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Council adopts FY25/26 third‑quarter financial report and modest budget adjustments
Summary
Council accepted the FY25/26 third‑quarter financial report showing an amended all‑fund budget of $229.7 million and approved $526,184 in appropriations (partially offset by $372,500 in revenue) for items including legal services, community development contract/advertising costs, and $7,488 for SB77 language‑access meeting services.
At the regular meeting on May 19, Certino’s budget team presented the third‑quarter financial report for fiscal year 2025–26 (through March 31, 2026). Acting Administrative Services Director Jonathan Arosco and Budget Manager Tony Oas Anderson summarized carryovers, encumbrances and midyear adjustments that increased the city’s amended all‑fund budget to about $229.7 million (from the adopted budget). Staff noted the amended budget largely reflects multi‑year capital projects and previously committed encumbrances.
The report showed a projected net use of general‑fund balance of approximately $3.9 million under current estimates, up from the adopted projection. Staff proposed third‑quarter adjustments totaling $526,184 in new appropriations, offset partially by $372,500 in incremental revenue, for a net requested draw of about $153,684 from fund balance. Significant items included $175,000 for unanticipated legal services, a reclassification and alignment of a senior assistant city‑attorney salary, $150,000 in community development bank/merchant fees (offset by $200,000 in related revenue), and $7,488 in the Innovation & Technology budget to comply with SB77 language‑access requirements for real‑time Chinese translation at public meetings.
Council members asked for clarity on which carryovers are one‑time project funds versus recurring revenue and how the credit‑card fee and revenue lines interact; staff explained merchant fees are typically passed through or offset by revenue in some departments but not others, depending on the payment platform used. The council adopted the staff recommendations, including a resolution approving the budget modifications and a companion resolution updating the compensation schedule for unrepresented employees.
Why it matters: The third‑quarter report updates the city’s financial outlook as staff prepare the FY27 budget. The modest net use of fund balance and the appropriation requests reflect both multi‑year capital projects and some one‑time operating needs; the SB77 language‑access funding implements a new state requirement for translation at public meetings.
Next steps: Staff will implement the approved budget changes, continue work on the FY27 proposed budget, and return to council for final budget adoption in mid‑June.
