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Council adopts FY 2025–26 budget; city to use reserves to address deferred maintenance and service priorities
Summary
The council adopted the fiscal year 2025–26 budget and appropriation limits, approving a general fund plan that uses reserves to cover a roughly $2.2 million operating gap while maintaining robust fund balances and continuing capital projects funded from other sources.
The City Council adopted the fiscal year 2025–26 budget on June 10, approving an overall spending plan that uses part of the city’s reserves to cover a projected general‑fund gap while preserving substantial fund balances.
City staff summarized the budget at the meeting and noted the proposed all‑funds budget includes approximately $148 million in total revenue and about $150 million in expenditures, with the general fund projected revenues near $56.4 million and proposed general‑fund expenditures roughly $58.6 million. Staff said the city plans to use reserves to cover an approximately $2.2 million general‑fund shortfall in order to address deferred maintenance, support parks and open‑space upkeep and sustain service levels.
City Manager Ben (surname not recorded in the spoken transcript) told the council the city’s unrestricted general‑fund balance is projected to remain healthy—about $34.9 million, or roughly 60% of operating expenditures—and total fund balance across restricted and unrestricted funds would be near $46.9 million (about 81% of operating expenditures). Staff said the landscape and lighting district subsidy totals about $3.8 million and contributes to the general‑fund pressure; the city also subsidizes recreation services by several million dollars per year to preserve programming.
The proposed capital improvement program totals about $12.2 million, funded mostly from restricted sources such as gas tax, RMRA, Measure I, water funds and grants; general‑fund capital is limited in the proposed plan due to the operating gap. Notable proposed work includes street and sidewalk repairs, park facility maintenance, backflow repairs and an emergency power project to allow City Hall and the police facility to be powered during outages.
Council members discussed the budget and acknowledged the city’s strong reserve position while noting long‑term pressures from rising costs, deferred maintenance and limited revenue growth. After discussion, the council adopted the budget by a 5‑0 vote; Council Member Cortez moved and Council Member Rogers seconded the motion.
Staff said the council will continue to monitor revenues and expenditures, pursue economic development to grow sales and property tax revenues, and report back with any midyear adjustments if needed.
