City of Sacramento
Budget and Audit Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00382 1/28/2025 Discussion Item 6.
(B&A) Fiscal Year (FY) 2025/26 Budget Process Update
File ID: 2025-00382
Location: Citywide
Recommendation: Receive and file.
Contact: Peter Coletto, Director of Finance, (916) 808-5416, [email protected]; Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected]; Department of Finance
Presenter: Peter Coletto, Director of Finance, (916) 808-5416, [email protected]; Mirthala Santizo, Budget Manager, (916) 808-5078, [email protected]; Department of Finance
Attachments:
1-Description/Analysis
2-FY2025/26 Budget Survey Results
Description/Analysis
Issue Detail: The City is facing significant financial challenges for the coming fiscal year, including a structural imbalance between City operating costs and available resources. As the City prepares for the release of the FY2025/26 Proposed Budget, staff are providing any additional information available and responses to questions asked at prior meetings and regular updates on the budget development process to the Budget and Audit Committee.
Budget Survey
At the direction of the Budget and Audit Committee last fiscal year, City staff conducted a community survey to receive input on public budget priorities. The nine-question survey was opened from February 27, 2024, through March 24, 2024.
Many community members felt that the period that survey was open to the public was too short and should have been conducted earlier. Based on that feedback, the FY2025/26 Budget Survey was open to the public for approximately two months via the City’s website from September 24, 2024,
File ID: 2025-00382 1/28/2025 Discussion Item 6.
through November 24, 2024. The 14-question survey asked the public about potential reduction strategies, Council and Public priorities, and strategies related to priorities. The survey was translated into five languages (Spanish, Hmong, Vietnamese, Chinese and Dari).
The budget survey was communicated on several platforms to encourage participation, which included: (a) posting on various City social media, (b) adding to the monthly communication toolkit sent to all neighborhood associations, Chambers of Commerce, property business improvement districts, (c) sending to the Community Engagement team’s distribution list, (d) sharing with 18 Community Ambassadors representing 19 different languages, (e) promoting on the weekly Sac Vibes vlog, (f) publishing on the City’s news site, City Express, which receives over 700,000 views and (g) publishing on the City’s newsletter (City Minute), which goes out to over 200,000 email addresses.
There were 813 survey responses. Except for two surveys taken in Spanish, all remaining surveys were taken in English. Public Safety, Housing, Homelessness, and Fiscal Sustainability were identified as top priorities. Full budget survey results are included in Attachment 2.
FY2025/26 Budget Development Schedule
At the December 10, 2024, Budget and Audit Committee meeting, councilmembers requested a detailed budget schedule. Below is the proposed FY2025/26 budget schedule, which includes Budget and Audit Committee meetings and department presentations prior to the FY2025/26 Proposed Budget release at the end of April.
Date Time Legislative Body Subject
January 28, 202511:00 AM Budget and Audit CommitteeBudget update, survey results & review financial policies February 25, 202511:00 AM Budget and Audit CommitteeFY2024/25 Financial update, revised forecast, updated FY2025/26 budget gap February 25, 20252:00 PM City Council Department presentations Late Feb / Early MarchTBD City Council FY2024/25 Financial update, revised forecast, updated FY2025/26 budget gap Late Feb / Early MarchTBD - Release of available reduction strategies March 18, 2025 2:00 PM City Council Department presentations March 25, 202511:00 AM Budget and Audit CommitteeBudget update & discussion of available reduction strategies March 25, 2025 2:00 PM City Council Department presentations April 1, 2025 2:00 PM City Council Department presentations Week of April 28, 2025TBD - FY2025/26 Proposed Budget Release May 13, 2025 11:00 AM Budget and Audit Committee(1) FY2025/26 Proposed Budget Overview and (2) Fees & Charges
May 13, 2025 5:00 PM City Council
(1) FY2025/26 Proposed Budget Overview and
(2) Assistant City Manager presentations (Community Services, Internal Services, Municipal Services and Public Safety)
May 19, 2025 5:30 PMMeasure U Community Advisory CommissionFY2025/26 Proposed Budget Overview with Measure U committee May 20, 2025 2:00 PM City Council
(1) 2025-2030 Capital Improvement Program,
(2) Citywide Fees and Charges
(3) Budget Equity Lens
May 20, 2025 5:00 PM City Council FY2025/26 Proposed budget deliberations and Council direction May 27, 2025 5:00 PM City Council Additional budget deliberations (if needed) June 3, 2025 11:00 AM Budget and Audit CommitteeFY2025/26 Final Budget discussion June 10, 2025 5:00 PM City Council Adoption of the FY2025/26 Final Budget Fiscal Year 2025/26 Budget Schedule (Dates subject to change)
File ID: 2025-00382 1/28/2025 Discussion Item 6.
Internal
Policy Considerations: This report is consistent with Council’s direction to keep the Council informed on the fiscal condition and/or process of the City.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns administrative activities and government fiscal activities that do not constitute a “project” as defined by CEQA Guidelines section 15378 and California Public Resources Code section 21080 and are not subject to the provisions of CEQA (CEQA Guidelines, §15060(c)(3)). CEQA review for any project which utilizes funds allocated in this report, has been or will be performed in conjunction with planning, design, and approval of each specific project as appropriate.
