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City finance staff reports midyear revenue and expenditure patterns; ARPA and tax lines noted
Summary
City finance staff reported second-quarter (through June 2025) results showing most funds near midyear benchmarks, highlighted stronger-than-expected replacement tax and projected surpluses in several tax lines while use tax is lagging; staff offered to provide further ARPA details on request.
City finance staff presented the second-quarter financial management report Monday, telling the Rock Island City Council that overall city finances are generally on pace with midyear expectations but that some revenue lines are ahead while others lag.
Jessica, a city finance staff member, said general fund revenues and expenditures were both near 43% of budget at midyear. She reported income tax receipts at 48.8% of budget with an estimated year-end projection of about $454,000 over budget; replacement tax was ahead at 63.7% of budget. Sales tax trailed the midyear benchmark at 40.2% but is projected to end the year roughly $438,000 above budget. Use tax was well below benchmark at 14.6% with an anticipated shortfall of about $450,000.
Other figures Jessica provided included local option sales tax at 37.8% with a projected $268,000 above budget, municipal utility tax at 45.2% with a projected $138,000 over budget, telecommunication tax near benchmark at 49.7% projected $26,000 over, food and beverage tax slightly below benchmark and projected to fall short by $39,000, and gaming tax at 43.1% projected $102,000 above budget. The city received just over $428,000 in investment interest in the second quarter across all investments, she said.
Jessica said among special revenue funds, library and TIF district revenues reflected timing of property tax collections and that ARPA revenues for the quarter primarily reflected an accounting adjustment moving deferred revenue to active revenue; ARPA expenditures were reported at 16% of budget. The housing and community development fund (which supports the Community Development Block Grant program) showed revenues at 17% and expenditures at 33%, reflecting the timing of federal drawdowns.
When Alderman Parker asked for an update on unspent ARPA funds, Jessica said she would prepare and distribute an update the next day. A council member also asked whether a newly instituted 50-cent gaming tax (effective Sept. 1 under state law) would flow to the city; staff said they would research whether the city will receive proceeds and report back.
Jessica concluded that most funds are performing near expectations and staff will continue monitoring areas with lower revenue performance and timing-related expenditures through the remainder of the year.
