Finance staff reports strong tax receipts, flags internal service fund accounting under GASB review

Ms. Holdren, a finance staff member, told the Budget and Finance Committee on March 3 that the city’s fiscal-year 2025 financials are nearly complete and that large property-tax receipts in January have materially affected the statements.

She said the city had “made it to the January 28” close and that staff were finishing a short remaining review. “We are not following GASB as it stands right now,” Holdren said, referring to the Governmental Accounting Standards Board standards the city is evaluating.

The finance staff described the internal service fund as currently recorded on the statements as transfers and “other financing sources,” whereas staff says the transactions should be reflected as an expenditure and a charge for service. Holdren said the city is evaluating whether the issue can be fixed within three months and how to transition the internal service fund back to fleet services only for the net effect to remain unchanged.

Committee members asked for clarification on the sales-tax and development-fee accounts used in upcoming agenda items. Alderman Linville noted the February sales-tax figure reflects December receipts and said the city is “trending up about 10% from last year.” Holdren confirmed the numbers included the holiday-period receipts and that fourth-quarter growth was roughly 1.5 percentage points year over year.

Vice Mayor Palmer asked for a brief explanation of GASB for the public; Holdren said GASB issues accounting standards for governments (for example, GASB 34 and GASB 87) and that recent guidance has addressed subscription-based services.

No formal action was taken on the financial update; it was presented as an informational briefing for committee oversight and to inform upcoming budget work.

The committee chair closed the item after members asked clarifying questions about fund balances and the timing of corrective accounting actions.