Budget and Finance Committee reviews January financials; minutes approved

Councilman Shaquan Davis, chair of the Budget and Finance Committee, opened the March 10, 2025, meeting and the committee approved the minutes from its Dec. 16, 2024, meeting by voice vote; Fred Green was recorded absent.

Chief Financial Officer Richard Traver presented the city—s January 2025 financial statements, telling the committee that the city recognized $3.6 million in revenue and $5.5 million in expenses for the month, producing a $1.9 million shortfall for January that officials said was expected at this point in the fiscal year.

Traver said the presentation was prepared on the budget the council approved in December and that staff refined how cash balances are attributed between operating and specialty funds. He reported $13 million in operating cash and about $16 million in specialty funds and noted the city is holding roughly $62 million for pensions and developer escrow, which are not part of operating balances.

Why it matters: Early-year timing and how the city classifies funds affect monthly variability and the appearance of short-term shortfalls. Traver told the committee the January deficit was anticipated because revenue collections are typically light in January and larger receipts, primarily real estate taxes, normally arrive in February through April.

Key details from the presentation:

- Revenue and expenses: The city recorded $3.6 million in revenue for January, about $400,000 below the monthly budgeted amount, and $5.5 million in expenses, about $900,000 under budget. Traver summarized those variances as part of normal timing effects early in the year.

- Net result and expectations: The net shortfall for January was $1.9 million. Traver said staff had expected a larger planned loss for January (about $2.5 million) and that later months should show favorable receipts when property-tax and other seasonal revenues are received.

- Insurance savings: A notable positive variance came from business insurance, which Traver said came in about $450,000 below the budgeted cost after negotiations on rates and terms. He cautioned that the savings could be partially offset as the year progresses by unanticipated expenditures.

- Fund reclassifications and balances: Staff moved several balances previously shown in operating cash to specialty funds after a refinement of accounting. Traver identified the rubbish fund, the rental-registration fund and the capital fund as moved out of operating and into specialty fund reporting. He said the change reflects council approval in prior years to treat rental-registration receipts as a separate fund.

- Forfeiture and police-associated accounts: Traver said about $500,000 in police-associated (forfeiture/foreclosure) accounts previously included in operating funds were reclassified to dedicated accounts. He said staff is researching legal restrictions on those funds, noting the police department previously used some forfeiture proceeds for vehicle purchases, but that current allowable uses are under review.

- Staffing and vacancies: Traver reported 22 budgeted vacancies for the year, including three positions budgeted to start Jan. 1 that had not all begun service. He provided a specific start date for one communications hire scheduled to begin March 24 and said staff will provide a timeline for the remaining hires and track the related salary and benefits savings.

- Grants and reimbursements: Traver said most grant receipts so far this year are reimbursements for prior-year expenditures. He cited a January receipt of $250,000 toward a fire truck purchase as an example and said he did not know of any new major grants the city could reliably count on for the current year.

Committee action and follow-up:

- The committee approved the Dec. 16, 2024, meeting minutes by voice vote; with two committee members present and one absent, the chair stated the ayes had it and the minutes were approved.

- Staff directions: Committee members asked staff to refine timelines on vacancies and to continue research into the legal restrictions on police forfeiture accounts; Traver said staff would return with additional detail and that he and the chief of staff would investigate if projected receipts do not materialize.

What was not decided: No ordinance, budget amendment, or formal policy change was approved at the meeting. The presentation was informational; subsequent actions were described as staff research and tracking rather than formal committee directives.

Next steps: Traver told the committee February financials are normally available in March, and staff will return with updated monthly numbers and the refined vacancy timeline and forfeiture-account research for future committee consideration.