Heath council reviews FY2025 year-end financials and approves budget amendment ordinance

Finance director Sam Ayers presented the FY2025 year-end financial report, summarizing revenue and expenditure results, fund balances and capital project status.

Highlights Ayers cited included an increase in property-tax revenue to roughly $6.5 million (about $800,000 higher than the prior year), a year-over-year sales-tax increase of roughly 13—16%, steady utility revenue trends, and lowered legal expenses compared with FY2024. The general fund ended the year with a fund-balance level above the city's 35% policy target (Ayers reported a balance that equated to roughly 50% of policy target in his presentation), and the water and sewer utility fund ended with robust operating balances. Staff noted a FY2024 billing true-up from the North Texas Municipal Water District that affected FY2025 expenditures and that an offsetting credit is expected in FY2026.

Ayers and council discussed use of excess fund balance for capital projects and the question of whether some of the surplus could be used to reduce future borrowing. Council members urged caution given potential state-level changes to property-tax and impact-fee rules and asked staff to present an analysis of options and timing. Council also requested further ledger detail on certain non-departmental charges.

Following the presentation, the council unanimously approved Ordinance 251209B, amending the FY2025 budget to align the adopted budgets with year-end activity, reallocate surpluses among divisions (including public-safety salary and equipment adjustments), capture Meadowview project entries, and recognize a roughly $1 million net impact funded from fund balance for true-up adjustments and other year-end items.

Staff said an audit and updated impact-fee analysis are underway and will inform future CIP planning and potential reallocation of excess fund balances.