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AGENDA ITEM NO. 15.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 12/10/2024 Originating Department: Finance |
City Manager:
Department Head:
SUBJECT:
Review of the Quarter 1 Financial Report for Fiscal Year 2024-2025.
RECOMMENDED MOTION:
Staff recommends that the City Council receive, approve, and file the Quarter 1 Financial Report for Fiscal Year 2024-2025.
DISCUSSION:
This report provides the required Quarter 1 Financial Report for Fiscal Year 2024-2025.
Quarter 1 of Fiscal Year 2024-2025 Revenues
At this point in the fiscal year, staff has compared revenues received to date with prior year actuals and determined that revenues are on track with the projections that were adopted by the City Council in June 2024. Budgeted General Fund revenues are currently $11,682,996 compared to $9,735,946 during the same reporting period in FY 2023-24 (which reflects a 20% increase); they are up about 21.7% in comparison to the same period in FY 2022-23.
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The most notable tax increases have been Business License Taxes and Utility Users Tax, which reflect 37% and 53% increases, respectively, compared to FY 23-24. Business License Tax collected during the 1st quarter is usually for delinquent payments from the prior fiscal year. There is a decrease in Transient Occupancy Tax of 38%, compared to FY 23-24. This revenue source is wholly dependent on visitors to the City of Hawthorne.
The City has also realized a 22% increase in construction permits during this first quarter of the fiscal year. During this same quarter in FY 23-24, there was an increase in construction permits of 57%.
Quarter 1 of Fiscal Year 2024-2025 Expenditures
General Fund expenditures are currently trending at 23.36% compared to 24.05% during the same reporting period in FY 23-24 and 25.61% in FY 22-23. Any time our General Fund expenditures as a whole are below 25% spending in the first quarter of the fiscal year; we consider that a success. For many years now, the direction from City Manager and City Council has been to spend wisely and conservatively. The City needs to be ready, with sufficient cash balances, for any unexpected emergencies. Currently, the only program with expenditures over 25% is Measure HH at 46.10%. The Measure HH program includes payments for the Los Angeles County Fire contract and RCC/911 Operations. Almost 30% of the fees for FY 2023-24 have already been remitted for the Fire Contract and 55% for the RCC/911 Services. Fees for Fire services are paid in advance of the month the service is provided, while fees for RCC/911 are paid a full quarter in advance of the service provided.
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General Fund Cash Balance
The required General Fund cash balance for Fiscal Year 2024-25 is $27,487,466, as required by Section O of HMC 2.04.040, which is the average of 3 months of operating expenditures for the current Fiscal Year. As of September 30, 2024, this balance was $90,124,026. As of September 30, 2023, this same balance was $86,218,804.
As of September 30, 2024, the above balance includes interfund activity of ($11,932,067) for funds with deficit balances related to Bond Payments, liability insurance payments, and grant reimbursable expenditures, which are expected to be collected throughout the current fiscal year.
Investments
The total investments for City held accounts is $132,748,855. Total General Fund investment earnings for Quarter 1 FY 2024-25 were $1,223,459. Compared to $360,694 during the same reporting period in FY 23-24, this reflects a 239% increase related to increase in interest rates.
Quarter 1 of Fiscal Year 2024-2025 Revenues
At this point in the fiscal year, staff has compared revenues received to date with prior year actuals and determined that revenues are on track with the projections that were adopted by the City Council in June 2024. Budgeted General Fund revenues are currently $11,682,996 compared to $9,735,946 during the same reporting period in FY 2023-24 (which reflects a 20% increase); they are up about 21.7% in comparison to the same period in FY 2022-23.
The most notable tax increases have been Business License Taxes and Utility Users Tax, which reflect 37% and 53% increases, respectively, compared to FY 23-24. Business License Tax collected during the 1st quarter is usually for delinquent payments from the prior fiscal year. There is a decrease in Transient Occupancy Tax of 38%, compared to FY 23-24. This revenue source is wholly dependent on visitors to the City of Hawthorne.
The City has also realized a 22% increase in construction permits during this first quarter of the fiscal year. During this same quarter in FY 23-24, there was an increase in construction permits of 57%.
Quarter 1 of Fiscal Year 2024-2025 Expenditures
General Fund expenditures are currently trending at 23.36% compared to 24.05% during the same reporting period in FY 23-24 and 25.61% in FY 22-23. Any time our General Fund expenditures as a whole are below 25% spending in the first quarter of the fiscal year; we consider that a success. For many years now, the direction from City Manager and City Council has been to spend wisely and conservatively. The City needs to be ready, with sufficient cash balances, for any unexpected emergencies. Currently, the only program with expenditures over 25% is Measure HH at 46.10%. The Measure HH program includes payments for the Los Angeles County Fire contract and RCC/911 Operations. Almost 30% of the fees for FY 2023-24 have already been remitted for the Fire Contract and 55% for the RCC/911 Services. Fees for Fire services are paid in advance of the month the service is provided, while fees for RCC/911 are paid a full quarter in advance of the service provided.
General Fund Cash Balance
The required General Fund cash balance for Fiscal Year 2024-25 is $27,487,466, as required by Section O of HMC 2.04.040, which is the average of 3 months of operating expenditures for the current Fiscal Year. As of September 30, 2024, this balance was $90,124,026. As of September 30, 2023, this same balance was $86,218,804.
As of September 30, 2024, the above balance includes interfund activity of ($11,932,067) for funds with deficit balances related to Bond Payments, liability insurance payments, and grant reimbursable expenditures, which are expected to be collected throughout the current fiscal year.
Investments
The total investments for City held accounts is $132,748,855. Total General Fund investment earnings for Quarter 1 FY 2024-25 were $1,223,459. Compared to $360,694 during the same reporting period in FY 23-24, this reflects a 239% increase related to increase in interest rates.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
.
FISCAL IMPACT:
None.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act