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Controller presents 2024 fiscal snapshot: modest general‑fund deficit, fund balance near 25% target; water plant needs flagged
Summary
City Controller Angela Gray and City Manager Fonda gave a 50,000‑foot review of 2024 finances: a $248,000 general‑fund deficit, water and sewer fund positions, discretionary fund balance of about $3.7 million, and a preliminary $27 million estimate to upgrade the water treatment plant.
City Controller Angela Gray and City Manager Fonda presented a year‑end summary of the city’s 2024 finances, telling council that the general fund posted a modest operating deficit while the city’s discretionary fund balance remains near a common benchmark used by finance officers.
Gray said the general fund ended 2024 with a $248,000 deficit versus a surplus the prior year; the water fund posted a $179,000 surplus and the sewer fund a $276,000 deficit. She said sales tax and state aid produced positive revenue variances (sales tax exceeded budget by about $260,000 and the city received roughly $198,000 more in AIM state aid). The controller also reported a notable increase in investment earnings.
On fund balance, staff reported an all‑in fund balance of roughly $4.5 million at year‑end and an available, unassigned (discretionary) fund balance of about $3.7 million. The presentation noted the Government Finance Officers Association’s (GFOA) minimum recommendation of roughly two months of expenditures (about 16%), while staff said a 25% (three‑month) target would be preferable. At 25% the target would be about $3.65 million, placing the city very near that benchmark but with multiple near‑term capital obligations.
City Manager Fonda and Gray emphasized that the apparent fund balance cushion is partly committed: council previously assigned $450,000 to the 2025 budget, roughly $113,000 remained encumbered into 2025, and there are known local‑match obligations of more than $3 million for projects council has pursued.
Gray and staff also reviewed enterprise funds and capital needs. The waterfront operated at a $179,000 surplus and the city placed $75,000 into a reserve. But staff warned of a large impending water‑system capital program: a preliminary engineering update estimated about $27 million would be needed to bring the drinking water plant up to current standards; metering and phased projects were described as likely subprojects. The sewer fund has a discretionary balance of about $2.3 million (roughly six months of appropriations) but carries an annual debt service payment of about $1 million that will continue for decades.
Staff urged more detailed asset management and capital planning, better grant‑match forecasting, and attention to public‑safety personnel costs, which account for about 63% of general‑fund expenditures. They warned that absent increased revenue (such as sustained sales‑tax growth) or structural adjustments, public‑safety costs will continue to crowd other services.
Councilors asked about assumptions in the numbers, about the 2023 revaluation’s impact on exempt vs. taxable property values, and about the city’s approach to local matches for grants. Gray and Fonda said more analysis on the changed exempt/taxable composition is forthcoming and stressed that several long‑standing capital projects remain to be prioritized in the 2026 budget process.
No formal votes were taken; council and staff agreed to continue detailed budget and capital planning work ahead of the 2026 budget cycle.
