REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
PREPARED BY: Zack Zithisakthanakul, Acting Chief Financial Officer
Subject:
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Fiscal Year 2025/26 Mid-Year Budget Adjustments & 2nd Quarter Forecast
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Statement of Issue:
The Finance Department has prepared a mid-year budget review for the fiscal year that began on July 1, 2025. In interfacing with operating departments, budgetary requests have been assessed across all City departments, and certain adjustments are being recommended based on available resources in respective funds. The proposed adjustments of $1,470,993 across multiple funds address operational needs, infrastructure requirements, and grant-supported programs while maintaining fiscal stability and uninterrupted service delivery.
Financial Impact:
Fiscal Year 2025/26 Mid-Year Adjustments
Approval of the proposed mid-year adjustments will appropriate a total of $1,470,993 across multiple funds. The Infrastructure Fund adjustments totaling $530,000 will be funded through available Infrastructure Fund fund balance. These requests address needs that were not originally programmed as part of the adopted Fiscal Year 2025/26 Budget. These requests are one-time in nature and do not create ongoing structural commitments beyond the current fiscal year.
The $499,000 in Grant Fund appropriations are fully supported by external grant revenues and therefore do not impact City fund balance. The $441,993 in Special Revenue Fund adjustments are funded by restricted revenues designated for their intended purposes.
Recommended Action:
recommendation
Approve mid-year budget adjustments to the Fiscal Year 2025/26 Revised Budget in the funds and by the amounts contained in Attachment 1.
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Alternative Action(s):
Do not approve the recommended action(s) and direct staff accordingly.
Analysis:
The purpose of this item is to present the City’s mid-year budget request and provide an updated financial outlook based on second quarter actual performance. Mid-year adjustments are a routine part of municipal budgeting and allow the City to address operational needs and infrastructure priorities that arise after adoption of the annual budget. The total mid-year adjustments requested for Fiscal Year 2025/26 amount to $1,470,993. Of this amount, $530,000 is attributed to the Infrastructure Fund, $499,000 to grant funds, and $441,993 to various special revenue funds. No General Fund appropriation increase is requested as part of this action.
The Infrastructure Fund requests total $530,000 and address infrastructure-related needs identified during the current fiscal year. These items are necessary to preserve City facilities and public assets and to prevent further deterioration or cost escalation. While these needs were not originally programmed in the adopted budget, they are operationally necessary to maintain safe and functional public facilities and infrastructure systems.
The Grant Fund request of $499,000 reflects program expenditures associated with externally funded initiatives. These funds allow the City to implement specific programs and services in accordance with grant requirements and timelines. Acceptance and appropriation of these funds ensures compliance with grant conditions and allows the City to maximize available external resources.
The Special Revenue Fund adjustments totaling $441,993 relate to program-specific activities supported by restricted funding sources. These appropriations enable departments to carry out legally or programmatically restricted activities consistent with the purpose of each respective fund.
In conjunction with these requests, staff has prepared the Fiscal Year 2025/26 Second Quarter General Fund forecast. The forecast incorporates year-to-date financial performance and updated projections for the remainder of the fiscal year. Revenues are performing favorably relative to initial assumptions, and expenditures continue to be managed carefully across departments. The updated forecast demonstrates that the City remains in a stable financial position while addressing the needs presented in this mid-year adjustment.
Environmental Status:
Not applicable
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Fiscal Year 2025/26 Recommended Mid-Year Adjustments
2. Fiscal Year 2025/26 Mid-Year Budget Adjustments Presentation