Informational Memo Management Services - Memo No. 26-039 Date: November 14, 2025 To: Mayor and Council Thru: Tadd Wille, Acting City Manager Dawn Lang, Deputy City Manager/CFO DLL From: Matt Dunbar, Budget & Policy Director MD Subject: Fiscal Year (FY) 2025-26 First Quarter Financial Report Attached is the FY 2025-26 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 2025-26 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 2021-22 to FY 2024-25), 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 positive except State Shared Revenues which are in Warning status, meaning we are keeping a close watch on any changes or trends in that category. The General Fund first quarter reflected an overall revenue increase of 2.3% over anticipated revenues based on budget, and a 3.4% decrease over the prior year’s collections through September, with 22.4% of budgeted revenues received compared to the 23.2% historical average. Overall, first quarter General Fund expenditures are at 34.2% of budget expended compared to 34.0% in the prior 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. Should you have additional questions regarding this information, please contact me at x2256 or Dawn Lang at x2255. Memo No. 26-039 November 14, 2025 Page 2 Attachment: FY 2025-26 First Quarter Financial Report c: Ryan Peters, Deputy City Manager Leah Powell, Deputy City Manager Quarterly Financial Report 1st Qtr FY 2025-26 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 Warning 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 Positive Informational Informational Page 17 Page 17 Page 18 Page 18 Page 19 Page 19 Page 20 Page 21 Page 22 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 Ambulance Services 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 11/14/2025 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 2024 (third estimate) Fourth Quarter 2024 First Quarter 2025 Second Quarter 2025 (third estimate) Source: U.S. Department of Commerce 3.3% 1.9% -0.6% 3.8% 4.75%-5.00% 4.50%-4.75% 4.25%-4.50% 4.00%-4.25% September 19, 2024 November 8, 2024 December 19, 2024 September 18, 2025 Source: Federal Reserve Bank Unemployment National State of Arizona Phoenix Metro Area* Jun-25 4.4% 4.5% Jul-25 4.6% 4.7% 4.0% 4.1% Aug-25 4.5% 4.8% 4.2% Sep-25 Not available due to Federal Shutdown 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 construction, and permit fees and construction sales tax revenues. Allspring benchmark is ICE BofA 0-3 year U.S. Treasury Index PFM's benchmark is ICE BofAML 1-5 year U.S. Treasury Index Chandler's quarterly average for single family building permits is 42.50 for FY Rate of Return is net of fees and includes interest earnings as well as both 2024-25, down from the 70.25 average permits per quarter in FY 2023-24. realized and unrealized gains/(losses). Rate of Return is typically negative in a rising rate environment. Fiscal Year 2025-26 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC Fiscal Year 2024-25 Rate of Return Benchmark Allspring Global Investments Benchmark PFM Asset Management, LLC Source: Investment Advisors 1st Quarter 1.12% 1.19% 1.14% 1.28% 1st Quarter 2.87% 2.83% 0.88% 0.86% Fiscal Year 1.12% 1.19% 1.14% 1.28% Fiscal Year 2.87% 2.83% 3.39% 4.14% Quarter Jul - Aug - Sep 2023 Oct - Nov - Dec 2023 Jan - Feb - Mar 2024 Apr - May - Jun 2024 Jul - Aug - Sep 2024 Oct - Nov - Dec 2024 Jan - Feb - Mar 2025 Apr - May - Jun 2025 Jul - Aug - Sep 2025* State of Arizona 9,858 9,164 11,192 10,967 10,380 8,973 9,855 9,429 4,651 Chandler 110 87 29 55 42 46 51 31 52 *State Sept. totals not updated due to federal shutdown 2 11/14/2025 General Fund Revenue Analysis: Overall General Fund Revenues FY 2025-26 3r FY 25 Actual Revenue Jul - Sep 25 $ FY 26 FY 26 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 83,874,077 $ 85,780,982 2nd Qtr Oct - Dec 25 95,741,121 3rd Qtr Jan - Mar 26 98,145,853 4th Qtr Apr - Jun 26 105,283,486 Total $ 383,044,537 $ 85,780,982 22.4% 23.2% 22.4% Dollars in Millions 1st Qtr FY 26 Actual Revenue 23.2% Historical Trend Actual to Budget 140 120 100 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 2025-26 were $1.9M (2.3%) above the adopted budget and $3.0M (3.4%) less than actual collections through the first quarter of FY 2024-25. Overall, General Fund revenues are coming in as expected. Certain categories are performing well due to continued local consumer spending including related inflation, and some business development activity. As the industrial development project winds down, reductions in several categories are reflected in the budget as anticipated. Now that major developments are substantially complete, revenues have stabilized, classifying much of the prior year’s additional revenues as one-time. Additionally, most of the overage throught the 1st quarter is a result of higher investment earnings. The performance indicator is positive as the percentage of budget received through the first quarter is less than 2% lower 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 2025-26 FY 26 % of Budget Adopted Actual Rec'd to Budget Revenue Date 203,838,400 $ 49,334,775 24.2% 83,463 2.6% FY 26 Revenue Categories Sales Tax $ Franchise Fees 3,190,000 Primary Property Tax 8,785,177 31,586 0.4% State Shared Sales Tax 115,125,994 25,202,793 21.9% Licenses & Permits 7,710,300 1,460,530 18.9% Charges for Services 19,928,507 3,596,796 18.0% Other Revenues 15,429,389 3,811,848 24.7% Indirect Cost Allocation 9,036,770 2,259,192 25.0% 85,780,982 22.4% Total $ 383,044,537 $ General Fund Collection History by Category % Indirect Costs 100% 80% Other Revenues 29% 34% 30% 29% 60% 40% 55% 52% 52% 58% 20% State Shared Revenue Primary Property Taxes Franchise Fees Local Sales Taxes 0% FY23 $373M Positive Charges for Services Licenses & Permits FY24 $402M FY25 - FY26 - Q1 $392M $85.8M This chart summarizes General Fund revenue collections by revenue category for FY 2025-26. 