In a recent council meeting, a five-year financial forecast was presented, highlighting projected operating surpluses and deficits for fiscal year 2029. The report, prepared for the mayor and filed with the state, indicates potential surpluses of $9.4 million or deficits reaching $35.4 million, depending on various assumptions, particularly concerning new school debt service requirements.

This marks the third consecutive year the forecast has been shared with the council. The primary concern remains the rising costs associated with debt service, which were disclosed prior to the approval of a significant $350 million bond initiative. Despite these challenges, the forecast reflects a positive development: school bonds were recently sold at a competitive interest rate of 3.81%, lower than the 4.5% rate used in the forecast.

Council members raised several inquiries regarding the report. Councilman Gephardt questioned the projections for employee benefits and the inclusion of $3 million in speed camera revenues for fiscal year 2026, which the forecast now incorporates following council approval. A revised forecast was subsequently transmitted to the council and state, correcting an error in the best-case scenario.

Councilman Foley noted that the latest forecast is an improvement over previous years, with a deficit projection for fiscal year 2026 reduced by over $10 million. This improvement is attributed to better-than-expected revenue and expense results, as well as increases in property tax levies.

The forecast adheres to state statutory requirements, which mandate projections extend five years into the future. Questions regarding existing debt service and the impact of new debt for school projects were also addressed, emphasizing the need for careful management of school spending amidst declining enrollment.

The discussion underscored the complexities of financial planning, particularly regarding the timing of state reimbursements for school projects. The council is expected to revisit legislation aimed at securing early reimbursement, reflecting ongoing efforts to navigate the financial landscape effectively.