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Albany finance director reports unaudited FY25 surplus, cites one-time revenues and higher labor costs
Summary
Finance Director Raina Schwartz reported an unaudited FY25 positive variance (about $800,000) driven largely by one-time revenues including a large property transfer; expenses were higher due to a $1.5 million settlement, updated MOUs and IT/security spending. The FY24 financial report received a GFOA award.
On Oct. 13 the Audit and Fiscal Sustainability Standing Committee heard a preliminary (unaudited) year-end budget review for fiscal year 2025 from Finance Director Raina Schwartz, who reported an overall positive variance of roughly $800,000 but cautioned that much of the revenue upside was one-time and that expense pressures persist.
"We had our auditors on-site last week, and it went very well," Schwartz said, and later announced the city had received the Government Finance Officers Association (GFOA) award for excellence in financial reporting for FY24. She said the city is aiming to complete the FY25 audit before Dec. 31 but the audited report may not reach council until January because of meeting schedules.
Schwartz summarized the principal drivers of the unaudited result: a $1.7 million favorable variance in property transfer taxes largely attributable to the resale of Belmont Village; higher revenues from mutual-aid reimbursements for fire deployments; and a one-time reimbursement from Measure R bond proceeds. She emphasized those revenues are not expected to repeat.
On the expense side, Schwartz said the general fund absorbed a $1.5 million settlement; $500,000 had been previously reserved, producing a net $1 million impact in FY25. Labor costs were higher than budgeted because memoranda of understanding (MOUs) for several bargaining units were finalized after the FY25 budget adoption, and the police department paid substantial leave payouts after a long-tenured police chief retired. Schwartz also cited elevated IT infrastructure and cybersecurity spending as another significant overrun.
"The bottom line is we did end up unaudited about 800,000 above," Schwartz said, but added that the FY26 outlook remains cautious given the one-time nature of many revenue gains and softness in sales tax receipts.
Committee members asked about options for setting aside the unaudited surplus; staff reminded the committee that reserve policy is set by council resolution and that the council has discretion over allocation (general reserves, pension reserve, etc.). A staff member clarified the city's reserve policy target is 25% (noting staff would confirm the precise base used in the policy); Schwartz said the mid-year update in January or February will present audited numbers and the first six months of FY26 activity to inform any reserve or budget action.
Public comment during the item included praise for finance staff and questions about labor negotiations and the city's military-equipment inventory; staff directed the commenter to the city's website, where collective bargaining agreements and the annual inventory required by state law are posted.
The discussion produced no committee action to change appropriations; staff will finalize the FY25 audited report and present mid-year FY26 results to the committee and council.
