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City reports near‑budget FY2025 results but flags reserve and sales‑tax assumptions
Summary
City finance staff reported FY2025 unaudited year‑end figures showing general fund revenues of about $133.4 million and expenditures below budget after encumbrances; staff recommended watching an aggressive sales‑tax growth assumption built into the FY2026 budget and noted a low beginning rainy‑day balance.
City finance staff on Thursday presented unaudited fourth‑quarter financial statements for the year ended Sept. 30, 2025, reporting approximately $133.4 million in general fund revenues and total expenditures of about $136.2 million, before accounting for encumbrances.
“I am pleased to present the fourth quarter year end financial statements for the year ended 09/30/2025,” the finance presenter said at the workshop. Staff told the council that sales tax — the city’s largest single revenue source — came in above budget for the year, while property and other taxes were slightly below expectations.
Officials said sales tax finished the year at roughly 102% of budget, while property taxes and other levies were near 97% of budget. Finance staff identified one‑time variances and refunds from a prior year’s homestead exemption adjustments as contributors to the differences in the property tax picture.
On the expenditure side, personnel costs made up an estimated 62% of spending; overall expenditures were reported at about 91% of the adopted budget after encumbrances and outstanding purchase orders. City staff said roughly $8.2 million in encumbrances will roll into FY2026, leaving expenditures about $5.1 million under the year’s budget when carried encumbrances are considered.
Council members pressed staff on reserve levels. Officials said the city began the new fiscal year with a limited rainy‑day balance — roughly $311,000 — and typically target a substantially larger cushion. Finance staff said they had added to the reserve in the FY2026 budget but that the low starting balance reduces the city’s flexibility for midyear additions.
Staff also flagged the sales‑tax growth assumption built into the FY2026 plan — a projected 6.41% increase — as optimistic and said it will be monitored monthly. The presentation noted the capital improvement program now totals about $712.2 million across hundreds of projects and that several grant and pass‑through financing arrangements are phasing off in coming years.
The council received the presentation; staff said audited financial statements will be available in February and that numbers are expected to be similar to the unaudited figures.
