CC SR 20251104 F - FY25-26 Q1 Financial Report
CITY COUNCIL MEETING DATE: 11/04/2025
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consider the Fiscal Year 2025-26 First Quarter Financial Report for the General Fund.
RECOMMENDED CITY COUNCIL ACTION:
(1) Receive and file the Fiscal Year (FY) 2025-26 First Quarter Financial Report for
the General Fund.
FISCAL IMPACT: This report provides an update on the General Fund status for the
first quarter of FY 2025-26, from July through September 2025. No
budget adjustments are requested.
Amount Budgeted: $41,480,200 (General Fund – Revenues)
$ 320,000 (General Fund – Transfers-In)
$37,306,550 (General Fund – Expenditures)
$ 4,493,650 (General Fund – Transfers-Out) VR
Additional Appropriation: N/A
Account Number(s): General Fund
(General Fund 101 – various accounts)
ORIGINATED BY: James O’Neill, Senior Administrative Analyst (Finance) JO
REVIEWED BY: Robert Moya, Deputy Director of Finance RM
Vina Ramos, Director of Finance VR
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. None
_____________________________________________________________________
EXECUTIVE SUMMARY:
This report focuses on the General Fund, the City’s primary operating fund, which
represents more than half of the City’s budget. Of the citywide revenue budget of
approximately $61.2 million (all funds), the General Fund is comprised of $41.5 million
(before transfers), or 68% of total citywide revenues. General Fund expenditures of $37.3
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million (before transfers) is 50% of the $74.5 million Citywide expenditure budget (all
funds).
The City’s second major fund, the Capital Infrastructure Program (CIP) Fund, is not
included in this report. Staff provides updates on the status of this fund every 60 days as
part of the landslide staff report, which is being presented separately this evening.
Overall, the first quarter status of FY 2025-26 General Fund (July 1 - September 30, 2025)
is summarized as follows:
• General Fund revenues reached approximately $6.8 million or 16.3% of the
adopted budget. This is slightly below last year’s figures after adjusting for a one-
time $5 million grant from Los Angeles County. The lower percentage received is
primarily due to timing of property tax collections, which typically occurs in
December 2025 and June 2026. Staff anticipate that revenues will align with
projections for the year.
• General Fund spending and transfers totaled $9 million or 21.5% of the adopted
budget. This level of spending is consistent with prior year trends and in line with
approved programs and activities for FY 2025-26.
After reviewing the General Fund revenues and expenditures for the first quarter, the
Finance Department determined that both revenues and expenditures are generally
aligned with the City’s adopted budget assumptions. No variances of concern have been
identified, and no budget adjustments are recommended at this time.
Staff will continue to monitor financial activities throughout the year and provide updates
in future quarterly reports.
BACKGROUND:
The Finance Department presents a first quarter status report on General Fund revenues
and expenditures each Fall as part of the City’s regular budget monitoring and
transparency practice. The City’s fiscal year runs from July 1 to June 30, with the first
quarter covering July 1 through September 30.
The quarterly report provides an overview and analysis of General Fund revenue and
expenditure activity and highlights any variances that may warrant Council attention . If
staff determines that actual revenues and expenditures differ significantly from the budget
assumptions, Staff recommend adjustments to maintain a balanced budget. In the past
decade, Staff have typically proposed budget changes only during the mid-year or third
quarter review, usually for grant-related activities or in response to significant variances
such as the sudden change in revenues one experienced during the COVID-19
pandemic.
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DISCUSSION:
General Fund Revenue - Overall
General Fund revenue of $41.5 million is categorized into seven (7) primary categories,
as illustrated in Chart 1 below.
Chart 1: General Fund Revenue by Category (FY 2025-26 Adopted Budget)
As shown in Chart 1 above, Property Tax and Transient Occupancy Tax (TOT) together
make up the largest portions of the City’s General Fund revenue, accounting for 44% and
17% of total budgeted revenues, respectively. These sources represent more than half of
the City’s total General Fund revenue. Other key sources include Permits and Fees
(10%), Other Taxes and Miscellaneous Revenues (10%), Sales Tax (7%), Franchise Tax
(6%), and the Utility Users Tax (6%).
Not all revenue is received evenly throughout the fiscal year, and the collection can vary
year-over-year. Therefore, a low percentage of budgeted revenue received to date is not
necessarily a concern for categories such as Property Tax. Although Property Tax is the
City’s largest source of revenue, the majority of this revenue is received in December
(part of the second quarter) and June (part of the fourth quarter) of each fiscal year.
