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Finance director reports December shortfall, ARPA funds exhausted; utility rates to rise 3%
Summary
Staff told council December sales tax was about $800,000 below budget and the general fund beginning balance for 2025 is roughly $200,000 lower than projected; ARPA funds are fully spent and the city will apply a 3% CPI utility rate increase that appears on March bills.
Kristin, finance staff, presented the city’s December and January financial reports in the council workshop and highlighted a few items the council should monitor through the first quarter.
In December, Kristin said, sales tax receipts fell short of the city’s budget by about $800,000 and the general fund ending balance came in roughly $200,000 below the projection used to start 2025. She told the council those shortfalls merit close monitoring but noted other major general-fund revenues are stable or trending upward and could offset the sales-tax softness.
On pandemic-era funds, Kristin said the city has fully expended its American Rescue Plan Act (ARPA) allocation and met the December 31 spending deadline; a full accounting of ARPA expenditures was included in the council packet. She also provided an update on the city’s growth fund: as of December the balance was about $4.3 million, roughly half of which is park mitigation, and about $1.6 million of that amount is already obligated to the Smoky Point Park project.
Kristin told the council the city remains in compliance with its financial policies and reserve requirements. She also reported that utility rates increased by 3% under the city ordinance tied to CPI; the increase will appear on bills issued March 1 and the utility-billing office has notified customers. The city plans to begin a property-lien process for unpaid stormwater-only accounts in March; Kristin said staff are taking extra care to confirm account eligibility before filing liens.
Councilmembers asked whether the utility-rate increase produced public feedback; Heather Logan said she had not heard complaints from the public.
What’s next: staff will continue to monitor sales-tax receipts and other major revenues through the first quarter. The growth fund and debt summaries in the packet show existing park and transportation obligations and a planned payoff of some public-works loans in 2026–2027.
