Finance director presents preliminary fiscal-year statements; general fund, water and sewer and solid waste reserves highlighted

Ted Chen, Mesquite's director of finance, presented preliminary fiscal-year financial statements and walked council through key operating funds, internal service funds and special-purpose funds. Chen emphasized that numbers are preliminary pending the fiscal-year audit.

General fund: Chen reported an unassigned fund balance of $35.1 million — a $3.3 million increase over the prior year — representing about 78 days of working capital (city policy requires 60 days). He said the larger fund balance supports bond ratings and provides reserves. Revenue drivers included a $10.5 million property-tax collection increase tied to a voter-approved rate adjustment and stronger building-permit revenue; sales-tax collections were slightly under amended budget but roughly flat year over year.

Water and sewer: The water and sewer operating fund ended with working capital of $90.1 million, an $18.9 million increase year over year, with 318 days of working capital. Chen said water sales and bulk-water sales were above budget and prior year, attributing bulk-water increases to development activity.

Solid waste: For the first full year the city accounted for solid-waste activity in a separate fund, working capital totaled $2.5 million (about 41 days). Chen said the city intentionally built that reserve to fund future truck and container replacement on a pay-as-you-go basis rather than issuing debt.

Internal service funds: Chen said the group medical insurance fund finished the year with a negative working capital of $486,000, primarily driven by sharply higher pharmaceutical costs. He said the city altered benefits midyear to address GLP-1 drug costs and would continue working with consultants and HR to restore the fund balance. The general liability fund ended with $3.4 million in working capital and an additional $2.2 million reserved for loss reserves after an actuarial review.

Other funds: The fiscal review covered 4B Quality of Life Corporation funds (half-cent sales tax) with a year-end cash balance of about $19.6 million and hotel occupancy tax fund trends tied to events such as the solar eclipse. Chen said staff will conduct audits of nine local hotels with a contractor that previously identified deficient filings.

Council members asked questions about sales-tax trends, the effect of a flat sales-tax curve on wage and pension decisions, and whether recent benefit changes would reduce medical costs. Chen and HR staff said plan changes had begun to change usage patterns, though full savings would phase in after the plan-year transition.

No formal council action was taken; the presentation was received and staff will incorporate audit adjustments into final statements.