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City finance staff reports $599,000 IRS payment due tied to 2021 water/sewer bonds; cash position $66.5M
Summary
Finance staff told council the city's bond consultant calculated a $599,000 yield‑reduction liability due to the IRS within 60 days related to 2021 water and sewer bonds; the city reported $66.5 million in cash and investments as of Dec. 31, 2025 and auditors have proposed budget amendments to appear at the next meeting.
At the March 5 meeting the city's finance staff briefed council on year‑end accounting matters and a required IRS payment tied to water and sewer bond proceeds issued in 2021.
"The most recent calculation from our consultants this month does show what is called a yield reduction liability that is due to the IRS in the amount of $599,000 and that amount must be paid within the next 60 days," finance staff Luckett told the council. He said the city had anticipated the obligation and has been preparing funds accordingly.
Luckett also summarized the December 2025 financials: cash and investments totaled $66,500,000; year‑to‑date general fund revenues were $16,800,000 (about 64% of the annual budget); and year‑to‑date expenditures were roughly 22% of the budget. He said auditors had provided a list of proposed budget amendments that staff will present for council approval at the next meeting.
On questions from the mayor, Luckett confirmed that earnings on the bond proceeds are allocated to the water and sewer fund and not the general fund. He said the city continues to monitor bond proceeds and that a final reconciliation will be performed once the bond proceeds are exhausted, which could produce an additional, smaller payment.
