Olivette Council approves audit; finance director warns of reserve pressure from TIF and pension items

The Olivette City Council on Jan. 13 approved the city's audited financial statements for the fiscal year ending June 30, 2025, and received a detailed presentation on the city's budget outlook from Finance Director Darren Mann.

Mann said the audit carried an unqualified (clean) opinion and highlighted roughly $2.2 million in grant awards tied to capital work, including sections of the Centennial Greenway Trail. He said the city's net position decreased by about $440,000 in the audit period but that, excluding tax-increment financing (TIF) notes and accrued interest, the government-wide position would have shown a roughly $5 million increase. "We have 24,100,000 in TIF notes and unpaid accrued interest that sit on our government-wide [statement]," Mann told the council.

Mann also reported a roughly $9.1 million net pension liability (an indicated 10% improvement) and noted that pension and TIF balances can make short-term net-position figures look worse even when operating results are steadier. He described variability in core revenues such as sales taxes, one-time receipts that have affected recent years (including a cell-phone settlement), and the fiscal effects of opening the new community center.

On reserves, Mann explained the council's existing reserve policy (set at 50% of current-year expenditures), showed projections that, under current assumptions, the general fund reserve line could decline over time, and said the city will review reserves as part of the coming budget process. "You make that line go down by increasing revenues or cutting expenses or a combination of both," Mann said in response to council questions about how to stabilize reserves.

Council debated assumptions used in the forecasts, including conservative revenue assumptions that do not yet include new sales-tax generators from recent development. Mann said some near-term revenue increases (for example, from openings in Olive Crossing) will be incorporated into forecasting as they become realized.

A council member moved to approve the audited financial statements as presented; the motion passed by roll call with all members voting yes (Council member Lewis; Council member Pashawn Hellman; Council member Solomanoff; Chairman Pro Tem Weil; Mayor Clark).

The council directed staff to carry these audit findings into the upcoming budget conversations; Mann and council members said they will continue to examine reserve policy, project assumptions and one-time revenue decisions in the next budget cycle.