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City manager reports first‑quarter budget better than projected; council given schedule for FY2026 budget
Summary
City manager presented first‑quarter general fund, water/wastewater and hotel occupancy tax results: revenues slightly above plan, expenditures under plan; council was briefed on budget calendar toward FY2026 and upcoming financial forecast meeting.
City Manager Peter Zanoni presented the city’s first‑quarter budget and performance report on March 25, telling the City Council the general fund revenues and expenditures to date track within expectations and that staff will deliver a fuller written report later in the day.
Zanoni said the fiscal‑year‑to‑date period (October through Dec. 31, 2024) showed general fund revenue of about $128 million versus an anticipated $124 million for the quarter; property taxes and sales taxes both came in slightly above the first‑quarter plan. He told council the city is watching industrial district in‑lieu payments, which were below estimate because of protested appraisals. On the expenditure side departments spent roughly $76.3 million in the quarter versus a planned $85.9 million, primarily timing and accounting adjustments; when auditors’ year‑end adjustments are considered the variance was smaller.
Zanoni also reviewed enterprise funds. The water fund first‑quarter operating revenue came in about $1 million above plan, attributed to higher sales to wholesale customers; wastewater revenue was about $700,000 under plan and staff will continue to monitor. He noted that the Visit Corpus Christi (hotel occupancy tax) receipts were a few hundred thousand dollars below plan for the quarter but expected travel volumes to improve after spring break. The manager said the city will email the full quarterly report to council and that the external auditor’s closeout of FY‑24 will provide final beginning balances for FY‑26 budget preparation.
Why it matters: Zanoni emphasized that the city charter requires the council to adopt the annual budget and previewed steps and schedule for the FY‑26 budget: a March 31 council retreat to set priorities, an April 29 financial forecast presentation, technical budget workshops in May and a proposed budget presentation in July followed by public hearings and adoption in September. He warned that escalation in construction materials, federal program cuts, potential state or federal mandates and union contract obligations could create pressure on the FY‑26 budget.
Questions and follow‑ups: Councilmembers asked for additional detail on the $1.7 million industrial district variance (Zanoni said staff will follow up by email with a breakdown of protested taxpayers) and for a future report showing total outstanding debt schedules; finance staff agreed to return with debt principal and interest schedules in a subsequent report.
Ending: Zanoni concluded that the first quarter shows the economy and revenues generally healthy and that staff will continue monthly monitoring and will bring the full quarterly report and the April 29 financial forecast to council.