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 came in higher than budget. 3 11/14/2025 General Fund Revenue Analysis (continued): Sales Tax Revenue FY 2025-26 FY 25 Actual Revenue Jul - Sep 25 $ FY 26 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 48,840,915 $ 49,334,775 2nd Qtr Oct - Dec 25 52,847,672 3rd Qtr Jan - Mar 26 54,980,368 4th Qtr Apr - Jun 26 47,169,445 Total $ 203,838,400 $ 49,334,775 24.2% 28.1% 24.2% 28.1% FY 26 Actual Revenue Historical Trend Actual to Budget 60 Dollars in Millions 1st Qtr FY 26 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 2025-26 were $493,860 (1.0%) above adopted budget and $1.1M (2.2%) less than actual collections in the prior year through the first quarter of FY 2024-25. 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 and collections coming in as anticipated. Sales Tax Collection History FY 26 4 Years Actual Sales Tax by Category (in millions) FY 26 % of Adopted Actual Actual to from Budget Revenue Budget Prior Yr. Retail/Mfd. Bldg/Jet Fuel $ Contracting 99,935,000 $ 24,672,168 24.7% 9.6% FY 21-22 20,766,000 3,605,843 17.4% -28.7% FY 22-23 92 Utilities 26,265,000 6,971,724 26.5% 5.0% Real Property Rentals 14,731,000 3,578,985 24.3% -42.2% FY 23-24 98 25 Restaurants & Bars 18,540,000 4,546,532 24.5% 2.4% FY 24-25 98 19 Telecommunications 1,648,000 403,686 24.5% -23.5% Personal Prop. Rentals Hotels/Motels 5,356,000 1,523,215 28.4% 1.9% 6,489,000 1,082,283 16.7% -0.3% Publishing/Printing/Adv. Amusements 213,000 48,810 22.9% 7.7% 1,575,000 460,776 29.3% 1.6% Use Tax 6,522,000 1,233,325 18.9% -21.6% 48,127,346 23.8% -3.8% Total Sales Tax $ 202,040,000 $ % Chg 85 17 0 16 28 70 21 16 17 23 19 21 18 25 18 21 19 140 210 Retail Contracting Utilities Real Property Rentals Restaurants & Bars Telecommunications Personal Prop. Rentals Hotels/Motels Publishing/Printing Amusements 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 2025-26 were $187,867 (0.4%) below the adopted budget and $1.9M (3.8%) less than actual collections through the first quarter of FY 2024-25. It should be noted that many of the categories are positive, reflecting continued consumer spending. Contracting/development collections and Personal Property Rentals are down as the Intel project slows and the residential rental tax elimination is now in effect. Use tax is a highly fluctuating revenue category and significant swings in collection percentage are not abnormal. 4 11/14/2025 General Fund Revenue Analysis (continued): Franchise Fee Revenue FY 2025-26 Jul - Sep 25 $ FY 26 % of *% of Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 48,543 $ 2nd Qtr Oct - Dec 25 660,047 3rd Qtr Jan - Mar 26 1,513,992 4th Qtr Apr - Jun 26 967,418 Total $ 3,190,000 $ 83,463 83,463 2.6% 1.5% 2.6% 1.5% Actual Revenue FY 26 Actual Revenue 3r Historical Trend Actual to Budget Dollars in Thousands 1st Qtr FY 26 Adopted FY 25 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 2025-26 were $34,920 (71.9%) above the adopted budget and $2,064 (2.4%) less than actual collections through the first quarter of FY 2024-25. 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. Primary Property Tax Revenue FY 2025-26 1st Qtr Jul - Sep 25 $ FY 26 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 53,272 $ 2nd Qtr Oct - Dec 25 1,844,556 3rd Qtr Jan - Mar 26 4,196,299 4th Qtr Apr - Jun 26 2,691,050 Total $ 8,785,177 $ 31,586 31,586 *% of 0.4% 0.6% 0.4% 0.6% FY 25 Actual Revenue FY 26 Actual Revenue Historical Trend Actual to Budget Dollars in Millions FY 26 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 2025-26, Chandler is collecting a primary tax rate of $0.2118 per $100 of assessed valuation and a secondary tax rate of $0.87 per $100 of assessed valuation for a total rate of $1.0818, representing a $0.001 cent decrease from the rates adopted in the prior year. For the properties that had assessed valuation increases, this reduction helps offset some of that increase for a smaller net tax increase. Primary property tax collections for FY 2025-26 were $21,686 (40.7%) below the adopted budget and $2,448 (8.4%) more than actual collections through the first quarter of FY 2024-25. 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 11/14/2025 General Fund Revenue Analysis (continued): State Shared Sales Tax Revenues FY 2025-26 Jul - Sep 25 $ FY 26 % of *% of FY 25 Actual Revenue Actual Budget Budget FY 26 Actual Revenue Budget Revenue Rec'd Hist. Rec'd 25,434,159 $ 25,202,792 2nd Qtr Oct - Dec 25 28,321,638 3rd Qtr Jan - Mar 26 28,994,935 4th Qtr Apr - Jun 26 32,375,262 Total $ 115,125,994 $ 25,202,792 21.9% 24.8% 21.9% 24.8% Dollars in Millions 1st Qtr FY 26 Adopted Historical Trend Actual to Budget 45 40 35 30 25 20 15 10 * Pro-rated based upon a four year historical trend of actual year-to-date collections 5 1st Qtr Warning 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 2025-26 are $179,885 (2.1%) below adopted budget and $67,066 (0.8%) more than actual collections through the first quarter of FY 2024-25. -- 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 at the time. The tax is distributed 2nd and 4th quarter of each year. Total collections for FY 2024-25 were $1.6M. -- 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 2025-26 are $69,095 (2.3%) above adopted budget and $128,254 (4.3%) more than actual collections through the first quarter of FY 2024-25. -- Urban Revenue Sharing: Eighteen percent (18%) of the 2023 State income tax collection is distributed to cities and towns as urban revenue sharing based upon estimated population. Collections for FY 2025-26 are $120,577 (0.9%) below adopted budget and $1.2M (0.8%) less than actual collections through the first quarter of FY 2024-25. The overall State Shared revenue performance indicator is warning as the percentage of budget received through the first quarter is between two to five percentage points below the historical budget received through the same period. 