $ 37,771,791 $ 12,390,805 32.8% 34.4% 32.8% 34.4% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 16 Dollars in Millions Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 14 12 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 32.8% of their FY 2024-25 adjusted budget and have historically spent 34.4% 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 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Information Technology Expenditure 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget 14 Budget Exp+Enc by Qtr by Qtr 12 $ 9,226,493 $ 2nd Qtr Oct - Dec 24 5,369,353 3rd Qtr Jan - Mar 25 5,779,985 4th Qtr Apr - Jun 25 9,847,619 Total $ 30,223,450 $ 12,907,965 12,907,965 42.7% 30.5% 42.7% Dollars in Millions Operating Only 1st Qtr Jul - Sep 24 FY 25 30.5% FY 24 Actual Exp+Enc FY 25 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 Information Technology spent 42.7% of their FY 2024-25 adjusted budget and have historically spent 30.5% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in professional services (large encumbrances for various contracts in the 1st quarter that will be spent down throughout the year) and personnel costs. The performance indicator is negative as expenses through the first quarter are more than five percentage points of historical budget spent through the first quarter, however it has been changed to positive since the expectation is to be within budget by fiscal year end. Management Services Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 2,405,014 $ 2nd Qtr Oct - Dec 24 2,218,902 3rd Qtr Jan - Mar 25 2,379,416 4th Qtr Apr - Jun 25 2,312,240 Total $ 9,315,572 $ 2,482,830 2,482,830 26.7% 25.8% 26.7% 25.8% Actual Exp+Enc Actual Exp+Enc Series2 Series3 Historical Trend Actual to Budget 2,800 3 Dollars Millions Dollars inin Thousands Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 FY 25 Series1 2,400 2,000 2 1,600 1,200 1 800 400 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, Water/Wastewater/Solid Waste, through the Indirect Cost Allocation). These divisions spent 26.7% of their FY 2024-25 adjusted budget and have historically spent 25.8% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in personnel costs. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 13 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Neighborhood Resources Expenditure 2024-25 Comparison Actual Exp+Enc Historical Trend Actual to Budget FY 25 % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 1,180,647 $ 2nd Qtr Oct - Dec 24 3,542,092 3rd Qtr Jan - Mar 25 2,400,997 4th Qtr Apr - Jun 25 2,928,641 Total Actual Exp+Enc FY 25 $ 10,052,377 $ 3,029,170 30.1% 3,029,170 11.7% 30.1% 11.7% Dollar in Thousands Operating Only 1st Qtr Jul - Sep 24 FY 24 *Avg Hist. 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. The department spent 30.1% of their FY 2024-25 adjusted budget and have historically spent 11.7% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 compared to FY 2023-24 reflects the timing shift of encumbrances from the prior year between the first and second quarter. The performance indicator is negative as expenses through the first quarter are between more than 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. Non-Departmental Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 13,905,841 $ 2nd Qtr Oct - Dec 24 1,341,081 3rd Qtr Jan - Mar 25 4,990,522 4th Qtr Apr - Jun 25 1,107,057 Total** $ 21,344,501 $ 8,567,468 8,567,468 40.1% 65.1% 40.1% 65.1% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Millions Operating Only 1st Qtr Jul - Sep 24 FY 25 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 2024-25 is 40.1% of the adjusted budget and has historically spent 65.1% of the adjusted budget through the first quarter of the fiscal year. Higher spending compared to the historical trend in FY 2023-24 compared to FY 2024-25 reflects a decreased payment towards the Public Safety Personnel Retirement System (PSPRS) unfunded liability payment amount of $7.0M, which was $73M in the prior year. This results in a positive performance indicator, with the expectation to be within budget by