Mill Creek finance staff reports modest first‑quarter results, flags potential street‑fund shortfall

Mill Creek finance staff on April 22 presented the city’s first‑quarter 2025 financial and investment report and said the city is holding its budget assumptions for now while continuing to monitor receipts.

The presentation, given by Amina (finance staff), said preliminary numbers show about $195,000 in expenditure savings and roughly $144,000 in additional investment returns compared with prior assumptions. General‑fund revenues for the quarter totaled approximately $2.2 million (about 8.9% of the budget), below the benchmark the staff uses for a three‑month period. Amina said property‑tax collections — which make up a large share of the city’s revenue — were not yet booked and will arrive in the coming month.

Why it matters: the general fund is the city’s primary operating account. Large, timing‑sensitive receipts such as property taxes and construction‑related sales tax can materially change near‑term cash flow projections. Councilmembers pressed staff for clarity on how the projections affect the adopted biennial budget and what would trigger corrective action.

Key details from the report: - General fund beginning balance was adjusted to about $3.13 million based on preliminary 2024 closing numbers. Staff reported about $195,000 less in expenditures than budgeted and about $144,000 more in investment income than projected. - The city’s excess cash position was reported at roughly $41 million; roughly 90% of that is invested in the state LGIP (local government investment pool) and the remainder in U.S. agency obligations. LGIP interest year‑to‑date was reported around $400,000 (about a 4.4% yield) and U.S. agency bond earnings about $67,000 (average roughly 4%). - Special revenue funds of note: staff flagged a projected shortfall of about $120,000 in the City Streets Fund tied to replacement of street lights and said staff are assessing whether capital funds could cover the cost to avoid a general‑fund impact. The City Hall North Fund was above benchmark after an annual insurance payment. - Capital projects receipts for March included a single large transaction that generated roughly $140,000 to the city. Internal service funds saw higher unemployment and self‑insurance expenditures related to a late‑2024 claim.

Council questions and staff responses - On gas‑tax revenue for streets, staff said state distribution depends on population and that the city did not have a current off‑the‑top figure to report; council discussion noted the long‑term effects of vehicle electrification on gas‑tax revenue. - When asked whether Q1 results change the 2026 year‑end projection for the general fund, Amina said, “As of the data that I have now, no — we are not going to make any changes,” and that staff will continue monitoring the lagged sales‑tax and tariff data that could alter forecasts. - Council asked how mid‑biennium or year‑to‑year impacts would be handled; staff said they will bring forward options and, if needed, adjust spending or recommend fee changes in future budget cycles.

Context and next steps: staff indicated they will continue to monitor receipts, especially property tax and sales tax, and will return with updates if revenue signals change. City staff also pointed to a separate, ongoing fee study and financial‑policy review that could inform future adjustments to fees and the technology fee that partially offsets software costs.