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Finance projects revenue above budget, flags personnel and overtime costs; committee approves airport CFC bonds
Summary
City finance reported third-quarter projections showing operating revenues above budget and described cost drivers in personnel and contracts; the committee approved an ordinance to issue up to $310 million in customer facility charge bonds for airport rental-car projects.
Mohammed Bala (recorded in the meeting as CFO Bala) and Yolanda Carr, deputy CFO, presented the third-quarter fiscal-year 2025 revenue and expense projections to the Finance Executive Committee and said the office has baked April and May data into the outlook.
Carr said the FY25 total budget is $889.6 million (including committed and uncommitted fund balances) and that operating revenue excluding fund transfers is $853.8 million. "Our projections for the remaining 2 months are around $999,000,000, which leads us to a year forecast in in of 960,100,000.0," Carr said, describing a year-end revenue forecast that would exceed the operating budget by roughly $106.3 million.
Carr and Sean Gabriel, budget chief, identified the strongest revenue performers: property taxes (projected ahead of budget by $12.3 million due to higher assessments in Fulton and DeKalb counties), public-utility and alcohol-related taxes (+$12.6 million), local option sales tax (+$8 million) and licenses and permits (+$5.4 million). They also cited a $51 million positive variance in "other revenues," primarily from investment earnings, one-time contributions and capital finance transfers.
On the expense side Gabriel said third-quarter projections showed a modest downward revision from $987.5 million to $984.6 million but continued to reflect significant overruns in personnel, contractual services and supplies. He highlighted three containment strategies: vacancy management through a vacancy review board, overtime optimization and reclassification of eligible general-fund expenses to other funds.
"Personnel is still the primary cost driver," Gabriel said, noting personnel-related costs increased from 15% to 17% over budget in the third-quarter projection and that group insurance and pension costs were contributors. He pointed to purchase contract services overruns largely for citywide insurance and security-related services and supplies overruns tied to street maintenance under Atlanta Department of Transportation.
Courtney Knight, chief of treasury, described the city’s debt and investment position: about $7.5 billion of debt across portfolios and roughly $2.2 billion invested. She said the portfolio yield declined to 4.16% in the third quarter amid market volatility, and she outlined recent and potential refinancings that produced and could produce substantial net-present-value savings for the Department of Watershed Management.
The committee also considered bond legislation to finance airport rental-car projects and refinance legacy Airport rental-car debt. The substituted ordinance 25-O-1343 authorized issuance of up to $310,000,000 aggregate principal in customer facility charge (CFC) revenue bonds secured by rental-car charges, including a proposed per-day rental-car charge increase from $5 to $8.50 tied to the bonds. The ordinance described approximately half the proceeds going to new capital work (mechanical, electrical, plumbing and conveyance upgrades across the rental-car center, parking garages and terminal) and the other half to refinance bonds previously issued for the rental-car facility.
Committee members discussed one-time revenue maneuvers and cautioned that some of the actions that improve the FY25 outlook are not repeatable in future years. The committee approved the substitute ordinance for the CFC bond issuance; the meeting record shows the committee voted in favor of the item.
