Mary Foster, Lima’s finance director, told City Council on Oct. 20 that through Aug. 31 the city’s general fund recorded $29.1 million in revenues versus a full-year budget of $41.4 million and $32.6 million in expenditures versus a $50.3 million budget, with $6 million of general fund reserves used so far this year.

Foster said she adjusted the budget to compare eight months of actuals to the full-year budget for a more realistic view and reported revenues were $1.5 million better than the prorated budget while expenditures were $900,000 better. She said $2.5 million in capital spending had been recorded through August.

The midyear review showed income tax remains the largest general-fund revenue source at about 55% of the total. Foster said historical income-tax collections were $24.1 million in 2024; through August 2025 the city had collected $16.1 million and, based on seasonal patterns, is on track to collect roughly $23.7 million this year — slightly short of the $24 million target.

Foster said salaries are the largest expenditure category (about 46% of operating costs) and that safety services (police and fire) accounted for roughly $18.3 million through Aug. 31, about 52% of current spending. She also noted the city is self‑insured for employee health care and projected those costs to be near $10.4 million for the year.

On cash balances, Foster said the general fund’s operating cash dropped from an all‑time high of $21.7 million at the end of 2024 (driven in part by ARPA dollars) to about $15.7 million as of Aug. 31. If revenues and expenditures remain at current levels, she estimated the city could see a roughly $9 million reduction in cash by year end, leaving a balance near $12 million.

Because of that outlook, Foster said the administration is pursuing a “strategic realignment” that includes a hiring freeze, overtime restrictions, a temporary capital hold, searches for new revenue sources and process-efficiency measures. She told council the hiring freeze was instituted on Sept. 6 and that certain positions identified as critical — an electrical inspector and a plans examiner — are being evaluated separately because contracting those services would cost more than hiring in-house. Safety-service hires will be reviewed case by case (for example, to address retirements), she said.

Foster described a recent banking change (a Huntington National Bank money‑market sweep recommendation) intended to increase interest on idle balances while complying with investment rules.

Council members pressed for clarification on the hiring freeze's start date and whether “operating cash” equals reserves; Foster confirmed Sept. 6 as the start and said operating cash and the reserve are the same for the general fund. Councilor Jordan asked which positions were exempt; Foster named an electrical inspector and a plans examiner and said safety services would be reviewed as needed.

Foster closed by urging continued attention to state and federal changes and to long‑range planning as the city adapts to the changed fiscal landscape.