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Committee approves midyear appropriation adjustments, moves $2.3 million from fund balance to cover shortfalls
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Summary
Finance staff presented midyear projections showing a projected general‑fund surplus but agency deficits in specific areas; the committee approved a midyear resolution that appropriates $2.3 million from fund balance to cover selected deficits and carry forward encumbrances.
The Finance Committee on July 28 recommended adoption of the midyear appropriation resolution after staff presented updated revenue and expenditure projections and agency highlights.
Budget staff said the general fund is projecting revenues about $9.7 million over budget and expenditures about $7.9 million under budget, producing a projected surplus of roughly $17.5 million at midyear. Much of the revenue variance reflects mark‑to‑market investment adjustments and higher interest; ambulance charges were cited as projecting $1.7 million above budget. Staff noted citywide vacancy rates (for the first five months) at about 6.5%.
Despite the overall projection, staff outlined agency‑level shortfalls and carry‑forwards. The midyear resolution appropriates $2.3 million from general fund balance to: cover some projected agency deficits (including transfers to civil rights, the clerk’s office, and Metro Transit), fund carry‑forward encumbrances, and correct interdepartmental billing errors. Christine (budget staff) and Dave (finance staff) explained that $1.4 million of the appropriation increases the general fund subsidy to Metro Transit to shore up ongoing operations until year‑end reviews; other transfers include $311,000 to the clerk’s office (salaries, benefits, supplies, purchase services) and $45,000 to Civil Rights for interpretation services.
Committee members asked for process clarifications about how agencies are selected for midyear transfers and for more detail on the clerk’s and Metro Transit deficits. Staff said agency projections start from June actuals and that analysts meet with each agency. The clerk’s office explained part of its overbudget projection is related to termination/transition costs, a full‑time LTE hired to assist with workload and temporary reclassifications of staff to deputy city clerk roles to handle election workload and staffing transitions; some BlueCrest absentee ballot equipment maintenance costs were also added. For Metro Transit, staff and council members said the projected shortfall (about $4 million overall) reflects both lower partner revenues/charges for service and higher overtime and paratransit purchase services; roughly half the variance is revenue shortfall and half is expense-driven.
The committee recorded a unanimous vote in favor of the midyear appropriation resolution. Staff said some items will be revisited at year‑end appropriation and that department structures (for example the clerk’s office) will be reviewed during the 2026 budget process.
