Summary
The Second Quarter FY24 QCMR, covering the period ending December 31, 2023, reflects continued financial pressures, with spending increases largely due to midyear transfer ordinances supporting street paving, clean and green initiatives, and new reserves. The City’s revenue estimate remains unchanged from Q1, though Realty Transfer Tax and Business Income & Receipts Tax continue to underperform, offset partially by stronger-than-expected Wage Tax collections. The projected year-end fund balance of $504.0 million is now below the Five-Year Plan, signaling increased financial strain as spending growth continues to outpace revenue collections. The report notes a 43% vacancy rate in Prisons and declining sanitation and public health service levels, adding operational concerns to the fiscal picture. Overtime spending remained high at $134.0 million, accounting for 14% of total wages. While the City remains financially stable in the short term, the long-term outlook suggests declining reserves unless structural spending imbalances are addressed.