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City presents January financial report showing lower sales tax, planned use of reserves
Summary
Finance Director Mike Evans briefed the council on the city’s January 2025 financials: a beginning general-fund balance just over $6.4 million, sales tax receipts down versus the prior year, and a forecast that will use one-time fund balance to balance 2025 and possibly 2026.
Finance Director Mike Evans presented the City of Shelton’s January 2025 financial report at the March 18 council meeting, outlining fund balances, revenue trends and early-year expenditure projections.
Evans said the general fund began 2025 “at just over $6,400,000” and the city is estimating an ending general-fund balance of about $5,400,000. He reminded council that per city policy a 20% reserve is maintained for emergencies and that using the reserved portion would require a plan to replenish it.
On revenues, Evans reported sales-and-use tax receipts lagging the prior year: January receipts (reflecting November sales) were down about 6% from January 2024; the subsequent month (December sales, received in February) were down about 4%. He said finance was initially projecting a sales-tax shortfall of about $163,000 for the year but cautioned it was early in the fiscal year and projections would be updated monthly.
On the expense side, Evans said department spending is difficult to predict after only one month of data, though some lines appear likely to be unfavorable based on conversations with department heads and trends. He said the city is currently estimating it will use roughly $900,000 of one-time funds to balance 2025 — less than the $1.1 million originally budgeted — but noted that could change as the year progresses.
Evans highlighted the city’s other funds (streets, water, sewer, storm) and said many are being drawn down because of active projects but are currently projected to remain at their designated reserve levels. He also noted the city’s fire-and-emergency-services contract payment varies with assessed value, which affected that line this year.
Council and staff said they will review the detailed forecast at a study session next week and at the council retreat in May to plan service levels and the 2026 budget. Evans closed by offering to answer questions and promised updated monthly reports.
