Sheridan staff review fiscal-year 2025 budget revisions; treasurer reports city remains 'in the black'

Sheridan Treasurer Darla Hawkins presented the city's proposed fiscal year 2025 budget revision (Resolution 08-25) at a Feb. 24 study session, saying the city ended fiscal 2024 with net positive results and is proposing targeted rollovers and reclassifications before finalizing the FY2025 budget.

Hawkins told the City Council the overall position for 2024 showed revenues exceeded expenses and that funds tied to multiyear grants and capital projects would roll into 2025. "We're all in the black," she said, adding that some adjustments are technical accounting fixes required by the audit.

The revision package includes three main drivers: (1) a contingency purchase list carried over from the FY2025 budget process tied to how 2024 closed, (2) the automatic rollover of special fund revenues used for capital projects, and (3) adjustments for unexpected expenses that arose during the audit that affect fund presentation. Hawkins said auditors required SLIB loan proceeds to be recorded first in the fund responsible for repaying the loan and then transferred to the projects fund, changing how those amounts appear on the books.

Key line items discussed include an over-collection of about $365,000 in the city's municipal (cap) tax compared with 2023; an insurance-covered fire station roof replacement that will require the city to pay an estimated deductible (Hawkins said roughly half of a previously budgeted $86,000 will cover the deductible, with the remainder shifted toward a $250,000 fire truck purchase); server hardware replacement cost increases (Hawkins said hardware pricing has risen and is now estimated at about $55,000); and reallocation of ARPA funds to purchase three police Dodge Durangos to meet an October expenditure deadline.

Hawkins proposed purchasing a 15-day PACE training package from Tyler Enterprise for city staff to improve system use and implementation. She said the package includes two investment-assessment days for staff (one each for customer service and the finance department) and three conference passes; after negotiations the vendor agreed to a second investment assessment at an additional discount if the city buys the full 15 days. Hawkins said the cost will be lower than initially budgeted and estimated the final payment at about $17,085.

Other items noted for rollover or adjustment included about $460,000 in interest earnings allocated to the projects fund last year (Hawkins proposed allocating portions to HR/payroll implementation, reserving $250,000 for a FY2026 payment, and transferring the remainder to the general fund reserves), a roughly $27,000 balloon or buyout payment related to an older parks equipment lease, and re-encumbering funds for a snowplow purchase that traces back to a 2023 purchase order that did not meet specs.

Mayor and council members asked follow-up questions, including the potential cost to replace the fire station roof (Hawkins said staff would get the exact figure), and the mayor confirmed the council planned to add roughly $200,000 to the snow-removal contingency to prepare for additional events this winter. The mayor said that contingency money not used will flow into unreserved fund balance at year end per auditor guidance.

Hawkins said staff will correct invoices that were paid in FY2025 but should have been charged to FY2024 by rolling the appropriate amounts into FY2025 to avoid exceeding the FY2025 budget. She closed by outlining that most funds will still show positive fund balances after the proposed adjustments and asked council for questions; none resulted in a motion at the study session.

The budget revision was presented for council discussion; no formal vote was recorded at the study session. Staff indicated the item will return to the council for formal action in the regular meeting process.