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City manager presents FY2025‑26 budget showing $1.3 million operating gap; council to workshop cuts
Summary
City manager Dr. Caldera presented a preliminary FY2025‑26 budget with a $1.3 million operating deficit, lower property valuations driven by multifamily decreases, rising personnel costs, and a risk from lower red‑light camera revenue; staff scheduled follow‑up workshops and hearings.
City Manager Dr. Mary Caldera presented the city’s preliminary fiscal‑year 2025‑26 budget on June 3, showing an estimated $1.3 million operating deficit and asking the council to guide cuts and priorities before final adoption.
Caldera said the city’s combined capital reserve is about $4.1 million and the emergency fund about $1.2 million, for roughly $5.4 million in reserves — or 4.1 months of operating income. "Your operating deficit is sitting at 1.3 mil," Caldera told the council, adding that the preliminary operating revenues are roughly $14 million and that numbers remain subject to final county valuation data.
Caldera highlighted a $46 million drop in total property valuations driven largely by multifamily evaluations falling about $31 million; she said the average single‑family house value rose about $6,000 but the total valuation change reduced ad valorem revenue by roughly $167,000 at the current 48‑cent tax rate. She said staff is using the existing 0.48 tax rate for planning because the official no‑new‑revenue rate and final valuations were not yet available.
Personnel costs are another pressure point: Caldera said health‑insurance costs were projected at a 15% increase for planning, and that TMRS employer rates slightly increased. She said the proposed budget includes cuts already identified and that additional adjustments will be presented during follow‑up meetings.
Caldera flagged a specific revenue risk from red‑light camera citations after recent media reports and legislative attention. The city’s red‑light camera fund, she said, could see a significant revenue shortfall this year; that fund’s reserve could drop from roughly $316,936 toward $141,000 under current projections if collections do not recover. "A couple of reports came out not to pay your red light camera tickets… you're not being paid anymore," she said in explaining the revenue decline.
Council members asked about proceeds from the recent sale of surplus property. Caldera confirmed the city received about $1.1 million; approximately $784,000 is designated in an account for public‑improvement obligations related to the sale and is not available for general use. She also outlined capital priorities and timing for large items such as an ambulance and future radio replacements and said staff will recommend how to target reserve dollars and capital timing.
Caldera said staff will hold a budget workshop on June 19 to dig into cuts and scheduled public hearings and a possible tax‑rate adoption around August 19, subject to the county’s certified valuations. She urged council members to identify priorities and said staff will return with proposed reductions for council consideration.