Similarly, Transient Occupancy Tax (TOT) and Sales Tax also fluctuate throughout the
fiscal year.
As shown in Table 1 below, General Fund revenues through September 30, 2025 totaled
just over $6.8 million. This figure reflects all General Fund revenue collected and
transfers-in, during the first quarter of Fiscal Year 2025-26.
$41.5 Million
Property Tax
$18.2 M
44%
TOT
$7.0 M
17%Sales Tax
$2.9 M
7%
Permit & Fees
$4.4 M
10%
Franchise Tax
$2.4 M
6%
UUT
$2.5 M
6%
Other Tax and Misc.
$4.1 M
10%
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Table 1: Revenue comparison (FY2025-26 to FY 2024-25)
When compared to the same period last year, despite the table showing a lower
percentage of budget achieved, overall revenue for FY 2025-26 is up by $283,058, or
5.1% (4.1% after factoring in last year’s transfers). This increase is after adjusting for last
year’s one-time $5.0 million landslide grant from the County of Los Angeles (Supervisor
Hahn’s Office), which is reflected in the “Other Taxes and Miscellaneous Revenues”
category. That one-time grant accounted for 42.5% of the $11.8 million in last year’s first-
quarter revenue and transfers.
An analysis of each revenue category is described below.
General Fund Revenue – Property Tax
Overall, property tax collections represent 2.6% of the adopted budget, up slightly from
the 2.2% recorded in FY 2024-25.
Property tax revenues for the first quarter of FY 2025-26 totaled approximately $470,200
(2.6%) of the total budget of $18,210,000. This includes $273,300 in secured property
taxes, $64,500 in in-lieu-of property taxes, and $132,400 in property transfer taxes, and
compares to $383,600 received in last year’s first quarter.
First-quarter revenues are approximately $86,600 or 22.6% higher than in the same
period last year. The increase reflects about $4,300 in higher secured property taxes and
$17,800 higher property transfer tax revenue, along with approximately $64,500 of
revenue from of in-lieu-of taxes (compared to $0 last year).
The increases indicate a continued strong real estate market, while the additional in-lieu-
of-property taxes this quarter reflect the timing of disbursements from the County.
Historically, secured property tax revenue increases significantly in December and June,
when most payments are received. Staff expect property tax collections to align with
Revenue Source
FY 2024-25
Adopted
Budget
FY 2024-25
1st Quarter
% of
Budget
FY 2025-26
Adopted
Budget
FY 2025-26
1st Quarter
% of
Budget
Property Tax 17,545,000$ 383,618$ 2.2% 18,210,000$ 470,186$ 2.6% 86,568$ 22.6%
Transit Occupancy Tax 6,580,000 1,904,725 28.9% 7,000,000 2,098,278 30.0% 193,553 10.2%
Sales Tax 2,850,000 710,099 24.9% 2,853,500 704,675 24.7% (5,424) -0.8%
Permit & Fees 4,091,500 858,024 21.0% 4,446,500 971,284 21.8% 113,260 13.2%
Franchise Tax 2,250,000 366,626 16.3% 2,400,000 376,195 15.7% 9,569 2.6%
Utility Users Tax 2,545,000 734,275 28.9% 2,457,200 789,809 32.1% 55,534 7.6%
Other Taxes & Misc. Revenues 3,792,800 6,813,446 179.6% 4,113,000 1,316,502 32.0% (5,496,944) -80.7%
Subtotal 39,654,300 11,770,813 29.7% 41,480,200 6,726,929 16.2% (5,043,884) -42.9%
Transfers In 250,000 62,500 25.0% 320,000 80,000 25.0% 17,500 28.0%
Total Revenues 39,904,300$ 11,833,313$ 29.7% 41,800,200$ 6,806,929$ 16.3% (5,026,384)$ -42.5%
Variance
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projections provided by the City’s property tax consultant, HdL Coren & Cone. Staff will
continue to monitor revenue to ensure they remain consistent with budget expectations.
General Fund Revenue – Transient Occupancy Tax (TOT)
TOT continues to remain one of the City’s most stable and dependable revenue sources.
The first-quarter total represents 30% of the adopted $7.0 million budget, compared to
28.9% of a $6.6 million budget last year. This modest increase reflects steady visi tor
activity and consistent performance at Terranea Resort and other local lodging
establishments.