1st Qtr Jul - Sep 25 $ 2nd Qtr Oct - Dec 25 FY 26 FY 26 % of *% of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 1,239,563 $ 18.9% 19.1% 1,460,530 18.9% 19.1% 2,051,387 3rd Qtr Jan - Mar 26 2,096,480 4th Qtr Apr - Jun 26 2,322,870 Total 1,460,530 $ 7,710,300 $ * Pro-rated based upon a four year historical trend of actual year-to-date collections Dollars in Thousands Licenses & Permits Revenue FY 2025-26 FY 25 Actual Revenue FY 26 Actual Revenue Historical Trend Actual to Budget 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive 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 2025-26 were $220,966 (17.8%) above adopted budget and $2.3M (61.%) less than actual collections through the first quarter of FY 2024-25 with large prior year building permits fees being onetime. Higher collections in the first three quarters of FY 2024-25 reflects large receipts recorded for industrial permits which will not be collected this fiscal year. 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 11/14/2025 General Fund Revenue Analysis (continued): Charges for Services Revenue FY 2025-26 Jul - Sep 25 $ 2nd Qtr Oct - Dec 25 FY 26 % of *% of Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 3,413,004 $ 18.0% 21.2% 3,596,796 18.0% 21.2% 4,039,110 3rd Qtr Jan - Mar 26 5,179,716 4th Qtr Apr - Jun 26 7,296,677 Total 3,596,796 $ 19,928,507 $ Actual Revenue FY 26 Actual Revenue 3r Historical Trend Actual to Budget Dollars in Millions 1st Qtr FY 26 Adopted FY 25 * Pro-rated based upon a four year historical trend of actual year-to-date collections 9 8 7 6 5 4 3 2 1 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 2025-26 were $183,792 (5.4%) above the adopted budget and $444,713 (14.1%) more than actual collections through the first quarter of FY 2024-25. 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. Other Revenue FY 2025-26 1st Qtr Jul - Sep 25 $ FY 26 % of Adopted Actual Budget Budget Budget Revenue Rec'd Hist. Rec'd 2,585,423 $ 2nd Qtr Oct - Dec 25 3,146,246 3rd Qtr Jan - Mar 26 4,029,345 4th Qtr Apr - Jun 26 5,668,375 Total $ 15,429,389 $ 3,811,848 3,811,848 *% of 24.7% 22.6% 24.7% 22.6% Dollars in Millions FY 26 FY 25 Actual Revenue FY 26 Actual Revenue Historical Trend Actual to Budget 16 14 12 10 8 6 4 2 - * 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 2025-26 are $1.2M (47.4%) above adopted budget and $831,843 (27.9%) more than actual collections through the first quarter of FY 2024-25. Interest Income experienced the most growth over budget since the fed rate was not reduced when anticipated, which resulted in higher one-time monies. 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. 7 11/14/2025 General Fund Expenditure Analysis: General Fund Expenditures + Encumbrances for FY 2025-26 by Function Dollars in Millions * Dept. Operating General Government $ FY 26 FY 26 % of % of Adjusted Q1 Budget Budget Budget Exp+Enc Exp'd Prior Yr. 92,519,721 $ 32,501,715 35.1% Community Services 42,692,710 16,056,108 37.6% 32.8% 16,956,324 4,346,153 25.6% 24.1% Public Safety 150,995,557 49,730,347 32.9% 32.6% Public Works & Utilities 7,795,671 3,037,005 39.0% 50.4% Neighborhood Resources Non-Dept. Pers. & O&M 11,175,420 2,375,124 21.3% 14.2% 40,648,581 Subtotal $ 362,783,984 Non-Dept. Reserves $ Non-Dept. Contingencies Total $ 16,144,127 39.7% 85.2% 124,190,577 34.2% 34.0% 3,138,600 $ - 0.0% 0.0% 25,413,068 - 0.0% 0.0% 31.7% 29.7% $ 391,335,652 $ 124,190,577 * Excluding Interfund Transfers Development Services 16 2 Community Services 30 33 Neighborhood Resources 9 16 12 3 35.4% Development Services 4 3 51 50 6 3 FY 25 Q1 Exp+Enc FY 26 Q1 Exp+Enc General Government Non-Dept. Pers. & O&M Public Safety 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 2024-25 and FY 2025-26. The Personnel and O&M (maroon category) increase mainly reflects the difference in the amount of the prior year's payment of $7M towards the Public Safety Personnel Retirement System (PSPRS) unfunded liability payoff, to the current year's payment of $15M with . General Govenment's (green category) increase mainly reflects higher personnel and technology related costs. Community Services' (yellow category) increase reflects the shift of landscape maintenance contracts from Public Works & Utilities. All other areas remained fairly consistent. FY 2025-26 operating expended and encumbered through the first quarter is 34.2% of the adjusted budget compared to 34.0% of adjusted budget spent and encumbered in the prior year. As shown on the following pages, departments (excluding non-departmental) have expended between 18.7% and 43.6% of their General Fund adjusted budgets for FY 2025-26. General Fund Expenditures + Encumbrances for FY 2025-26 by Category FY 26 *Dept. Operating FY 26 FY 25 % Change Adjusted Q1 Q1 from Prior Budget Exp+Enc Exp+Enc Yr. Actual FY 2025-26 General Fund Actual Expenditures + Encumbrances 261,526,346 $ 78,424,508 $ 70,683,187 11.0% Operations Operations & Maint. 101,257,638 45,766,070 44,643,278 2.5% Reserves/Contingencies 28,551,668 Personnel Total $ $ 391,335,652 $ 124,190,577 - 0.0% $ 115,326,465 7.7% & Maint. 37% Personnel 63% * Excluding Interfund Transfers Total General Fund operating expenditures and encumbrances are reflected by spending category. Personnel spending through the first quarter of FY 202526 is 11.0% more than spending for FY 2024-25. The majority of the increase was due the $15M payment to the Public Safety Personnel Retirement System (PSPRS), versus $7M in the prior year and also includes other citywide personnel cost increases and FTE changes. Operations and maintenance spending through for FY 2025-26 is 2.5% higher than spending for FY 2024-25, due to some higher spending and encumbrances in Neighborhood Resources and IT professional services. 