Newark posts $3.9 million general‑fund surplus in unaudited year‑end review

The City of Newark closed fiscal year 2024–25 with an unaudited $3.89 million general‑fund surplus, Finance Director Kristen Lee told the City Council on Sept. 23. Lee said revenues exceeded projections, led by higher sales tax and transient‑occupancy (hotel) tax receipts, and that personnel and project savings also contributed to the positive result. The council voted unanimously to accept the year‑end review and proposed budget adjustments.

Lee said the city’s general‑fund revenues grew year over year, with notable line‑item increases including sales tax (a large fourth‑quarter bump) and transient‑occupancy tax after voters approved Measure LL to raise the hotel tax rate. She described a $3.89 million net operating surplus after required transfers and designations and said the results are unaudited figures. “This outcome reflects that our revenues exceeded projections, especially in the sales tax and the transient occupancy tax,” Lee said.

Why it matters: the surplus gave the council and staff flexibility to replenish reserves and designate funds for capital needs. Lee said staff used surplus and savings to make strategic transfers consistent with council policy, including contributions to pension/OPEB reserves, the emergency fiscal‑uncertainty reserve and capital funds.

Supporting details: Lee reported the city’s emergency fiscal‑uncertainty reserve met the 30% target and listed the following year‑end transfers and designations (unaudited figures reported to council): approximately $7,377,300 to the pension/OPEB reserve (partly replenishing a prior transfer to the city’s Section 115 trust); about $1,600,000 to the emergency fiscal‑uncertainty reserve; $1,000,000 to a maintenance reserve; $390,000 to the capital fund for the Newark Resource Center (completing a commitment using ARPA funds); $1,000,000 in final ARPA‑eligible reimbursements for personnel before a federal deadline; and earmarks of $1,200,000 in TOT revenue for future debt service and $6,500,000 of Measure GG revenue for capital financing.

Lee said total general‑fund expenditures increased modestly year over year but remained approximately $6.8 million under budget due mainly to vacant positions and project savings; she attributed personnel savings to vacancies in the police and public works departments and to using outside grants to fund some positions. Lee noted investment earnings were slightly below projections because of lower market yields and flagged that the external audit and the city’s annual comprehensive financial report (ACFR) are still in process and expected in January 2026.

Council reaction: members praised the finance team and the city manager for conservative budgeting and fiscal stewardship. Councilmember Bridal asked about hotel performance excluding the tax rate change; Lee said staff would follow up with more detailed analysis showing occupancy and rate trends. The council directed staff to carry the proposed year‑end amendments forward; a motion to accept the report passed unanimously.

Limitations: figures reported were described by staff as unaudited. Lee told the council the external audit is underway and the ACFR will be presented after audit close in January 2026.

Next steps: staff said they anticipate beginning the next biannual budget process in January or February with public workshops and aim for final adoption in June 2026.