Summary
The Second Quarter FY07 QCMR reports a projected fund balance of $171.7 million, a decline from previous projections due to rising costs in pensions, healthcare, and debt service. Revenue growth has been strong, particularly in Wage, Business Privilege, and Real Estate Transfer Taxes, but expenditure increases are outpacing these gains. Federal human services reimbursements have continued to decline, requiring the City to adjust its budget accordingly. Staffing levels are increasing, and overtime costs remain high, particularly in the Fire and Police Departments. The report also notes that the City’s dependence on a small number of volatile revenue sources poses a long-term challenge. While revenues are currently strong, expenditure growth threatens future financial stability.