8 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Mayor & Council Expenditure FY 2025-26 Comparison *Avg Hist. Operating Only 1st Qtr Jul - Sep 25 $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 322,103 $ 2nd Qtr Oct - Dec 25 337,652 3rd Qtr Jan - Mar 26 396,938 4th Qtr Apr - Jun 26 398,110 Total $ 1,454,804 $ 360,324 24.8% 360,324 22.1% 24.8% 22.1% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 26 FY 25 500 400 300 200 100 - * Historical Trend represents the average of the past 4 years % of actual to budget 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Positive The Mayor and Council division spent 24.8% of their FY 2025-26 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 2025-26 reflects increases in personnel, professional services, operating supplies, and communication/transportation costs. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. City Clerk Expenditure FY 2025-26 Comparison *Avg Hist. Operating Only 1st Qtr Jul - Sep 25 $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 497,915 $ 2nd Qtr Oct - Dec 25 461,647 3rd Qtr Jan - Mar 26 440,385 4th Qtr Apr - Jun 26 440,141 Total $ 1,840,088 $ 344,345 344,345 18.7% 18.7% 27.1% 27.1% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget Dollars in Thousands FY 26 FY 25 500 400 300 200 100 - * 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 18.7% of their FY 2025-26 adjusted budget and has historically spent 27.1% of their adjusted budget through the first quarter of the fiscal year. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. 9 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Law Expenditure FY 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 1,350,172 $ 2nd Qtr Oct - Dec 25 1,193,890 3rd Qtr Jan - Mar 26 1,383,728 4th Qtr Apr - Jun 26 1,190,464 Total $ 5,118,254 $ 1,340,026 1,340,026 26.2% 26.4% 26.2% 26.4% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 2,000 Dollars in Thousands Operating Only 1st Qtr Jul - Sep 25 FY 26 FY 25 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 Law spent 26.2% of their FY 2025-26 adjusted budget and has historically spent 26.4% of their adjusted budget through the first quarter of the fiscal year. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. City Magistrate Expenditure FY 2025-26 Comparison *Avg Hist. Operating Only 1st Qtr Jul - Sep 25 $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 1,425,723 $ 2nd Qtr Oct - Dec 25 1,517,657 3rd Qtr Jan - Mar 26 1,617,610 4th Qtr Apr - Jun 26 1,493,239 Total $ 6,054,229 $ 1,906,906 1,906,906 31.5% 31.5% 23.5% 23.5% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 2,000 Dollars in Thousands FY 26 FY 25 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 31.5% of their FY 2025-26 adjusted budget and has historically spent 23.5% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2025-26 reflects increases in professional services (a large encumbrance for public defender services in the first 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 higher than 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 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): City Manager & Organizational Support Expenditure FY 2025-26 Comparison 1st Qtr Jul - Sep 25 $ Actual Exp+Enc Historical Trend Actual to Budget FY 26 FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 7,384,593 $ 2nd Qtr Oct - Dec 25 5,596,341 3rd Qtr Jan - Mar 26 5,597,550 4th Qtr Apr - Jun 26 5,252,574 Total Actual Expend FY 26 $ 23,831,059 $ 8,119,374 8,119,374 34.1% 31.0% 34.1% Dollars in Millions Operating Only FY 25 *Avg Hist. 9 8 7 6 5 4 3 2 31.0% 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, Connection & Impact, Economic Development, Fleet Services, Human Resources, Transportation Policy, as well as Cultural Development which is shown separately. Combined these divisions spent 34.1% of their FY 2025-26 adjusted budget and have historically spent 31.0% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 reflected increases in professional services (a large encumbrance in Transportation Policy in the first quarter that was spent down throughout the year), higher utilities citywide reflected in Building & Facilities, and personnel costs. Higher spending in the first quarter of FY 2025-26 reflects increases in operating supplies (a large encumbrance in Building & Facilities in the first quarter will be spent down throughout the year) and personnel costs. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. Communications & Public Affairs Expenditure FY 2025-26 Comparison Operating Only 1st Qtr Jul - Sep 25 $ FY 26 FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 1,417,628 $ 2nd Qtr Oct - Dec 25 1,014,901 3rd Qtr Jan - Mar 26 1,041,250 4th Qtr Apr - Jun 26 1,047,784 Total $ 4,521,564 $ 1,179,985 1,179,985 26.1% 31.4% 26.1% 31.4% Dollars in Thousands *Avg Hist. FY 25 Actual Expend FY 26 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 26.1% of their FY 2025-26 adjusted budget and have historically spent 31.4% of their adjusted budget through the first quarter of the fiscal year. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. 11 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Cultural Development Expenditure 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 1,660,689 $ 2nd Qtr Oct - Dec 25 1,288,991 3rd Qtr Jan - Mar 26 1,384,740 4th Qtr Apr - Jun 26 1,354,343 Total $ 5,688,763 $ 1,586,438 1,586,438 27.9% 29.2% 27.9% 29.2% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 2,000 Dollars in Thousands Operating Only 1st Qtr Jul - Sep 25 FY 26 FY 25 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 27.9% of their FY 2025-26 adjusted budget and have historically spent 29.2% of their adjusted budget through the first quarter of the fiscal year. