Finance staff: third-quarter update shows roughly $6.3 million surplus; major revenue lines beating projections

Finance staff delivered a third-quarter financial update to the Board of Trustees on the city’s key operating funds, saying revenues and restrained spending have produced a year-to-date surplus.

The presentation, given by Andrea (staff member), covered the general fund, water and sewer, parking, TIF and capital funds through Sept. 30. Andrea said the general fund budget is about $28.3 million in revenue and just under $29 million in expenses; excluding a planned interfund transfer to capital for the public works facility, the operating position is positive. She reported actual year-to-date revenues of about $24.6 million and spending of about $18.3 million, leaving a surplus of roughly $6.3 million.

The update noted several revenue lines outperforming projections: state sales tax ($7,760,000, 88% of budget), home-rule sales tax ($2,650,000, 85% of budget), local government distribution/income tax ($4,800,000, 81%), and food-and-beverage tax ($1,100,000, 85%). Andrea said those sales-tax lines comprise about 42% of the overall revenue budget and are a primary driver of the year-to-date position.

Andrea also reviewed enterprise funds. The water and sewer operating fund was budgeted for a 4.5% surplus; actuals show a surplus of just over $3,000,000 year-to-date, with revenue at about 82% of budget and spending at about 63%. She said staff plans gradual rate increases to build reserves ahead of upcoming Lake Michigan borrowing obligations. Andrea reported the first bond sale of $20,000,000 closed in July; water sales were reported at just under $7,000,000 on an $8.7 million budget (about 80%).

On the parking fund, Andrea said revenue exceeded spending by about $38,000 through three quarters. Parking permit receipts were $83,000 (69% of budget); ordinance-violation revenue has been low but should rise now that a new collection agency is in place. TIF property tax receipts were about $1,100,000 through September (near last year’s level), and capital-fund tax receipts were $4,700,000 on a $5.6 million budget (84%).

Trustees responded with praise. One trustee said, “These are fantastic numbers,” and another added, “You’re worth every penny that we pay you,” acknowledging staff work on holding expenses down. A trustee asked for a copy of the report; another noted some grant payouts in the memo looked low, and Andrea explained grant revenue is recognized at year-end based on work completed (she cited Wolf’s Crossing as an example), so the apparent shortfall is a timing issue.

The board took no formal fiscal actions during the presentation; trustees requested staff circulate the detailed report to the board for further review.

The Committee of the Whole adjourned and the board later recessed to a closed session as announced.