CC SR 20210330 01- SR Midyear Report FINAL
CITY COUNCIL MEETING DATE: 03/30/2021
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to receive and file the Fiscal Year 2020-21 Mid-Year
Financial Report and year-end estimates.
RECOMMENDED CITY COUNCIL ACTION:
1) Receive and file the FY 2020-21 Mid-Year Financial Report and year-end
estimates.
FISCAL IMPACT: None
Current Budget: Revenues: $28,969,900
Transfers In: $230,000
Expenditures: $27,353,386
Transfers Out: $2,170,500
ORIGINATED BY: Christopher Browning, Senior Administrative Analyst
Vina Ramos, Deputy Director of Finance
REVIEWED BY: Trang Nguyen, Director of Finance
APPROVED BY: Ara Mihranian, AICP, City Manager
BACKGROUND:
The financial report for the General Fund as of December 31, 2020 is presented tonight
for the City Council. Overall, the mid-year report compares revenues and expenditures
for the first six months of the fiscal year (July-December) relative to the same point in
time last year. Based on the mid-year results, Staff also prepared an analysis to project
the year-end estimates for FY 2020-21. On March 18, 2021, Staff presented the same
report and analysis to the Finance Advisory Committee (FAC). At this meeting, FAC
moved to receive and file the reports.
Based on the first six months of the fiscal year, Staff projects year-end revenues will
exceed expenditures by roughly $2 million, before transfers out. After including the
transfers out to Capital Improvement Fund (CIP) of $1.1 million, $20,000 to Portuguese
Bend Improvement Authority, and $10,000 to Subregion One, the revenues are
projected to exceed expenditures (surplus) by approximately $855,300. This surplus
amount is inclusive of all the additional appropriations of approximately $723,000,
1
approved by the City Council through December 31, 2020. The majority of the surplus is
a result of lower transfers to CIP based on the projected transient occupancy tax (TOT)
revenues, citywide reduced operating activities, deferred/unfilled vacancies, and
prudent spending. A detailed analysis highlighting the major changes is presented in
this report.
DISCUSSION:
General Fund Revenue
During the first six months of the fiscal year, the General Fund received just over $13.5
million or 46.7% of budgeted revenue, approximately $381,400 or 2.7% less than what
was received at the same point last year, before transfers in. The largest contributing
factor to this change is the decrease of transient occupancy tax (TOT) revenue. This
was expected as the effects of the pandemic still linger across the state and demand for
travel remains low.
Despite the pandemic related declines in TOT, sales tax, and permits and fees revenue,
strong and consistent revenue from property tax, utility users tax, and several other
smaller revenue sources have partially offset these losses. A comparison of FY 2019-20
and FY 2020-21 General Fund revenues at mid-year, including transfers in, are
presented in Table 1 below.
Table 1: Mid-Year General Fund Revenues - Current Year vs. Prior Year
Chart 1 below compares the General Fund’s mid-year of FY 2019-20 and FY 2020-21
by category.
FY 2019-20 FY 2020-21
Mid-Year Mid-Year
Property Tax $6,344,400 $6,612,500 $268,100 4.2%
Transient Occupancy Tax $2,951,100 $1,489,500 ($1,461,600) -49.5%
Sales Tax $1,019,400 $982,900 ($36,500) -3.6%
Permits & Fees $1,120,900 $1,020,200 ($100,700) -9.0%
Franchise Tax $533,300 $519,000 ($14,300) -2.7%
Utility Users Tax $929,100 $1,041,900 $112,800 12.1%
Other Taxes & Misc. Revenues $1,020,100 $1,870,900 $850,800 83.4%
Subtotal $13,918,300 $13,536,900 ($381,400) -2.7%
Transfers In $68,800 $115,000 $46,200 67.2%
Total Revenues $13,987,100 $13,651,900 ($335,200) -2.4%
Revenue Type Variance
2
Chart 1: Mid-Year General Fund Revenues - Current Year vs. Prior Year
Table 2 below provides a view of the mid-year revenues by category, along with the
total received compared to the revised budget.