fiscal year end. 14 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Development Services Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr $ 3,237,014 $ 2nd Qtr Oct - Dec 24 3,392,814 3rd Qtr Jan - Mar 25 3,717,376 4th Qtr Apr - Jun 25 3,647,334 Total $ 13,994,538 $ 3,376,299 3,376,299 24.1% 23.1% 24.1% 23.1% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 4 Dollars in Millions Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 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 Development Services includes the following cost centers: Administration, Construction Management and Permits, Building Safety, Transportation Engineering, Engineering, and Planning. The department spent 24.1% of their FY 2024-25 adjusted budget and have historically spent 23.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in professional services and personnel costs. The performance indicator is negative as expenses through the first quarter are between more than 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. Public Works & Utilities Expenditure FY 2024-25 Comparison *Avg Hist. % of Budget Trend % FY 25 Adjusted Actual Expended of Budget 7 Budget Exp+Enc by Qtr by Qtr 6 $ 4,869,273 $ 2nd Qtr Oct - Dec 24 2,344,221 3rd Qtr Jan - Mar 25 2,791,721 4th Qtr Apr - Jun 25 1,924,302 Total $ 11,929,517 $ 6,015,865 6,015,865 50.4% 40.8% 50.4% 40.8% Dollars in Millions Operating Only 1st Qtr Jul - Sep 24 FY 25 FY 24 Actual Exp+Enc FY 25 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 department spent 50.4% of their FY 2024-25 adjusted budget and have historically spent 40.8% of their adjusted budget through the first quarter of the fiscal year. Higher spending compared to the historical trend reflects availability of materials, general increases in costs of goods, and personnel increases. The performance indicator is negative as expenses through the first quarter are more than five percentage points of historical budget spent through the first quarter, however this was changed to positive as the expectation is to be within budget by fiscal year end, and is in line with prior year spending. 15 11/7/2024 General Fund Expenditure Analysis (continued / department summaries): Fire Expenditure FY 2024-25 Comparison *Avg Hist. Jul - Sep 24 $ FY 25 % of Budget Trend % Adjusted Actual Expended of Budget 18 Budget Exp+Enc by Qtr by Qtr 15 13,943,080 $ 16,659,832 2nd Qtr Oct - Dec 24 11,470,449 3rd Qtr Jan - Mar 25 12,296,849 4th Qtr Apr - Jun 25 11,543,819 Total $ 49,254,197 $ 16,659,832 33.8% 28.3% 33.8% 28.3% Dollars in Millions Operating Only 1st Qtr FY 25 FY 24 Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 12 9 6 3 1st Qtr * Historical Trend represents the average of the past 4 years % of actual to budget 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 33.8% of their FY 2024-25 adjusted budget and have historically spent 28.3% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in professional services and personnel costs which includes a one-time payment to the Post Employment Health Plan (PEHP) for all sworn members covered by the MOU. The performance indicator is negative as expenses through the first quarter are between more than 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. Police Expenditure FY 2024-25 Comparison *Avg Hist. 1st Qtr Jul - Sep 24 $ FY 25 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 28,929,635 $ 34,793,009 2nd Qtr Oct - Dec 24 26,193,524 3rd Qtr Jan - Mar 25 27,530,097 4th Qtr Apr - Jun 25 25,737,498 Total $ 108,390,754 $ 34,793,009 32.1% 26.7% 32.1% 26.7% Actual Exp+Enc FY 25 Actual Exp+Enc Historical Trend Actual to Budget 40 Dollars in Millions Operating Only FY 25 FY 24 35 30 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 32.1% of their FY 2024-25 adjusted budget and have historically spent 26.7% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflects increases in personnel costs which includes a one-time payment to the Post Employment Health Plan (PEHP) for all sworn members covered by the MOU. The performance indicator is negative as expenses through the first quarter are between more than 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. 