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Atlanta finance staff present mixed Q1 picture: revenue gains offset by personnel-driven expense pressures
Summary
City finance officials told the council’s Finance and Executive Committee that FY2026 revenue is tracking above the adopted budget while personnel costs — especially police and fire sworn salaries — are driving projected year‑end expense pressures. Officials proposed controls and will return with additional updates next quarter.
Atlanta finance officials presented a cautiously mixed first‑quarter outlook on Nov. 25, telling the Finance and Executive Committee that revenues are running stronger than expected even as personnel costs push projected expenses above budget.
“Based on our current trends, we project year end revenue at 987,500,000,” Lawrence Davis Jr., revenue chief, told the committee, saying that figure would exceed the adopted FY26 general fund budget by about $12.2 million. Deputy Chief Financial Officer Yolanda Carr said the city expects stronger receipts from public utilities, alcoholic beverage taxes and permit licensing, and that the city is monitoring federal developments that could affect revenue.
At the same time, Sean Gabriel, budget chief, said the committee is projecting year‑end expenses of roughly $992 million — about $17 million over a $975 million funded budget — with personnel costs the primary driver. “The $11,000,000 personnel variance is primarily driven by sworn salaries,” Gabriel said, citing police and fire as the biggest contributors to the projected variance.
Officials described several expense‑control measures already in place: a 50% hiring hold on general‑fund departments, a vacancy review board that vets new hires, monthly revenue/expense reporting to the council and a review of operational efficiencies across funds. Gabriel said there remain legitimate exceptions for contractual obligations such as body‑worn cameras and legacy licensing or communication contracts.
On debt and investments, Courtney Knight, chief of treasury, summarized the city’s portfolio and recent activity, saying the city had roughly $8.3 billion in outstanding debt and that recent defeasance and principal payments reduced the general obligation portfolio by more than $200 million in the quarter. Knight also highlighted a roughly $1 billion bond issuance for the Department of Aviation, of which about $900 million was labeled green bonds.
Council members pressed staff for further detail. One asked for a division‑level breakdown of the sworn‑staff variance in APD and AFRD; staff agreed to provide that. Members also sought updates on apparatus purchases and fee and rate studies; staff said fee studies should arrive early in the calendar year and that DPW rate work will take longer because it requires a more detailed rate study process.
The finance team said it will return with updated projections at the end of the second quarter and provide the requested breakdowns in the interim.
