City Budget &
Budget Process
Overview
Overview
❖ The City is required to Adopt a Balanced Budget for FY 202 5-27 o The General Purpose Fund (GPF) and many restricted funds face significant projected structural deficits.
o Th is gap assumes status quo operations relative to the initial Adopted Midcycle 2024 -25
o The Biennial deficit assumes that the City’s Actions to resolve the FY 2024 -25 budget deficit are successful, if not any current year shortfall would need to be added to the future deficit
o These deficits stem from core financial issues that the City must resolve over the short, medium, and long term, to stabilize its fiscal circumstances
Overview
❖ Financial uncertainty remains in large part due to:
o Risk associated with Federal Policy changes both from the executive branch and potential Congressional action
o Economic uncertainty due to the interplay of federal fiscal, tax, trade, immigration, and monetary policy.
❖ Known Challenges exist due to :
o High service demand, particularly regarding Homelessness, Housing, and Community Safety
o Maintenance and replacement needs for City Buildings , Vehicles , and Information Technology Systems
Department
Proposals
Baseline
Budget
Development
Budget
Priorities
Poll
Budget
Priorities Poll
Results
Council
Priorities
Workshop
Five-Year
Forecast
Released
Council
Priorities
Due
Mayor’s
Proposed
Budget
Community Budget
Forums & Police
Commission Hearing
Council
President’s
Budget
Deadline for
Budget
Adoption
Final Policy
Decisions
from Mayor
The Budget Process
Date(s) Task(s)
Mar 7 CFP in Feb: Council Initial Budget Briefing and Priorities Discussion Briefings on estimated baseline expenditures, revenue projections and an Overview of the City's budgeting process.
Opportunity to begin discussing priorities for the next budget year based on the Assessment of Stakeholder Needs, Concerns and Priorities
Mar 15 CFP by Mar 15: Statement of Councilmember Priorities Council Members to advise the Mayor and City Administrator publicly of their priorities. Submit up to seven expenditure priorities in ranked and/or weighted order for changes to the baseline budget Early
April
Five Year Forecast Heard at Finance & Management Committee April CFP before Apr 15: Budget Outlook Message & Calendar Report to the City Council a Budget Outlook Message & Calendar no later than April 15th that provides an overview of the budget development process and lists all key dates and estimated dates of key budget events, including release of the Proposed Budget, Community Budget Forums, Council budget meetings, and formal budget passage dates May 1 CFP by May 1: Mayor’s Proposed Budget Published
May 1
to 15
CFP before May 15: Mayor’s Proposed Budget Presented at Special Council Meeting May 15
to 31
CFP in May & Jun: Community Budget Forums starting May 14 May 27 Third Quarter R&E Report Heard at Finance & Management Committee, Budget Errata Published Jun 1 CFP Jun 1: Budget Advisory Commission's Report
June CFP before Jun 17: Council President’s and Other Amendments presented at Special Meeting Timeline
FY 2025-26 &
FY 2026-27
Budget –
GPF Deficit
~$265million
Over Two-Years
GPF FY 2025-26 FY 2026-27
Revenue 771,438,423 799,316,204
Expenditure 909,359,827 926,065,024
Deficit (137,921,404) (126,748,820)
FY Baseline Deficits in key Non -GPF Funds
Select Non-GPF Funds FY 2025-26 FY 2026-27
1720 - Comprehensive Clean-Up Fund
Primary Uses: Street Sweeping, Illegal Dumping (739,535) (664,143) 1820 - OPRCA Self Sustaining Revolving Fund
Primary Uses: Youth Recreation Programs (4,332,034) (4,378,247) 2218 - Measure BB Local Streets and Roads
Primary Uses: Transportation Maintenance & Infrastructure (3,709,103) (3,593,727) 2310 - Lighting and Landscape Assessment District
Primary Uses: Park & Rec. Facility Maintenance, Street Lighting (1,028,582) (1,028,582) 2241/2243 - Measure C/D -Library Services
Primary Uses: Library Services & Operations (2,275,063) (2,063,221) 2244 – Measure Q Parks, Homelessness, Stormwater
Primary Uses: Parks Maintenance, Homelessness, Storm Water (5,864,337) (5,768,968) Financial Issues Plaguing the City Today &
Tomorrow - Diagnosis
Our fiscal circumstances and structural deficit are been caused by multiple issues; some directly others indirectly which manifest financially:
Direct Causes of Structural Deficit
❖ Not following Adopted Fiscal Policies and Best Practices:
➢ One -Time Resources for Ongoing Programs (ARPA, Fund Balance) ➢ Insufficient Reserves
➢ Negative Fund Balances
❖ Cost Escalation Pressures that Exceed Revenue Growth ➢ Pension & Retiree Medical Costs
➢ Insurance Premiums
➢ Health Care Benefit Costs
Financial Issues – Diagnosis (cont.)
Our fiscal circumstances and structural deficit are been caused by multiple issues; some directly others indirectly which manifest financially:
Indirect Causes of Fiscal Circumstances
❖ Services that are not effectively or efficiently delivered ❖ Internal Processes that are not time & resource efficient ➢ Contracting
➢ Payroll
➢ Hiring
➢ Onboarding
❖ Lack of Accountability for Performance in Services,
Contracts, & Grants
Financial Issues - Prognosis
If we don’t
solve these
problems?
CITY
SERVICES
Insurance
Costs
Pension
Costs
Medical
Costs
Negative
Fund
s
Inefficient
Processes
Insufficient
Reserves
Lack
of
Accountability
PUBLIC
TRUST
COMMUNITY
OUTCOMES
QUESTIONS?