REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
PREPARED BY: Robert Torrez, Interim Chief Financial Officer
Subject:
title
Fiscal Year 2025-26 Proposed Budget Review
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Statement of Issue:
The City Charter requires the City Manager to submit the proposed budget to the City Council at least thirty days prior to the beginning of each fiscal year. After reviewing the proposed budget and making such revisions as it may deem advisable, the City Council shall hold a public hearing thereon at least fifteen days prior to the beginning of each fiscal year. The Proposed Budget for Fiscal Year 2025-26 is presented for City Council consideration.
Financial Impact:
A proactive Budget Balancing Plan was implemented as part of the Fiscal Year 2025-2026 Proposed Budget to address an anticipated budget deficit. The Budget Balancing Plan identified additional offsetting revenues and expenditure reductions that will be discussed. The FY 2025-2026 Proposed Budget is structurally balanced. The proposed Citywide expenditure budget for all funds is projected at $588.9M, subject to change prior to May 20. The General Fund proposed expenditure budget totals $297.5M. Expenditures for all funds and departments are offset by a combination of expenditure reductions, revenues, one-time transfers, and prudent use of reserves.
Recommended Action:
recommendation
A) City Council receive and discuss the Proposed Budget for Fiscal Year 2025-26; and
B) Set the date for adoption of the City budget as June 3, 2025. A meeting date of June 17, 2025, is set as an alternative should the City Council require additional deliberation to approve the budget.
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Alternative Action(s):
Do not approve and direct staff accordingly.
Analysis:
Adoption of the City Budget is the most important decision that the City Council is required to make each year. The City Budget establishes funding for every City program and service. It is the roadmap that guides the City for the upcoming fiscal year.
Staff is presenting an overview of the proposed Citywide budget. Since the General Fund provides for all traditional City services, such as public safety, public works, parks, recreation and other vital services, it will be the primary focus of staff’s presentation.
The City Council and the public have received updates on the City budget at various times during the current fiscal year. Staff have discussed with the City Council that, based on year-to-date and forecasted expenditures and revenues, a deficit of approximately $8.8M is anticipated for Fiscal Year 2025-26. The presentation will provide an overview of the strategies employed in developing a balanced budget for Fiscal Year 2025-26; discuss the significant impacts of the City’s Unfunded Accrued Liability with CalPERS; provide an update on the forecast of City revenues and expenditures over the next ten years; and, also discuss options for Council consideration in addressing future potential deficits.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable - Administrative Item