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. Community Services Expenditure 2025-26 Comparison *Avg Hist. % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr Operating Only 1st Qtr Jul - Sep 25 $ 14,655,093 $ 2nd Qtr Oct - Dec 25 9,290,350 3rd Qtr Jan - Mar 26 9,251,861 4th Qtr Apr - Jun 26 9,495,406 Total $ 42,692,710 $ 16,056,108 16,056,108 37.6% 34.3% 37.6% 34.3% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 16 Dollars in Millions FY 26 FY 26 FY 25 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 37.6% of their FY 2025-26 adjusted budget and have historically spent 34.3% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2025-26 reflects increases professional services for park maintenance (large encumbrances in the first quarter that will be spent down throughout the year) and personnel costs. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. 12 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Information Technology Expenditure 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 8,018,770 $ 15,156,369 2nd Qtr Oct - Dec 25 7,949,103 3rd Qtr Jan - Mar 26 10,406,806 4th Qtr Apr - Jun 26 8,413,967 Total $ 34,788,646 $ 15,156,369 43.6% 23.0% 43.6% 23.0% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 16 Dollars in Millions Operating Only 1st Qtr Jul - Sep 25 FY 26 FY 25 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 Information Technology spent 43.6% of their FY 2025-26 adjusted budget and have historically spent 23.0% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 and FY 2025-26 reflects increases in professional services (large encumbrances for various contracts in the first quarter that are spent down throughout the year) with the large financial/HR ERP system project this year. The result is a negative performance indicator as expenses are more than five percentage points higher than 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. Management Services Expenditure FY 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 2,316,240 $ 2nd Qtr Oct - Dec 25 2,149,348 3rd Qtr Jan - Mar 26 2,508,239 4th Qtr Apr - Jun 26 2,248,487 Total $ 9,222,314 $ 2,507,947 2,507,947 27.2% 25.1% 27.2% 25.1% 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 25 FY 26 FY 25 FY 26 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, Central Supply, Purchasing, Tax & License, and Utility Services (reimbursed by the Public Works & Utilities Department, Water/Wastewater/Solid Waste, through the Indirect Cost Allocation). The Budget Division is also included in this summary, although reports directly to the City Manager's Office. These divisions spent 27.2% of their FY 2025-26 adjusted budget and have historically spent 25.1% of their adjusted budget through the first quarter of the fiscal year. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. 13 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Neighborhood Resources Expenditure 2025-26 Comparison Operating Only 1st Qtr Jul - Sep 25 $ Actual Exp+Enc Historical Trend Actual to Budget FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 1,744,384 $ 2nd Qtr Oct - Dec 25 3,532,965 3rd Qtr Jan - Mar 26 2,759,780 4th Qtr Apr - Jun 26 3,138,292 Total Actual Exp+Enc FY 26 $ 11,175,420 $ 2,375,124 2,375,124 21.3% 15.6% 21.3% 15.6% Dollar in Thousands FY 26 FY 25 *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 21.3% of their FY 2025-26 adjusted budget and have historically spent 15.6% 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 2025-26 reflects spending for the Youth Enhancement and Operation Open Door programs. Higher spending in the first quarter of FY 2025-26 compared to the historical trend reflects increase human services costs which support non-profit agencies. The result is a negative performance indicator as expenses are more than five percentage points higher than 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. Non-Departmental Expenditure FY 2025-26 Comparison *Avg Hist. FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr Operating Only 1st Qtr Jul - Sep 25 $ 33,487,513 $ 2nd Qtr Oct - Dec 25 2,741,000 3rd Qtr Jan - Mar 26 2,166,630 4th Qtr Apr - Jun 26 2,253,437 Total** $ 40,648,581 $ 16,144,127 16,144,127 39.7% 82.4% 39.7% 82.4% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 40 Dollars in Millions FY 26 FY 25 35 30 25 20 15 10 5 - * 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 2025-26 is 39.7% of the adjusted budget and has historically spent 82.4% of the adjusted budget through the first quarter of the fiscal year. Higher spending in FY 2025-26 compared to FY 2024-25 reflects the increase payment to the Public Safety Personnel Retirement System (PSPRS) payment in the amount of $15M, which was $7M in the prior year. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. 14 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Development Services Expenditure FY 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget 7 Budget Exp+Enc by Qtr by Qtr 6 3,908,426 $ 2nd Qtr Oct - Dec 25 3,874,470 3rd Qtr Jan - Mar 26 5,072,378 4th Qtr Apr - Jun 26 4,101,049 Total $ 16,956,324 $ 4,346,153 4,346,153 25.6% 23.0% 25.6% 23.0% Dollars in Millions Operating Only 1st Qtr Jul - Sep 25 FY 26 FY 25 Actual Exp+Enc FY 26 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 Development Services includes the following cost centers: Administration, Construction Management and Permits, Building Safety, Transportation Engineering, Engineering, and Planning. The department spent 25.6% of their FY 2025-26 adjusted budget and have historically spent 23.0% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2025-26 reflects increases in professional services (large encumbrances for various contracts in the first quarter that are spent down throughout the year) and personnel costs. