Auburn reports $2.8 million gap as city draws down fund balance in second-quarter review

Director Thomas, finance director for the City of Auburn, presented the city’s second-quarter 2025 general fund report at the Sept. 8 study session, saying the report covers revenue and expenditures through June 30, 2025. "We have collected 11% more in revenue year to date compared to our budget," Thomas said, and added the city has spent $2,800,000 more in 2025 than it has collected through that date. The presentation noted the 11% favorable collection versus budget but a 5% shortfall compared with the same period in 2024, a difference Thomas attributed largely to one-time transfers of about $4.2 million into the general fund in 2024 tied to ARPA and grants.

Thomas told the Council the city is drawing down fund balance as planned: "we are spending down some of that fund balance, which is how we did budget for that," and projected that the current pace will reduce that balance over the next four to six years. The report showed property tax revenue—budgeted at $25 million and accounting for 32% of the city’s tax revenue—was on track to meet budget, while retail sales and use tax was $252,000 (about 2%) ahead of budget. Utility taxes, budgeted at $15.8 million (20% of taxes), outperformed expectations by about $1.8 million, in part because the city began collecting utility taxes in 2023 from neighboring providers whose customers reside in Auburn and because of some back collections.

On business and occupation tax, Thomas said the city collected $7.1 million year to date against a $10 million budget and that $1.18 million of the apparent overperformance in 2025 consisted of past‑due taxes from prior years. "If you were to normalize that number," Thomas said, removing back taxes, the city would be about $600,000 over budget in that category. Licenses and permits were 9% under year‑to‑date budget overall, driven by lower street and excavation permits even as building permits and business licensing were above budget. Intergovernmental revenues were under budget by $651,000 and 27% below 2024 year to date, a shortfall Thomas attributed mainly to the timing of MIT compact receipts and grants; he said the city expects most timing differences to correct by year end but estimated intergovernmental revenues could finish $100,000–$200,000 below budget.

Thomas highlighted expenditure variances as well: overall city departments had spent 14% less than budget through June 30 but 4% more than they had at the same point in 2024. He said the police department was underspent by about $2.8 million because a cost-of-living adjustment negotiated in the bargaining agreement did not take effect until August; he expected that amount to change in the third-quarter report when retroactive pay is processed. Human services and several ARPA-funded programs also showed underspending; Thomas said about $6.3 million of ARPA funds remained unspent as of June 30, 2025, with an estimated $1.25 million still budgeted but not yet spent in the human services ARPA program.

Council members asked clarifying questions during the presentation. Council member Clinton Taylor asked how Auburn’s liquor excise tax collections compared with neighboring cities; Thomas said the tax is state‑shared revenue, so distributions track state collections and would likely be similar if statewide collections were lower. Council member Ortiz asked whether the salary underruns reflected vacancies concentrated in particular departments; Thomas said public safety accounted for the largest underspend but emphasized the timing of the bargaining agreement was the main driver. Thomas also confirmed a slide typo: an intergovernmental line showing "983,000 million" should read $983,000.

The report was informational; there was no council action at the session. Thomas said finance staff will return with mid‑biennial budget adjustments in November and that some 2026 projections will be updated to reflect higher recreation and investment returns seen in 2025.