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Council receives detailed budget‑to‑actual review for fiscal 2023–24; general fund ends above policy reserves
Summary
Finance staff reported that actual FY 2023–24 revenues and expenditures resulted in a stronger-than-budgeted general fund balance — with roughly seven months of operating reserves — and staff said they will present midyear adjustments in March.
City finance staff presented the fiscal 2023–24 budget‑to‑actual results to the council on Jan. 13 and the council agreed to receive and file the report.
Finance Director Linda Lieber walked the council through the results for the city’s five primary funds, explaining why wages and benefits often come in under budget (vacancies and turnover), which capital and grant projects rolled into the new year, and how one‑time connection fees raised water and sewer revenues for the year.
Highlights: Lieber reported that general fund revenues finished slightly above budget due to a modest increase in interest earnings, slightly higher lodging tax (TOT) and Measure S receipts. On the expenditure side, total general fund spending for 2023–24 was below the approved budget, in part because several projects (notably a street project funded with Measure S) were not completed in the fiscal year and were rebudgeted.
The finance director said the city’s unrestricted general fund balance was about $5.1 million as of June 30, 2024 (about $1.0 million of that is Measure S money restricted for Measure S purposes). Using the current fiscal year budget and policy assumptions (25 percent reserve of the operating budget), staff estimated an unallocated, spendable general fund balance of just over $500,000 at the end of the current year after the required reserve is set aside.
The presentation covered other funds as well: the Lighthouse Cove RV Park, housing authority, sewer and water funds. Staff noted one‑time connection fees had materially increased sewer and water fund revenues for 2023–24 and cautioned those receipts are not recurring. The sewer fund working capital remains elevated but staff said a planning grant and a pending capital improvement list will draw on those balances over time; the treatment‑plant‑level capital program could be in the $10–20 million range over several years, staff said.
Council discussion touched on deferred maintenance and project sequencing. Public works staff and the city manager described prioritized capital work already planned (meter replacements, collection‑system repairs, the street project) and noted grant applications and a rate study are underway to address longer‑term needs.
Council action: The council agreed by consensus to receive and file the report and directed staff to return with midyear budget adjustments in March.