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. Public Works & Utilities Expenditure FY 2025-26 Comparison *Avg Hist. $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget 7 Budget Exp+Enc by Qtr by Qtr 6 3,476,914 $ 2nd Qtr Oct - Dec 25 1,367,095 3rd Qtr Jan - Mar 26 1,798,372 4th Qtr Apr - Jun 26 1,153,291 Total $ 7,795,671 $ 3,037,005 3,037,005 39.0% 44.6% 39.0% 44.6% Dollars in Millions Operating Only 1st Qtr Jul - Sep 25 FY 26 FY 25 Actual Exp+Enc FY 26 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 39.0% of their FY 2025-26 adjusted budget and have historically spent 44.6% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first FY 2024-25 reflects increases in professional services (large encumbrances for landscape maintenance contracts in the first quarter that were spent down throughout the year whch shifted to parks this year) and personnel costs. The result is a positive performance indicator, with the expectation to be within budget by fiscal year end. 15 11/14/2025 General Fund Expenditure Analysis (continued / department summaries): Fire Expenditure FY 2025-26 Comparison *Avg Hist. 1st Qtr Jul - Sep 25 $ FY 26 % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr 13,851,526 $ 15,939,406 2nd Qtr Oct - Dec 25 10,438,570 3rd Qtr Jan - Mar 26 12,077,468 4th Qtr Apr - Jun 26 10,465,328 Total $ 46,832,891 $ 34.0% 15,939,406 29.6% 34.0% 29.6% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 18 Dollars in Millions Operating Only FY 26 FY 25 15 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 34.0% of their FY 2025-26 adjusted budget and have historically spent 29.6% of their adjusted budget for the fiscal year. Higher spending in the first quarter of FY 2024-25 and FY 2025-26 reflects increases in professional services and personnel costs which included a one-time payment to the Post Employment Health Plan (PEHP) for all sworn members covered by the MOU. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. Police Expenditure FY 2025-26 Comparison *Avg Hist. % of Budget Trend % Adjusted Actual Expended of Budget Budget Exp+Enc by Qtr by Qtr Operating Only 1st Qtr Jul - Sep 25 $ 29,269,174 $ 33,790,941 2nd Qtr Oct - Dec 25 24,109,292 3rd Qtr Jan - Mar 26 27,277,670 4th Qtr Apr - Jun 26 23,506,530 Total $ 104,162,666 $ 33,790,941 32.4% 28.1% 32.4% 28.1% Actual Exp+Enc FY 26 Actual Exp+Enc Historical Trend Actual to Budget 40 Dollars in Millions FY 26 FY 26 FY 25 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 32.4% of their FY 2025-26 adjusted budget and have historically spent 28.1% of their adjusted budget through the first quarter of the fiscal year. Higher spending in the first quarter of FY 2024-25 and FY 2025-26 reflects increases in personnel costs which included a one-time payment to the Post Employment Health Plan (PEHP) for all sworn members covered by the MOU. The result is a warning performance indicator as expenses are between two and five percentage points higher than 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. 16 11/14/2025 Enterprise Funds Enterprise Fund Analysis: Water Fund Analysis FY 2025-26 Comparison Revenues $ Transfers In FY 26 Actual % of Budget % of Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 67,360,453 $ 16,988,108 6,962,168 25% 24% 0% 0% - Total Revenues $ 74,322,621 $ 16,988,108 23% 24% Operating Expenses $ 46,386,741 $ 23,151,669 50% 51% 17,831,859 45% 42% 0% 0% 3,129,604 53% 19% 44,113,132 39% 39% Major Capital Expenses 39,380,336 Debt Service 20,366,027 Transfers Out 5,860,753 - Total Expenses $ 111,993,857 Net Rev / Exp $ (37,671,236) $ (27,125,024) Positive $ Water Fund Analysis Revenues Expenses 120 Dollars in Millions Water Fund FY 26 Adjusted 100 80 60 40 20 0 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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 2025-26 reflects a $37.7M drawdown to fund balance due to increased pay as you go, as well as bond funded (sold in prior year) capital spending (including unspent capital carryforward from prior years), and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $6,962,168 includes $5,573,368 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 $5,860,753 includes indirect cost allocation to the General Fund of $3,584,888, payment of $227,985 to the Technology Replacement Fund, payment of $600,000 to the Insured Liability Self-Insurance Fund, payment of $35,353 to the Workers' Compensation Self-Insurance Trust, payment of $21,291 to the Uninsured Liability Self-Insurance Fund, as well as a subsidy of $1,391,236 to the Reclaimed Water Fund to reflect benefits received. Year-to-date Operating Revenues through the first quarter are 25% compared to 24% for FY 2024-25, while Operating Expenses through the first quarter are 50% compared to 51% for FY 2024-25. The first quarter of the fiscal year includes large encumbrances ($20.7M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund performance indicator is positive. Wastewater Fund Analysis FY 2025-26 Comparison Revenues $ Transfers In FY 26 Actual % of Budget % of Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 160 60,121,073 $ 10,584,610 18% 20% 140 4,287,418 1,287,418 30% 0% Total Revenues $ 64,408,491 $ 11,872,028 18% 17% Operating Expenses $ 26,424,663 $ 11,682,486 44% 41% Major Capital Expenses 82,084,575 33,234,388 40% 37% Debt Service 21,577,374 0% 0% Transfers Out 6,630,251 4,255,687 64% 20% 49,172,561 36% 34% Total Expenses Net Rev / Exp Positive - $ 136,716,863 $ $ (72,308,372) $ (37,300,533) Wastewater Fund Analysis Revenues Dollars in Millions Wastewater Fund FY 