Ross presents five-year forecast and draft FY24–25 budget; staff flags pension, fire and facilities costs

Town Manager Krista Johnson and staff presented a five-year financial forecast and the draft fiscal year 2024–25 budget, outlining revenue drivers, major cost increases and near-term priorities.

Staff told the council the town’s largest revenue source remains property taxes (about 64% of budgeted revenue in the forecast) and that a conservative forecast from the town’s property tax consultant HDL projects roughly 4% annual growth. Staff said building permit receipts and interest income have come in higher than projected this year, supporting a projected FY24 year-end surplus of $1,725,000.

Major cost pressures include rising pension obligations and Ross Valley Fire Department JPA costs. Staff reported a recent CalPERS valuation showing an unfunded accrued liability of about $5.7 million (an increase from the prior year tied to investment performance), and outlined steps the town has taken — discretionary paydowns totaling roughly $3.2 million since 2016 and shortened amortization schedules — to reduce long-term costs.

Fire service costs constitute the town’s largest departmental expense at roughly 31% of the operating budget and are projected to jump about 13% in the coming fiscal year, driven by the JPA decision to staff engines with three firefighters and create in-house command positions.

The draft budget adds one full-time police officer and a 0.25 FTE recreation position to form a full-time recreation coordinator; it maintains healthy reserve targets (operating fund reserve policy calls for 30%). Staff also included $30,000 for part-time planning support to implement housing-element actions and $75,000 for planning consultant technical work.

Council members pressed staff on options including setting up an internal fund versus additional CalPERS paydown, and on tracking housing-element–related expenses separately (staff said they will bring more detailed line items for council review). Staff emphasized the draft is balanced for FY25 as proposed but cautioned that the town’s long-term sustainability depends on controlling rising fire and pension costs, pursuing grants for capital, and careful use of one-time funds for the Civic Center project. The council will consider final budget adoption in June.