Jessica Stratton presented the city's third-quarter general fund variance report (January through September), clarifying this is a cash-based variance report rather than a year-end accrual projection.

Stratton reported that general fund revenue was unfavorable to budget by 0.5% while general fund expenses were favorable by 2.2%. She explained that timing of receipts affects year-to-date revenue recognition: property tax receipts occur twice a year (the second half is due in November), sales tax is recorded two months in arrears and many revenues are seasonal or only received at year end. Stratton said the general fund's year-to-date revenues are about 60% of the annual budget at this point in the year (00:11:24).

On category drivers, she said sales tax underperformance appears driven primarily by the construction category based on Department of Revenue data; property taxes are under budget largely due to current-year exemptions and utility tax trends are affected by a utility commission decision reducing a rate increase (Vista) adopted after the budget. On the expense side, favorable variances appear in police (vacancies and lower benefits) and human services (timing related to hazardous-climate sheltering), while the fire department is above budget due to overtime for recruit training.

Stratton reported the unappropriated general fund balance remains roughly $7 million and the city is about $7 million shy of fiscal targets. She and councilors discussed property tax variance (about -3.5%) and emergency weather activation fund details. No action was taken; staff will continue to monitor and provide details during the mid-biennial budget process.