Lancaster CFO reports strong third-quarter finances, projects year‑end surplus

Mike Delmore, the city’s chief financial officer, told the Lancaster City Council at a July 22 work session that the city’s third-quarter financial results (April–June 2024) show broadly positive performance and a possible year‑end surplus.

“We had about $163,500,000 in investments, which earned almost $2,200,000 for the quarter,” Delmore said, noting the city’s pooled-government investments (TexPool, Texas Class and LOGIC) have short average maturities and have benefited from higher market interest rates. He told council he expects to earn a little over $7.0 million in investment income on an annualized basis.

The citywide revenue total for the period stood at about $87.0 million versus a budget of $88.7 million, Delmore said, or roughly 98% of budget through three-quarters of the fiscal year. He said the general fund is tracking at about 101% year to date and that property‑tax collections (including penalties and interest) are tracking to plan. Sales tax, Delmore said, is performing well and is projected to finish the year more than budgeted; he estimated sales tax receipts will exceed budget by roughly $5 million.

Why this matters: stronger‑than‑expected revenue and elevated investment returns would give the city limited one‑time spending flexibility and could increase fund balances heading into the FY2024–25 budget process, Delmore told council.

Delmore also reviewed fund‑level variances. Water and wastewater revenue are performing well—about $1.7 million higher than last year and near budget—while the airport fund is below last year and at roughly 79.9% of its budget, a shortfall Delmore attributed to lower fuel‑service margins. He flagged large encumbrances and project purchases that affect timing: for example, a $1.3 million purchase order for Cedardale Road is expected to be completed by the end of September.

On expenses, Delmore said overall city spending is at about 65% of budget through three quarters, with general fund spending at about 71%. He called out several categories for explanation: legal expenses are running at 113% (about $282,000), building-inspection staffing is low (showing 40% of budget spent), and a planned $525,000 PO for meter replacement is expected to be completed this fiscal year.

Council members responded positively. One councilor called the report “thorough,” and another reflected on the city’s long-term fiscal progress, saying sustained work and a pro‑development approach had helped Lancaster’s current results. Delmore closed by reminding council that property tax rates will be finalized soon and that staff will carry these figures into the budget process.

The council did not take formal action on the report; the presentation will inform the FY2024–25 budget work in the coming weeks.