Mary Foster, Lima’s finance director, presented the city’s mid‑year financial report covering January through August 2025, telling council the city is generally on target but must realign after a reduction in cash balances following ARPA drawdowns.

Key figures Foster reported:
- General fund revenues through Aug. 31, 2025: $29,100,000 (compared with a full‑year budget of $41,400,000).
- Expenditures through Aug. 31, 2025: $32,600,000 (full-year budget $50,300,000).
- After adjusting budgets to an eight‑month basis, revenues were $1.5 million better than budget and expenditures $900,000 better than budget; $2.5 million in capital has been spent.
- The city has used approximately $6,000,000 of general fund reserves as of Aug. 31, 2025.
- Cash balance fell from a 2024 year‑end high of about $21.7 million (largely driven by one‑time ARPA funds) to roughly $15.7 million as of Aug. 31; if current trends continue Foster projected an ending cash balance near $12 million.

Foster described a strategic realignment to preserve fiscal strength, including a hiring freeze (in effect as of Sept. 6), overtime restrictions, a temporary capital hold, a focus on revenue generation and process efficiencies. She said certain positions would be exempted if necessary — she specifically named an electrical inspector and a plans examiner as roles the city is evaluating to fill because contracting for those services would cost more than in‑house staffing; safety‑service staffing (police/fire) would also be evaluated as retirements occur.

Enterprise funds
Foster reported enterprise fund snapshots through Aug. 31, 2025: the water fund’s revenues roughly cover expenses (cash balance about $4.2 million); the sewer fund was drawing on reserves (revenues $12.5 million; expenditures $13.2 million; cash balance about $2.4 million); refuse, stormwater and other enterprise funds were largely in balance.

Why it matters
Foster said the change from the post‑ARPA peak requires deliberate realignment. The hiring freeze and capital hold are immediate steps to preserve reserves while staff and council consider long‑term budget options.

What’s next
Council asked for hard copies and follow‑up details. Foster and staff will continue budget monitoring and return with refined projections and any necessary ordinance or appropriation requests.