City revenues up 1.4% according to first quarter budget report
Council approves first quarter budget update at Tuesday meeting
– The Paso Robles City Council met Tuesday night, where city staff presented the first quarter budget report, offering an overview of the city’s financial outlook based on actual transactions for fiscal years 2023-24 and 2024-25. The first quarter of the 2024-25 fiscal year is from July 1 to Sept. 30, 2024.
The report outlined the general fund, with total revenues of $56.6 million, a use of reserves totaling $7.3 million, and expenditures amounting to $62.9 million. The year-end reserve estimate stands at $15.4 million.
Quarterly updates show revenues are 1.4% higher than anticipated, while expenses are at 94.9% of appropriations. The updated year-end reserve estimate has increased to $17.6 million, or about 34% of revenue trends.
The budget for fiscal years 2024-25 and 2025-26 was approved before the close of the fiscal year, as required by state law, which mandates that budgets be adopted before the start of the year. Because of this, estimates and assumptions were made to predict financial activity after the budget was set but before the fiscal year closed, according to the staff report.
The general fund initially estimated unappropriated reserves would total $19.4 million by June 30, 2024. However, actual reserves on that date amounted to $19.7 million, providing a positive impact of about $250,000, or less than 1% of the total general fund. This confirms that year-end estimates were accurate, and no further adjustments are necessary.
As noted in previous budget discussions, the general fund is balanced with projected revenues of $55.1 million and operating expenditures of $53 million for the end of the fiscal year. An additional $8.5 million was allocated for one-time capital projects. With current projections, revenues are expected to exceed earlier estimates by 1.4%, and operating expenditures are tracking at about 95% of appropriations, further validating the budget’s accuracy.
The financial activity of the General Fund is summarized below:
According to a report by the San Luis Obispo Tribune, recent claims of a $42 million deficit are unfounded.
“There is no deficit. We’re not anticipating a deficit,” interim city manager Chris Huot told The Tribune. “Revenues have slowed slightly post-COVID, but that’s not something that’s unique to the city. That’s happening across the country. We’re still in a very solid fiscal footing.”
The city’s operating budget shows that the city is not spending in excess of its revenues. The city maintains healthy reserves at a mandated 30% or more of its 10-year revenue trend, according to the Tribune report.
City officials clarified that the interpretation of a deficit overlooked important context. Paso Robles primarily funds its operating costs through general fund revenues, while capital projects are financed through special revenue funds, such as development impact fees and federal allocations. These funds are used for large, one-time projects and are replenished over time.
The special revenue reserves aren’t included in the “Total Revenues” column, which can create the misleading impression of a shortfall. City officials emphasized that this is a common practice and the funds are accounted for properly, according to the Tribune report.
The council unanimously approved receiving and filing the report.
Click here to view the full agenda with linked staff reports.
Watch the full meeting below:
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