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Arlington City March financial report: sales tax up 3%, fuel tax dip flags streets fund watch
Summary
At a council workshop, Arlington City staff presented the March first-quarter financial report: general fund revenues and expenses were slightly higher year-over-year, sales tax was about 3% higher, and the streets fund showed a first-quarter decline in fuel-tax revenue that staff said warrants monitoring.
At a council workshop, Arlington City staff presented the March first-quarter financial report and a citywide revenue check-in for 2025. Finance staff member Kristen Garcia told council that general fund revenues and expenses are "slightly higher than they were from this time last year" and that overall revenues are "on track with budget." Garcia said the city’s sales tax collections are 3% higher compared with the first quarter of 2024.
Garcia described several revenue trends: enterprise revenues (airport, water, sewer, storm) are trending up; timing differences in utility and garbage tax payments can create apparent spikes in quarterly results; and the streets fund’s fuel-tax revenue was down in the first quarter, leaving the streets fund balance "a little bit low." Garcia cautioned the council that if the trend continued to the point that fund balance and cash flow became strained, the general fund would have to cover streets-related cash needs.
On reserves and policy compliance, Garcia said the city is maintaining its required two-month general fund reserve and that investments are within policy. She also informed council that state auditors plan to start federal single-audit work "next week," followed by the financial statement and accountability audits, creating what she expects will be a lengthy audit season.
Councilmember Deborah Nelson asked whether a proposed electric-vehicle tax would produce local revenue similar to gas-tax shares. Garcia replied, "Not not yet. Okay. Unless they roll it into the fuel tax amount and, itemized. But as far as I can tell, we don't have anything for EV." Paul (staff) said he will compile a legislative update for council tracking potential impacts. Nelson also raised national/regional shipping slowdowns reported in media and suggested those trends could reduce goods movement and affect local tax collections; she presented that as a request to monitor the next quarter.
Garcia noted that lodging-tax grant applications for 2026 are posted on the city website and that she planned to update an applicant training video before the council’s summer recess so grant awards can be made earlier in the year.
No formal fiscal actions, amendments, or budget transfers were recorded in the provided transcript excerpt. Council discussion centered on monitoring revenues and upcoming audits and on staff follow-up for legislative developments that could affect city revenues.
