City projects $78 million revenue surplus but up to $20 million year-end deficit as personnel costs bite

Chairman Shook and the Finance Executive Committee heard a second-quarter FY25 financial status report that projects the city will end the fiscal year with roughly $78 million in revenue above the operating budget but as much as a $20 million year-end deficit after expenses, largely driven by personnel and public-safety costs.

The city—s funded budget was described at $889.6 million after a midyear adjustment that added $30 million from fund balance. "Revenues are projected to end the year with a surplus of $77,900,000," Lawrence Davis Jr., revenue chief for the Office of Revenue, told the committee, adding that property tax, local-option sales tax and hotel-motel tax are outperforming budget. "We—re benefiting from a favorable rate environment," Davis said.

The nut graf: while revenues are outperforming expectations across several categories, Finance staff warned that expense pressures particularly personnel and overtime in public safetyare large enough that, even after the midyear adjustment, the city could finish FY25 with a deficit unless additional controls or one-time…