January monthly report shows conservative $9.8M general-fund projection; staff say spending holds and revenues may narrow gap

City finance staff presented the monthly financial report for January 2026 and described a conservative projection that currently shows a possible $9.8 million general-fund deficit and pressure in the health/medical fund.

Finance staff attributed the projected shortfall to a combination of board-of-education spending projections, overtime and self-insurance cost trends, and timing of revenues. "Based on current projections, we're looking at a $9.8 million deficit," staff said, while noting the report is conservative and some incoming revenues (transportation and tuition reimbursements, delinquent tax collections) could reduce the exposure.

Staff stressed mitigations: spending holds remain in place, and the administration is tracking ARPA closeout deadlines and reallocations to minimize year-end structural impacts. They also noted that recent winter storms may shift some costs into subsequent months and that final outcomes will be clearer as the fiscal year progresses.

Next steps: Finance will continue monthly reporting to the committee and update projections as receipts and departmental spending data are finalized.