By Shawn Raymundo
The city’s general fund revenue collections for the first quarter of the fiscal year were slightly behind pace compared to the previous year—a direct result of pandemic restrictions, city officials recently reported to the council.
According to the city’s latest financial report for the first quarter of Fiscal Year 2021—covering July through September—$5.7 million, or 8.3% of the $68.2 million budgeted for the year, has been collected in taxes and other revenue sources.
Compared to the same period from FY 2020, the city’s revenue collections are behind by about $1.6 million. Nearly 11% of the city’s revenues in the last fiscal year were collected in the first quarter, the city noted.
Jake Rahn, the financial services officer, noted that the pace has been slower than previous years because the pandemic has impacted travel, resulting in fewer transient occupancy taxes. The pandemic has also restricted recreational services and rental activity that would normally provide the city with revenues from fees and other charges.
“Revenues below prior year are mostly and primarily in revenue sources, which are directly serving the public,” he said, adding: “These are primarily in the permits and fees, service charges, which include recreation classes and rental activity, all things that are restricted by pandemic operations.”
As for the city’s largest sources of revenue—property and sales taxes—Rahn said the city isn’t seeing any issues with the tracking of those collections.
Property taxes for the fiscal year, the bulk of which are typically collected in late fall and early spring, are expected to reach about $37.12 million—or roughly 54% of the city’s total revenue. Sales taxes will account for nearly $9.95 million of the total revenue.
According to the city’s financial report, a total of $665,145 in property taxes was collected in the first quarter, down from the same period the prior year by $19,384. However, sales taxes collected from July through September were $907,157, which exceeded collections from the first quarter of FY 2020 by $67,692.
In expenditures, the city spent just north of $17.2 million during the first quarter, or 24.6% of the $70 million budgeted—roughly matching the same spending pace compared to the same period last year, the financial report stated.
Rahn noted that the $17.2 million spent was about $400,000 below the $17.6 million that the city had spent in the first quarter of FY 2020.
“We’ve achieved some savings in a variety of areas, which includes lower costs in salaries, benefits, supplies and other charges and interdepartmental charges,” he said.
Some line item expenditures in the first quarter, he said, did increase, including public safety costs—such as the police and fire contracts—and capital outlay.
“Right now, staff is working with the departments to identify cost savings, and during mid-year adjustments, we’ll communicate those savings,” Rahn said. “The adjustments will not impact service levels and are mostly to offset areas where costs were not incurred … finance staff is confident these cost savings will address any decrease in the revenues.”
The city is slated to present to the council by March the Long-Term Financial Plan (LTFP).
Additionally, the council, during the Dec. 15 meeting, instructed staff to prepare a White Paper report on the city’s unfunded pension liability, which is at about $45 million.
That White Paper is expected to be presented to the council prior to the LTFP workshop.
Shawn Raymundo is the city editor for the San Clemente Times. He graduated from Arizona State University with a bachelor’s degree in Global Studies. Before joining Picket Fence Media, he worked as the government accountability reporter for the Pacific Daily News in the U.S. territory of Guam. Follow him on Twitter @ShawnzyTsunami and follow San Clemente Times @SCTimesNews.