16 11/7/2024 Enterprise Funds Enterprise Fund Analysis: Water Fund Analysis FY 2024-25 Comparison % of Budget % of Revenue/ Rec'd/Exp'd Budget Water Fund Adjusted Budget Exp+Enc to Date Prior Yr. Revenues $ 15,070,086 Transfers In 62,054,928 $ 1,839,514 24% 25% 0% 0% - Total Revenues $ 63,894,442 $ 15,070,086 24% 23% Operating Expenses $ 45,576,635 $ 23,403,167 51% 52% Major Capital Expenses 39,420,546 16,650,370 42% 31% Debt Service 15,469,937 0% 10% Transfers Out 5,672,987 1,096,034 19% 28% 41,149,571 39% 37% - Total Expenses $ 106,140,105 Net Rev / Exp $ (42,245,663) $ (26,079,484) Positive $ Water Fund Analysis Revenues Expenses 120 Dollars in Millions FY 25 Actual FY 25 100 80 60 40 20 0 FY 24 Actual Q1 FY 25 Actual Q1 FY 25 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 2024-25 reflects a $42.2M drawdown (includes unspent capital carryforward from prior years) to fund balance due to increased pay as you go, as well as bond funded (sold in prior year) capital spending, and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $1,839,514 includes $450,714 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 $5,672,987 includes indirect cost allocation to the General Fund of $3,439,300, payment of $221,949 to the Technology Replacement Fund, payment of $600,000 to the Insured Liability Self-Insurance Fund, payment of $33,528 to the Workers' Compensation Self-Insurance Trust, and a payment of $23,511 to the Uninsured Liability Self-Insurance Fund, as well as a subsidy of $1,354,699 to the Reclaimed Water Fund (reflects benefit received). Year-to-date Operating Revenues through the first quarter are 24% compared to 25% for FY 2023-24, while Operating Expenses through the first quarter are 51% compared to 52% for FY 2023-24. The first quarter of the fiscal year includes large encumbrances ($12.7M) 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 2024-25 Comparison FY 25 Actual % of Budget % of FY 25 Revenue/ Rec'd/Exp'd Budget Wastewater Fund Adjusted Budget Exp+Enc to Date Prior Yr. Revenues $ 50,795,566 $ 6,260,896 Total Revenues $ Operating Expenses $ 57,056,462 9,966,828 - 20% 20% 0% 0% $ 9,966,828 17% 16% 25,424,100 $ 10,372,823 41% 48% Major Capital Expenses 153,448,226 56,818,975 37% 39% Debt Service 19,019,789 0% 16% Transfers Out Total Expenses Net Rev / Exp Positive - 4,464,800 $ 202,356,915 $ 891,835 20% 19% 68,083,633 34% 38% Revenues Expenses 250 Dollars in Millions Transfers In Wastewater Fund Analysis $ (145,300,453) $ (58,116,805) 200 150 100 50 0 FY 24 Actual Q1 FY 25 Actual Q1 FY 25 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 2024-25 reflects an $145M drawdown (includes unspent capital carryforward from prior years) to fund balance due to increased pay as you go, as well as bond funded (sold in prior year) capital spending and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $6,260,896 includes $5M for System Development Fee (SDF) loan paybacks and $1,260,896 from Reclaimed Water towards related capital costs. The budgeted Transfers Out totaling $4,464,800 includes indirect cost allocation to the General Fund of $2,911,800, payment of $152,413 to the Technology Replacement Fund, payment of $22,377 to the Workers' Compensation Self-Insurance Trust, and a payment of $23,511 to the Uninsured Liability SelfInsurance Fund, as well as a subsidy of $1,354,699 to the Reclaimed Water Fund (reflects benefits received). Year-to-date Operating Revenues through the first quarter are 20% compared to 20% for FY 2023-24, while Operating Expenses through the first quarter are 41% compared to 48% for FY 2023-24. The first quarter of the fiscal year includes large encumbrances ($5.1M) 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. 