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Council reviews FY 2526 proposed budget; staff to return with scenario analyses
Summary
Finance staff presented a FY 2526 proposed budget with $26.8M in general fund resources and appropriations and a five-year forecast showing a potential fund-balance decline; council requested alternate forecasts (with/without a frozen motor officer position and higher sheriff cost assumptions) and consensus to include desktop replacements and cloud camera upgrades in the proposed budget.
City Finance Director presented the proposed fiscal year 2526 budget and a five-year forecast to the Aliso Viejo City Council. The proposed general fund revenues are approximately $26.8 million with corresponding appropriations, producing a modest operating surplus in the presented draft. Key revenue estimates included $10.3 million in property taxes, $8.5 million in sales tax (including approximately $3.2 million from sales tax-sharing agreements), and $1.6 million in transient occupancy tax. The director also outlined special revenue funds, grant balances, and proposed capital improvement projects funded with reserves.
On the expenditure side, staff noted public safety accounted for about 44% of the general fund and discussed proposed cost-saving measures including freezing a second motor officer position in the sheriff contract (a vacancy credit is already built into the contract). Staff proposed $145,000 to replace citywide desktops and approximately $96,000 to replace end-of-life cameras at the AV Center and Aquatic Center; IT staff said replacements would move those systems to a cloud-based platform for consolidated management. Council members asked detailed questions about the assumptions in the five-year forecast, vacancy credits in the sheriff contract, potential assessment appeal impacts on property tax (staff cited a possible $120,000 reduction if certain appeals are approved), and revenue sensitivity tied to two major sales-tax-sharing agreements.
Mayor Ackley and several council members asked staff to present alternative budget scenarios showing (a) the current forecast with the motor officer position frozen and (b) a scenario that assumes the position is staffed, and to model a higher annual increase (5%) in sheriff contract costs rather than the 3.5% used in the initial forecast. Council reached consensus to include desktop and camera replacements in the proposed budget pending final figures; staff indicated the final budget will return for adoption on June 4 with the requested scenario analyses.
There was no final appropriation vote on the budget at the meeting; staff requested direction and said they will provide the final budget for adoption at a future meeting.
