City Manager Matt Atkinson reported to the Lubbock City Council on Dec. 2 that initial projections of a $5.4 million sales-tax shortfall for fiscal 2025 narrowed to about $5.19 million in the final unaudited figures. The presentation framed the late-year months as stronger than earlier in the fiscal year and credited staffing and spending adjustments for avoiding deficit spending.

Atkinson said the city closed the year with some positive month-to-month actual-to-actual changes: July through September showed consecutive months where 2025 actuals exceeded 2024 actuals, producing increases of roughly $270,000, $462,000 and $629,000 in those months. On a total-year basis, collections rose from about $99.1 million in FY2024 to roughly $100.4 million in FY2025, a $1.33 million positive variance versus the prior year but still below the adopted budget.

Atkinson outlined measures taken beginning in April to protect the general fund: a hiring freeze on open general-fund positions except for public safety, reductions in cash-funded projects, a pause on nonessential training and travel, renegotiated health-plan terms effective Jan. 1 and targeted reductions in supplies, maintenance and professional services. He estimated unaudited general-fund expenditures were approximately $6.2 million under budget, with identified savings including about $900,000 from compensation and benefits, $1.7 million from health-insurance-related savings, $800,000 from supplies, $400,000 from maintenance, and roughly $1 million from training, travel and professional-services reductions.

Council members praised staff for implementing the adjustments and for frequent monitoring. Several members debated the prudence of the FY2026 sales-tax forecast (+$2.5 million projected) and noted historical five-year averages near 7% growth that informed the prior projection. Atkinson said the city will keep the hiring freeze in place until revenue trends better match budgeted expectations.

The manager said the numbers presented were unaudited and reminded council the formal audit will arrive in February. He characterized the last three months of FY2025 as showing early signs of recovery but cautioned that the budget remains dependent on sales-tax performance.

The council did not take formal action on the report; the work session moved on to regular session business after the briefing.