Title
Budget Workshop for Fiscal Years 2025-26 and 2026-27 to Provide Direction that Will Be Incorporated into Budget Adoption Hearing Materials for City Council Consideration in June 2025. (Finance 10024056)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City Manager is proposing a General Fund Budget of $152,310,465 in Fiscal Year (FY) 2025-26, and $152,966,825 in FY 2026-27. The Proposed General Fund Biennial Budget recommends the use of Residual Fund Balance of $6.5 million in FY 2025-26, and $2.9 million in FY 2026-27 for both one-time and ongoing expenses. For ongoing expenses, less than 3% of the General Fund is drawn from the Residual Fund Balance due to current economic conditions. The expectation is to utilize the next two years to monitor the economy and consider potential strategies to increase revenues and to develop a contingency plan in case additional cost-saving measures are required. The total proposed budget for all funds is $335,141,690 in FY 2025-26 and $337,288,291 in FY 2026-27.
Overall, the Proposed General Fund Biennial Budget is using 2.88% of total General Fund expenditures from fund balance for FY 2025-26 and 2.78% for FY 2026-27 to cover ongoing operating costs due to the current economic climate. Operating expenses in the Proposed Budget exceed revenues by $4.2 million in FY 2025-26 and by $4.1 million for FY 2026-27. General Fund one-time costs, covering primarily the Capital Improvement Program (CIP) budget, are $7,861,335 in FY 2025-26 and are $4,188,335 in FY 2026-27. The proposed budget also incorporates key values to retain existing employees by bringing them to a market rate salary as well as offering a cost-of-living adjustment and other benefits. Staff is proposing an operating budget to maintain current service levels while working within the constraints of a tight economic reality.
The City Manager and staff anticipate evaluating the two-year bienn...
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