26 Adjusted Expenses 120 100 80 60 40 20 0 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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 2025-26 reflects a $72.3M drawdown to fund balance due to increased pay as you go, as well as bond funded (sold in prior year) capital spending (including unspent capital carryforward from prior years), and also assumes all appropriated operating and capital funds are spent, which is typically not the case. The budgeted Transfers In totaling $4,287,418 includes $3M for System Development Fee (SDF) loan paybacks and $1,287,418 from Reclaimed Water towards related capital costs. The budgeted Transfers Out totaling $6,630,251 includes indirect cost allocation to the General Fund of $3,121,200, payment of $153,640 to the Technology Replacement Fund, payment of $23,594 to the Workers' Compensation Self-Insurance Trust, payment of $21,291 to the Uninsured Liability Self-Insurance Fund, as well as a subsidy of $3,310,526 to the Reclaimed Water Fund, reflecting benefits received. Year-to-date Operating Revenues through the first quarter are 18% compared to 20% for FY 2024-25, while Operating Expenses through the first quarter are 44% compared to 41% for FY 2024-25. The first quarter of the fiscal year includes large encumbrances ($5.4M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund performance indicator is positive. 17 11/14/2025 Enterprise Funds Enterprise Fund Analysis (continued): Reclaimed Water Fund Analysis FY 2025-26 Comparison % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget $ Exp+Enc to Date Transfers In 2,005,374 $ 4,701,762 Prior Yr. 585,266 29% 34% 6,000 4,701,762 100% 0% Total Revenues $ 6,707,136 $ 5,287,028 79% 13% Operating Expenses $ 3,511,950 $ 1,706,850 49% 60% 1,325,707 47% 1% 48% 26% Transfers Out 2,819,356 Total Expenses $ 6,331,306 $ 3,032,557 Net Rev / Exp $ 375,830 $ 2,254,471 Positive Revenues 7,000 Dollars in Thousands Revenues FY 26 Actual Budget Reclaimed Water Reclaimed Water Fund Analysis FY 26 Expenses 5,000 4,000 3,000 2,000 1,000 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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 2025-26 budget reflects a increase to fund balance. The budgeted Transfers In totaling $4,701,762 includes subsidies from Water Fund of $1,391,236 and Wastewater Funds of $3,310,526 to reflect the benefit each fund receives by reclaiming water. The budgeted Transfers Out totaling $2,819,356 include an indirect cost allocation to the General Fund of $138,800, payment of $3,339 to the Technology Replacement Fund, $999 to the Workers' Compensation Self-Insurance Trust, as well as a payment of $1,388,800 to the Water Fund and $1,287,418 to the Wastewater Fund to reflect contributions to reclaimed capital costs. Year-to-date Operating Revenues through the first quarter are 29% of budget compared to 34% for FY 2024-25, while Operating Expenses through the first quarter are 49% of budget as compared to 60% for FY 2024-25. The first quarter of the fiscal year includes large encumbrances ($1.1M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund performance indicator is positive. Solid Waste Fund Analysis FY 2025-26 Comparison FY 26 FY 26 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Exp+Enc to Date Solid Waste Fund Analysis Revenues 27 $ 20,859,133 $ 4,284,438 21% 22% 24 Total Revenues $ 20,859,133 $ 4,284,438 21% 22% Operating Expenses $ $ 16,801,976 83% 81% Budget 20,182,633 Major Capital Expenses 1,746,288 819,747 47% 11% Transfers Out 1,437,173 410,342 29% 29% Total Expenses $ 23,366,094 $ 18,032,065 77% 64% Net Rev / Exp $ Positive Dollars in Millions Prior Yr. Revenues Solid Waste 21 18 15 12 9 6 3 FY 25 Actual Q1 (2,506,961) $ (13,747,627) Expenses FY 26 Actual Q1 FY 26 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 2025-26 reflects a drawdown of $2.5M (including unspent capital carryforward from prior years). The budgeted Transfers Out totaling $1,437,173 include an indirect cost allocation to the General Fund of $1,352,200, payment of $68,065 to the Technology Replacement Fund, and payment of $16,908 to the Workers' Compensation Self-Insurance Trust. Year-to-date Operating Revenues through the first quarter are 21% compared to 22% for FY 2024-25, while Operating Expenses through the first quarter are 83% compared to 81% for FY 2024-25. The first quarter of the fiscal year includes large encumbrances ($13.5M) recorded at the start of the fiscal year, with revenues more equally apportioned throughout the year. By adjusting for those encumbrances, the resulting fund performance indicator is positive. 18 11/14/2025 Enterprise / Other Funds Enterprise / Other Funds Analysis (continued): Airport Fund Analysis FY 2025-26 Comparison Revenues $ General Fund Subsidy % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 1,197,988 $ 321,658 27% 27% - 0% 0% $ 321,658 2% 2% 1,800,474 $ 441,292 25% 31% 14,619,972 5,017,394 34% 9% 117,324 42,324 36% 35% $ 5,501,010 33% 12% $ (5,179,352) 15,339,782 Total Revenues $ Operating Expenses $ Major Capital Expenses Transfers Out Total Expenses $ Net Rev / Exp $ Positive FY 26 Actual 16,537,770 16,537,770 - Revenues Expenses 20,000 18,000 Dollars in Thousands Airport Fund Airport Fund Analysis FY 26 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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 2025-26 reflects no budgeted change in fund balance since the General Fund Subsidy of $15.3M is budgeted from the General Fund to make up the funding needed to support operations and, the majority for this year is for major capital expenses. The budgeted Transfers Out totaling $117,324 includes indirect cost allocation to the General Fund of $100,000 and a payment of $17,324 to the Technology Replacement Fund. Year-to-date Operating