HomeMy WebLinkAboutCC 11-18-2025 Item No. 18 City Manager's First Quarter Financial Report for FY 2025-26_Written Communications_2CC 11-18-2025
Item No. 18
City Manager's First
Quarter Financial
Report for FY 2025-26
Written Communications
From:Tracy K
To:City Council; City Clerk
Subject:Agenda Item 18 Comments
Date:Tuesday, November 18, 2025 7:26:34 AM
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Dear City Council,
I appreciate the level of detail in the latest financial report. While the 2024-25 financial report
looks fine, with revenue coming in above expectations (to note, primarily due to mark to
market adjustments) and expenses coming in below, the Q1 2025-26 $21.6M deficit raises
some questions.
Revenues: How much in sales taxes are we expecting to be returned by CDTFA? Will it be
similar to the prior year? Assuming that amount is returned and brings us back to, we still have
the $31M in expenses to contend with. Should we be concerned that revenues and expenses
are so greatly imbalanced?
Expenses: There is a $3.2M one-time transfer to capital reserves -- which fund is this exactly?
Per the latest ACFR we have a $10M capital projects reserve, $24M economic uncertainty
reserve, $124K sustainability reserve and a sales tax repayment reserve (although I believe
there have since been changes to this fund). Were we somehow using these reserves and need
to replenish them, or are we adding to them?
Regardless, I appreciate the level of detail in the report.
Thanks (and writing on behalf of myself only),
Tracy