City finance staff provided the Ways and Means Committee an overview of the proposed revenue forecast for the 2026 budget on Aug. 7, describing an overall conservative approach with a roughly 1% increase for the general fund and modest declines in capital and stormwater funds.

The forecast is important because it frames department budgets and identifies revenue assumptions that committee members and department heads must use in preparing spending plans for the coming year.

Staff said the 2026 working draft shows a 1% overall increase for the general fund and similar modest changes for other funds. Capital improvements were shown down about 1% and stormwater down about 2%. Finance staff noted that the city made an 8% increase to the general fund when preparing the 2025 budget and intentionally smoothed that between 2025 and 2026 to keep 2026 manageable.

Committee members asked about specific line items. On cable-receivers litigation money, staff said a past lawsuit and settlement have produced intermittent receipts that the city expects to continue; staff described the receipts as "trickling in" quarterly or semiannually. On permit revenue, planning staff said permit fees were adjusted in 2023 to align with comparator cities and that application counts have decreased, so they do not recommend further fee increases now.

Finance staff explained interest-income budgeting: the working budget used a conservative $200,000 assumption for interest income even though recent receipts exceeded that level in the prior year. Staff said the city reduced investable balances by about $2 million to acquire the public works facility, which lowers investment income forecasts until FEMA/CEMA reimbursements replenish those funds.

For capital and other specialized revenues, staff noted the city expects closing proceeds from a TDD and that those funds are restricted to infrastructure uses. For stormwater, staff presented new information from the regional utility showing estimated OMCI and Prop S receipts of roughly $139,000 and $100,000 respectively; finance staff said they placed $239,000 in stormwater revenue and will reflect related expenditures when projects are selected.

Committee members asked clarifying questions across multiple line items; finance staff and department heads said they will continue refining the working document and provide updated figures as additional receipts and reimbursements are confirmed.