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Roseville projects balanced FY26 budget but flags pension, sales‑tax trends in five‑year forecast
Summary
Finance staff presented a proposed FY2025–26 citywide budget with $827 million in total expenditures, highlighted a flattening sales‑tax outlook, projected pension costs, and a five‑year forecast showing potential budget pressures beginning FY27 without adjustments.
Roseville’s finance team presented the citywide proposed budget and five‑year forecast at the May 28 budget workshop, asking the City Council to consider a $827 million total expenditure plan for fiscal year 2025–26 and noting the use of approximately $17 million in fund balances to align spending with revenues.
Nancy Roethlisberger, the city’s budget manager, said total citywide revenues are estimated at about $810 million, with enterprise funds making up roughly 56% and the general fund approximately 28%. The general fund operating revenues are budgeted at about $243 million for FY26, led by Bradley‑Burns sales and use tax, measure B local sales tax and property tax. The city is budgeting $70.9 million for Bradley‑Burns sales tax and $29.5 million for measure B; property tax is projected to grow about 5% to roughly $80.5 million.
Finance Director Scott Pettengill explained the general fund discretionary calculation used in planning: after removing revenues that are dedicated to specific services (about $52 million) and nondiscretionary obligations (about $26 million), the city projects roughly $165 million in discretionary resources for ongoing operations and one‑time uses. Pettengill said the forecast assumes 8–10 new positions per year in later forecast years unless revenue growth slows.
Staff highlighted two pension tools the council has adopted or uses: transfers from a pension reserve trust and the possibility of future additional discretionary payments to CalPERS. For FY26, the budget uses $800,000 from the pension trust to offset an anticipated $3 million increase in general fund pension costs. Pettengill said the most recent actuarial shows a funded ratio around 65% and an unfunded liability of roughly $506 million; the projected annual pension cost for FY26 is about $66 million.
The five‑year forecast uses three revenue scenarios (base, optimistic, conservative). Under the most likely scenario staff presented, expenditures are expected to outpace revenues beginning in FY27 absent adjustments; the difference between the most favorable and least favorable revenue paths is about $31 million by the end of the forecast period. Staff recommended preserving reserves, updating fees and charges, and evaluating pension trust and CalPERS discretionary payments when one‑time funds are available. The council did not take final action at the workshop and will consider adoption at a June 18 meeting.