Transient Occupancy Tax (TOT) revenues for the first quarter of FY 2025-26 totaled just
under $2.1 million, with the majority generated by Terranea Resort and approximately
$31,700 from other lodging sources. This reflects an increase of approximately $193,600
from the same period last year, when total collections were $1.9 million . The continued
growth in TOT revenue highlights the strength of the City’s hospitality businesses,
particularly Terranea.
Given the early nature of these numbers, no adjustments are recommended at this time.
However, Staff will be monitoring this closely and will provide updates as necessary to
ensure fiscal alignment with the adopted budget.
General Fund Revenue – Sale Tax
Sales tax revenues for the first quarter of FY 2025-26 totaled approximately $704,700,
compared to about $710,100 during the same period last year. The slight variance of
roughly $5,400, or less than 1%, indicates that sales tax collections are trending flat,
consistent with projections made during the budget preparation process.
This stability reflects the broader regional economy, where consumer spending has
remained steady but not expanded significantly due to moderate inflation and cautious
household spending patterns. The first quarter total represents about 24.7% of the
adopted $2.9 million budget, nearly identical to last year’s pace, demonstrating continued
consistency in the City’s retail base and overall economic resilience.
Given the current consistent year-over-year performance, Staff does not recommend any
budget adjustments at this time and will continue to monitor economic conditions and
sales trends and provide updates in future quarterly reports.
General Fund Revenue – Permits and Fees
Permit and fee revenues for the first quarter of FY 2025 -26 totaled approximately
$971,000, compared to about $858,000 during the same period last year. This represents
an increase of roughly $113,000, or 13.2%, reflecting both steady development activity
and the updated fee schedule approved by the City Council in May 2025, which increased
most fees by 3%, in line with the Consumer Price Index (CPI) adjustment.
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The first-quarter total represents about 21.8% of the adopted $4.5 million budget,
compared to 21.0% of last year’s $4.1 million budget. Building and Safety permits
continue to generate the largest share of this category, accounting for $40,700 increase,
supplemented by strong activity in planning and zoning and plan check fees, which
account for over $55,000 of the increase, and an increase of over $15,000 in Business
License revenue.
The higher level of revenue is consistent with current construction trends in the City,
particularly ongoing residential improvement projects. Staff do not recommend any
budget adjustments at this time but will continue to monitor development activity and
permit volumes throughout the fiscal year.
General Fund Revenue – Franchise Tax
Franchise Taxes are levied on providers of utility, refuse, and cable services in exchange
for the use of the City’s public right-of-way.
Revenues collected through the first quarter of FY 2025-26 totaled approximately
$376,200, reflecting approximately a $9,600 (or 2.6%) increase compared to the same
period last year. This first quarter total represents 15.7% of the $2.4 million of the adopted
budget for FY 2025-26, which is consistent with 16.3% during the first quarter of FY 2024-
25.
This modest increase reflects stable utility and service demand within the City. Given the
consistent performance of this category, Staff do not recommend any budget adjustments
at this time but will continue to monitor receipts and provide future report updates.
General Fund Revenue – Utility Users Tax (UUT)
UUT revenues are primarily influenced by weather conditions, utility consumption rates,
and prices for electricity, gas, and water.
At the end of the first-quarter, UUT revenue totaled approximately $789,800, representing
32.1% of the adopted $2.5 million budget for this category. This is up from the $734,300
received during the same period in FY 2024-25, which represents 28.9% of that $2.6
million budget at the time.
The year-over-year increase of roughly $55,500, or 7.6%, reflects stable utility and
moderate rate adjustments across electricity, gas, and water providers. The current pace
of collections is consistent with budget expectations and suggests that overall
consumption patterns within the City remain steady.
Given the predictable nature of this revenue stream, Staff does not recommend any
budget adjustments at this time and will continue to monitor utility pricing and usage
trends and provide updates as needed in future quarterly reports.
General Fund Revenue – Other Taxes and Miscellaneous Revenue
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Key revenue sources include golf taxes, rentals and leases, and interest earnings, all of
which performed as expected.
First-quarter revenues in this category for FY 2025-26 totaled just over $1.3 million
compared to about $6.8 million received during the same period in FY 2024-25. While
this appears to be a significant decline (-80.7%), the difference is primarily due to the one-
time $5.0 million landslide recovery grant issued from County of Los Angeles, Supervisory
Hahn’s Social Program to assist the City in addressing landslide-related impacts.
