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Lake Forest adopts two-year operating budget and financial plan; council backs capital and reserve targets
Summary
The City Council adopted a two-year operating budget, master financial plan and capital improvement program on a 4-1 vote. Staff presented a risk-based reserve strategy and a multi-year forecast; one resident urged spending cuts and questioned certain line items.
The Lake Forest City Council voted 4-1 on June 3 to adopt the 2025-27 operating budget, master financial plan and related documents, authorizing spending for the first year only and updating the city's strategic business plan.
Director of Finance and City Treasurer Kevin Shireh presented the two-year budget and an updated reserve and risk analysis. He said the city uses a risk-based reserve approach rather than a fixed percentage; recommended target reserves are $80,000,000 with a minimum reserve level of $76,000,000. The plan includes $38.6 million in capital improvement projects over two years across parks, streets, facilities, environmental and traffic projects, supported by a mix of restricted and discretionary funds.
Citywide figures presented in the public slides showed an expected-revenue scenario. For fiscal year 2026 Shireh reported estimated general fund revenue of approximately $69.1 million and cost estimates of about $64.3 million; forecast tables included a longer-term outlook to 2032 under alternative scenarios.
A resident, Andrew O'Connor, questioned the forecast and spending levels during public comment, arguing the city's expenses are growing faster than revenues and citing several budget line items he said merited public scrutiny. Shireh and staff provided the budget documents for council review; councilmembers who supported adoption said the budget is structurally balanced for ongoing operations and preserves reserves.
Councilmember Benjamin Miao Yu moved adoption; the motion carried on a 4-1 roll call with Councilmember Tetimer dissenting. The adopted documents include the capital improvement plan, reserve risk analysis and updated financial and budget policy. The city manager told the council that the operating budget was balanced and that general fund surpluses in the plan would support capital investments.
The council's approval authorizes year-one spending and finalizes strategic priorities reflected in the plan; staff will implement the projects and report back through the regular budget and capital monitoring processes.
