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Finance director: first-quarter variance report shows timing-driven revenue and expense differences
Summary
Finance Director Alexis Miller told council first-quarter variances reflect timing (property tax receipts and cyclical expenses), noted unaudited numbers and explained a temporary capital charge for sewer lateral work pending tax receipts; the audit team is on site and some prior-year accruals may be reclassified.
Alexis Miller, finance director, presented the city's fiscal year 2024 first-quarter variance report and walked council members through key drivers of the reported variances. "Because it's the first quarter, generally, we should have either collected 25% of our revenue or we should have expended 25% of our budget," Miller said, noting that timing differences and cyclical expenses often alter that expectation.
Miller explained that property tax receipts typically arrive in January and February with an additional distribution in April or May depending on appeals, which means earlier quarters can understate revenue. She also highlighted several accounting items that affected the report: vending-machine license revenue had been combined with business licenses and will require an interfund transfer to correct the classification, and sewer lateral expenses currently appear in capital because the related taxes and receipts have not posted; staff is monitoring to ensure lateral expenses do not exceed budgeted amounts for the year.
Miller told council auditors are on site and that auditors sometimes reclassify expenses to prior years when they determine amounts are accruals. "We're working with unaudited numbers," she said, adding that such adjustments could create some variance in the presented figures.
Council members discussed whether the budget software could present cyclical or seasonal timing more clearly. Miller said the new budget software can break down some cycles but noted that it is budget software, not a full finance system, and that some expense timing will still require context.
The presentation was received for information; no formal action was taken.