17 11/7/2024 Enterprise Funds Enterprise Fund Analysis (continued): Reclaimed Water Fund Analysis FY 2024-25 Comparison % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget $ Exp+Enc to Date Prior Yr. Transfers In 1,729,000 $ 2,709,398 585,634 34% 32% - 0% 0% Total Revenues $ 4,438,398 $ 585,634 13% 13% Operating Expenses $ 2,037,359 $ 1,222,292 60% 34% 35,682 1% 1% 26% 14% Transfers Out 2,783,214 Total Expenses $ 4,820,573 $ 1,257,974 Net Rev / Exp $ (382,175) $ (672,340) Positive Revenues Expenses 5,000 Dollars in Thousands Revenues FY 25 Actual Budget Reclaimed Water Reclaimed Water Fund Analysis FY 25 4,000 3,000 2,000 1,000 FY 24 Actual Q1 FY 25 Actual Q1 FY 25 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 2024-25 budget reflects a drawdown to fund balance. The budgeted Transfers In totaling $2,709,398 includes subsidies from Water and Wastewater Funds of $1,354,699 each to reflect the benefit each fund receives by reclaiming water. The budgeted Transfers Out totaling $2,783,214 include an indirect cost allocation to the General Fund of $129,500, payment of $3,070 to the Technology Replacement Fund, and $948 to the Workers' Compensation Self-Insurance Trust, as well as a payment of $1,388,800 to the Water Fund and $1,260,896 to the Wastewater Fund to reflect contributions to reclaimed capital costs. Year-to-date Operating Revenues through the first quarter are 34% of budget compared to 32% for FY 2023-24, while Operating Expenses through the first quarter are 60% of budget as compared to 34% for FY 2023-24. The first quarter of the fiscal year includes large encumbrances ($690K) 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. Solid Waste Fund Analysis FY 2024-25 Comparison Solid Waste Fund Analysis FY 25 FY 25 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Exp+Enc to Date Revenues 27 $ 19,712,816 $ 4,287,722 22% 21% 24 Total Revenues $ 19,712,816 $ 4,287,722 22% 21% Operating Expenses $ $ 16,251,543 81% 82% Budget 20,117,322 Major Capital Expenses 5,753,482 647,820 11% 7% Transfers Out 1,345,520 387,369 29% 30% Total Expenses $ 27,216,324 $ 17,286,732 64% 70% Net Rev / Exp $ Positive Dollars in Millions Prior Yr. Revenues Solid Waste Expenses 21 18 15 12 9 6 3 FY 24 Actual Q1 (7,503,508) $ (12,999,010) FY 25 Actual Q1 FY 25 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 2024-25 reflects a drawdown of $7.5M (includes unspent capital carryforward from prior years). The budgeted Transfers Out totaling $1,345,520 include an indirect cost allocation to the General Fund of $1,261,500, payment of $67,985 to the Technology Replacement Fund, and payment of $16,035 to the Workers' Compensation Self-Insurance Trust. Year-to-date Operating Revenues through the first quarter are 22% compared to 21% for FY 2023-24, while Operating Expenses through the first quarter are 81% compared to 82% for FY 2023-24. The first quarter of the fiscal year includes large encumbrances ($13M) 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 11/7/2024 Enterprise / Other Funds Enterprise / Other Funds Analysis (continued): Airport Fund Analysis FY 2024-25 Comparison Revenues $ General Fund Subsidy % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 1,217,988 $ 332,836 27% 31% - 0% 0% $ 332,836 2% 4% 1,603,846 $ 504,041 31% 32% 12,916,659 1,198,116 9% 5% 115,324 40,324 35% 35% $ 1,742,481 12% 12% $ (1,409,645) 13,417,841 Total Revenues $ Operating Expenses $ Major Capital Expenses Transfers Out Total Expenses $ Net Rev / Exp $ Positive FY 25 Actual 14,635,829 14,635,829 - Revenues Expenses 16,000 Dollars in Thousands Airport Fund Airport Fund Analysis FY 25 14,000 12,000 10,000 8,000 6,000 4,000 2,000 FY 24 Actual Q1 FY 25 Actual Q1 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 2024-25 reflects no budgeted change in fund balance since the General Fund Subsidy of $13.4M 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 $115,324 includes indirect cost allocation to the General Fund of $100,000 and a payment of $15,324 to the Technology Replacement Fund. Year-to-date Operating Revenues through the first quarter are 27% of budget compared to 31% for FY 2023-24, while year-to-date Operating Expenses through the first quarter are 31% of budget compared to 32% for FY 2023-24. The first quarter of the fiscal year includes encumbrances ($62K) 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. Highway User Fund (HURF) Analysis FY 2024-25 Comparison FY 25 