Table 2: FY 2020-21 Mid-Year Revenue Status
FY 2020-21 FY 2020-21
Revised Budget Mid-Year
Property Tax $14,129,700 $6,612,500 46.8%
Transient Occupancy Tax $3,762,500 $1,489,500 39.6%
Sales Tax $2,312,300 $982,900 42.5%
Permits & Fees $1,819,200 $1,020,200 56.1%
Franchise Tax $2,167,500 $519,000 23.9%
Utility Users Tax $2,099,700 $1,041,900 49.6%
Other Taxes & Misc. Revenues $2,679,000 $1,870,900 69.8%
Subtotal $28,969,900 $13,536,900 46.7%
Transfers In $230,000 $115,000 50.0%
Total Revenues $29,199,900 $13,651,900 46.8%
Revenue Type %
Received
3
It should be noted that future economic activity, legislation, and policy decisions, and
any other unforeseen circumstances could affect the City's revenue streams for the
remainder of FY 2020-21.
Staff has provided a detailed discussion and analysis of the General Fund’s major
revenues sources at mid-year and year-end below.
Property Tax
As of the end of the second quarter, the total property tax revenue received is $6.6
million, slightly outpacing FY 2019-20 by $268,000 or 4.2%. Revenue is estimated to
end the year at $14.3 million, an increase of roughly $130,000 or 0.9% over the
budgeted amount of $14.13 million. This increase is attributed to higher-than-expected
revenue from property transfer tax. Staff projected a decline in home sale activity during
the budget process in the spring of 2020, however, the housing market performed better
than experts projected.
Transient Occupancy Tax (TOT)
At the end of the second quarter, the City has received just under $1.5 million in TOT
revenue, 49.5% less than the $2.9 million received at this point last fiscal year. As
mentioned previously in this staff report, TOT is the revenue source that has
experienced the largest impact by the economic slowdown. At budget adoption, revenue
was projected to reach $3.7 million during FY 2020-21, a decrease of $1.7 million or
32% from FY 2019-20 revised budget and $147,000 or 4% less than FY 2019-20 year-
end actual revenues.
During the budget process of the FY 2020-21 budget, the TOT revenue projection of
$3.7 million was developed by using the FY 2019-20 budget as a baseline. This figure
was adjusted to reflect future economic forecasts by reducing the prior year actuals by
70% during the first quarter, 50% during the second quarter, and assuming full recovery
in the third and fourth quarters. As the effects of the pandemic persisted, it became
clear that the negative impacts to TOT revenue would persist throughout the fiscal year
and the revenue estimates presented in this section will be reflective of these changes.
Terranea Resort is responsible for over 96% of all TOT revenue. For this reason, the
TOT revenue received from Terranea will be the focus of this analysis. Staff projected
revenue would reach just under $368,000 during the first quarter and Terranea
outperformed estimates by 138%, coming in at $875,700. During the second quarter,
TOT revenue from Terranea began to slow down as COVID-19 cases began to spike
over the holidays and as stay-at-home orders were tightened across the state. Of the
$853,000 in revenue that was projected during the second quarter, just under $544,000
or 64% was received as shown in Table 3. This resulted in TOT revenue from Terranea
Resort of $1.4 million, roughly $199,000 more than the projected $1.2 million.
4
Table 3: Terranea TOT Revenue Analysis July 2020 – December 2020
Despite the favorable revenue numbers during the first half of the fiscal year, Staff
adjusted the year-end estimates to reflect the prolonged slowdown in operations seen
through the first couple months of 2021 and the expected continuation of this decrease
in revenue through the remainder of the fiscal year. Table 4 below compares Staff’s
initial budgeted revenue for the third and fourth quarters of FY 2020-21 compared to the
revised year-end estimates.
