Finance director reports clean audit, preliminary 2025 results and a budget formula error

Julie Elsom, Finance Director, presented the city’s preliminary financial status for 2025 and next steps for the 2027–28 budget at the Feb. 17 meeting.

Elsom said the exit conference for the 2024 audit produced a clean audit and that several corrective actions already have been implemented. She said additional policy and process improvements are planned for 2026 to strengthen documentation and internal controls.

On preliminary 2025 results, Elsom reported general fund revenue collected at about 47.6% of budget and major tax revenues at 49.7%. She noted building permit revenue is down about 32% from 2024 and interest earnings are down about 43.2% compared with 2024. On expenditures, the general fund is around 49.6% expended; human services is at about 80% of budget largely due to prior reductions.

Elsom also told council that water CIP reflects $4,400,000 in bond proceeds the city received in December and that the sewer fund received $13,400,000 in bond proceeds; she cautioned that capital fees for water and sewer are down sharply (about 51% and 49%, respectively).

While reconciling a recent budget adjustment, Elsom said she discovered a formula error that picked up a negative carryover value and made ending fund balance totals appear higher than they should. She said projects and transfers themselves are correct but the summary totals need correction and will be returned to council with aligned totals. Elsom added that several positions remain vacant (utility-billing contractor, deputy finance director, two police officer positions and an interim parks manager) and that projected salary-and-benefit savings of about $313,000 are available to fill vacancies.

Council thanked Elsom for the work; staff will return with the corrected totals and further budget items for council consideration.