City manager outlines multi-year fiscal sustainability plan to close structural deficit

City Manager Doug Schultz laid out a business and fiscal sustainability plan intended to eliminate the citys structural general-fund deficit within three fiscal years without depleting reserves below policy minimums.

Schultz reviewed recent budget results, noting that FY24 ended with an unexpected surplus but that FY26 projections include a significant reserve drawdown. He identified the city's heavy reliance on sales tax (roughly 41% of general fund revenue) and relatively low property-tax share compared with peer cities. The presentation included a SWOT analysis, long-term goals to diversify revenue streams (including waterfront development and business-license reform), and a package of expenditure-management measures such as position freezes, rightsizing, and pursuit of grant funding.

"Fiscal sustainability allows leaders to shift the focus from year to year survival to long term service delivery and investment," Schultz told council. He said staff had already identified roughly $2 million in near-term savings and was pursuing another $3 million in cost-savings tied to operations and transport services; larger structural changes could yield additional savings but would require policy and labor discussions.

Councilmembers questioned timeline assumptions, requested clearer numeric estimates tied to specific projects (for example, projected revenues from waterfront hotel development), and emphasized the need for audited FY25 financials to inform planning. Public commenters echoed both urgency and caution: some urged tight focus on solvency while others warned against assuming future development revenues.

After deliberation, council voted unanimously to adopt the plan and directed staff to return with follow-up materials and quarterly budget-to-actual reporting beginning in October.