Finance projects modest tax growth for FY26; council hears transfer of stormwater bond proceeds

City finance staff briefed council on revenue forecasts for fiscal year 2025–26 and explained a proposed intradepartmental transfer of stormwater bond proceeds within the Tulsa Public Facilities Authority (TPFA) funds.

Jared Morton in the budget office explained the ordinance on the council agenda to transfer available appropriations in the TPFA 2023 stormwater fund from the Comanche project to a stormwater facilities project. Morton emphasized a legal constraint on the funds: because the revenue originated from stormwater bonds, bond proceeds are restricted to stormwater purposes and cannot be used to cover non‑stormwater project gaps. He said the Comanche stormwater components are nearing completion and the remaining stormwater bond proceeds will be reassigned to the stormwater facilities project where they are needed.

On revenue forecasting, the finance team described methodology and assumptions: they use Forecast Pro with long series data and inputs from national (Federal Reserve FOMC) and local (Moody’s, Visit Tulsa) sources. The team reported conservative assumptions for GDP and applied a middle‑case growth rate to sales and use taxes. Staff projected roughly 1.6% growth in all taxes for FY26 in the model they presented, noting use tax has continued to outpace sales tax because of changing shopping patterns.

Finance also highlighted a major swing factor: interest income. After unusually strong interest returns in the current fiscal year, staff forecast a substantial drop in interest earnings for FY26 driven by expected Federal Reserve rate easing; the model reduced the interest income estimate substantially relative to FY25 actual receipts and the presenter described that line item as the most volatile and difficult to forecast.

Other points raised: franchise taxes tied to utilities (PSO, ONG) were below original budget in the current year due to milder weather and lower consumption, with staff projecting recovery toward budget levels next year. Visit Tulsa hotel‑motel tax projections were modestly positive (roughly half‑percent growth in the model), but staff cautioned that some large events that supported recent hotel performance will not return in the next year and that performing‑arts run lengths and national tours also affect hotel demand.

Councilors asked follow‑up questions about the hotel tax assumptions, the role of major events (for example, conventions or touring shows) and whether the forecasts incorporate known lost events; staff said they would follow up with Visit Tulsa to refine assumptions where appropriate. Council members also used the revenue briefing to discuss travel and training budgets: staff said the council travel line item was $40,000 and that the training account contains $4,000; current year spending and timing of elected officials affected available balances and staff warned that anticipated software purchases next year will reduce flexibility in those accounts.

Ending: City finance staff said the forecasts have generally been within a 2.5% variance historically and offered to provide the presentation slides and follow‑up detail to councilors.