TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
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First Budget Study Session for the Fiscal Year 2025-26 General Fund Budget.
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2. SUMMARY
This budget study session is intended to provide an analysis and assumptions of the proposed budget for the General Fund revenue and expenditure for Fiscal Year 2025-26.
3. RECOMMENDED ACTION
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Provide direction to staff to prepare the Fiscal Year 2025-26 Preliminary General Fund Budget.
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4. FISCAL IMPACT
Fiscal impact will be determined with final budget adoption.
5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability
6. DISCUSSION AND BACKGROUND
Fiscal Year 2025-26 (FY 26) continues to be a challenging year to present a structurally balanced budget for the General Fund. The two largest revenue sources, Property Tax and Sales Tax, for the City are projected to remain flat in FY 26. Inflation is expected to continue to increase, impacting the cost of the City's contracts and material purchases. The City, once again, will need to implement several budget balancing measures totaling $13 million, to balance the budget. The following measures are included in the proposed FY 26 budget, and are intended to limit the service impacts to the residents and community:
* leveraging one-time revenues,
* temporarily freezing and partially funding vacant positions,
* reducing funding for special events,
* deferring replacements and repairs,
* partially funding overtime,
* partially funding the City's Accrued Liability contributions,
* deferring contributions to the General Liability Fund and Workers' Compensation Fund, and
* use the estimated undesignated fund balance from FY 25.
Below are the details of the FY 26 General Fund proposed budget.
General Fund Revenues for FY 26
Based on current trends and analysis, the General Fund revenues are projected to remain flat ...
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