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Canby midyear budget review shows large reserve balances; $30M of capital will largely roll to next year
Summary
Finance Director Denise LaRue told the council the city’s cash is at a multi-year high and projected total ending fund balances of about $48.2 million. Staff said $30 million in capital was budgeted for FY26 but only about $9.2 million is likely to be completed this year, creating compression for FY27 budgeting.
Canby’s midyear budget review on Feb. 4 showed higher-than-normal cash balances and significant capital project rollovers that will affect the FY27 budget process.
Finance Director Denise LaRue reported actuals through December 2025 and projected year-end outcomes, saying the city’s total cash balance peaked near $61.3 million and staff projects a total city ending fund balance around $48.2 million for FY26. "Most of our cash is held in the local government investment pool," LaRue told the joint council and budget committee meeting, adding that FY26 capital spending is running well below budgeted levels.
Capital spending versus delivery: the city budgeted about $30 million in capital work for FY26 but staff now anticipates completing roughly $9.2 million of that amount before June 30. LaRue said rolling projects forward into FY27 is a major driver of a projected FY26 general fund ending balance near 39% of operating revenue, with a rough FY27 projection near 25% under current assumptions.
Staff cautioned about capacity constraints: department heads and staff said turnover, hiring gaps and bidding/permitting delays have limited project delivery. "There's a bandwidth challenge," one staff member said, and the city is considering whether to phase projects, add project-management capacity, or adjust service levels to maintain healthy reserves while completing priority infrastructure.
Revenue and budget strategy: staff presented three high-level approaches for sustaining services — increase revenues, reduce costs/service levels, or phase capital projects over time. LaRue noted revenue assumptions already forecast modest growth and recommended the council examine priority lists and internal capacity before moving projects forward.
Personnel and FTEs: the presentation noted FY26 budgeted FTEs at about 103.7 (a net decrease from FY25) and about 6.5 unfilled positions at the time of the slide. Staff said hiring and internal capacity are factors in project delays and that some positions may be recommended in future budgets to improve project delivery.
What’s next: staff will bring proposed FY27 budget schedules and recommendations to the council in May, with adoption planned for June 17. Councilors asked staff to provide more detailed fund-by-fund cash reports, restrictions on capital money (which funds are restricted vs. flexible), and clearer phasing plans for large projects.
