Berkley City Council members and city staff on April 28 reviewed the proposed fiscal year 2025–26 general fund budget and recommended keeping the general fund target near current levels while directing recurring surpluses to a new public improvement fund to pay for capital needs.

City Manager Crystal and Finance Director Carl presented an overview that emphasized legal and structural limits on local property-tax growth under Proposal A and the Headley override mechanism; staff said those limits mean taxable value on which millage is levied grows only by the lesser of 5% or inflation in most years, constraining revenue upside even when market assessed values rise.

The presentation said the city expects to end the current year with a roughly $4.5 million fund balance and recommended keeping the fund balance at about 28 percent of annual expenditures (the council’s policy target range is 20–40 percent). Instead of adding year-end surpluses to the general fund, staff recommended setting aside $250,000 annually in a public improvement fund beginning FY2025–26; staff also said they would move approximately $315,000 from this fiscal year into the new fund to start it.

Staff noted projected revenue increases for 2025–26, including an estimated $377,000 in higher property-tax receipts and about $150,000 in additional state marijuana revenue-sharing receipts, but said those gains would not cover some rising costs, including union-negotiated wage increases, higher health-care costs, and inflation-driven capital project price increases. The biggest single current-year variance staff identified was a roughly $1.4 million HVAC capital project that increased year-to-date expenditures and will be reflected in an upcoming amendment.

Council members and staff emphasized the budget before them is primarily the general-fund year and is part of a three-year planning document; the state allows only a one‑year formal adoption, with proposed years two and three shown for planning purposes. Councilmembers directed staff to bring detailed CIP items and other funds for review on the second night of the work session.