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City reviews FY2025 fourth-quarter finances, flags sales-tax forecast risk
Summary
Temple staff presented unaudited FY2025 year-end financials showing $133.4 million in revenues, modest shortfall to budget, a $712.2 million capital program and a projected 6.41% sales-tax growth for FY2026 staff said will be closely monitored.
Tracy, the city’s finance presenter, told the council on Nov. 20 that the city’s unaudited fiscal‑year 2025 results show total general‑fund revenues of roughly $133.4 million, with sales tax the largest revenue source. "I am pleased to present the fourth quarter year end financial statements for the year ended 09/30/2025," Tracy said at the workshop.
Tracy reported total revenues were about $17,000 under the adopted budget and that sales tax receipts came in at about 102% of budget while property and other taxes were roughly 97% of budget. Tracy said the shortfall in property tax revenue—about $840,000—was driven in part by large refunds and homestead exemption adjustments. She added that sales‑tax growth slowed late in the year and that staff has budgeted a 6.41% growth assumption for FY2026, but that the number will be watched month to month.
On the spending side, total expenditures were reported at about $136.2 million, with personnel costs representing roughly 62% of expenditures. Tracy noted encumbrances and outstanding purchase orders that roll forward to the next fiscal year and said those commitments reduce available funds; she also said the city increased its rainy‑day balance this year but will begin FY2026 with a smaller-than‑target balance (about $311,000 against a typical goal near $2 million).
The presentation examined enterprise funds as well. Water revenues were near budget while the hotel‑motel fund showed a roughly $1.7 million deficit for the year, and the drainage fund ended with a modest increase in fund balance. Tracy also reviewed the investment portfolio ($461.6 million) and described performance and maturities.
Council members questioned the assumptions behind the FY2026 sales‑tax forecast and the use of reserves. Tracy said the city will adjust forecasts and, if needed, recommend midyear expenditure changes. She closed the presentation by reminding the council the figures are unaudited and that the audited statements will be published in February.
The council did not take a vote at the workshop; the presentation provides the basis for future budget decisions and for the audited FY2025 statements expected in February.
