Council adopts fiscal-year Q3 budget adjustments; staff forecasts modest surplus

The City Council on May 20 adopted a quarterly budget update that adjusts the city's fiscal-year 2024-25 operating and capital budgets and approves a transfer to reimburse a prior interfund advance.

Administrative Services Director Buffy Bullis presented the Q3 update and recommended adoption of Resolution No. 2025-23. Bullis told the council the update proposes overall revenue increases of about $2.7 million and expenditure reductions of about $3.06 million across operating and capital funds as staff aligns budgets with current estimates. She said, "Given the proposed adjustments for, 20 four-twenty 5, we expect to close the year with a surplus of about 870,000 in the general fund." Bullis noted sales tax projections were lowered due to a slowdown in vehicle sales, while transient-occupancy-tax (hotel) revenue had outperformed expectations and was increased in the proposal.

Bullis described a pair of transfers to reimburse a prior general-fund loan for the well-field electrical project: a $2,000,000 transfer from the Water Fund to the Capital Projects Fund followed by a $2,000,000 transfer back to the General Fund to fully reimburse the earlier transfer. She said the water fund is now in a position to repay the prior advance.

Councilmember motioned to adopt Resolution No. 2025-23 and the council approved it by roll call (Belden, Jimenez, Mayor Pro Tem Dr. Kelly, and Mayor Shevlin voted yes). The staff report also listed CIP adjustments that reduce some projects' 2024-25 budgets to roll them into 2025-26, and it listed completed capital projects and those the city expects to finish by June.

Bullis said the city continues a conservative approach to budgeting given state and national economic uncertainty and noted the quarterly process helps council and staff adjust proactively. The motion passed unanimously by the four councilmembers present.