Director Potts, the city’s finance director, told the joint Shaker Heights City Council and Finance Committee on Nov. 10 that the city expects to end 2025 with roughly $66,000,000 in revenues versus a $64,000,000 budget and projected expenditures of about $48.4 million, producing a combined surplus of about $3.5 million.

Potts said the revenue outperformance—"we beat budget by $2,000,000"—was driven by conservative property tax estimates that produced fewer-than-expected appeals, higher-than-expected court costs and EMS revenues, stronger investment earnings and earlier-than-expected school permit fees related to projects such as Woodbury. On expenditures he said some savings came from vacancy in the police department and lower-than-budgeted non-payroll costs.

Why it matters: the administration proposed using the surplus to cover four priorities it described as largely required or strongly recommended rather than discretionary spending. Potts summarized the administration’s plan as three "needs" and one "want-also-a-need": a $225,000 transfer to the street lighting assessment fund to restore a near-20% reserve after energy costs exceeded the recent reassessment; a $500,000 increase to the self-insurance transfer (bringing the transfer to $1,000,000) primarily to cover sharply higher workers’ compensation claims; $1.8 million returned to the general capital fund to make the public works roof and solar project appropriation whole; and roughly $1.0 million shifted toward the Lee Road construction match (the match is currently about $1.9 million).

The finance director said those moves would leave a small carryover and maintain a general fund reserve around 41.9% (about 3 percentage points lower than previous calculations). Potts framed the transfers as needed to avoid drawing further on capital reserves or contingencies.

Council response and context: council members and citizen finance committee members largely praised finance staff for producing the favorable results, but they also pressed for clarity on which transfers are strictly mandatory. Councilmember (Mrs.) Martin said the four transfers "seem to me that these are all must dos" and warned that if the city did not use surplus funds the capital fund or reserves would be tapped. Potts agreed, saying that if the city had ended the year in deficit those same transfers would have been covered by the reserve.

Police staffing and pension questions: council asked whether the police’s roughly $1.3 million underspend in 2025 would be needed in 2026; Potts said the 2026 police budget is set at $11.9 million (up from a 2025 budget of $11.1 million) to reflect collective bargaining steps and that the department will use the larger appropriation if it becomes fully staffed. Chief Hudson said the department is currently "62 sworn" with an authorized 68 and expects to recruit toward full staffing in early 2026 while maintaining hiring standards.

Workers’ compensation: on the self-insurance transfer, Potts said recent serious injuries drove up workers’ compensation claims and the $500,000 increase "should be the biggest chunk" needed, but additional claims could change the picture; staff suggested an executive session if council wanted confidential claims detail.

Looking forward to 2026: Potts presented the 2026 operating budget totals—revenue $65.6 million, expenditures $53.4 million, transfers $12.1 million—and said the budget assumes a 2.75% cost-of-living adjustment and other negotiated steps for bargaining units, a 5.4% increase in healthcare costs, and use of a reserve set aside for the 27th pay to offset the extra payroll in 2026. Department-level highlights included allocations for an accounting clerk in police, a FEMA grant reconciliation for fire, an increase in recreation senior transportation, funding to make the city website ADA compliant, a $75,000 housing plan allocation in economic development, and an increase to the citywide composting program from $75,000 to $125,000.

Community needs and safety-net concerns: Councilmembers pressed administration staff on the local effects of federal SNAP and ACA subsidy changes. Councilwoman Bixenstein said she was surprised to learn the city had about 2,000 SNAP recipients and asked whether the 2026 budget should include emergency assistance. City staff reported that community fundraising and a city commitment had provided near-term relief: Mr. Carroll said local donations totaled about $17,000 and the city had committed $10,000 to augment the Shaker hunger network’s capacity.

Public comment on the solar project: during the public-comment portion Sarah Scazzoni of 2940 Morley Road thanked the finance presentation but criticized the city’s handling of the public works solar project, saying it "just became a ballooning, ballooning project" after earlier promises of a pilot-sized allocation. Potts responded that the project appropriation and de-obligations meant about $1.8 million needs to be restored to the capital fund to complete the approved scope.

What happens next: finance staff said they will present capital budget specifics at the next meeting (two weeks) and bring back a 10-year capital plan and department-level capital requests. The council also asked administration to look more closely at youth programming funding and potential grant opportunities tied to school partnerships.

Ending: no formal budget adoption was taken Nov. 10; staff will return with capital budget detail and any updated revenue projections before final adoption in December.