First-quarter report shows slight revenue shortfall but strong fund balance, staff says

Finance Director John Regine presented the city's February/first-quarter financial results on June 3 and told the committee the report is intended as an early warning system that projects where the general fund may end the year.

Regine said overall revenues show a modest projected shortfall of roughly $66,000 on an $80 million budget; expenditures were projecting a slight surplus. After accounting for $784,000 in approved carryovers from the prior year, the city's projected year-end position was a $760,000 positive balance, putting the unassigned fund balance at roughly $27 million, or 114% of the city's policy target.

The report highlighted several items for monitoring. Building and permit revenues were down, projecting an approximate $90,000 shortfall against budget and $231,000 below where the city was at the same time last year; Regine said timing and a few large permits explain much of the variance and cited expected forthcoming permits for St. Bernard's (estimated $82,000) and a children's campus project (about $73,000). Hotel-motel tax metrics were stronger; the combined measure RevPAR (occupancy and average daily rate) was up about 12% year over year in the most recent 12-month run.

Regine also flagged reduced ambulance revenues caused in part by fewer billable trips; he said trips are a primary driver of ambulance revenue and that the city is projecting a revenue shortfall for ambulance fees. On the expenditure side, overtime remains a pressure point: the police department projected a net overtime shortfall of about $472,000 even though regular wages showed a small projected surplus, and the fire department showed an overtime shortfall of about $259,000 that staffing and sick-time patterns exacerbate. Regine said departments are reviewing pay types and operational steps to limit overtime costs.

Health-insurance claims were a bright spot: health costs ran at about 85% of budget in April (improved from earlier presentations) and the number of high-cost claimants declined compared with the prior year, producing meaningful claim-cost reductions in the period.

Regine said the fund-balance barometer remains in the green, with an available reserve roughly equivalent to 70 days of operating expenditures (the policy minimum is 60 days). The first-quarter projection carries a higher risk of variance than later quarterly forecasts, Regine said, and staff will continue monthly monitoring and follow-up with departments.