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Staff says departmental savings will cover $538,118 shortfall in adopted FY2026 budget
Summary
City staff told council at a work session that a $538,118 reduction in planned non-departmental savings will be offset by anticipated year-end departmental savings and possible revenue adjustments; staff recommended returning after fiscal year end with detailed savings breakdown.
City finance staff briefed Lynchburg City Council on Aug. 26 about how the adopted fiscal year 2026 budget will absorb restorations to services the council approved at a prior meeting. Staff said the adopted ordinance reflects a $538,118 reduction in planned budget savings in a non-departmental line item; those reductions were made to restore programs and services the council directed earlier in the budget process.
"In your final ordinance that came to you, there was a line item for that $538,118 reduction, in non departmental," staff said during the briefing. Finance staff explained the city budgets for annual "managed vacancy" savings and historically sees unspent funds across departments that can be used for one-time capital maintenance projects or to offset midyear restorations. Staff proposed using those anticipated departmental savings to cover the $538,118 shortfall and to return to council at the end of FY2026 with an itemized report showing where savings were realized.
Council members pressed staff on whether to instead amend revenue estimates now, noting June receipts that were stronger than earlier projections. One council member noted higher-than-projected sales and use tax receipts and suggested increasing revenue projections to reflect the surplus; staff said they received June numbers only recently and preferred to rely on anticipated departmental savings rather than revise ongoing revenue projections until July/August results are finalized. Staff also noted that other revenue categories (meals and hotel taxes) have trended below budget and previously were adjusted downward in the FY2026 forecast.
Staff said some program fees (for parks and recreation facilities such as the Templeton Center and Jackson Heights classes) are recorded in fee budgets rather than the general fund, which is why certain program revenues appear as "0" on the general-fund summary. The briefing closed with staff offering to return to council after fiscal year end with a reconciliation of where the anticipated savings occurred.
No formal action was taken at the Aug. 26 work session on the FY2026 budget; councilmembers discussed options including amending revenue projections or relying on department savings to balance the adopted ordinance.