Revenues through the first quarter are 27% of budget compared to 27% for FY 2024-25, while year-to-date Operating Expenses through the first quarter are 25% of budget compared to 31% for FY 2024-25. This results in a positive performance indicator. Ambulances Services Fund Analysis FY 2025-26 Comparison Ambulance Services Fund Analysis FY 26 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 3,372,047 Total Revenues $ 3,372,047 Operating Expenses $ 1,468,047 $ Total Expenses $ 3,372,047 Net Rev / Exp $ Major Capital Expenses Positive $ 1,904,000 - - 0% 0% - 0% 0% 43,415 3% 0% 257,099 14% 0% $ 300,514 9% 0% $ (300,514) Revenues 6 Expenses 5 Dollars in Millions Transfers In FY 26 4 3 2 1 0 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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. The Ambulance Services Fund supports operating functions and major capital costs that can be paid without borrowing. The budgeted Transfers In totaling $3,372,047 includes General Fund loans that will be paid back at a future date. Fiscal year comparisons for Operating Revenues and Operating Expenses will not be shown as the Ambulance Services Fund was established in FY 2025-26. 19 11/14/2025 Enterprise / Other Funds Enterprise / Other Funds Analysis (continued): Highway User Fund (HURF) Analysis FY 2025-26 Comparison $ Other Total Revenues $ Operating Expenses $ Major Capital Expenses Transfers Out Total Expenses Net Rev / Exp Positive FY 26 Actual % of Budget % of Adjusted Revenue/ Rec'd/Exp'd Budget Budget Exp+Enc to Date Prior Yr. 22,434,000 $ 3,487,335 16% 20% 1,448,000 366,960 25% 35% $ 3,854,295 16% 21% 23,882,000 10,535,779 $ 3,357,905 32% 33% 22,610,935 4,783,176 21% 44% 135,085 133,524 99% 99% 25% 40% $ 33,281,799 $ 8,274,604 $ (9,399,799) $ (4,420,309) Highway User Fund Analysis Revenues Dollars in Millions Highway Users Tax FY 26 Expenses 33 30 27 24 21 18 15 12 9 6 3 0 FY 25 Actual Q1 FY 26 Actual Q1 FY 26 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 2025-26 reflects a drawdown of $9.4M (including unspent capital carryforward from prior years). The budgeted Transfers Out totaling $135,085 include a payment to the General Fund of $2,082 for miscellaneous charges, a payment of $27,921 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 16% of budget compared to 20% for FY 2024-25, while year-to-date Operating Expenses through the first quarter are 32% of budget compared to 33% for FY 2024-25. The first quarter of the fiscal year includes encumbrances ($759K) recorded at the start of the fiscal year, the resulting fund performance indicator is is negative, however, with revenues more equally apportioned throughout the year, it has been changed to positive. 19 11/14/2025 Other Funds Other Funds Analysis (continued): Enterprise System Development Fee Funds Analysis FY 2025-26 Comparison FY 26 FY 26 % of Budget Development Fee Adjusted Actual Rec'd to Budget Revenue Date (SDF) Funds Water $ Reclaimed Water Wastewater Total SDF Revenue $ 3,487,000 $ 421,160 12% 913,200 135,622 15% 3,240,000 661,615 20% 1,218,398 16% 7,640,200 $ 4 Dollars in Millions Enterprise System Note: Budget and Actual amounts reflect SDF revenues and the interest earned FY 25 Adjusted Budget FY 26 Adjusted Budget FY 25 Actual FY 26 Actual 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 2025-26 budget and year-to-date collections through the first quarter compared to the FY 2024-25 budget and year-to-date collections through the first quarter. Collections through the first quarter FY 2025-26 are 16% of the budget as compared to the prior year's collections of 39% of the budget. General System Development Fee Funds Analysis FY 2025-26 Comparison FY 26 Development Fee (SDF) Funds Arterial Streets % of Budget Adjusted Actual Rec'd to Budget Revenue Date 4,052,000 $ 734,779 18% Fire 280,000 78,445 28% Parks 1,769,000 397,833 22% Police 202,000 20,428 10% Public Building 102,000 18,110 18% 1,249,594 20% Total SDF Revenue $ FY 26 $ 6,405,000 $ FY 25 Adjusted Budget FY 25 Actual FY 26 Adjusted Budget FY 26 Actual 5,000 4,500 Dollars in Thousands General System 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Arterial Streets Note: Budget and Actual amounts reflect Impact Fee revenues and the interest earned on fund balances, and excludes loan transfers in/out or proceeds from Fire Library Parks Public Building 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 2025-26 budget and year-to-date collections through the first quarter compared to the FY 2024-25 budget and year-to-date collections through the first quarter. Collections through the first quarter FY 2025-26 are 8% of the budget as compared to the prior year's collections of 38% of the budget. 20 11/14/2025 Other Funds Other Funds Analysis (continued): Grant Funds Analysis FY 2025-26 Comparison Operating Grant Revenues $ FY 25 Actual Actual Revenue Revenue FY 25 Actual Revenue 143,345 $ 137,357 Community Services 166,401 12,075 Neighborhood Resources 49,993 - Neighborhood Res. - CDBG & HOME 2,997 2,476 4,709,671 4,271,112 Public Safety 704,669 223,581 Public Works & Utilities 216,917 174,756 Neighborhood Res. - HUD Total Operating Grant Revenue $ 5,993,995 General Government* $ 1,460,929 $ 53,652 - 224,756 Cultural Development Public Works & Utilities $ 3,228,672 FY 26 Actual Revenue 5 4 3 Millions General Government* FY 26 4,821,357 2 1 - 2,565,907 Total Capital Grant Revenue $ 4,689,600 $ 2,844,315 Total Grant Revenue $ 10,683,595 $ 7,665,672 * 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. The Federal Grant changes that continue to be proposed will impact some categories and is being monitored. Collections through the first quarter of FY 2025-26 are $7.7M as compared to $7.8M as collected through the first quarter of FY 2024-25. 21 11/14/2025