City staff reviewed the city’s fiscal position and warned of a potential budget shortfall within several years if spending and revenue trajectories are not changed. The presentation said personnel costs and public-safety spending are the largest components of the general fund and that those costs have been rising faster than revenues.

Speaker 1 told the meeting that public safety represents about 40% of the general fund and that recent increases moved material dollars in a short period — a change that has reduced the city’s flexibility to invest in other services. Staff also noted the city carries a legacy pension liability related to a former local police department that increases costs.

To manage expenses, staff described cost-saving moves such as buying and operating a street sweeper in-house, which staff said saved roughly $200,000, and highlighted the city’s reserve position used for one-time capital projects. Staff said the city’s reserves would allow operations to continue for several months under an extreme revenue loss scenario but warned that, without changes, the city could face service or staffing reductions by about 2027–28.

Staff framed assessment districts as one of several possible responses to the fiscal trajectory, along with fee adjustments and other measures. The presentation closed by directing the public to a longer "state of the city" presentation and urging residents to review budget documents posted on the city website.