City manager unveils $735 million proposed FY26 budget; staff urge cautious posture amid economic uncertainty

City Manager Joel presented the proposed fiscal year 2026 budget — a $735 million fiscal plan that includes approximately $196 million in general fund appropriations — and described a conservative approach focused on maintaining essential services while advancing capital projects and workforce priorities.

Key budget elements presented by the manager and interim CFO Scott Sanden included:

- Total gross appropriations: approximately $735,000,000 (includes intra‑fund transfers and internal service charges). General fund appropriation: about $196,000,000. - Proposed staffing: 22 new permanent positions across funds (10 in the general fund, roughly $1.0 million incremental cost for FY26), and 12 positions for enterprise or other funds. City management recommended adding four grant‑funded positions to the final adopted budget (those grants expire in late FY25) at an estimated additional cost of about $507,000 if the commission chooses to continue them. - Capital policy: the budget restores the capital set‑aside to 5% in FY26, an increase staff said they have phased in over recent years. - Revenues: staff projected income tax base growth of 3.5% in FY26 (6% in the current year FY25) and modeled compliance revenue falling from a higher recent level toward a long‑run normal of $7–8 million; staff said income tax is the city’s most volatile revenue source and urged caution. - Fiscal risks: staff emphasized uncertainty from federal action (tariffs and federal grant availability), market turmoil affecting municipal bond issuance and higher borrowing costs, and the possibility of an economic slowdown. Treasurers and advisors recommended maintaining liquidity and budget stabilization reserves and cautioned about additional large debt issuance in the near term.

The manager highlighted programmatic investments: workforce pipeline initiatives, technology and permitting upgrades, expanded neighborhood cleanup and corridor‑clean programs, continued funding for parks and housing-related programs, and targeted public‑safety staffing and training. Staff also proposed a modest set of communications and constituent‑service enhancements and a six‑month pilot for additional 3‑1‑1 staffing to assist customers.

Commissioners asked clarifying questions about modeling assumptions (income tax, property tax values, population growth), potential budget amendments and options for prioritizing positions; staff offered additional data and pledged to answer follow‑up questions in upcoming budget work sessions and to publish the resident guide and budget books for public review. The commission set a public hearing for May 13 and scheduled budget work sessions leading to final adoption in May.

Ending: The budget presentation generated detailed discussion and follow‑up requests; staff will provide additional modeling and answers in upcoming sessions and the public hearing process will continue.