Preliminary year-end figures outperform budget projections as city closes books on FY2026
Capital spending drives fund balance decline, with millions reimbursed through dedicated taxes and grant
MANDEVILLE — The City of Mandeville ended its 2026 fiscal year with sales tax collections up $1.24 million from the previous year and slightly above its adjusted budget, while preliminary figures show the city spent more than $17 million on capital projects and assets during the year.
Finance Director Jessica Farno presented the preliminary year-end financial report to the City Council Thursday night, cautioning that the figures could change as the city completes its year-end closing process and makes audit adjustments.
Sales and use tax collections totaled $23.05 million for the fiscal year ending Aug. 31, while property tax collections totaled $2.25 million, about $72,000 above budget.
Across the city’s governmental funds, revenues totaled $34.13 million and operating expenditures were $25.19 million. The city also recorded $17.2 million in capital outlay during the year.
Governmental fund balances declined by $8.26 million, less than the $9.82 million decrease projected in the city’s revised budget. Farno emphasized that the decline came during a year in which the city spent heavily on capital projects and other assets.
The General Fund showed a preliminary decrease of $1.32 million, including $9.62 million in capital spending. Farno said roughly $5 million of that spending was reimbursed through the city’s special sales tax funds, with additional reimbursements coming from grants.
Farno told the council the preliminary General Fund result could improve considerably as the city finishes reconciling grant revenue associated with projects completed during the fiscal year.
“This number I would expect to change a little bit, probably get closer to a net even, possibly even a net increase,” Farno said.
She explained that expenses generally are recorded as invoices arrive, while some grant revenues associated with capital projects cannot be recognized until the city completes its reconciliation process.
Water and sewer remain in the red
The water and sewer system remained in the red, but its preliminary $1.62 million loss was about $380,000 less than what the city had budgeted.
The enterprise fund generated $4.56 million in revenue and recorded $6.17 million in operating expenses, including depreciation, resulting in a preliminary loss of $1.62 million. The city’s budget had anticipated a loss of approximately $2 million even after the utility rate changes implemented during the year.
Water revenue came in slightly above budget, while sewer revenue remained below budget.
District I Councilwoman Cynthia Strong-Thompson questioned why the system remained substantially in the red despite what she calculated as approximately a 23% year-over-year increase in water collections.
Farno said the problem appeared to be primarily on the sewer side.
“I think it’s almost all tied to sewer income not being where it needs to be,” Farno said.
Mayor Clay Madden said the city is moving forward with a second review of its water and sewer rates after accumulating a full year of operating data under the current rate structure.
The council authorized the review earlier this year following complaints from some residents about utility bills.
Madden said the city’s original rate study was funded by the state and conducted by Manchac Consulting Group. He said other Louisiana municipalities and parish governments that underwent similar studies also are seeking a second review after operating under their new rates.
“We’ve been through a year. We wanna get a second set of eyes to come in and reevaluate and make sure that we did things correctly,” Madden said.
Council weighs short-term rental limit
The council also approved the city’s 19th whole-house short-term rental permit Thursday while postponing action on an application that would fill the 20th and final slot currently authorized by the city.
Ordinance 26-35, allowing a whole-house rental at 538 Girod St., received unanimous approval.
The application prompted council members to discuss whether the city should stop at its current limit of 20 permits rather than increasing the cap again.
District II Councilman Kevin Vogeltanz, who previously opposed increasing the limit from 10 to 20, said he would be reluctant to authorize additional permits after the remaining slot is filled.
“When we fill out these 20, I’m gonna be hard-pressed to approve any more,” Vogeltanz said.
District III Councilwoman Jill Lane expressed a similar view.
“Let’s cap it at 20,” Lane said, while noting that she has not received complaints about existing short-term rentals.
Planning Director Cara Bartholomew recommended allowing the existing program to operate for a period before the council considers another increase. She said the city waited approximately two years before increasing the original limit and has experienced few problems with the permitted rentals.
Councilman-at-Large Scott Discon defended the rentals as a source of customers for Old Mandeville businesses, particularly because the city does not have a hotel.
20th permit postponed
The council then considered Ordinance 26-36, which would authorize a whole-house short-term rental at 1939 Lakeshore Drive and fill the city’s 20th available permit.
Planning and Zoning recommended approval, and Bartholomew said the city received no opposition from neighboring property owners.
Council members, however, began questioning where the property owners would live after converting the house to a short-term rental and who would be responsible for managing it.
After reviewing the application during the meeting, Bartholomew read a statement indicating that the owners would not reside locally and intended to hire a professional short-term rental management service. The application did not yet identify the management company or local contact.
Vogeltanz said he wanted the applicants to appear before the council before a decision was made.
“They’re not here. They haven’t listed a management company. They haven’t listed emergency contacts,” Vogeltanz said. “I would like to give them the opportunity to appear.”
The council unanimously postponed the application until its Oct. 8 meeting and requested that the applicants attend and provide information identifying who would oversee the property.
The city therefore remains at 19 approved whole-house short-term rental permits.
Councilman-at-Large Jason Zuckerman was absent from Thursday’s meeting.
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