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City finance director reports steady revenues; auditor gives FY25 'clean' opinion
Summary
Finance director John Locke reported Q1 revenues below proportional budget but improved sales-tax receipts and portfolio yields above benchmark; independent auditors issued an unmodified (clean) opinion for FY2025 and noted a roughly $41.3 million general-fund balance.
San Marcos finance staff and the city's auditors briefed council on March 31 on the city's financial position and audit results, offering context ahead of the FY2027 budget process.
Finance Director John Locke presented a quarter-one snapshot through Dec. 31, 2025: "For the general fund, the total revenue budget is a $123,000,000. The actual revenue brought in was 24 and a half million," he said, noting that collections typically lag because property-tax receipts come in January and February. Locke highlighted that sales-tax receipts are up about $400,000 compared with the prior year and that the city's investment portfolio ($458 million) yielded 3.8%, outperforming the two-year treasury benchmark.
Independent auditor Jeremy Barbato of ABIP reported the annual audit for the fiscal year ending Sept. 30, 2025 and issued an unmodified opinion. "We find enough evidence gathered through our audit procedures to issue an unmodified opinion. That's a clean opinion," Barbato said, noting the city maintained accounting and auditing standards and recorded a general-fund balance of roughly $41.3 million, a decrease of about $2.5 million from the prior year. Barbato also told council the city implemented GASB Statement 101 on compensated absences during the year, which required a restatement of beginning balances.
Council used the presentation as a backdrop for budget-policy discussions: staff outlined the FY2027 budget calendar (preliminary tax roll April 30; certified roll July 25; budget presentation Aug. 18) and the council provided direction on keeping the property-tax rate at the current level for planning assumptions. Locke flagged a forecasted general-fund shortfall of approximately $4 million for FY2027 (excluding additional funding discussions on emergency medical services), and listed planning considerations including personnel cost increases and changes to how citywide software allocations are budgeted across funds.
The audit and finance briefing will inform upcoming budget workshops and public hearings; council members asked for follow-up materials and presentation links so they and the public can review details ahead of future votes.
