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City projects a small general-fund shortfall; schools report larger projected deficit
Summary
Finance staff reported January 2025 monthly financials showing a projected general-fund shortfall of roughly $3 million (before use of an assigned $3 million school fund balance), higher projected school-district deficit and offsets from stronger-than-expected tax and permit revenues.
City finance staff reported the monthly financial report for January 2025, projecting a general-fund deficit that staff said would be largely covered by a previously assigned fund balance earmarked for education.
The report matters because it provides a near-term snapshot of revenues and expenditures that inform budget monitoring and potential intra-year transfers.
Finance staff said the city was projecting approximately a $3,000,000 deficit in the general fund as of the January report but noted that $3,000,000 of the beginning fund balance had been assigned for education uses and would be used to address the shortfall. On the consolidated numbers the presenter reported a projected negative variance of about $6,960,000 in the general fund line but offsetting revenue variances (property-tax collections about $448,000 above estimate, other license/permit and fee revenue about $1,000,000 above estimate, investment income about $700,000 above estimate) produced roughly $2,500,000 in positive variance in revenue; on the expenditure side the net negative variance was about $6,400,000, yielding an overall roll-up near $3,130,000.
The presenter said the school district had reported a projected deficit of about $4,900,000 in its last full disclosure, though the central office had identified some revenue-side offsets to reduce the shortfall. The finance presenter said the city is tracking overtime costs, noting that police retroactive payments had hit the ledger and that a $1,700,000 labor reserve and vacancy-savings estimates would help absorb labor-contract impacts.
Committee members asked whether an intra-year budget transfer would be requested to cover labor-contract-related costs now that the police contract changed pay rates; staff said they would prepare a transfer as soon as possible, and that a February report would show updated short-duration data. Alder Walter Preston asked specifically about the relationship between vacancies and overtime in police and fire, and staff said they expected training and recruit classes to reduce overtime pressure over time but that vacancies continue to complicate the relationship.
The committee voted to read and file the monthly financial report for January 2025.
