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Council adopts fiscal year 2025–26 budget; staff will pursue revenue options to close medium‑term gap
Summary
Council adopted the FY 2025–26 operating and capital budgets after staff described cost‑saving measures and a plan to use reserves to avoid deep service cuts; staff said it will continue to seek revenue enhancements and present quarterly updates.
The Vacaville City Council on June 24 adopted the city’s fiscal year 2025–26 budget after a multi‑session review that included proposed cost‑saving measures and a plan to use excess reserves to avoid immediate deep program cuts.
Finance Director Ken Mesmey walked council through the budget timeline and the three study sessions that preceded adoption. Mesmey said the proposed operating budget is “a little over $301,000,000” and a capital improvement program of roughly $50,000,000; staff told council the general fund proposal is about 0.5% higher than the current year. The proposal relies on one‑time reserve use and cost‑saving steps to keep service levels intact.
Key measures and projections
The proposed budget includes a citywide 2.5% departmental cost‑reduction target, a pause on most pilot and measure programs (with exceptions for neighborhood cleanup and youth scholarships), a reduction in capital transfers and no general CPI increases to service and supplies line items. Staff recommended freezing three positions and delaying hiring on 22 positions as part of cost‑control measures.
Mesmey and Assistant City Manager John Collette presented a five‑year forecast showing a projected general fund gap averaging about $9,000,000 per year in outside years if no structural changes are made; projected reserves are 29% at the end of the current fiscal year and about 23% at the end of FY 2025–26 under the adopted plan. Staff stressed these reserve levels are temporary cushions and that the city will need revenue options to address the medium‑term structural gap.
Council action and next steps
Council approved the budget by motion. Assistant City Manager said staff will continue to provide quarterly budget updates and will return with options for revenue enhancements, including potential fee adjustments and the feasibility of broader revenue measures in the future. Council members praised department staff for identifying savings and emphasized the need for a longer‑term plan to restore fiscal balance.
