Carmel staff presents FY 2025–26 recommended budget; council to workshop on May 21

City staff delivered an overview of the recommended fiscal-year 2025–26 budget and scheduled a detailed council workshop for May 21 to gather questions from council and the public.

Jamie (Finance) told the council the recommended budget shows $34,700,000 in revenues and $39,700,000 in total expenditures, a gap of about $5 million funded from fund balance if all projects proceed as planned. “The total recommended expenditures is 39,700,000.0,” Jamie said. He described the three largest revenue sources as property taxes ($9.2 million), sales taxes ($10.1 million) and transient-occupancy taxes ($9.1 million) and noted those three account for roughly 83% of anticipated revenues.

Staff said the proposed budget includes a smaller capital-works list ($7.8 million of new projects versus $12.2 million last year) but also expects to carry forward about $23.8 million in work underway. Because of that carryover and other commitments, staff said the plan would use fund balance to cover a $5 million shortfall if projects proceed. Jamie explained the budget changes in method: salaries are now budgeted at projected actual step levels rather than top- step worst-case salaries, and the city is assuming positions will be vacant on average about a third of the year while recruitment occurs; those changes removed about $2.6 million of built-in cushion previously used in expense planning.

Council members asked detailed questions about specific line items, including why the Sunset Center operating grant appears under “marketing,” where the large marketing total is allocated, and whether the budget could break out individual salaries alongside authorized positions for transparency. Staff answered that Sunset Center has historically been included in the marketing grouping and agreed to review whether another categorization makes more sense. Council members also pressed for clearer estimates for capital projects that currently list only design-phase funding (for example, Junipero bypass pipe design at $175,000 and Piccadilly restroom expansion design at $70,000) and asked staff to provide rough total project cost estimates where available.

On reserves and fund balance, staff reported an estimated unassigned general-fund balance of roughly $11,854,000 at the end of the current fiscal year and walked through scenarios showing a projected end-of-year reserve requirement of about $15,921,000 (50% policy) depending on carryovers and commitments. Jamie said staff will provide a more detailed multi-year fund-balance projection and itemized answers before the May 21 workshop.

Council directed staff to collect written questions from council and the public ahead of the May 21 workshop and to publish answers so the council and public can review them in advance.