City reports $5.8 million revenue surplus; plans to appropriate funds to cover school deficit

City finance staff reported Tuesday that fiscal 2025 closed with roughly $5.8 million more in revenue than budgeted and that the Board of Finance will consider appropriating part of those funds to cover a Board of Education deficit. Diane, a city finance staff member, told the joint meeting the city collected stronger-than-expected revenues across multiple lines and is largely closed out for the fiscal year. “We’re pretty much closed out as far as the expenditures are concerned and the revenues — everything’s posted,” she said. The surplus breakout included roughly $769,000 from a three-year property-tax audit initiative, more than $2 million in supplemental building-permit revenue, and about $3.05 million in investment income, Diane said. She added that tax collections remain strong and that an official year-end collection rate will be reported next month. The comptroller’s report also noted the board of education submitted a budget deficit. Diane said a district called Vertivale reported a roughly $5.9 million shortfall and that the city plans to appropriate some of the newly realized revenues to cover that gap. “What will happen is that $5,000,000 plus that we have in revenues, we will appropriate that to cover the board of education deficit. So the board of finance will do that at their next meeting,” she said. Why it matters: Council members and speakers at the meeting framed the revenue news against the school deficit and recent public debate over whether municipal leaders adequately funded education before the tax increase was announced. Two members of the public who spoke during the meeting urged the council to stop blaming the school board and said the city’s budgeting decisions drove the shortfall. Public comment: Mike Garacenko, who identified himself as a resident, criticized the mayor’s public statements linking the board of education to the tax increase and said the city’s own reports showed the shortfall was predictable. “When an audit commissioned by you states the funding is insufficient to cover expenses, a deficit is not unexpected,” he said. Melina Floyd, another resident, echoed that criticism and urged city officials to fund education at levels that match contractual obligations. What’s next: The city’s auditor is on site; a draft audit is expected in December, with a final report by mid-December, Diane said. The Board of Finance will consider a formal appropriation at its next meeting; council members said they expect that appropriation to be brought forward for approval. Context and limits: Diane repeatedly described the figures as unaudited and said the fund balance sits at about 12 percent of the budget (the city’s range is 12–15 percent recommended by rating agencies). She cautioned that some numbers remain preliminary and that the tax collector’s final collection rate will be available next month.