Table 4: Terranea TOT Revenue Projection January 2021 – June 2021
Budget Actual Budget Actual
Terranea 367,800 875,700 852,900 543,800
Month 1 122,600 238,300 284,300 284,100
Month 2 122,600 331,800 284,300 190,400
Month 3 122,600 305,600 284,300 69,300
Jul - Sep Oct - Dec
Budget Actual Variance
1,220,700 1,419,500 198,800
Total at Mid-Year
Budget Estimates Budget Estimates
Terranea 1,066,200 210,500 1,332,900 600,000
Month 1 355,400 40,500 444,300 200,000
Month 2 355,400 70,000 444,300 200,000
Month 3 355,400 100,000 444,300 200,000
Jan - Mar Apr - Jun
Budget Actual Variance
2,399,100 810,500 -1,588,600
January - June Estimate
5
For year-end estimates, Staff projects a significant reduction to revenues during the
third quarter that will slowly increase each month and then level out during the fourth
quarter as larger portions of the population are vaccinated and the stay-at-home orders
are relaxed.
Table 5: FY 2020-21 Terranea TOT Revenue Year-End Estimate
Based on these revised estimates, TOT revenue from Terranea is projected to reach
$2.2 million, $1.4 million or 37% less than the $3.6 million in revenue budgeted. Total
TOT revenue is estimated to end the year at just under $2.4 million compared to the
$3.8 million budgeted.
Sales Tax
Sales tax revenue has experienced a slight decline due to the effects of the pandemic.
Terranea and local restaurants comprise nearly half of the City’s sales tax revenue. As
projected, revenue in the hospitality and food service industries have continued to feel
the prolonged impacts of the decreased demand for their services. For these reasons,
sales tax revenue at mid-year was $982,900, $36,500 or 3.6% less than the $1.02
million received at this same point in time last fiscal year. Staff estimates a decrease of
$340,000 or 15% from $2.3 million to $1.97 million. Sales tax revenue data typically lags
behind by two months. Revenue earned over the holiday season is expected to be
lower than in previous years.
Permits and Fees
Staff projected that the COVID-19 pandemic, stay-at-home orders, and social distancing
measures would decrease the number of permits generated, therefore reducing permit
revenue. Despite these difficulties, permits and fee revenue has held relatively stable
compared to the adopted budget. At mid-year revenue has reached just over $1 million
or 56.1% of the $1,819,200 budgeted. Staff projects a slight decrease of $13,700 or
0.8% bringing the year-end estimate to $1,806,000. This decrease is primarily attributed
to a reduction in film and miscellaneous encroachment permits.
Franchise Tax
Franchise tax is levied on the providers of utility, refuse, and cable services in exchange
for using the City’s rights-of-way. As of the second quarter the City has received
$519,000 in revenue, 2.7% less than the $533,000 received at this same point last fiscal
year. The economic slowdown is not expected to have any significant impact on this
revenue source. However, based on historical data and current fiscal year trends, Staff
Budget Actual Variance
3,619,800 2,230,000 -1,389,800
FY 2020-21 Year-End Estimate
6
is reducing the year-end estimate by $17,500 or 0.8%, which brings the year-end
estimate to $2.15 million, down from $2.17 million.
Utility Users Tax (UUT)
At mid-year the City has received just over $1 million in UUT revenue, 12.1% more than
the $929,000 received at this same point last fiscal year. Utility users tax revenue has
been relatively flat since FY 2014-15. There has not been any indication after the first
two quarters that any adjustment to the adopted budget of $2.1 million will be
necessary. This revenue source is driven primarily by weather conditions, utility rates,
and consumption. Staff will continue to monitor revenue trends for the remainder of the
fiscal year and modify the year-end estimate, if necessary, during our third quarter
review.
Other Taxes and Miscellaneous Revenue
This revenue category is comprised of 19 unique revenue sources, the largest being
business license tax, golf tax, interest earnings, and rentals/leases. This revenue source
can be challenging to predict due to the wide variety of sources in this category.
Revenue has reached just under $1.9 million at mid-year, 83% or $851,000 higher than
this same period last fiscal year. Some of the items that have contributed to the
increase in revenue are listed below.
