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City presents long-term financial plan projecting balanced revenues through FY31; staff to refer plan to Financial Review Committee
Summary
City staff presented an updated long-term financial plan that projects balanced general fund results through fiscal year 2031 and asked the council to refer the plan to the Financial Review Committee.
City finance staff presented an updated long-term financial plan that projects general fund revenues and expenditures through fiscal year 2031 and asked the council to refer the plan to the Financial Review Committee as part of the upcoming budget process.
Staff reported that the amended FY25 budget reflects general fund revenues of approximately $49.5 million and expenditures and transfers totaling about $63.2 million. Staff explained that those figures include transfers out (about $12.2 million) and a one-time payment to CalPERS of $1.85 million; excluding those items, budgeted revenues exceed expenditures by roughly $320,000. Staff said actual revenues are expected to exceed budget and actual expenditures to come in below budget.
The plan projects that general fund revenues should keep pace with or slightly exceed expenditures through FY31, and that reserves will remain fully funded with the unassigned fund balance above 7% throughout the forecast period. Staff explained the city took a conservative approach in the forecast and accounted for planned capital-improvement program funding. Staff asked that the council refer the long-term financial plan to the Financial Review Committee for consideration in the May budget workshops; council agreed to refer the plan for FRC review and staff will bring the plan back in June with budget adoption materials.
Council members praised staff for the city's fiscal position and asked a few follow-ups about investment policy, CalPERS market volatility, and when actuarial returns are reported. Staff said investment options are constrained by California Government Code and noted preliminary investment-return announcements from CalPERS are typically provided in July. Councilmember questions about the budget numbers were answered by staff, who explained the FY25 transfers to separate funds and a pension trust caused the apparent difference between revenues and expenditures.
