Annapolis aldermen lay out FY26 budget priorities; budget staff warn of tighter reserves and flat grant funding

City budget staff told the Annapolis City Council at a Jan. 16, 2025 virtual work session that the city faces a tighter fiscal picture for FY26 and asked council members to prioritize preserving essential services as they prepare budget amendments.

Jake Trudeau, the city’s budget manager, said the city projects a one-time reserve of $4,390,000 at the end of FY25 and a capital reserve of $5,810,000. “We believe that the theme this year is to preserve,” Trudeau told the council, and he warned that grant funding remains flat while expenses continue to increase.

Trudeau and acting city management staff flagged variables that could affect the FY26 outlook: potential state funding shifts, a projected transportation-fund deficit, lower interest income on cash reserves, and staffing and inflation pressures.…