• $515,000 in federal grant revenue in the form of COVID-19 relief funds, which
have been used to offset costs associated with the City’s response to the
pandemic. These funds have been used for items such as personnel costs,
cleaning supplies, plexiglass barriers, and additional cleaning and sanitation
throughout the City.
• $298,000 in revenue received from Los Angeles County. This revenue is
disbursed in July and January of each year and is for the repayment of loans
made by the City to the Redevelopment Agency (RDA) for the Portuguese Bend
and Abalone Cove landslide areas.
• $225,800 in revenue from parking lot fees, $119,500 or 112% more than was
received at this point in time last fiscal year. Revenue from parking lot fees has
already exceeded budgeted amounts by over $87,000. Increased demand for
parking at Abalone Cove is the primary catalyst for this surge, as people sought
recreational activities in the midst of a large-scale shutdown of many
entertainment venues.
In addition to the items above, golf tax revenue has already reached $265,000 at mid-
year, 88% of the budgeted $300,300. Rental and lease revenue from parks and
recreation facilities has been severely limited due to the stay-at-home orders with no
revenue projected to be received this fiscal year. However, cell tower rental and lease
revenue has helped to offset this revenue category with revenues at mid-year of
$224,000, $83,000 a 64% increase over budget. Overall, Staff is increasing year-end
7
estimates by $415,000 or 15%, raising expected revenue to $3.1 million up from $2.7
million.
Table 6: FY 20-21 Budget vs. Projected Year-end Revenues
At mid-year FY 2020-21, the General Fund has received just over $13.5 million in
revenue, approximately $381,400 or 2.7% less than what was received at the same
point last year. Staff will continue to monitor revenues throughout the third quarter and
will provide any revisions, if necessary, in the preliminary budget.
General Fund Expenditures
As of December 31, 2020, the total for the General Fund expenditures is approximately
$12.6 million or 43% of total budget, including transfers out. Compared to the same
period last year, total expenditures decreased by $2.6 million or 17%. The results are
aligned with the City’s reduced budget and current activities. The majo rity of the
decreased amounts are a combination of the following:
➢ Savings from salaries and benefits from park closures, and deferred and unfilled
vacancies
➢ Less expenditures for all categories in accordance with the reduced budget in FY
2020-21 and potential year-end saving
➢ Timing of disbursements, mainly invoices from the Los Angeles County Sheriff’s
Department
➢ Lower transfers-out to CIP based on adopted budget
Personnel Costs
At the end of the second quarter, salaries ended at approximately $3.5 million or 42% of
the FY 2020-21 adopted budget. Compared to the prior year, this category is about
$181,500 or 5% lower. The variance is in line with the reduced budget in FY 2020 -21.
FY 2020-21 FY 2020-21 FY 2020-21
Revised Budget Mid-Year YE Estimates
Property Tax $14,129,700 $6,612,500 $14,260,700 $131,000 0.9%
Transient Occupancy Tax $3,762,500 $1,489,500 $2,366,000 ($1,396,500) -37.1%
Sales Tax $2,312,300 $982,900 $1,972,300 ($340,000) -14.7%
Permits & Fees $1,819,200 $1,020,200 $1,805,500 ($13,700) -0.8%
Franchise Tax $2,167,500 $519,000 $2,150,000 ($17,500) -0.8%
Utility Users Tax $2,099,700 $1,041,900 $2,099,700 $0 0.0%
Other Taxes & Misc. Revenues $2,679,000 $1,870,900 $3,093,900 $414,900 15.5%
Subtotal $28,969,900 $13,536,900 $27,748,100 ($1,221,800) -4.2%
Transfers In $230,000 $115,000 $230,000 $0 0.0%
Total Revenues $29,199,900 $13,651,900 $27,978,100 ($1,221,800) -4.2%
Revenue Type Variance
8
Additionally, the lower amounts result from deferred and unfilled vacancies and savings
from part-time staff due to park closures. Correspondingly, benefits ended at
approximately $1 million or 38% of the FY 2020-21 adopted budget. Compared to the
prior year, benefits are about $302,700 or 22% lower.
