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AGENDA ITEM NO. 11.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 01/28/2025 Originating Department: Finance |
City Manager:
Department Head:
SUBJECT:
Annual Comprehensive Financial Report of the City of Hawthorne for the Fiscal Year Ended June 30, 2024.
RECOMMENDED MOTION:
Staff recommends that the City Council receive and file the Annual Comprehensive Financial Report of the City of Hawthorne for the Fiscal Year ended June 30, 2024.
DISCUSSION:
The General Fund actual revenues exceeded budgeted revenues by approximately $10.1 million in Fiscal Year 2023-2024. The excess revenue was primarily due to an increase in tax and special
assessments revenues and operating transfers in. While the City received 10.1% more than budgeted, with the slowing of the economy, this resulted in a decrease, the first since 2012, of 1.7% in General Fund revenues compared with the prior fiscal year 2022-2023. Revenue projections for FY 2023-2024 were based on conservative estimates to account for modest economic growth. The General Fund expenditures for Fiscal Year 2023-2024 were under budgeted expenditures by approximately $12.6 million. The decrease in expenditures was primarily due to a decrease in capital outlay; actual expenditures for all departments were below budgeted amounts.
The programs with lower than anticipated expenditure amounts included Mayor and City Council of $511 thousand, City Manager of $190 thousand, City Attorney of $138 thousand, Administrative Services of $619 thousand, Public Safety of $12.1 million, Planning of $654 thousand, Building & Safety of $184 thousand, Parks & Recreation of $590 thousand, and Public Works of $1.2 million.
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The City’s unrestricted fund balance for the General Fund increased from $78.7 million at year end June 30, 2022 to $93.98 million at year end June 30, 2023. The City’s unrestricted fund balance at fiscal year end June 30, 2024 for the General Fund was $109,366,673. This is approximately 128.48% of the total General Fund Expenditures. The required fund Balance for Fiscal Year 2023-24 was $24.1 million, or 3 months (25%) of budgeted expenditures.
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The City’s total long-term liabilities decreased by $6.5 million during the current fiscal year, primarily due to the decrease in the bond liability in the fiscal year.
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The City’s operational liabilities, which include Compensated absences, OPEB, pension-related debt and claims and judgments, total $148 million. This is an increase of $13 million primarily in Net Pension Liability. Debt service payments for Fiscal Year 2023-24 totaled $5,350,850 as follows:
As determined by the latest actuarial valuation, the City’s OPEB Liability decreased by $96 thousand to a total of $100,619,074. The City currently pays the postemployment health insurance on a pay as you go basis, with payments totaling $3,211,093 in Fiscal Year 2023-2024. The Council authorized the PARS IRS approved Section 115 Trust which was established in November of 2022. A total of $4.5 million in contributions have been made to the trust since it was established.
The City’s net position, at June 30, 2024 totaled $74.6 million. The total net position increased from the prior fiscal year 2022-23 by $33,354,329 primarily due to the decrease in public safety expenditures.
The following contributing items have impacted the overall net position:
· Taxes increased by $8.3 million
· Use of money & property increased by $2.7 million
· General Government expenditures decreased by $1.5 million
· Public Safety expenditures decreased by $12.1 million
· Community Development expenditures decreased by $838 thousand
· Parks & Recreation expenditures decreased by $590 thousand
· Public works expenditures decreased by $$1.2 million
The following table reflects the change in net position from fiscal year 2022-23 to fiscal year 2023-24.
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assessments revenues and operating transfers in. While the City received 10.1% more than budgeted, with the slowing of the economy, this resulted in a decrease, the first since 2012, of 1.7% in General Fund revenues compared with the prior fiscal year 2022-2023. Revenue projections for FY 2023-2024 were based on conservative estimates to account for modest economic growth. The General Fund expenditures for Fiscal Year 2023-2024 were under budgeted expenditures by approximately $12.6 million. The decrease in expenditures was primarily due to a decrease in capital outlay; actual expenditures for all departments were below budgeted amounts.
The programs with lower than anticipated expenditure amounts included Mayor and City Council of $511 thousand, City Manager of $190 thousand, City Attorney of $138 thousand, Administrative Services of $619 thousand, Public Safety of $12.1 million, Planning of $654 thousand, Building & Safety of $184 thousand, Parks & Recreation of $590 thousand, and Public Works of $1.2 million.
The City’s unrestricted fund balance for the General Fund increased from $78.7 million at year end June 30, 2022 to $93.98 million at year end June 30, 2023. The City’s unrestricted fund balance at fiscal year end June 30, 2024 for the General Fund was $109,366,673. This is approximately 128.48% of the total General Fund Expenditures. The required fund Balance for Fiscal Year 2023-24 was $24.1 million, or 3 months (25%) of budgeted expenditures.
The City’s total long-term liabilities decreased by $6.5 million during the current fiscal year, primarily due to the decrease in the bond liability in the fiscal year.
The City’s operational liabilities, which include Compensated absences, OPEB, pension-related debt and claims and judgments, total $148 million. This is an increase of $13 million primarily in Net Pension Liability. Debt service payments for Fiscal Year 2023-24 totaled $5,350,850 as follows:
| Debt Service Payment | Amount |
| SBRPCA Lease | $ 205,850 |
| Certificates of Participation (Refinance of 2015 POB and Police Facility) | $2,215,000 |
| 2019 Pension Obligation Bonds | $2,930,000 |
| Total | $5,350,850 |
As determined by the latest actuarial valuation, the City’s OPEB Liability decreased by $96 thousand to a total of $100,619,074. The City currently pays the postemployment health insurance on a pay as you go basis, with payments totaling $3,211,093 in Fiscal Year 2023-2024. The Council authorized the PARS IRS approved Section 115 Trust which was established in November of 2022. A total of $4.5 million in contributions have been made to the trust since it was established.
The City’s net position, at June 30, 2024 totaled $74.6 million. The total net position increased from the prior fiscal year 2022-23 by $33,354,329 primarily due to the decrease in public safety expenditures.
The following contributing items have impacted the overall net position:
· Taxes increased by $8.3 million
· Use of money & property increased by $2.7 million
· General Government expenditures decreased by $1.5 million
· Public Safety expenditures decreased by $12.1 million
· Community Development expenditures decreased by $838 thousand
· Parks & Recreation expenditures decreased by $590 thousand
· Public works expenditures decreased by $$1.2 million
The following table reflects the change in net position from fiscal year 2022-23 to fiscal year 2023-24.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
.
FISCAL IMPACT:
None.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act