Folsom finance staff outlines budget process, warns of maintenance funding gap

City finance staff led a workshop Feb. 28 to brief the Folsom City Council on how the city prepares its annual budget, how funds are constrained by legal restrictions, and where shortfalls are most likely to appear.

The presentation explained that the budget and accounting framework is guided by national accounting standards, the Folsom Municipal Code and best-practice recommendations from the Government Finance Officers Association (GFOA). Finance staff said the city follows a policy range of 17 to 20 percent for unassigned general fund balance and maintains an operating contingency of at least 1 percent, but that funding for ongoing building, equipment and technology replacement is insufficient.

Finance staff said the city's overall adopted budget for fiscal year 2024'25 was roughly $247 million, with about $117 million appropriated in the general fund and approximately $115 million in general-fund revenues budgeted for the year. Major general-fund revenue sources cited were property tax (about 39 percent of general-fund revenue) and sales tax (about 25 percent). Staff noted the city uses conservative revenue forecasting and engages external consultants for major sources such as sales and property taxes…