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City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Administrative Services
Meeting Date: May 12, 2025
Report #:2503-4317
TITLE
FY 2026 Proposed Operating and Capital Budget - Finance Committee Update and Council Budget Discussion. CEQA Status – Not a project
RECOMMENDATION
This study session is intended to facilitate next steps in the FY 2026 Budget process. Facilitation of a forum for Finance Committee to discuss with the City Council the status of FY 2026 budget review in preparation for the Committee’s budget wrap-up work on May 20, 2025.
Staff recommends that the City Council:
•Review the current proposed budget adjustments to the Fiscal Year 2026 Proposed Operating and Capital Budgets and Municipal Fee Schedule in alignment with the work completed by the Finance Committee on May 6, 2025 and May 7, 2025; •Review the areas of focus for the City Council as identified by the Finance Committee and staff; and
•Provide feedback to the Finance Committee on any areas of focus or additional deliberations to review as part of the Budget Wrap-up Meeting scheduled for May 20, 2025.
ANALYSIS
Finance Committee reviewed the FY 2026 Proposed Operating and Capital Budgets and Municipal Fee Schedule at the Finance Committee Meeting on May 6, 2025 and May 7, 2025.
This report supports the discussion on the Finance Committee proposed adjustments to the FY 2026 budgets and/or Municipal Fee schedule.
FY 2026 Budget documents are referenced below:
- FY 2026 City Manager Proposed Budget Transmittal Letter - FY 2026 Proposed Operating Budget
- FY 2025 Proposed CIP Budget
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- Budget Transmittal to City Council ( May 5, 2025) - Agenda Report - Finance Committee Review of Proposed Budgets ( May 6 and May 7, 2025) Agenda Report
- Finance Committee Review of Proposed Municipal Fee ( May 7, 2025) Agenda Report As new materials are released during the Finance Committee review, all materials can be found on https://www.paloalto.gov/budget
FISCAL/RESOURCE IMPACT
This report is a study session for the City Council to review the Finance Committee’s analysis and tentatively recommended changes to the FY 2026 Proposed Budget. No financial impacts will occur as a result of this report; however, recommendations from this study session will inform the Finance Committee’s final recommendations for adjustments to the FY 2026 Proposed Budgets to the City Council for adoption on June 16, 2025.
STAKEHOLDER ENGAGEMENT
Community members are encouraged to review budget publications available online and engage throughout the budget process with City Council and Finance Committee to inform priorities and service needs.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because providing recommendations regarding the FY 2026 Proposed Budgets is fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).
APPROVED BY:
Lauren Lai, Administrative Services Director