Non-Personnel Costs
At the end of the second quarter, the non-personnel category ended at approximately
$6.8 million or 42% of the FY 2020-21 revised budget. This category includes legal
services, the Sheriff’s Department contract, repairs and maintenance, professional and
technical services, supplies, training and conferences, and miscellaneous expenses.
Overall, non-personnel costs decreased by about $1.2 million or 8% compared to the
same period as last year. The decreased amount is mainly due to the citywide reduced
budget in FY 2020-21, timing of disbursements, and reduced activities. The areas in
which Staff expects to see year-end savings are from training and conferences,
supplies, repairs and maintenance, and professional and technical services.
Transfers-Out
This category accounts for the General Fund transfers to CIP, Subregion One, and the
Portuguese Bend Improvement Authority for a total of $2.2 million. At the end of the
second quarter, transfers-out is $1.2 million or 55% of the FY 2020-21 revised budget.
Compared to the prior year, the main transfers out to CIP, net of cumulative public
safety increases, are lower by $870,000 or 42%, which is based on the anticipated TOT
revenues in FY 2020-21.
In summary, Table 7 below provides a view of the midyear expenditures by category,
along with the total spent to budget.
Table 7: FY 2020-2021 General Fund Status Report – Expenditures by Category
Expenditure Type
FY 2020-21
Revised Budget
FY 2020-21
Mid-Year
%
Spent
Salaries 8,338,100$ 3,511,664$ 42%
Benefits 2,736,900$ 1,047,445$ 38%
City Attorney 975,000$ 478,790$ 49%
Sheriff Contract 7,110,900$ 3,524,646$ 50%
Supplies 608,025$ 168,374$ 28%
Professional/Technical 3,025,946$ 813,597$ 27%
Repairs and Maintenance 3,067,940$ 1,175,714$ 38%
Training/Conference 311,400$ 57,333$ 18%
Misc. Expense 1,179,175$ 586,839$ 50%
Transfers Out 2,170,500$ 1,188,500$ 55%
Total Expenditures 29,523,886$ 12,552,902$ 43%
9
Chart 2 compares the General Fund’s second quarter of FY 2019-20 and FY 2020-21
by category.
Chart 2: Mid-Year General Fund Expenditures - Current Year vs. Prior Year
Year-End Outlook for Expenditures
Although cuts were made to the FY 2020-21 budget for expenditures, overall, at the end
of the second quarter, the General Fund is trending to end the year lower than
estimated. This is mainly due to the lower transfers to CIP based on projected TOT
revenues, citywide reduced activities, such as deferred/unfilled vacancies, park
closures, and conservative spending.
As illustrated in Table 8 on the next page, Staff anticipates that the General Fund at
year-end will have favorable results for expenditures in the amount of $2.4 million or 8%
lower than revised budget, after transfers out. Similar to the same process as previous
years and due to the uncertainty of the reopening of businesses, Staff recommends
continuing to monitor the third quarter expenses and submit any proposed budget
adjustments, if needed, in the preliminary budget report.
10
Table 8: Second Quarter General Fund Expenditures: Year-End Estimates
The following highlights the expenditure year-end assumptions.
Personnel Costs
As illustrated in Table 8, salaries and benefits account for $11.1 million or 38% of the
total revised budget, including transfers. At the end of second quarter, Staff projects to
end the year at approximately $10.1 million or 9% lower than the revised budgeted. The
savings of $982,100 are primarily from unfilled vacancies, deferred recruitments, and
park and facility closures.
