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FY26 update: sales and use tax steady; overtime pressures raise caution
Summary
Budget staff reported through-January FY26 numbers showing combined sales and use tax up 3.9% year over year (use tax +16.6%), provisional property-tax figures, and rising personnel overtime that has pushed personnel costs above target; staff will return with refined projections and department budgets.
Budget Manager Eric Sto provided the committee with an updated FY26 budget‑versus‑actual report through January, highlighting revenue and expense trends and areas of caution.
On the revenue side Sto said combined sales and use tax was up about 3.9% compared to the same period last year, with use tax performing strongly (+16.6%) and sales tax up 1%. Property‑tax totals are above budget so far but labeled provisional while the county clarifies credits and adjustments. Franchise tax collections (notably cable) and electric receipts were running below prior expectations. Sto said the ground emergency medical transportation (GMT) reimbursement estimate was lowered by roughly $400,000 due to a change in calculation.
On expenditures Sto noted personnel spending ran higher than target chiefly because of overtime. Personnel stood at roughly 62% of budget at the time of the update, with 75% of the overtime budget already spent. Fire and police leaders told the committee minimum staffing requirements, predictable special events and unpredictable critical incidents have driven overtime usage; the police representative noted about 20 vacancies in the department as another factor. Capital and finance‑charge accounting cleanups also appeared in the report and will be reconciled.
Sto said staff will return next month with refined general‑fund revenue projections and that department and fund budgets will be presented in May. Committee members asked for continued monitoring and for staff to present the plan of action on insurance and the budget timeline after the municipal election.
Next steps: updated revenue projections to come; departmental and fund budgets to be presented in May.
