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City’s fourth-quarter 2024 financial report: revenues exceeded budget; sales, utility and B&O taxes show mixed trends
Summary
The city closed 2024 with general-fund revenues about $5.7 million (5%) above budget and expenditures about $15.8 million (14%) under budget. Staff flagged a possible slowdown in retail sales tax in early 2025, strong B&O discovery collections in 2024 and an investment yield shift as interest rates fell from mid-4% to the low-3% range.
Director Thomas presented Auburn’s fourth-quarter 2024 financial report to the City Council study session on April 28, summarizing general-fund revenue and expenditure performance and highlighting reserve and non‑general-fund balances.
Key figures: the general fund ended 2024 roughly $5.7 million (about 5 percent) above budget in revenues and about $15.8 million (14 percent) under budget in expenditures compared with the original 2024 adopted budget. Director Thomas said transfers in were lower than budgeted by about $9.4 million due to timing of capital projects, which also produced offsetting lower expenditures.
Tax revenue drivers: property tax collections met budgeted expectations. Retail sales tax — 29 percent of general-fund tax revenue — finished slightly under year-to-date budget (about $95,000) and staff said early 2025 receipts are showing moderating trends that could signal a looming slowdown. Construction-related sales tax declined $240,000 year over year as major school-district projects completed; retail trade and several subcategories also softened.
Business and occupation (B&O) tax outperformed budget: the newly implemented B&O program produced $11.6 million in 2024 collections against a $7.0 million budget estimate; roughly $1.0 million of that was delinquent taxes discovered through enforcement and discovery work. Director Thomas noted continued enforcement and discovery activity added materially to collections and that some collections related to prior years (2022–23) were received in 2024.
Utility taxes and other revenue: utility tax collections outperformed budget by about $1.6 million, influenced in part by internal water/sewer/storm bases and some external late collections in 2023 that distorted year-over-year comparisons. Licenses and permits were near budget but building-permit revenue softened versus the prior year. Fines and penalties exceeded budget significantly, driven by school-zone speed-infringement revenue and B&O delinquency collections.
Investments and interest: the city’s portfolio had an average yield-to-maturity of about 4.31 percent for the life-to-date holdings; a recently purchased $5 million agency security carried a 3.82 percent yield — staff said market yields have already declined and future yields are likely to come down if the Treasury and prime rates are reduced.
ARPA and capital funds: the city received $14.7 million in ARPA funds and had spent just under $6.8 million as of Q4; staff said spending pace was increasing and several large projects were underway with planned spending into 2025. Real-estate-excise-tax and impact‑fee funds were cited as healthy and in line with the city’s adopted capital facilities plan.
Next steps and context: Thomas recommended cautious budgeting for 2025 given early signs of sales-tax moderation, and noted that personnel and program underspending from 2024 will be addressed in Amendment 1 to the 2025–26 budget.
Ending: Council had no immediate action; staff will bring required budget amendments and return with further context on early 2025 revenue trends and ARPA spending schedules.
