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Council hears preliminary 2025–26 budget briefing as revenues soften and hazard‑mitigation grant winds down
Summary
Finance staff told the council the city faces declining sales tax projections, the impending end of a multiyear hazard‑mitigation grant and higher fire‑contract costs. Staff said those pressures required reallocation to balance the upcoming year and that further fiscal sustainability work will be presented at a future meeting.
City finance staff presented a preliminary overview of the 2025–26 budget, warning that the city faces continued pressure from falling sales‑tax projections, the scheduled conclusion of a large hazard‑mitigation grant and increased costs tied to the fire contract.
Finance staff noted a multi‑year decline in regular and district sales tax compared with earlier years; the staff report projected a cumulative multi‑year decline that will reduce general fund revenues materially and may take years to recover. The hazard‑mitigation grant that supported several positions is also winding down, which staff said will reduce reimbursable revenue the city has relied on. In addition, council took up contract amendments related to the cityʼs fire services that added near‑term cost pressures.
To balance the upcoming yearʼs budget, staff said they moved several fire‑related costs into a district tax fund, adjusted police staffing allocations between funds and did not budget previously planned transfers to capital reserves. Those steps allowed staff to present a balanced preliminary budget, but staff warned that the city will need to consider longer‑term fiscal strategies.
Finance staff said consultants will present a fiscal‑sustainability analysis at the councilʼs next meeting to further review structural options. Councilmembers asked questions about priority services, potential impacts on staffing and if there were opportunities to shift costs or pursue alternate funding sources. No budget adoption occurred; the item was informational and scheduled for future action.