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. $ 17,000,000 $ Total Revenues $ 17,669,000 Operating Expenses $ Other 669,000 Major Capital Expenses Transfers Out $ 3,392,447 19% 232,617 35% 12% 3,625,064 21% 19% 10,353,357 $ 3,380,028 33% 33% 17,334,017 7,549,925 44% 36% 133,747 132,186 99% 99% 40% 35% Total Expenses $ 27,821,121 $ 11,062,138 Net Rev / Exp $ (10,152,121) $ (7,437,074) Positive 20% Highway User Fund Analysis Revenues Dollars in Millions Highway Users Tax FY 25 Expenses 30 27 24 21 18 15 12 9 6 3 0 FY 24 Actual Q1 FY 25 Actual Q1 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 2024-25 reflects a drawdown of $10.1M (includes unspent capital carryforward from prior years). The budgeted Transfers Out totaling $133,747 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 $105,082 to the Uninsured Liability Self-Insurance Fund for stormwater oversight. Year-to-date Operating Revenues through the first quarter are 20% of budget compared to 19% for FY 2023-24, while year-to-date Operating Expenses through the first quarter are 33% of budget compared to 33% for FY 2023-24. The first quarter of the fiscal year includes encumbrances ($864K) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances and faster capital spending than the prior year, the resulting fund indicator is positive. 19 11/7/2024 Other Funds Other Funds Analysis (continued): Enterprise System Development Fee Funds Analysis FY 2024-25 Comparison FY 25 FY 25 % of Budget Development Fee Adjusted Actual Rec'd to Budget Revenue Date (SDF) Funds Water $ Reclaimed Water Wastewater Total SDF Revenue $ 3,594,000 $ 1,184,513 33% 890,300 327,326 37% 3,293,000 1,495,288 45% 3,007,127 39% 7,777,300 $ 10 Dollars in Millions Enterprise System Note: Budget and Actual amounts reflect SDF revenues and the interest earned FY 24 Adjusted Budget FY 25 Adjusted Budget FY 24 Actual FY 25 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 2024-25 budget and year-to-date collections through the first quarter compared to the FY 2023-24 budget and year-to-date collections through the first quarter. Collections through the first quarter of FY 2024-25 were 39% of the budget as compared to the prior year's collections of 12% of budget showing some increases to the number of permits being pulled, but still at a much slower pace than prior years. General System Development Fee Funds Analysis FY 2024-25 Comparison % of Budget Adjusted Actual Rec'd to Budget Revenue Date FY 25 Development Fee (SDF) Funds Arterial Streets $ Fire 3,876,000 $ 1,195,392 31% 557,000 109,813 20% 278 0% 818,945 86% Library - Parks 948,000 Police 312,000 62,201 20% Public Building 277,000 53,906 19% 2,240,537 38% Total SDF Revenue $ 5,970,000 $ FY 24 Adjusted Budget FY 24 Actual FY 25 Adjusted Budget FY 25 Actual 8,000 7,000 Dollars in Thousands FY 25 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 2024-25 budget and year-to-date collections through the first quarter compared to the FY 2023-24 budget and year-to-date collections through the first quarter. Collections through the first quarter of FY 2024-25 were 38% of the budget as compared to the prior year's collections of 8% of the budget, which includes a significant development permit issued this year. 20 11/7/2024 Other Funds Other Funds Analysis (continued): Grant Funds Analysis FY 2024-25 Comparison Operating Grant Revenues $ Community Services Neighborhood Resources Neighborhood Res. - CDBG & HOME Neighborhood Res. - HUD Public Safety Total Operating Grant Revenue $ General Government* $ FY 24 Actual Actual Revenue Revenue FY 23 Actual Revenue 137,357 $ 126,044 12,075 192,715 - 77,412 2,476 489 4,271,112 3,810,375 223,581 221,072 4,821,357 $ 4,428,107 53,652 $ 189,431 FY 24 Actual Revenue 5 4 3 Millions General Government* FY 25 2 1 Cultural Development 224,756 Public Works & Utilities 2,565,907 - - 3,229,962 Total Capital Grant Revenue $ 2,844,315 $ 3,419,393 Total Grant Revenue $ 7,665,672 $ 7,847,500 * 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 2024-25 are $7.7M as compared to $7.8M as collected through the first quarter of FY 2023-24. 21 11/7/2024