AGENDA ITEM EXECUTIVE SUMMARY
ITEM TITLE*
title
FY 2025 Excess Fund Balance Appropriation Proposal
presenter
RESPONSIBLE STAFF, TITLE, DEPARTMENT*
Amy Oland, Director, Business Management Department
STAFF RECOMMENDATION*
Staff recommends that Council adopt O-1 to appropriate $3 million in FY 2025 General Fund excess fund balance.
body
ACTION/DECISION POINTS*
Council must approve or reject the excess fund balance appropriation recommendation.
LEGISLATIVE CONTEXT*
In order to appropriate the excess fund balance, Council must amend the current budget as described in state statute 159-15.
BACKGROUND AND CONTEXT*
The Town finished FY 2025 in a much better financial position than we had originally projected. Mid-FY 2025, we found ourselves in an unusual set of circumstances because sales tax numbers were plummeting and lapsed salary saving projections were anticipated to be very low. We immediately began having conversations with departments about holding off on all major expenditures. We made the decision to intentionally hold off on non-critical hirings and projects to ensure we ended the year to the good.
Things started to turn around after the budget was adopted. Revenues were not as bad as we predicted they would be (specifically sales tax and inspections permits) and lapsed salary savings were much higher than projected.
Most importantly, the impacts of these discussions and of year-end results don't influence the budget discussions from last year's budget preparation. We are looking at one-time funds to allocate vs ongoing revenue needs to continue funding our operations.
The Local Government Commission and rating agencies prefer to see a financially sustainable approach to budgeting that results in some excess fund balance than for communities to use fund balance to balance their budget. Excess fund balance is the Council's opportunity to identify one-time investments toward goals and priorities. Ideally, we would end each year with $1-$2 million an...
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