Title
Discuss and provide direction to staff on the allocation of Fiscal Year 2025 budget surplus funds.
Body
REQUESTOR:
Finance Department
BACKGROUND:
During the September 2, 2025, City Council meeting, staff presented an end-of-year budget surplus of $2.3 million, primarily generated from conservative revenue projections, strong sales tax performance, higher-than-expected interest income, and prudent expenditure management. While $200,000 was set aside for the fitness park project at the September 16, 2025, meeting due to time-sensitive grant requirements, Council is still deciding the final allocation of the full $2.3 million. The fitness park funding was temporarily “parked” in the grant account to demonstrate potential match funding; these funds remain available within the surplus total and will only be formally allocated if Council confirms the funding source for the fitness park, which could also come from non-bond CIP or the Parks fund balance if Council chooses.
Staff presented various allocation options during the September 2 meeting, based on the City Council's feedback, listed in alphabetical order. The direction following this meeting was to hold the funds in the General Fund balance for future allocation.
DISCUSSION:
As outlined in the September 2 City Council meeting discussion, the surplus represents one-time revenues that are generally recommended for one-time expenditure or fund balance enhancement rather than ongoing operational costs. The allocation options previously presented and discussed include:
• Columbarium project ($200,000)
• Economic Development Fund increase
• Equal distribution amongst council districts
• Fitness Park at Justice Center ($200,000)
• Increasing Fund Balance (general fund or targeted reserves)
• Mercer Park enhancements ($1 to $2 million)
• Squire Park improvements (up to $1 million)
Council members expressed varying preferences during the September 2 discussion, with recommendations for infrastructure investments, park enhancements, and general fund allocation to maintain flexibility for future priorities.
Staff is seeking Council direction on the preferred allocation strategy, including the fitness park funding approach.
FISCAL IMPACT:
$2.3 million remains available for allocation from the FY25 budget surplus, as well as the fitness park project funding source.
ATTACHMENT(S):
1. Presentation