Finance director reports unaudited FY25 surplus driven by one‑time revenues; cautions on sales tax and labor costs

Finance Director Raina Schwartz presented a preliminary, unaudited year‑end review for fiscal year 2025 on Oct. 13 and announced the city received the Government Finance Officers Association award for excellence in financial reporting for FY24.

Schwartz said auditors were on site and the city aims to complete the audit by Dec. 31, with finalized audit numbers likely to reach Council in January. Staff described FY25 as showing stronger revenues than budgeted—about $1.7 million above budget on property transfer taxes—driven primarily by the resale of Belmont Village and condominium sales at 555 Pierce. Schwartz cautioned that much of the revenue gain was one‑time and should not be relied on for ongoing budgets.

On the expense side, the finance director identified three notable pressures: a roughly $1 million settlement payment, higher labor costs resulting from recently negotiated memoranda of understanding (including increased payouts and salary adjustments for multiple departments), and substantial one‑time and ongoing IT infrastructure and security investments. Schwartz said the city’s labor budgets did not fully anticipate the new MOUs adopted during FY25 and that some departments experienced sizable leave payout costs.

Sales tax collections were described as Albany’s largest revenue weakness—roughly 5% below budget—partly tied to the closing of Golden Gate Fields and broader softening in consumer activity. Staff recommended cautious monitoring and scheduled a midyear budget update in January/February of FY26 to reassess revenue and expense trends. The committee discussed reserve policy mechanics and noted that the city’s reserve policy target is 25% (applied to expenditures and revenues), which will influence what portion of the unaudited positive balance is considered available for designation.