City budget staff told the Aurora council on April 12 that updated economic forecasts and sales‑tax trends leave the city with near‑term pressure on the general fund and capital projects fund, and that staff will present a combination of expenditure reductions and revenue options during budget development.

Lead figures
- Staff said an updated revenue projection (prepared by the Leeds School of Business) and early‑year collections point to an additional shortfall of about $13.4 million in 2026 beyond the $11.5 million already reflected in the current budget plan, producing a headline total of approximately $25 million to address across the five‑year forecast.
- Staff noted sales tax volatility and a roughly $1.6 million shortfall in sales tax receipts through the first months reported; building‑related taxes and capital‑related use taxes also appeared weak.

Options discussed
- Cuts and delays: staff listed top‑down (citywide) and bottom‑up (department) reductions, pausing or delaying capital carry‑forwards, delaying new projects and revisiting nonessential capital set‑asides.
- Fees and new revenue: staff said they will evaluate new fees and cost recovery, including shifting eligible costs into other funds (for example, increasing recovery through the 9‑1‑1 fund and other utility or program fees). Fees can be adopted administratively or by council without a public vote; tax increases require voter approval and likely would not balance the 2026 budget in time.
- Use of reserves: staff noted the city’s recession set‑aside (about $25 million) and operating reserves. They said staff do not plan to rely wholly on reserves but expect to develop a multi‑year plan that blends one‑time use of reserves with structural reductions or revenue changes.

Economic context and assumptions
- Staff reviewed indicators used by the Leeds School of Business, including slower national employment growth, lower household savings compared with earlier post‑COVID years and an overall “softening” in consumer demand. Leeds provided baseline, optimistic and pessimistic scenarios; staff said they used a conservative baseline with modest adjustments in the near term.

Timing and next steps
- Staff said council and executive leaders will pursue both top‑down and bottom‑up measures over the next months, present options in budget briefings and work to balance the 2026 proposed budget. Staff emphasized the need for a multi‑year approach rather than one‑time fixes.

Speakers
- Greg Hayes, budget director (presentation start ~s:6539)

Clarifying details
- Additional general fund shortfall cited in presentation: roughly $13,400,000 in 2026 on top of an existing $11,500,000 gap cited in the budget (combined ≈ $25M).
- Recession set‑aside: staff said the city has approximately $25,000,000 in the recession reserve available for one‑time use.

Topics
- primary: municipal-budget
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Discussion vs. decision
- Discussion points: revenue forecast updates, sales tax volatility, fee and tax policy options, reserve usage and capital program reprioritization.
- Direction: staff to return with specific package(s) of expenditure reductions and revenue options during the coming budget process; council indicated interest in a mix of approaches and asked for analysis of fee impacts and capital pause options.

Searchable_tags:["budget","general-fund","sales-tax","reserves"]