The following are a summary of the savings of approximately $982,100:
➢ Administration Department estimated savings of $28,000:
• Public Safety Administrative Analyst I – position filled in October 2020
• Portion of the salaries were allocated in Emergency Operations Center
based on tasks related to the COVID-19 pandemic
➢ Finance Department estimated savings of $83,600:
• Deputy Director of Finance and underfill Accounting Supervisor -
position filled August 2020 and November 2020
• Finance Part-Time Staff Assistant I
➢ Community Development Department estimated savings of $406,000:
• Building Official – vacant, unfilled
• Associate Planner and Assistant Planner – vacant
• Deputy Director – position filled in September 2020
• Code Enforcement – position filled in September 2020
• Senior Planner – vacant in September 2020, filled in November 2020
Expenditure Type
FY 2020-21
Revised Budget
FY 2020-21
Midyear
FY 2020-21
YE Estimates
Salaries 8,338,100$ 3,511,664$ 7,382,363$ (955,737)$ -11%
Benefits 2,736,900$ 1,047,445$ 2,710,515$ (26,385)$ -1%
City Attorney 975,000$ 478,790$ 905,000$ (70,000)$ -7%
Sheriff Contract 7,110,900$ 3,524,646$ 7,101,900$ (9,000)$ 0%
Supplies 608,025$ 168,374$ 514,402$ (93,623)$ -15%
Professional/Technical 3,025,946$ 813,597$ 2,887,200$ (138,747)$ -5%
Repairs and Maintenance 3,067,940$ 1,175,714$ 2,958,620$ (109,320)$ -4%
Training/Conference 311,400$ 57,333$ 258,231$ (53,169)$ -17%
Misc. Expense 1,179,175$ 586,839$ 1,257,355$ 78,180$ 7%
Transfers Out 2,170,500$ 1,188,500$ 1,147,200$ (1,023,300)$ -47%
Total Expenditures 29,523,886$ 12,552,902$ 27,122,785$ (2,401,101)$ -8%
Variance
11
➢ Public Works Department estimated savings of $99,200:
• Director – position filled in February 2021
➢ Recreation and Parks estimated savings of $ 365,300:
• Recreation Supervisor I Open Space – vacant, unfilled
• Park Ranger – position filled in October 2020
• Part-time savings from park and facility closures
• Portion of the salaries were allocated in Emergency Operations Center
based on tasks related to the COVID-19 pandemic
Moreover, the savings above are offset by approximately $161,000 to fund part-time
salaries that are needed to temporarily fill the vacancies and temporary help utilizing
professional and technical services. The following is a summary of the temporary
services:
• Part-time Staff for Senior Planner (Community Development)
• Consultant for planning services (Community Development)
• Part-time Staff for Staff Assistant I (Public Works)
• Part-time Staff for Staff Assistant I (Human Resources)
Non-Personnel Costs
Non-personnel accounts for $16.3 million or 55% of the total revised budget,
excluding transfers. At the end of second quarter, Staff projects to end the year at
approximately $15.9 million or 2% under than the revised budgeted.
The estimated year-end savings of approximately $396,000 is mainly from the City’s
ongoing efforts to save when possible and from the overall reduced activities due to
the closures of city facilities and parks.
The non-personnel estimated year-end savings of $396,000 are as follows:
➢ Professional and Technical $138,800
o Majority of the savings are from Recreation and Parks Contract
Classes program, Community Development, and Public Works
➢ Repairs and Maintenance for $109,300
➢ City Attorney for $70,000
➢ Training and Conference for $53,200
➢ Supplies and Other Miscellaneous Expenses for $15,400
➢ Sheriff Contract for $9,000
Transfers-Out
Transfers-out to CIP and other funds accounts for $2.2 million or 7% of the total revised
budget. At the end of the year, Staff projects the TOT transfer to CIP at $1.1 million or
48% lower than the revised budget. Of this amount, approximately $900,000 is based
on the anticipated TOT revenues of $2.4 million, minus the cumulative public safety
12
increases for a total of $1.5 million. The remaining $206,500 of transfer to CIP is from
the additional appropriations that the City Council approved in December 2020, with the
goal to increase the increase the CIP transfer from the prior year’s unrestricted surplus
in General Fund.
