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10 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 P R OJ E C T I O N S F O R Y E A R - E N D A N D F U N D B A L A N C E Financial projections become more accurate as the year progresses because they are based on a growing amount of actual financial data and less on early estimates. Most property tax revenue is collected in the second quarter, and expenditure patterns and timing become clearer over time. With fewer unknowns remaining, forecasts can better reflect current trends, known commitments, and seasonal patterns. As of the end of the quarter, overall revenues and expenditures are tracking positively with the adopted budget. Based on year- to-date results and current trends, staff projects that total revenues will meet or exceed budgeted levels by the end of the fiscal year. Major revenue sources are performing as expected, with normal timing and seasonal variations reflected in quarterly activity. Expenditures are also progressing within anticipated ranges. While certain departments show higher spending percentages at this point in the year due to timing, contractual obligations, or seasonal factors, no material overruns are currently projected. Staff continues to closely monitor areas subject to cost pressures, including personnel-related expenses and externally driven costs. The projected year-end financial position remains stable, and no significant budget adjustments are expected at this time. Although it is still early in the fiscal year, net results are trending toward a potential positive result in the General Fund. Staff will continue to monitor revenue collections and expenditure trends throughout the remainder of the year and will present any recommended budget amendments if conditions change. F U N D B A L A N C E Cary remains in compliance with fund balance policy. Cary policy requires that a minimum of 33.33% of adopted budgeted operating expenditures be retained in fund balance. The required amount to meet the fund balance policy this year is $96.3 million. Staff estimates $106.4 million in fund balance at the end of FY 2025 and projects $124.8 million at year-end; this represents an $18.4 million increase. Adding these funds will help maintain and stabilize reserves to support future capital needs and cover unforeseen or one-time expenditures. Fund balance projections during the fiscal year are difficult to quantify by category because fund balance is formally calculated and classified at year-end as part of the audit process. As the year continues, these projections will be monitored, discussed with Council, and reflected in the recommended FY 2027 budget.

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