Oswego Committee of the Whole Meeting – February 4, 2025

The Oswego Village Board met as a Committee of the Whole on February 4, 2025, at 6:00 PM to receive an unaudited financial update for the transition year ending December 31, 2024. The meeting focused on a general fund surplus of approximately $3.9 million and staff's recommendation to transfer it to the capital improvement fund. No public comments were made, and no closed session was held.

Discussion Items

• Transition Year 2024 Year End Financial Update (Unaudited) – Presented by Finance Director Andrea. The general fund reported a surplus of just under $3.9 million, compared to a budgeted surplus of $65,000. Revenues totaled $20.3 million (112% of the $18.2 million budget), while expenditures were $16.3 million (90% of the $18.1 million budget). A key factor was the early payoff of the series 2013 bonds, eliminating a $1.18 million debt service transfer. Other savings included $250,000 in road maintenance (snow removal), $115,000 in engineering wages due to vacancies, $70,000 in outsourced building inspections not needed, and a housing study covered by a grant. Investment income reached $1 million, or 487% of the conservatively budgeted amount, due to high CD and interest rates. Sales tax (the largest general fund revenue source) totaled $8 million (105% of budget), of which $5.95 million was state sales tax and $2.08 million home rule sales tax. Food and beverage tax was $1 million (109% of budget). Police expenditures were 104% of budget due to a one-time $387,000 transfer of earned sick time to a Section 115 trust; excluding that, police spending was 99%.
• Water and Sewer Operating Fund – Revenues of $6.8 million and expenditures of $6.4 million produced a $423,000 surplus, compared to a budgeted deficit of $1.1 million. Revenue exceeded budget by $800,000 (114%) largely due to higher water volume; expenditures were 90% of budget. Interest income of $244,000 was significantly above budget. Staff noted a shift toward budgeting only for known routine maintenance and setting aside reserves for unexpected repairs.
• Capital Improvement Fund – A surplus of $128,000 was reported, with expenditures $1.9 million under budget (a timing issue, mainly related to Wolf's Crossing). Investment income of $224,000 was 450% of budget.
• Water and Sewer Capital Fund – Real estate transfer tax revenue of $743,000 reached 212% of the $350,000 budget, the highest in an eight-month period. Investment income of $188,000 was 377% of budget.
• Investment and Fund Balance Discussion – Trustees inquired about investment liquidity (most in 12-month CDs, one 10-year bond of $1.5 million), the impact of the upcoming loss of the state grocery tax (effective January 1, 2026), and whether the surplus could be used to offset that loss. Staff explained that all surplus cash is already invested and that moving the general fund surplus to the capital fund is a best practice to protect the village's bond rating. The board discussed that the early debt payoff smoothed the impact of the grocery tax loss and that the 2025 budget already accounts for a $1 million surplus transfer to capital, which will not be possible in 2026.

Key Outcomes

• Consensus to Transfer General Fund Surplus – The board reached consensus to transfer the general fund surplus (approximately $3.9 million) to the capital improvement fund, consistent with the prior year's action. Specific capital projects (e.g., public works facility, Wolf's Crossing) will be considered during the 2026 budget process. A formal budget amendment will be brought back when final audited figures are available.
• No Other Actions – No closed session was held. The meeting adjourned after approximately 30 minutes, with the regular board meeting scheduled for 7:00 PM.