Finance director reports continued use of fund balance and mixed revenue trends

Finance Director Scott Jurgis presented a midyear finance report that showed mixed revenue trends and continued reliance on fund balance. "Our collections on the date are 8,370,000 on a budget of 8,322,000," Jurgis said when discussing property-tax receipts. He reported general fund revenues through June of $26,930,000 — about $822,000 ahead of last year — but preliminary projections show a use of fund balance of roughly $1,510,000 and an ending fund balance near $4,403,000 (about 15.8% of revenues). Jurgis warned the city has used fund balance several years in a row and that operating with low reserves is operationally difficult.

Council members thanked staff for budget work but raised concerns about the multiyear pattern. One council member said, "Continuing to deficit spend is not sustainable and puts our city in jeopardy of having a fund balance that is, dangerously low." Members discussed post-COVID revenue changes, flat sales-tax growth relative to inflation, and the need for a proposed property-tax increase included in next year's budget to stabilize finances. Jurgis also reviewed specific revenue lines (motor vehicle fees, sales taxes, class C road funds, transient room tax, municipal energy tax and cable franchise receipts) and noted several pending invoices (a $141,000 hydrant bill and approximately $80,000 of personnel timing costs) that will affect final expense totals.

The report concluded with projections for transfers and a discussion of the city's recently adopted fund-balance policy setting a 15–25% target; Jurgis said the current projection places the city at the low end of that range but above the minimum calculated requirement. The presentation prompted council discussion but no immediate formal action beyond continuing budget work and the existing proposal for a tax increase to be finalized in coming weeks.