City’s Year-End Financial Report Shows Revenue Decline with Expenditure Increases

There was a little good news and lots of bad in Ashland’s June 30 “statement of revenues and expenditures” for the 2024-25 fiscal year, compared to the previous year and budget for this year.

The worst news was the revenue picture. In the 2024-25 year, tax collections were up only $200,000 from the year before and nearly $2 million below budget estimates.  Compared with 2023-24, property tax income was up only $193,000 and the transit occupancy tax increased $128,000, but the food and beverage tax income and the electric users tax revenue each were down $200,000. Income from the ambulance service dropped more than $1 million.

In addition, income from services, primarily utilities, declined more than $400,000 from 23-24 and were $8.3 million below estimates  Total revenue dropped $7 million from 2023-24 and came in at more than $15 million below budget. While this was in part due to lower than expected capital project borrowing it also led to imposition of a new parks fee and increases in the fire protection and policing fees, the increase in water rates and expected hikes for other utility rates.

On the expenditure side, payroll costs went up $3.1 million to $40.2 million, while payments for materials and services increased $2.1 million to $45 million. Both expenses, however, came in below budget, with personnel costs $9 million less than budgeted and materials and services $14 million below.

This raises the question of what’s wrong with the city’s budgeting process? How can estimates be so out of whack?  Were the personnel “savings” planned in anticipation of the raises given to city workers that went into effect July 1?

The bottom line from the fiscal year end revenue and expenditure report is: Total fund balances declined nearly $4 million from 2023-24 with the general fund down $1.7 million, the capital improvement fund down $600,000 and the parks equipment fund declining nearly $500,000.

The city’s utility fund balances report was mixed with the two water funds growing close to $1.8 million to nearly $20 million; wastewater funds rising $1.3 million to nearly $9 million; and the street funds increasing near $500,000 to $7 million. The electric fund, on the other hand, dropped $1.8 million after the purchase of the North Mountain avenue substation to $7.6 million.

The utility funds are maintaining large balances in part to pay for future capital projects.  The large fund balances, however, had a side benefit – leading to the city receiving nearly $4 million in interest payments on investments, down $150,000 from the previous year.

Reprinted with permission from Ashland Chronicle.