After adjusting for that one-time grant, as anticipated and accounted for, the first-quarter
revenues in this category are down by about $497,000, representing a 27.4% reduction
from the revised $1.8 million of last year’s quarterly revenue , with the following major
contributing factors:
▪ Interest Earnings: $77,000 lower than approximately $424,000 in the first quarter
of FY 2024-25, which is attributed to a depletion of the City’s available cash for
investments.
▪ A timing difference for a fair value adjustment of $426,000. This adjustment was
recorded in October, whereas, in FY 2024-25, the adjustment was recorded in
September. This adjustment is required under Governmental Accounting
Standards Board (GASB) based on the City’s fair value at the end of FY 2024-25
for investments.
▪ $135,000 less collected in loan repayment from the Redevelopment Agency’s
Successor Agency, receiving only $130,000 instead of last year’s $265,000. This
is primarily due to the Successor Agency’s inability to make its full annual payment
due to a significant reduction in tax revenue from the landslide area properties.
The first-quarter total represents 32.0% of the adopted $4.1 million budget, a healthy level
of performance for this point of the fiscal year. Golf taxes, rental income, and investment
earnings are all performing within expected ranges. Interest income remains strong,
though slightly offset by fair-value adjustments required under Governmental Accounting
Standards Board (GASB) reporting.
Staff will continue to monitor these revenue streams closely and the decline in some areas
was anticipated. At this time, no adjustments to the adopted budget are recommended.
Future updates will be provided as necessary to reflect evolving trends or other one-time
revenues.
General Fund Expenditures – Overall
During the first quarter of FY 2025-26, total General Fund expenditures totaled
approximately $8.9 million, representing a $755,700, or 9.2%, an increase compared to
the same period in FY 2024-25 of about $8.2 million.
Salaries, Benefits, and the Sheriff’s Contract increased slightly over last year’s first
quarter, as expected and consistent with the adopted budget. Repairs increase d by just
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under $41,000 or 5.8%, and Miscellaneous Expense saw an increase of over $502,000
or 104.8%, mainly from the tax assessments paid in July. However, all other categories
were lower than last year’s first quarter actuals. A detailed discussion of these variances
by expenditure category is provided in the following sections.
Chart 2 and Table 2 below provide a comparison of the first quarters in FY 2024-25 and
FY 2025-26.
Chart 2: General Fund Expenditures by Category (comparison of first quarter
actuals and adopted budgets of FY 2025-26 and FY 2024-25)
[Continued on Next Page]
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Table 2: First Quarter – FY 2024-25 vs. FY 2025-26 (General Fund)
An analysis of each expenditure category is described below.
General Fund Expenditures – Personnel Costs (Salaries and Benefits)
During the first quarter of FY 2025-26, salary expenditures totaled approximately $2.4
million, representing 20.6% of the adopted $11.8 million budget. This reflects an increase
of about $283,000, or 13.1%, compared to the same period in FY 2024-25 when salaries
totaled $2.16 million, representing 19.6% of last year’s budget for that category . The
increase is mainly from the filling of vacancies from prior year’s first quarter, cost-of-living
adjustments, and annual performance-based merit increases, in accordance with labor
agreements.
Benefit costs for the first quarter totaled approximately $1.1 million, representing 28.4%
of the adopted $3.9 million budget. This is an increase of about $247,000, or 28.7%, from
$859,000 in the same period last year, mainly from the increase of the City’s annual
prepayment of its CalPERS unfunded liability in July.
Personnel expenditures are trending in line with budget expectations, and no adjustments
are recommended at this time.
General Fund Expenditures – Non-Personnel Costs
Non-personnel expenditures for the first quarter of FY 2025-26 totaled approximately $4.0
million, representing 18.5% of those combined budget categories. This includes costs
such as contractual services, supplies, maintenance, legal services, insurance, and
equipment replacement.
Expenditures &
Transfers-Out
FY 2024-25
Adopted
Budget
FY 2024-25
1st Quarter
% of
Budget
FY 2025-26
Adopted
Budget
FY 2025-26
1st Quarter
% of
Budget
Salaries 11,029,500$ 2,156,944$ 19.6% 11,824,900$ 2,439,630$ 20.6% 282,686$ 13.1%
Benefits 3,601,100 859,478 23.9% 3,900,300 1,106,418 28.4% 246,940 28.7%
Sheriff Contract 8,171,600 1,322,308 16.2% 8,587,000 1,430,650 16.7% 108,342 8.2%
Legal Services 965,000 307,568 31.9% 1,250,000 166,743 13.3% (140,825) -45.8%
Supplies 725,000 111,109 15.3% 751,600 87,682 11.7% (23,427) -21.1%
Professional and Technical 4,679,500 542,184 11.6% 4,427,700 466,132 10.5% (76,052) -14.0%
Repairs 4,307,000 704,123 16.3% 3,808,800 744,839 19.6% 40,716 5.8%
Training and Conferences 439,750 57,270 13.0% 486,350 49,571 10.2% (7,699) -13.4%
Capital 78,000 32,378 41.5% 38,000 62,840 165.4% 30,462 94.1%
Miscellaneous Expense 1,780,700 479,461 26.9% 2,231,900 982,143 44.0% 502,682 104.8%
Transfers-Out 4,147,500 1,653,913 39.9% 4,493,650 1,445,788 32.2% (208,126) -12.6%
Totals 39,924,650$ 8,226,736$ 20.6% 41,800,200$ 8,982,435$ 21.5% 755,699$ 9.2%
Variance
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Compared to the same period in FY 2024-25, non-personnel expenditures increased by
about $434,000, or 12.2%, primarily due to timing differences in invoices and project
expenses. The most notable variances include:
• Sheriff Contract, which increased by approximately $108,000, due to escalation of
costs in the approved agreement;
• Legal Services, which decreased by about $141,000 due to lower litigation activity
during the first quarter;
• Professional and Technical Services, which decreased by roughly $76,000,
reflecting higher consulting work and engineering support for capital and
maintenance projects last year;
• Repairs and Maintenance, which rose by approximately $41,000, driven by
scheduled facility and infrastructure work early in the fiscal year, and;
• Miscellaneous Expenses increased by about $503,000, largely due to higher
insurance premiums and the timing for the tax assessment payment for the
Klondike Canyon Landslide Abatement district (KCLAD).
Other categories, including Supplies and Training and Conferences, showed moderate
decreases, while Capital Expenditures showed a $30,000 increase, due to a one-time
bluff trail fence repair.
Overall, non-personnel costs are trending in line with budget expectations and reflect
standard variations in timing across program areas. No budget adjustments are
recommended at this time.
General Fund Transfers-Out
At the end of the first quarter, Transfers-Out were down $208,000, or 12.6% from the
same period last year. The $1.4 million, or 32.2% of the budgeted transfers for FY 2025 -
26 is compared to $1.6 million from the first quarter in FY 2024-25. This variance is
primarily attributed to the lower scheduled transfers based on adopted budget to other
City funds.
Transfers are expected to better align with the adopted budget as activity occurs later in
the fiscal year.
CONCLUSION:
Overall, the City’s financial performance in General Fund through the first quarter of FY
2025-26 reflects continued fiscal stability and prudent budget management. General Fund
revenues totaled approximately $6.8 million or 16.3% of the adopted budget, consistent
with the City’s revenue projections and slightly lower than the same period last year after
adjusting for one-time grant funding. Key revenue sources such as Property Tax,
Transient Occupancy Tax, and Sales Tax remain strong, demonstrating steady economic
conditions and ongoing activity in the local housing and hospitality sectors.
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On the expenditure side, General Fund spending and transfers totaled about $9.0 million,
or 21.5% of the adopted budget, closely aligning with prior-year patterns. Personnel costs
increased moderately due to cost-of-living adjustments, filled vacancies, and the City’s
prepayment of its CalPERS unfunded liability, while non-personnel costs reflected normal
timing variations for contractual and maintenance expenses.
At this stage of the fiscal year, revenues and expenditures are tracking in accordance
with the adopted budget, and no adjustments are recommended. The City’s General Fund
remains supported by stable revenue sources, disciplined spending, and effective
oversight of capital and operational priorities. Staff will continue to monitor financial trends
and provide updates in subsequent quarterly reports to ensure ongoing transparency and
sound fiscal stewardship.
ADDITIONAL INFORMATION:
Finance Advisory Committee (FAC)
The same staff report will be presented to the FAC at its November 13, 2025 meeting as
a receive and file report.
FY 2026-27 Budget Process
At its January 20, 2026 meeting, the City Council will be asked to approve the budget
calendar for FY 2026-27. The budget process will begin with a Goals Workshop, followed
by workshops on the General Fund and Capital Improvement Program.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action s are available for
the City Council’s consideration:
1. Direct staff to make specific budget adjustments.
2. Take other action, as deemed appropriate.
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