FY 2025-26 General Fund
Long Range Financial Forecast
LONG TERM FINANCIAL POLICY AUDIT
SUBCOMMIT TEE
MARCH 13, 2025
VERONICA CONNER
BUDGET & FINANCIAL ANALYSIS MANAGER
2 Preliminary Long Range Financial
Forecast
Revenues
Transfers In
Total Revenues & TI
Expenditures
Transfers Out
Total Expenditures & TO
Surplus (Deficit) (46.6)
2.3 235.3
271.4
10.5 281.9
233.0
($34.9)
$230.3
262.5
10.2 $272.8
($42.5)
$226.7
250.9
10.7 $261.6
($19.3)
FY 26-27
$219.6
2.3 $221.9
240.2
10.5 FY 25-26
$215.0
2.3 $217.3
226.1
$250.7
($28.8)
10.5 $236.6
$224.3
2.3 FY 28-29
$228.0
2.3 FY 27-28 FY 29-30
3 Revenue Highlights
Major Revenue Category Description YOY Change
Business Tax – additional revenue from Nov ’24 tax
measure
$2M
TOT – additional revenue from Nov ‘24 tax measure $1M
Property Tax – estimated 5% growth, includes VLF Swap $3.6M Sales Tax – reduced to match actual trend ($5.4M)
PED Charges for Services – no net increase -
Recreation Charges for Services – no net increase -
Total $1.2M
4 Sales Tax – Bradley Burns Lookback
0.0 10.0
20.0 30.0
40.0 50.0
60.0 2018/19 2019/20 2020/21 2021/22 2022/23 FY 23/24 FY 24/25 Millions
Budget Actual
5 Future Expenditure Assumptions
Major Expenditure Category Description YOY Change
Salaries and Benefits – COLAs, Equity Adjustments,
Incentive pays per labor contracts and uncontrollable
increases in benefits costs
$9.3M
Mid-Year Reductions – Council eliminated $4.0M of
ongoing personnel and operating costs from the General
Fund on January 28, 2025
($4.1M)
REDCOM – Fire Department’s contract costs paid by
Measure H
($1.3M)
Fleet Costs ($1.3M) and Fire/EQ Insurance ($500K) $1.8M Total $5.7M
6 Future Expenditure Assumptions
• Salaries & Benefits:
• FY 2026/27: 4% COLA + 1% merit increases; 3% thereafter • UAL grows by $11M in 5 years per CalPERS valuation report • Services & Supplies
• Most categories grow at 1% assuming departments will limit spending • Fire and Earthquake Insurance grows at 15% based on historical increases • Vehicle Replacement & Repair grows at 7% based on historical trends and state mandates for clean energy vehicles
7 FY 2025-26 Summary
Description Amount
FY 2024/25 Budgeted Deficit ($13.3M)
Additional Revenues (slide 3) $1.2M
Additional Expenditures (slide 5) ($5.7M)
Additional Transfers Out: ARPA funds for Homeless
Services Expire; General Fund resumes costs
($1.5M)
FY 2025/26 Budgeted Deficit ($19.3M)
Next Steps
8 • April 15th, 2025
• City Council Budget Study Session to address General Fund deficit and propose further budget reductions
• April 22nd, 2025
• LTFPA 3rd Quarter General Fund Review and projections of year-end • May 6 & 7, 2025
• City Council Budget Study Session to discuss city-wide FY 25/26 proposed budget
9 Questions?