Council reviews FY2026 budget draft, hears debate over CIP removals and large park investments

Umbrash — City staff presented the proposed fiscal year 2026 budget framework, the city’s strategic plan and updates to the five‑year capital improvement program during the work session.

Staff described a high‑level, two‑year strategic plan built around pillars—quality of life, outstanding service and community development—and noted objectives for public safety, infrastructure and neighborhood services that will guide budget decisions. Finance staff outlined personnel cost drivers built into FY2026: pension and retirement rate projections, step increases for fire, a 2.3% COLA assumption and a 3% merit pool for non‑MOU employees, plus health‑insurance increases. Staff said they will incorporate carry‑forward capital and any tentative award decisions into the May 6 tentative budget presentation.

On capital projects, staff reported a total five‑year CIP of about $64.1 million (including recent changes). Notable changes presented to the CIP included: park improvements increased from $2 million to $22.5 million over five years, Parks and Recreation facilities and renovations were reprioritized, and the council chambers AV enhancement request was increased to $150,000 for phase 2. Staff said some projects previously listed—city hall expansion, police station expansion and a Ramirez Road widening—were removed from the current five‑year CIP based on earlier council feedback and because staff assessed those projects as unlikely to be approved by the full council in the current cycle.

That decision sparked debate. Multiple councilmembers said the police station remains an unfunded need that should stay on the CIP for tracking or be the subject of a building tour; others said prior resident feedback and a rejected bond measure necessitated rethinking the timing and funding approach. Councilmembers asked staff to put the police station and certain water main replacements back on the CIP for further study and to pursue alternative funding strategies if grant applications are unsuccessful.

Staff also reviewed departmental changes, notable capital carry‑forwards and special projects. The budget presentation included requests tied to the strategic plan—neighborhood services initiatives, downtown revitalization funding and an employee compensation study—and indicated the city continues to meet fiscal discipline benchmarks, including maintaining a multiyear structural balance and reserves.

Next steps: staff will present updated tentative budget and utility rate recommendations on May 6 and return with the final budget on May 20. Several councilmembers asked that staff include the police‑station needs and the First Avenue/Ventura Street water main project on next year’s CIP agenda or present alternative funding scenarios.