City finance staff report April shortfall tied to timing of tax mailings; payroll withholding and franchise fees remain strong

Wes, a finance presenter, told the Budget Committee of the Whole on May 27 that the city’s monthly financial update for the fiscal year through April 30 shows mixed results: payroll withholding continues to grow relative to budget, franchise fees and golf revenues are above expectations, but several revenue lines underperformed in April because of processing and timing issues.

"This is the monthly financial update for fiscal year '20 '20 '5, for the month ending April 30," Wes said, adding that April did not show the spike in revenue the budget assumed because net profit and other mail‑based revenues arrived late. He said roughly $6,000,000 in net profit payments that staff had expected in April were processed in May instead.

Director Luker told the committee that personnel spending is running about 4% under budget, and that the variance is spread across full‑time pay, overtime and payout categories. Luker also said operating savings are partly illusory because open purchase orders will be paid in the next fiscal year.

Wes and Luker explained that some transfers recorded in April reflect revenue realized in a prior fiscal year; those accounting entries create a paper deficit even though funds have already been collected and are available to spend. Wes said those transactions are valued at about $20.2 million.

Other revenue details included: - Payroll withholding: generally strong year‑to‑date, despite an underperformance in April that staff expect to offset when May receipts are posted. - Net profits (business income): processing delays tied to late mail delivery moved about $6 million of receipts into May. - Insurance and some other lines: underperformed in April because staff prioritized processing net profits when the mail arrived late. Staff expect posting to return those lines closer to budget once May postings are complete. - Franchise fees and golf course receipts: performing above budget. - Penalties, interest and miscellaneous revenues: came in stronger than anticipated and added about $1 million versus budget.

Luker noted a number of year‑to‑date savings in professional services, operating supplies and vehicle repairs and said some of those savings have already been reallocated to projects such as an $800,000 emergency appropriation for Jacks Creek Pike. He reminded the committee that the mayor’s proposed budget also includes an $18.3 million prefund for FY26 that will absorb some of the reallocated savings.

Chair remarks and a short question period followed the update. There were no formal votes on the monthly update itself; the committee moved on to other agenda items.

Why it matters: the city’s April numbers are affected more by timing and processing delays than by a structural shortfall, staff said. That matters for near‑term cash planning — and for council discussions about how much of FY25 savings are available to prefund FY26 items.