Oswego staff report $3.9 million unaudited surplus; trustees signal consensus to move funds to capital improvement

Andrea, a village staff member, presented unaudited transition-year financial results for the eight months ending Dec. 31, 2024, saying the general fund shows an approximate $3.9 million surplus and recommending the amount be transferred to the capital improvement fund.

The presentation matters because the surplus affects funding available for major projects and because the village faces an upcoming revenue change: the state grocery tax expires Jan. 1, 2026, a point trustees raised while discussing how to use one-time funds. Andrea cautioned the figures are unaudited and subject to change once year-end entries are completed.

Andrea told trustees the general fund revenue totaled about $20.3 million, or 112% of the budgeted $18.2 million; expenditures were about $16.3 million, or 90% of the $18.1 million budget. A key driver of the surplus was an unneeded budgeted transfer of $1,180,625 to debt service because the Series 2013 bonds were paid off early. “These are unaudited actuals,” Andrea said, “we have not started working on our year end entries, so while I don't expect any of the figures to change materially, I do expect the figures to change.”

Investment income outperformed assumptions across funds. The village recorded roughly $1 million in investment income for the general fund — about 487% of budget — driven mainly by short-term certificates of deposit and higher interest rates. Sales tax receipts for the May 1–Dec. 31 period were the highest in the 10-year comparison window, with total sales-tax receipts (state portion plus home-rule portion) cited at about $8 million; the state portion of that was reported as about $6 million and the home-rule portion about $2.08 million.

Andrea described several expenditure variances: road maintenance (primarily snow removal) was under budget by about $250,000; engineering wages and benefits were under by about $115,000 due to vacancies; building inspections outsourced budget ($70,000) was not needed; and a planned housing study was covered by a grant so the village did not expend budgeted funds. Police expenditures included an out-of-budget $387,000 transfer to a Section 115 trust to place accrued sick-time funds into the trust rather than paying them out monthly; Andrea said excluding that transfer police spending was essentially on target at 99% of budget.

On next steps, Andrea asked whether trustees concurred with staff's recommendation to transfer the general-fund surplus to the capital improvement fund to be allocated during the 2026 budget process. She said a budget amendment would be brought back when final year-end figures are available. Trustees signaled general agreement by nods and remarks; no formal motion or recorded roll-call vote occurred. The village noted staff's recommendation reflects fund-balance policy and credit-rating considerations: keeping large amounts in the general-fund reserve could hurt bond ratings, staff said.

Andrea also summarized other funds: the Water and Sewer Operating Fund closed the eight-month period with about $6.8 million revenue and $6.4 million expenses, producing a roughly $423,000 surplus on a budgeted $1.1 million deficit; the capital improvement fund showed a $128,000 surplus (timing-driven) and the water and sewer capital fund was helped by a strong real-estate-transfer tax result of about $743,000 (212% of the $350,000 budget). Andrea noted much of the village’s cash is invested in 12-month terms on a ladder; one investment of $1.5 million has a 10-year term. The village uses two investment advisors, PFM and PMA, for guidance but makes final decisions internally.

Trustees asked questions about liquidity, the composition of investment income, the breakdown of sales-tax components, and the potential effect of the grocery-tax expiration. One trustee said the earlier debt payoff was intended to smooth the fiscal impact when the grocery tax ends; staff confirmed that without the early payoff the village would not have had the same one-time flexibility in 2025. Trustees discussed capital priorities that could use transferred funds, including Wolf’s Crossing and a new public works facility, but deferred specific allocations to the 2026 budget process.

No formal vote was taken; staff will return with final audited year-end figures and a proposed budget amendment if trustees maintain consensus to move the surplus into the capital improvement fund.