Smithville projects modest FY2026 surplus amid sales‑tax dip and one‑time utility grant

Finance Director Rick Welch presented the FY2026 six‑month budget update on May 19, telling the Board that clearer seasonal patterns and improved monitoring allow firmer projections for the year.

Welch said the City now expects general fund revenues to finish slightly higher than budget — increasing from just over $7.1 million to nearly $7.3 million — and projected a modest year‑end surplus of approximately $156,000. He attributed the improved projection, in part, to stronger use‑tax receipts and higher interest income.

Welch also reported a projected sales‑tax shortfall of about $65,000 and cautioned that sales tax collections can vary month to month based on retailer filings and external economic factors; he noted a recent fire that affected some local businesses. A large, one‑time grant received by the utility funds had materially boosted utility revenue for the reporting period but was characterized as timing‑dependent and not a recurring source.

The Director said staff reduced the number of mid‑year budget amendments compared with the prior year (from eleven at the same point to four) because of tighter monitoring. The four amendments listed were for: a sewer line replacement at City Hall; increased costs on the OK Railroad Trail project (parks and stormwater funds); strategic planning expenses; and added water supply costs tied to an Army Corps of Engineers lease and additional public safety costs related to labor contracts.

Welch emphasized that expenditures were being held near budgeted levels because of timing uncertainty around capital projects; overall, the City’s finances were described in the presentation as stable with healthy fund balances. Development Director Jack Hendrix and staff will continue refining projections for building‑permit revenue and major projects going forward.