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Five‑year forecast shows recurring deficits; staff warns reserves will dip below policy
Summary
City finance staff presented a five‑year forecast showing recurring deficits (projected $2.6M in FY26‑27 and an estimated combined five‑year shortfall of about $60M) and warned reserves could fall under the policy minimum by 2029‑30 without new revenue.
Finance staff presented a five‑year outlook showing recurring deficits and declining reserves that motivated discussion of a potential 0.25% sales tax. Staff summarized the outlook by saying, "We are still seeing red, meaning budget deficit for the next 5 years," and noted a projected FY26‑27 deficit of about $2.6 million and an aggregate five‑year deficit on the order of $60 million.
Staff explained the city has already implemented sizeable reductions over the past two years (about $37.3 million combined across two budget cycles) and is assuming additional cuts in the forecast, but the trend still shows reserve percentages declining toward the council’s policy minimum (staff estimated the reserve could dip below 25% by 2029‑30). Council members cited recent infrastructure failures in neighboring jurisdictions as examples of risk if maintenance is deferred.
