City finance staff brief council committee on fund balance, reserves and fiscal monitoring
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Summary
City finance staff told the public works committee that Tulsa’s budget remains balanced under state law but that the city is using some fund balance to meet operations and faces longer-term structural gaps; staff described reserves, monitoring practices and constraints on drawing the city’s rainy-day fund.
City finance staff briefed the public works committee on the city’s fiscal health, the use of fund balance in budgeting, and local and state controls designed to preserve financial stability.
A finance presenter identified as Christie (surname not recorded in the transcript) told members that the city does not operate with a deficit budget because the budgeted resources can include the use of fund balance. “We cannot have a deficit budget,” Christie said. The presenter distinguished between a legally balanced budget that uses fund balance and “deficit spending,” which she characterized as dipping repeatedly into reserves to cover ongoing operations and as a structural imbalance.
Staff explained the different reserve categories: the general fund emergency operating reserve (policy goal 10%) and the charter-required economic stabilization reserve (the city’s “rainy day” fund), funded by a dedicated sales tax producing about $5 million annually and holding approximately $23 million at the time of the presentation. The presenter said the emergency operating reserve dipped in 2023 after the Father's Day storm response and that the city has been rebuilding the balance; the draw in 2023 was described as about $14.6 million.
Finance staff noted revenue pressures including a recent decline in use tax collections since June and the maturing of TIF districts, which reduced general fund receipts by roughly $2.2 million in the current fiscal year. Staff also flagged long-term cost pressures such as homelessness/housing programs that have relied on one-time ARPA grants (which will deplete) and wages/compensation pressures; staff noted no across-the-board pay raise was included in the FY 2026 budget.
Staff described monitoring and budget controls: routine department-level monitoring, enterprise system budget-to-actual reports, monthly sales-and-use-tax memos to the mayor and city administrator, and monthly small-budget-group reports to council. The presenter said the finance office favors conservative revenue estimates and that the budget book includes formal budget policies.
Council members asked clarifying questions about when the rainy-day fund may be tapped; finance staff said statutory triggers and year-over-year revenue declines drive that access and that drawing the rainy-day fund requires specific conditions and is not done lightly. Staff said credit-rating agencies have noted the city’s use of fund balance as a risk to watch and that current ratings from S&P and Moody’s remained high and stable.
Committee members requested additional reporting showing unappropriated/unreserved fund-balance trends over the last decade and asked staff to coordinate communications explaining reserve types and the limits on tapping them; staff and members discussed more public-facing communications as the council begins budget planning.
