Redwood City – Delivering three primary services to residents — health, public safety and public assistance — made up the vast majority of the County’s expenses in the last fiscal year, according to the Annual Comprehensive Financial Report recently released by Controller Juan Raigoza.
While the County’s budget forecasts expected revenues and allocates funds, the ACFR shows revenues received, expenses incurred and the County’s assets and liabilities for the fiscal year ending June 30, 2024.
The report includes the County’s government-wide financial statements, fund financial statements (including the County’s General Fund), management’s discussion and analysis and notes. The General Fund is used to finance and budget most of the County’s operations.
Some financial highlights in this year’s report include:
- The cost of delivering three core services to residents comprised 82 percent of total expenditures: 40 percent for health (includes the San Mateo Medical Center and clinics), 24 percent for public safety and 18 percent for public assistance services.
- General Fund revenues totaled $2.1 billion, while expenditures totaled $1.8 billion.
- Net pension liabilities increased to $823 million.
- Expenditures of Measure K funds (the voter-approved half-cent countywide sales tax) totaled $124 million, including $50 million for housing and homelessness, $14 million for youth and education, and $19 million for mental and other health initiatives.
- Total taxes received (property, sales, transient occupancy, etc.) were $1.1 billion, similar to last year.
- The County received $41 million from the state for its share of the Vehicle License Fee (VLF) shortfall generated in fiscal year 2022-23 – its share of the countywide shortfall for fiscal year 2023-24 is $68 million, which has not yet been paid by the state.
- Three core revenue sources comprised 90 percent of total government-wide revenues: 37 percent from taxes (mostly property taxes), 26.5 percent from operating grants and contributions (mostly federal and state grants), and a similar 26.5 percent from charges for services (largely Medicare, Medi-Cal and other insurance payments for health services).
The Letter of Transmittal, the report’s opening section, summarizes the County’s key financial management policies, economic indicators and other information. Some of these economic indicators include that:
- The County’s unemployment rate was 3.5 percent in June 2024; unchanged as of November 2024, and is the lowest among California’s 58 counties, as is usually the case.
- Recently released 2023 edition of Gross Domestic Product (GDP) statistics show that San Mateo County was ranked No. 15 among the largest U.S. counties measured by GDP, as its economy generated $203 billion and grew by 7.7 percent, the most among these large counties.
- After dropping in 2022 and 2023, the County’s office vacancy rate rose to 10.8 percent as of June 2024, and to 11.2 percent for the quarter ending September 2024, close to the 11.5 percent rate from June 2021.
- The median price for a single-family home has remained more or less flat during the last 3 years hovering around $2 million.
- At San Francisco International Airport, a local economic engine, the number of passengers served increased 9 percent to 51.3 million for the year ending June 2024, up from 47.1 million in prior year, but still below its pre-pandemic volume of 57.4 million passengers.
The flat residential property values and increased office vacancies may reduce, compared to prior years, the annual growth rate of future assessed property values and related tax revenues. Still, total countywide property taxes increased by 6.87 percent for the prior fiscal year 2023-24 and 5.75 percent for the current, in progress, fiscal year 2024-25.
The ACFR notes that the County has several major capital projects under construction including, among others, the South San Francisco Health Campus, Flood Park, San Mateo County Resiliency Center, Pescadero Fire Station, and the Tunitas Creek Beach Improvement project. For fiscal year 2023-24, capital assets increased by $227 million to $1.9 billion, primarily due to the County’s investments in buildings.
Rising costs for on-going operations, funding for unfunded pension liabilities and investments in major capital projects will continue to require disciplined budget planning to protect the County’s long-term financial health and its ability to provide essential services to residents.
In addition to the ACFR, the Controller’s Office also recently released the County’s Financial Highlights report, otherwise known as the Popular Annual Financial Report, which summarizes in an easy-to-read manner the information presented in the ACFR. Both reports, along with the County Executive Office’s Budget Reports, are frequently recognized with the Government Finance Officers Association’s Triple Crown Award for excellence in financial reporting.
“These financial reports are two of many ways that our office and County work to make the County’s financial activities transparent and understandable to residents and taxpayers. These reports, annual budget reports, Property Tax Highlights publications and other information is available online via County’s website for everyone to learn about the services provided by the County and its financial activities,” Raigoza said.
The Annual Comprehensive Financial Report and Financial Highlights report are both available at https://smcgov.org/controller.
###
Kim Le, Deputy Controller
(650) 363-4777