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Treasurer urges conservative interest projections, flags restricted 1% tax administration fee
Summary
The treasurer reported strong investment income last year but recommended lowering projected interest revenues and warned that the 1% tax administration fee is a restricted revenue source; council agreed to lower the interest projection and to review interfund timing.
The treasurer presented the treasury office personnel and revenue pages and urged the council to adopt more conservative interest-income projections for the next fiscal year.
The treasurer told the council that recent investment returns have been strong: "Last year we made over a million and a half," she said, reporting roughly $1.5 million in investment income in the last fiscal year. She cautioned, however, that much of the city’s invested cash is constrained by interfund timing and cash-flow needs and that general-fund money is rarely idle and therefore rarely available for investment. Because of those constraints, the treasurer asked the council to reduce an optimistic projection in the recommended budget and suggested lowering the FY25–26 expected interest on investments to about $1.75 million. Councilors asked staff to adjust the revenue projection downward in the recommended budget as a more realistic figure.
The treasurer also reviewed the city’s 1% tax administration fee, which is added to tax bills and is restricted by statute to tax-related purposes. She said her calculations indicate the fee should cover assessor, board of appeals and approximately 60% of the treasurer’s office; she reported tax-year collections to date of $912,219.42 versus an estimated need of $797,060. The treasurer recommended the council track those restricted funds separately rather than commingling them with the general fund and suggested the council consider whether the fee could be reduced while still covering required costs.
On operational matters the treasurer noted the city has about $24,000 in American Express rewards points that departments can use for purchases by authorization; council members suggested using the points for targeted capital purchases such as filing cabinets.
Councilors asked the comptroller and treasurer to lower the investment-income projection and to pursue monthly interfund reconciliations to make more funds available for investing when appropriate. The meeting record includes no final ordinance or vote on these items; the treasurer’s recommendations were recorded as guidance for the recommended budget.
