Council hears FY25 financial status report through December 2024; sales tax above budget
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Summary
City finance staff reported a strong first half of FY25 with local sales tax collections about $3.5 million above budget through December 2024 and vacancy savings in personnel; services expenditures trailed budget largely for timing reasons.
City finance staff presented the FY25 midyear financial status report for the period July–December 2024 at the March 18 Surprise City Council meeting. The presentation showed stronger-than-expected local sales tax receipts and timing-driven underspending in several service categories.
According to the presentation, local sales tax revenue was roughly $3.5 million over budget for the reported period. Staff said intergovernmental revenues were slightly higher in final accounting than earlier estimates, but the city continued to experience a "significant decrease" in income-tax–related shares compared with prior periods. Charges for services showed one-time growth; staff described a strategy of reserving recurring revenues for ongoing expenditures and placing one-time excess receipts into one-time uses such as software projects.
On the expense side, personnel budgets carried typical midyear vacancy savings, especially in public safety positions that require academy onboarding. Services were running below budget by about $3 million at midyear, a variance staff attributed primarily to timing; staff expected those costs to come in closer to budget in the second half of the fiscal year. Staff also noted recent interest-rate changes had temporarily increased investment income, though they cautioned interest rates could fall.
Finance staff invited questions; none were recorded on the public transcript. The presentation concluded with staff characterizing the city’s fiscal position as strong for the first half of the year and noting they expect to monitor revenues and timing of expenditures as the fiscal year continues.