Tustin adopts FY2025–26 budget and biannual financial plan, setting 20% general fund reserve
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Summary
The council approved the FY2025–26 budget and related resolutions after staff presentations on a 10‑year fiscal sustainability strategy; the Year‑1 general fund revenue is projected at just over $101 million and the city set a 20% reserve target using $5.2 million of land sale proceeds.
City staff presented an abridged version of the biannual budget for FY2025–26 and FY2026–27 and a 10‑year fiscal sustainability plan intended to align recurring revenues with expenses. Assistant City Manager Nicole Bernard said the plan’s objectives are to increase recurring revenue (through development and property offerings), reduce ongoing expenses (including paying down unfunded accrued liabilities) and use one‑time proceeds to maintain reserves. Bernard said the Year‑1 general fund reserve is targeted at 20% and that a transfer of $5.2 million from land sale proceeds would achieve that level.
Finance Director Jennifer King presented revenue and expenditure projections: Year‑1 general fund revenues were projected at just over $101 million and Year‑2 at about $106 million; property and sales taxes are the largest revenue sources, comprising over 60% of general fund receipts. The capital improvement program shows roughly $58 million in Year‑1 projects across 35 projects and $32 million in Year‑2 across 17 projects. Staff said sales and property tax projections incorporate consultant HDL’s April update.
Council members discussed revenue uncertainty and midyear review processes; staff confirmed the city will revisit revenue and expenditure assumptions at midyear and can adjust appropriations as needed. After discussion, council adopted the proposed budget, Gann appropriation limit and related resolutions by roll call, with the motion recorded as passing 5–0.
