City managers and finance staff told the Budget Committee that the proposed biennial general fund budget contains cuts to personnel and materials to meet contingency but leaves the fund balance thin and vulnerable to contract and cost pressures.

David (finance director) summarized that the biennial budget includes reductions of eight positions across departments and about $1.6 million in materials and services cuts. The committee heard staff concerns that the general fund’s ending balance will be much lower than in prior years and that contingency and reserves are being used to balance the biennium. Staff repeatedly emphasized that many personnel and operating costs—PERS, insurance and labor contracts—are rising significantly faster than the city’s revenue growth.

Committee members asked for clearer labeling in budget documents to show the portion of fund balance that is committed for cash‑flow (salaries and operations until property tax receipts arrive) versus discretionary reserves. The mayor and the city manager urged that a clear explanation be added to the budget message about which portion of the 20% policy reserve is reserved for ongoing cash flow and which is discretionary.

Councilors asked about service impacts from the eight position reductions. Staff answered that service impacts will vary by department: reduced hours at the library, longer code compliance response times, some delays in records processing and part‑time patrol officer hours shifted in the police department (estimated 15–20 hours weekly for some duties). The chief said some patrol duties may be covered by non‑sworn staff where state law allows; staff said the city can revisit service levels midterm if revenue or public safety trends require it.

Staff and councilors discussed options for addressing the structural gap — growing the tax base with new development, finding new revenue streams (fees, possible future TLT adjustments) or cutting programs and services. Committee members flagged deferred maintenance and employees’ workload as risks if the cuts persist, and they urged continued outreach if the council later considers a levy or other new revenue source.