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City finance director: midyear finances on track but falling investment earnings could shrink capital transfers
Summary
Finance Director Cherie told the council the city’s midyear (July–December) finances show revenues exceeding expenditures by about $600,000 and that investment earnings, which produced $1.4 million in FY2024, have fallen from a 2024 peak of 5.29% to about 3.86% in January 2026 — a decline that could reduce one-time transfers to capital projects such as parks.
Cherie, the city’s finance director, presented the midyear financial report for July through December and said general-fund revenues currently exceed expenditures by about $600,000 year to date. "Very normal," she said of the December property-tax inflow that boosted that balance.
Cherie emphasized three items in the new midyear format: the presentation itself, an investment-earnings overview, and a quarterly "council priority" spotlight on fiscal responsibilities. She told the council that 82% of general-fund revenue is tax revenue and that some categories, such as building permits, have already exceeded projections.
On investment returns, Cherie walked the council through a decade-long trend and then through a recent spike and pullback. "We saw as much as in 2024 5.29 percent return of investment," she said, noting the city recognized about $1,400,000 in investment earnings in FY2024. "I pulled up the rates through, January, I believe it was January 2026, and we're down to 3.86," she added. Cherie described those investment earnings as largely "one-time money" that the city typically transfers to capital projects, including parks.
"As those investment earnings go down, that's less money we will have to push over to capital," Cherie warned, and told the council they will see that correlation in the upcoming budget process and capital transfers. She also flagged that capital costs remain sensitive to market conditions — contractor competition, steel and oil prices, and other geopolitical factors can push bid prices beyond budgeted amounts.
The finance director said utility funds and overall expenditure projections appear on track. She closed by offering to bring further detail on utility funds and cost-of-capital assumptions during the budget process.
The council thanked Cherie for the new format and asked no substantive follow-up questions during the meeting. Next procedural steps include incorporating these projections into the spring budget review and capital programming.
