City warns general fund reserves could slip below policy if right-of-way fee is not realized

Sally Alcorn, chair of the BFA committee, heard a report from the controller's office on the city's monthly finances and the budget risk tied to a proposed right-of-way fee.

According to the controller's presentation, the city is "projecting an ending fund balance of $294,000,000 or 11.2% of expenditures plus debt service and pay as you go for FY 2027." The presenter said that projection includes "approximately $104,000,000 in revenue associated with the proposed right of way fee," and cautioned that "because of implementation of the fee remains uncertain, this revenue represents a significant risk to the projected ending fund balance." The controller's office told the committee that, if the fee is not implemented, the projected ending fund balance would fall to "approximately 190,000,000 or 7.3% of expenditures," below the city's 7.5% reserve guideline.

Committee members asked staff about the timing and conditions for recognizing the right-of-way revenue. The controller's office said the projection currently includes the amount but that staff will continue to monitor implementation steps; a closing action connected to the fee is expected in December, and until required steps occur the revenue carries execution risk.