City staff report a projected $600,000 surplus; plan proposed to cover $230,000 property-tax shortfall

Peter, a city finance staff member, told the council the updated budget packet shows the city is projecting ‘‘to to have about $600,000 surplus.’’ He said the revised figure came after correcting duplicate revenue postings and will be reflected in an updated packet distributed to council members.

Matt, a council member, framed the surplus relative to city finances: ‘‘We have a $19,900,000 general fund. … In the budget that was approved by the council, there was an allocation of $360,000 of fund balance that we would pull in to balance the budget.’’ He said the staff proposal to use two unreserved balances and reallocate part of the prior-year surplus would raise the planned use of fund balance to about $432,000 (roughly 2.1 percent of the general fund) — a modest increase compared with the overall fund size.

Peter explained how staff proposes to cover the roughly $230,000 shortfall in property-tax revenue: use two budgeted unreserved balances (approximately $88,050 and $78,040), then move $63,100 from the prior-year surplus into the current appropriated fund balance via a budget amendment. ‘‘What that essentially does is take from the 600k from the prior year and allocates it to the existing budget for this year,’’ Peter said.

Council members asked clarifying questions about timing and the composition of the revenue lines; Peter emphasized that year-to-date collections and several accrued expenses were already reflected in the numbers. No formal vote on the budget amendment was recorded during the work session; staff said they would circulate the corrected packet and bring any proposed amendment forward for formal action.