Paul, presenting the city’s financial report, told the Arlington City Council that the fund-balance charts show a decline driven by planned capital spending and airport match obligations. He listed recent expenditures: roughly $1 million on Smoky Point Park, about $1 million in facility upgrades, approximately $800,000 in transportation projects and roughly $400,000 as the city’s match for FAA airport grants.

Paul said the city earned just over $1 million in investment income this year but that sales-tax collections remain roughly flat and the city projects a shortfall this year and again next year. To address the gap, staff are deferring hiring and pulling back on some budget items across general-fund departments; Paul said larger cuts could be required if sales tax declines further.

Council and staff discussed whether those actions are “cuts” or “deferments.” Paul said current steps are primarily deferrals and that no planned filled positions are scheduled for elimination, but emphasized staff will continue monitoring revenues and may propose further adjustments as needed.

No formal budget adoption or new appropriations were made at this meeting; the report was informational and staff will return with follow-up as needed.