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Cudahy's unaudited FY2024–25 financials show higher-than-budgeted ending fund balance; grants drive cash flow variability
Summary
Interim finance director presented unaudited FY2024–25 results showing a larger-than-expected General Fund ending balance, under-spending by departments, and a grants fund that creates cash-flow variability due to cost-reimbursement timing.
The Cudahy City Council received unaudited financial statements for the fiscal year ended June 30, 2025, showing the General Fund ended with about $7.0 million in fund balance—well above the $3.2 million budgeted—and that departmental expenditures were roughly 20% under budget.
The interim finance director told the council that General Fund revenue finished about 6.5% below budget, driven by overestimates in permitting and related revenue, but that expenditures were nearly $3.7 million below budget, producing the stronger-than-expected ending balance. “We budgeted, a year ago, ending fund balance of 3.2 and you actually ended up with 7,000,000, which is quite good,” the interim finance director said.
Why this matters: the city’s higher-than-expected fund balance gives Cudahy more flexibility for operations and capital investment, but a large portion of the city’s overall budget comprises grants and capital projects that operate on reimbursement schedules and therefore create cash-flow variability.
The presentation stressed that roughly half of the FY2025–26 budget is grant-funded capital projects. The grants fund operates on a cost-reimbursement basis, which requires the city to front construction and project costs until grantors reimburse the city. The director said the city recently received about $2.7 million in reimbursements that improved the grants fund cash position, and that the city invests excess cash in the Local Government Investment Pool (LGIP) at roughly 4.2% at the time of the presentation.
Council members pressed for clarity about the drivers of the underspending and whether charging staff time to grants was appropriate. The interim finance director and the city manager said departments had underspent for several reasons, including unfilled positions and reallocation of staff time to grant-funded projects; staff confirmed they had checked grant rules and auditors to ensure time charging followed grant requirements.
Council received the report and voted to place the unaudited financial statements on file. No budget amendments were approved during the meeting.
Key figures mentioned in the presentation: General Fund ending fund balance roughly $7.0 million; revenue variance −6.5% versus budget; expenditures about $3.7 million below budget; recent grants reimbursements ~$2.7 million; LGIP yield ~4.2%.
