Council staff outline FY26 budget framework, propose keeping public-improvement sales-tax share in general fund

City finance staff presented the draft Fiscal Year 2026 budget and revenue forecasts at a July 19 budget work session, proposing not to continue a recent practice of diverting 2% of general‑fund sales tax to the public‑improvement fund and instead keep that share at 1% within the general fund. Finance Director Matthew Lu said staff will monitor the public‑improvement fund balance and return unused funds to capital projects if community priorities require it.

Why this matters: The proposed treatment of sales‑tax revenue affects the size of the general fund available for operations and the public‑improvement fund available for capital projects. Staff framed the recommendation with multi‑year revenue assumptions — including population and development fee trends — that shape the city’s ability to pay for projects now…