City Manager warns general fund reserves could dip to policy threshold as staff previews FY27 budget

The City Manager opened a budget workshop by reminding the council that the FY27 budget is both a legal spending plan and a policy document that must balance short‑term operations with long‑term sustainability. The manager said the budget calendar includes additional workshops in June and July, a manager proposal on Aug. 3 and public hearings and adoption in August and September. "The purpose of today's workshop is to give an overview of city finances, the budgeting process and the community investment plan," the City Manager said.

Staff reviewed the city’s fund structure—general, capital projects, enterprise and fiduciary funds—and said the general fund supports day‑to‑day services such as police, fire, public works and parks. On the revenue side, staff reported the largest FY26 general fund sources: sales tax (about one‑third of revenues) and property tax (roughly 31.8%), with industrial payments and charges for services making up smaller shares.

On projections and risks, staff told the council that mid‑year estimates show the general fund reserve trending toward the city policy threshold of 20% of expenditures by the end of FY26 if current trends continue. Staff cited inflationary pressures, scheduled pay increases for civilian staff, fire and police contracts and other cost drivers. "If the trends continue as projected at this point we would be at our 20% general fund balance threshold at the end of FY26," the City Manager said, and staff signaled they will bring scenarios for mitigation to the June 3 work session.

Council members asked clarifying questions and thanked staff for the briefing. Staff emphasized that projections are not final, that the budget is an iterative process and that independent audits and performance monitoring will continue through implementation. The workshop was informational only; no formal actions, public comment or votes occurred.