If city finances are healthy, the city will complete the fiscal year with expenditures lower and revenues higher than anticipated, that is, with a surplus. Many government financial experts believe that a surplus, or reserve, makes good management sense. As excess city funds are identified, they generally are either used to fund supplementary appropriations to the current year’s budget, are used to fund extraordinary or emergency projects, or unplanned capital projects as they arise.
A far more serious situation exits when revenues are over-estimated and/or not budgeted expenses are incurred, so that a potential deficit situation exists. In such instances, immediate action has to be taken to curtail spending. There is little, if any, opportunity to pursue the alternative remedy, that is, to increase revenue yields, once the budget has been approved. To date, the General Fund has never incurred a year-end deficit from this type of situation. If you have any questions, please email the Department of Budget and Evaluation.