Aldermen were encouraged by the 2024 city audit figures provided last week by Lumdsden and McCormick certified public accountants.
The short presentation by Jermey Smith, CPA, showed that last year’s revenue had increased over the previous year as a result of an increase in total property taxes and departmental income.
Real property taxes increased to $14,213,000 from $13,714,000 in 2023. Departmental income reached $10,748,000 compared to $9,918,000 in 2023.
Salaries continue to be the largest expense for the city at $15,262,000 compared to $14,949,000. That budget line will continue to increase since the city agreed to increase compensation for the police department in 2026.
“Next year is a whole different ball game,“ said John Craig, 1st Ward alderman who serves as the council’s finance committee chair. While the city came out $2 million ahead in 2024, expenses are increasing, especially for compensation.
City finance director Dan Cavallari did not respond to a request for comment on the audit.
Craig said that the increase in revenue came from billing for the city’s ambulance service, but that income was offset by staffing costs. Craig noted that the auditor wrote that the city needs a more detailed accounting of ambulance-related costs within the fire department to better understand the costs of that service.
“It’s not that the city has to make money on them, but if we’re losing money at the end of the day, that’s not good for the city,” he said. “I think most people want to have it, and I’m certainly for it.”
Regarding salaries, Craig said, “The ongoing negotiations with bargaining units is going to be a factor in the short and longer term. I certainly don’t want to say we have to trim, but it comes to a point where we say, What can we afford?”
Sources of state and federal revenue were down in 2024, from $7,720,000 to $6,696,000, which Craig said was the result of COVID-19 recovery monies being phased out.
“The budget for 2025 is going pretty well,” Craig said. “I think we’re trying to be fair and equitable about it.
A funding request from the Dale Association, and whether to continue youth and recreation services, along with supporting the current number of parks, are all financial impacts that the common council has to weigh, Craig said.
“There will be a certain percentage of the budget next year that will be set aside for contingency,” Craig said. “It’s usually 1%. If we get the annual $307,000 from the state, it will be set in reserves. It sounds to me from 2024’s audit that we do have extra revenue. The city does have a separate reserve fund of $9 million to $9.5 million. We don’t really touch it unless we need to.”
Margaret Lupo, 5th Ward alderman, said that 2024 numbers were positive and have left the city in a solid position going into this year. Lupo said she believes the city is in a better position than originally thought for financing the police salaries. Lupo said the council is currently working on its 2026 budget and will work on strategies to address the coming increases in compensation costs.