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Finance director Thomas outlines midyear budget changes, requests $280,000 in net operating adjustments
Summary
Thomas reported a midyear general‑fund review showing a $1.9 million increase in unassigned fund balance and recommended adjustments including $200,000 for builder’s‑remedy legal costs, $17,000 for code‑enforcement legal support and $100,000 for housing element consulting. Staff also detailed refund payments for excessive building fees and capital reimbursements.
Thomas, the town’s finance director, told the Finance & Investment Committee that the town closed the prior fiscal year with an unassigned fund balance up about $1.9 million to $4.4 million, citing higher property tax receipts and stronger investment income as primary drivers.
He said a one‑time $800,000 transfer from the ARPA fund and council reallocation of $400,000 to reserves also contributed to the positive variance. "That was driven by higher property tax and investment income," Thomas said, summarizing FY24‑25 results.
For the current fiscal year (FY25‑26) midyear, Thomas reported revenues and expenditures were tracking differently: revenues were collected at about 38% of budget while expenditures were at 49% of budget. He highlighted a shortfall in licenses and permits (budgeted at $2.0 million; roughly $680,000 collected to date) and said staff expects at least a $150,000 reduction related to discontinued plan retention and energy fees.
Thomas presented a package of proposed midyear adjustments with a net general‑fund impact of about $280,000. Notable requests included $200,000 to fund builder’s‑remedy litigation counsel and $17,000 to add a dedicated code‑enforcement attorney; Thomas explained the code‑enforcement attorney (Lance Bayer) would help resolve long‑outstanding property cases and improve responsiveness.
On refunds, staff reported they mailed checks totaling $304,000 in an initial batch and were preparing additional payments; about $520,000 remained as an outstanding liability pending claim responses. "We sent out 21 checks for $304,000 and we'll be sending additional mailings for the remainder," Thomas said.
Capital items discussed included an $800,000 budgeted payment to Los Altos Hills Community Fiber (about $400,000 spent to date) and collection activity tied to the El Monte undergrounding project, where the town has billed providers $5,000,000 and received about $4,700,000 so far. Thomas said staff will include required adjustments in the council staff report and return with updated numbers before March 19.
Committee members asked follow‑up questions on permit projections and refund accounting; Alan urged staff to reflect the refunds and permit shortfalls in the version delivered to council. The committee agreed to receive a revised staff report in advance of the council hearing.
