Finance committee: third-quarter reports show mixed results across city funds

City finance staff on the finance committee presented third-quarter fiscal year 2025 financial reports for multiple city funds, saying overall the city remains within policy targets but that revenue softness and timing issues are tightening some accounts.

Finance staff and department representatives reported individual fund highlights. Transit staff reported a $59,100 surplus for the quarter and about $163,000 in surplus year-to-date; winter storms reduced rides and fare revenue in January–February before ridership rebounded in March. The transit presenter said state operating revenue now better reflects overhead assigned to a micro-transit demonstration grant after staff reallocated project costs to the grant account.

At the regional airport, Assistant Airport Director Kathy Vance told the committee the airport enterprise continued to project year‑end positive results driven by higher landing fees, revamped car-rental agreements and stronger interest income on cash balances. Vance said terminal revenue and airfield revenue centers were above expectations but that utilities and custodial contracts drove some expense growth. In her presentation Vance stated a projected FY25 surplus amount (quoted in the presentation as "a hundred thousand $647"). That figure was stated on the record; staff later offered to clarify the precise formatting of that number.

The Blintenburg Regional Juvenile Detention Center reported revenue through the quarter of $2,561,874 with expenditures of $2,300,389. The presenter said salary increases, overtime and relief workers were the primary expenditure drivers; the center reported an average per-diem of $330 and average daily population near 18 youth, noting Lynchburg accounted for over two‑thirds of those in custody.

Water, sewer and stormwater presenters reported contrasting outcomes. The Water Fund reported revenues expected about $168,000 below budget largely because citywide water use is down roughly 9% compared with recent years; however interest earnings partly offset the shortfall. The Sewer Fund expects revenues about $1.3 million above budget driven by additional contract and high‑strength waste surcharges; sewer expenses were projected lower than budget largely because of lower landfill fees and reduced contractor use. The Stormwater Fund expected revenues about $84,000 above budget and expenses notably below budget.

The general fund summary through March 31 showed expenditures running about 70% of budget (slightly ahead of revenue collections for the quarter), with several major tax revenues received later in the fiscal year (real estate and personal property due in May–June). The monthly tax comparison noted sales tax was slightly above budget through March, meals tax rebounded from winter months but remained below long‑term expectations, and lodging tax remained materially below budget for the period.

Department presenters and finance staff flagged several operational drivers: insurance premium increases, higher parts lead times (driving increased inventory on hand), timing of vendor billing (notably tire purchases recorded in a later month), and a large self‑insurance claim that affected fund splits. Staff told the committee the funds generally meet the city’s financial policy ratios; the Water Fund reported a debt coverage ratio of 1.21 and a fund balance of about 31%.

Committee members asked for follow-up details on a range of items, including runway construction timing at the airport and an earlier discussion about bringing back an air show, the composition and drivers of detention-center per‑diems, and exact budget‑to‑actual clarifications that staff said they would provide.

The finance presenters urged that some line‑item variances reflect timing and billing anomalies rather than structural budget problems; they also described ongoing efforts to better assign grant overhead and to hold additional parts inventory because supplier lead times had lengthened from one week to two or three months.

The committee did not take formal budget adoption votes during this session; staff asked members to signal any questions they wanted included in follow-ups and said more detailed quarter adjustments (for some funds) would come before council later in the month.