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4 Q2 F I N A N C I A L H I G H L I G H T S FY 2026 C A RY, N O RT H C A R O L I N A F Y 2 0 26 2 N D Q U A R T E R R E P O R T E X E C U T I V E S U M M A RY This financial snapshot provides an overview of Cary's financial operations for the second quarter of FY 2026 and reflects activity through Dec. 31, 2025, or 50% of the fiscal year. The report summarizes revenues and expenditures for Cary's two major funds, the General Fund and the Utility Fund, and compares current year-to-date results with those from the same period in the previous year. This report includes an updated section projecting year-end results based on year-to-date balances as of Dec. 31. This section is intended to provide additional insight into financial performance to enhance transparency and ensure alignment across organizational activities when evaluating overall results. During the second quarter, Cary continued working through the closeout of FY 2025. The audit of Cary's financial statements is not yet complete. However, preliminary results indicate that staff's strategic monitoring of expenses and closure of capital projects during the latter part of the year contributed to positive year-end outcomes despite ongoing inflationary challenges. The audit has been delayed due to guidance and approval timelines from the Local Government Commission following the federal government shutdown earlier this year. The shutdown limited the availability of federal resources needed for auditors to obtain guidance required to complete federal compliance procedures, a necessary component of the audit. As a result, certain compliance sections of the annual audit were delayed, extending the audit timeline overall. The updated deadline published by the Local Government Commission is Feb. 12. Staff is confident the completed financial statements will confirm that Cary remains in excellent financial health. Although the departure of Cary's prior town manager drew significant media attention, normal operations continued, and net financial trends remained positive at the end of the second quarter of FY 2026. Property tax and sales tax revenues contributed to favorable revenue variances, while expenditures declined year over year due to continued monitoring, lower capital spending, and changes in personnel costs resulting from vacancies. Based on these results, year-end projections remain favorable and aligned with the current year's budget expectations as of the second quarter. Additionally, Cary continues financial planning and budget development for FY 2027. By evaluating both historical and current financial performance, the Town is well-positioned to develop a sustainable budget that supports long-term goals and priorities.

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