FY 2020-21 General Fund – Fund Balance
Overall, as shown in Table 9, Staff estimates that the fund balance for the General Fund
on June 30, 2021 will be $22.6 million, including transfers out. The estimated fund
balance is projected to increase by $1.2 million or 6% from the revised budget. After
applying the City Council Reserve Policy of 50% of the operating budget, the estimated
unrestricted excess reserve is $9.6 million, which is an increase of approximately $1.9
million or 24% from the revised budget. As demonstrated in this report, while the
revenues are projected to come in lower than estimated by $1.2 million over revised
budget, the significant increase in excess reserves is mainly from the reduction of
expenditures particularly deferred and unfilled staff positions.
Table 9: FY 2020-21 General Fund – Fund Balance Summary
CONCLUSION:
Staff has reviewed all revenues and expenditures at mid-year for FY 2020-21, with an
emphasis on the General Fund to determine if the current budget was on target with the
actuals at mid-year and the year-end estimates. Staff highlighted any areas that may
end the fiscal year significantly above or below budget.
At the close of the first six months of the fiscal year, the General Fund has received
over $13.5 million in revenue, approximately $381,400 or 2.7% less than what was
received at the same point last year. This decrease in revenue is primarily from lower
General Fund
FY 2020-21
Adopted
Budget
FY 2020-21
Additional
Appropriations
FY 2020-21
Revised
Budget
FY 2020-21
Year-End
Estimates
Beginning Fund Balance - 7/1/2020 21,748,709 21,748,709 21,748,709
Add: Revenues 28,969,900 28,969,900 27,748,100
Add: Transfers-In 230,000 230,000 230,000
Total Revenues 29,199,900 - 29,199,900 27,978,100
Less: Expenditures (26,836,900) (516,486) (27,353,386) (25,975,585)
Less: Transfers to CIP (1,934,000) (206,500) (2,140,500) (1,117,200)
Less: Other Transfers-Out (30,000) - (30,000) (30,000)
Total Expenditures (28,800,900) (722,986) (29,523,886) (27,122,785)
Unaudited Ending Fund Balance - 6/30/2021 22,147,709 (722,986) 21,424,723 22,604,024
50% Reserve Policy 13,418,450 - 13,676,693 12,987,793
Unrestricted Excess/(Deficit) Reserve - 06/30/21 8,729,259 (722,986) 7,748,030 9,616,232
13
TOT and sales tax revenue as a result of the economic slowdown caused by the
pandemic. Monitoring TOT revenue will continue to be a focus for Staff as it continues
to be the source most impacted by the pandemic. Despite the pandemic-related
declines, strong and consistent revenue from property tax, utility users tax, and several
other smaller revenue sources have helped to offset a portion of these losses. The
projected year-end General Fund revenues are expected to end the year at just under
$27.7 million, a decrease of about $1.3 million or 4.2% from the $29.0 million adopted
budget excluding transfers.
As of December 31, 2020, total expenditures decreased by $2.6 million or 17% from the
same period last year. Based on the most current information, Staff projects the year-
end expenditures at $27.1 million, which is lower by $2.4 million or 8% over the FY
2020-21 revised budget. Of this amount, based on the projected TOT revenues, the
transfers out is reduced by a little over $1 million. Additionally, the mid-year results
show that the City continues to contain costs when possible, in response to the
anticipated overall revenue loss. The year-end projections include the further savings
that are anticipated from park closures, reduced department activities, and delayed
recruitments.
While Staff anticipates revenues to come in lower than budgeted and projects savings
from expenditures, no changes to the budget are recommended at this time. This is
mainly due to the current economic uncertainties caused by the pandemic , continuous
health orders from Los Angeles County, any potential upcoming legislation, and policy
decision changes that may affect the results of the third and fourth quarter. As was done
in prior years, for a more refined year-end outlook, Staff will repeat the review after the
third quarter and present an updated report and propose final budget adjustments as
one of the discussion items on the preliminary budget.
14