Sustainability: Not applicable.
Rationale for Recommendation: This report is for informational purposes. It provides the Budget and Audit Committee with additional information on the FY2025/26 Proposed Budget process and
File ID: 2025-00382 1/28/2025 Discussion Item 6.
timeline.
Financial Considerations: City staff are currently working to close the budget gap and balance the FY2025/26 Proposed Budget.
Local Business Enterprise (LBE): Not applicable.
Attachment 2
Fiscal Year 2025/26 Budget Community Survey Results
1) Last year, City staff forecasted that the City is facing a "structural budget deficit" with the rate of cost increases outpacing available City resources. The City closed a projected $66 million deficit to balance the Fiscal Year 2024/25 budget with a combination one-time and ongoing budget balancing strategies. As we approach budget development for Fiscal Year 2025/26, do you think the City’s budget deficit will be:
a) Smaller than the Fiscal Year (FY) 2024/25 budget deficit b) About the same size as the FY2024/25 budget deficit
c) Larger than the FY2024/25 budget deficit
d) Unsure / Don't know
2) To address the budget deficit, should the City:
a) Increase fees and taxes to raise revenues
b) Eliminate or cut back on programs to reduce expenditures c) A combination of A and B
d) Unsure / Don't Know
3) To increase City revenues, what strategies should be considered? Please choose all that apply.
a) Increase fees for City services
b) Increase City permit fees
c) Support a ballot measure to raise sales tax
d) Support a ballot measure to raise utility user tax
e) Support a ballot measure to raise business license tax f) The City should not increase its fees/taxes
4) Please indicate your level of support for reducing expenses in each of the following areas by selecting your top five choices.
Select "Strongest Support for Expense Reductions" for the area you most support reducing expenses in, "2nd Strongest Support for Expense Reductions" for your next choice, and so on. (Strongest Support for Expense Reductions, 2nd Strongest Support for Expense Reductions, 3rd Strongest Support for Expense Reductions, 4th Strongest Support for Expense Reductions, 5th Strongest Support for Expense Reductions):
a) Affordable housing programs
b) Arts and culture programs
c) Capital projects (large new projects or infrastructure improvements) d) Climate programs
e) Community benefit programs (such as free Sacramento Regional Transit rides for school-age children)
f) Community Development (Animal Care, Code Enforcement and Planning) g) Economic Development
h) Fire Department
i) General government services (Information Technology, Human Resources, Finance, Clerk, Auditor, City Attorney)
j) Homelessness programs
k) Youth, Parks & Community Enrichment programs
l) Police Department
m) Public Works (Roads, public facilities and tree maintenance, parking)
5) City staff and the City Council in September 2023 participated in a public priority setting workshop. Council members collectively selected homelessness, public safety, housing and deferred maintenance/infrastructure investment as their top four priorities. Last year, the Community Survey identified Public Safety, Homelessness, Housing, and Fiscal Sustainability as the top 4 priorities for the City. Do you believe those should still be the top priorities for the City?
6) If no, please select your top four priorities from those the choices provided to Council in the 2023 public priority setting workshop:
a) Homelessness
b) Housing
c) Fiscal sustainability
d) Public safety
e) Diversity, equity and inclusion
f) Deferred maintenance/infrastructure investment
g) Economic development and creative economy
h) Youth
i) Climate
7) Public Safety
a) Police presence in main business areas
b) Police presence in residential areas
c) Community-based programs (neighborhood watch, non-profit services) d) Lighting for streets and parks
e) Pedestrian and traffic safety
8) Homelessness
a) Shelter beds
b) Enforcement of City Ordinances
c) Linkage to County services (healthcare and mental health services) d) Linkage to SHRA housing opportunities
e) Encampment Cleanup
9) Housing
a) Affordable housing incentives
b) Affordable housing requirements
c) Market rate housing incentives
d) Zoning / regulation changes to support development
10) Fiscal Sustainability
a) Savings incentive programs for City departments
b) Policies to address long-term liabilities such as unfunded pension obligations and capital needs
c) Policies mandating future year budget forecasts are balanced d) Tax measures to raise revenues
e) Contracting out services for cost savings
11) Would you support using contractors to provide services traditionally provided by City employees if it would help decrease the budget deficit? a) Yes
b) No
c) Unsure/Don't know
12) How many years have you lived in the City of Sacramento? a) 0 to 5 years
b) 6-10 years
c) 11-15 years
d) 16-20 years
e) More than 20 years
f) Prefer not to say
g) I do not live in the City of Sacramento
13) What City of Sacramento Council district do you live in (find your district here)? a) District 1
b) District 2
c) District 3
d) District 4
e) District 5
f) District 6
g) District 7
h) District 8
i) Unsure/Don't know
j) Prefer not to say
k) I do not live in the City of Sacramento
14) What is your age range?
a) Under 20 years of age
b) 20-24 years of age
c) 25-29 years of age
d) 30-34 years of age
e) 35-39 years of age
f) 40-44 years of age
g) 45-49 years of age
h) 50-54 years of age
i) 55-64 years of age
j) Over the age of 64
k) Prefer not to say