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City reports positive February budget variance after $1.38M FEMA reimbursement; council delays allocation decision
Summary
Finance director reported a positive overall budget variance, largely due to a $1,380,000 FEMA reimbursement for winter-storm expenses; council took no immediate action and asked for capital-improvement program context before allocating the funds.
Finance Director Erin Daigle presented the city’s monthly financial report at the Feb. 18 meeting, saying Lakeway is tracking close to budget with an overall positive variance driven largely by a FEMA reimbursement.
Daigle said the city budgeted $10,490,000 in revenues and, after recording a $1,380,000 FEMA reimbursement that was not included in the original budget, the adjusted numbers showed an overall positive variance of approximately $240,000 (about 1%). She said the timing of collections and reimbursements caused much of the variance: “We budgeted 10,490,000.00 which is a positive budget variance of 1,270,000.00. So I'm sure you all know the variance is primarily due to the 1,380,000.00 that we brought in in the FEMA reimbursement funds,” Daigle said.
On the expenditure side, Daigle reported budgeted expenditures of $7,040,000 with actuals of about $6.69 million for a positive variance of roughly $350,000, largely from timing differences in personnel and supplies. She concluded that the city is "on budget" when removing the one-time FEMA reimbursement from comparisons.
Council discussed options for the FEMA funds during a later agenda item. The city manager summarized several approaches: return the funds to the general fund, apply them to the capital improvement program (CIP), or divide them across multiple funds. Council declined to take immediate allocation action and instead directed staff to present a CIP update at the March meeting; council members emphasized wanting that information prior to any spending decisions.
No allocation decision was made on Feb. 18; staff will report back with CIP priorities and a recommendation for how to use or reserve the FEMA reimbursement during the upcoming budget process.
