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<br /> <br />MEMORANDUM <br /> <br />Date: November 18, 2025 <br /> <br />To: Mayor and City Council <br /> <br />From: Gerry Beaudin, City Manager <br />Susan Hsieh, Finance Director <br /> <br />Subject: November 18, 2025, City Council Agenda Item 12 - Fiscal Year 2024/25 <br />Year-End Operating Report – Responses to City Council Questions <br /> <br /> <br />This memorandum responds to questions and comments received regarding the Fiscal <br />Year (FY) 2024/25 year-end operating budget report. <br /> <br />Regarding the question about using a table and narrative format for the report, staff will <br />consider the suggestions as part of implementing the recommendations from the Eide <br />Bailly report, taking into account practical examples used by other agencies. <br /> <br />The year-end report is intended to cover the financial transactions that took place during <br />FY 2024/25. As part of the Mid-Year Budget Review in February 2026 and Mid-Term <br />Budget Update in May 2026, financial projections will be adjusted based on more <br />current financial data. Staff will seek input and reconsider options and strategies to <br />balance the budget for the current budget cycle during those discussions, including the <br />reserve level for the General Fund. <br /> <br />Overall, actual General Fund revenue and expenditure are in line with the budget, <br />excluding one-time transactions. Excluding the $12.8M revenue associated with the <br />Costco project, actual revenue is higher than budget by $7.0M, or 4.6%. Excluding the <br />$3.4M in one-time development services fees, mainly due to large development <br />projects, actual revenue is higher than budget by only 2.4%. As a practice, staff will <br />continue to recommend that one-time revenue be used for one-time expenditures.. <br /> <br />Excluding the $12.8M expenditure associated with the Costco project, actual <br />expenditure is below budget by $0.8M, or 0.5%. Net income is approximately $7.2M <br />before accounting for the use of program reserves and transfers to/from other funds. <br />Consistent with the City’s financial policies, available resources are used to fund one- <br />time projects and strengthen reserves as outlined in Tables 1 and 2 of the staff report, <br />including: