FY 2026-27 Budget Priorities
Public Hearing
CITY COUNCIL MEETING
JANUARY 27, 2026
VERONICA CONNER
BUDGET AND FINANCIAL ANALYSIS MANAGER
SCOTT WAGNER
CHIEF FINANCIAL OFFICER
Overview
The past year saw significant actions from the City Council in addressing the structural deficit which included:
$10.4 million in one-time funds allocated to the City’s reserves $15.2 million in ongoing annual reductions
Workforce reduction of 54 full time equivalent positions Voter approved enhanced revenues brought additional revenue to the General Fund Business Tax saw a $3.3 million increase
Transient Occupancy Tax saw a $400K increase
Despite these actions the General Fund remains in a structural deficit $8.4 million deficit in FY 2025-26 expected to grow to $17.3 million in FY 2026-27 Primary factors include stagnant sales tax revenue & CalPERS unfunded liability payment growth The City has received an unmodified opinion (clean and without audit findings) back from our independent auditor for the Fiscal Year 2024-25 Annual Comprehensive Financial Statement 2 Long Range
Financial
Forecast
- The City uses a 5-year
financial forecast using
trend analysis for revenues
and expenditures to judge
the health of the General
Fund
- Will create basis for any
potential targeted
reduction amount
3 4
FY2025 FY2026 FY2027 FY2028 FY2029
6/30/2025 Final Reserves 79,582,000$
FY 26/27 Budget Deficit (17,300,000)$
6/30/2026 Projected Reserves 62,282,000$
FY 27/28 Budget Deficit (23,100,000)$
6/30/2027 Projected Reserves 39,182,000$
FY 28/29 Budget Deficit (30,100,000)$
6/30/2028 Projected Reserves 9,082,000$
FY 29/30 Budget Deficit (33,700,000)$
6/30/2029 Projected Reserves (24,618,000)$
* Council Mandated Reserve was $34.9M in FY2024, expected to be $40.6M in 2027 Upcoming Budget Adoptions
Projected Use of Reserves
Cumulative Budget Reductions To Date
• Council has adopted $15.2
million of ongoing budget
reductions since mi-year FY
2024-25
• FY 25-26 original deficit amount
of $19.3 million was reduced to
$8.4 million
5 Department 8% Target 24/25 Mid-Year +
25/26 Adopted Cuts
(Below) / Over
Target
Police Department 6,222,331.0$ 3,005,002.0$ (3,217,329)$ Fire Department 4,469,286.0$ 2,127,000.0$ (2,342,286)$ Transportation & Public Works 2,060,252.0$ 1,894,605.0$ (165,647)$ Planning & Econ Development 1,400,261.0$ 1,510,190.0$ 109,929$ Recreation & Parks 1,369,611.0$ 1,166,731.0$ (202,880)$ Finance 640,292.0$ 1,754,902.0$ 1,114,610$ H ousing & C ommunity S ervices 392,022.0$ 1,579,000.0$ 1,186,978$ Human Resources 371,420.0$ 519,435.0$ 148,015$ City Attorney 367,459.0$ 308,050.0$ (59,409)$ C ity Manager 253,062.0$ 844,900.0$ 591,838$ C omms & Intergovt. Relations 145,580.0$ 444,368.0$ 298,788$ Santa Rosa Water 59,617.0$ 57,000.0$ (2,617)$ Total 17,751,193.0$ 15,211,183.0$ (2,540,010)$ GF Cut Amounts by Department - Mid Year + Adoption
General Fund Revenues FY 2024-25
6 Revenue Source FY 2024/25 Budget FY 2024/25 Actual Over (Under) Budget % Difference Interes t 600,000$ 5,022,393$ 4,422,393$ 737.1% * Interest is flat budgeted to $600K each year to insulate operations from gains and losses of the market Revenue Source FY 2024/25 Budget FY 2024/25 Actual Over (Under) Budget % Difference TOT 7,000,000$ 7,399,552$ 399,552$ 5.7% Business Taxes 4,750,000$ 8,018,506$ 3,268,506$ 68.8% Total 11,750,000$ 15,418,058$ 3,668,058$ 31.2% ** Voter approved changes occured after adoption and were not included in budget Revenue Source FY 2024/25 Budget FY 2024/25 Actual Over (Under) Budget % Difference Sales Taxes 75,866,735$ 69,098,976$ (6,767,759)$ -8.9% Property Taxes 39,068,300$ 40,764,412$ 1,696,112$ 4.3% Other Taxes (net of BT and TOT) 36,625,700$ 37,290,883$ 665,183$ 1.8% Charges for Services 26,727,653$ 27,709,234$ 981,581$ 3.7% UUT 14,200,000$ 15,059,524$ 859,524$ 6.1% Contributions from Private Parties 3,611,535$ 3,408,160$ (203,375)$ -5.6% Licenses and Permits 3,181,000$ 2,899,067$ (281,933)$ -8.9% Miscellaneous 2,116,360$ 4,075,098$ 1,958,738$ 92.6% Intergovernmental Revenue 1,991,493$ 1,807,234$ (184,259)$ -9.3% Fines and Forfeitures 1,610,900$ 1,613,965$ 3,065$ 0.2% Total 204,999,676$ 203,726,554$ (1,273,122)$ 0.6% Total 6,817,330$ 3.1%
Purpose of Public Hearing
Public input on budget priorities for Fiscal Year
2026-27
Public input on Council Goals
Written public input can be submitted online at:
www.srcity.org/BudgetComments
7 Next Steps
Departments and City Manager develop a budget with
consideration of Public Priorities and Council Goals:
February-May 2026
Mid-year financial update: March
Council review of department budgets: May 5 & 6,
2026
FY 2026-27 draft Budget Documents available to the
public: June 2, 2026
FY 2026-27 Budget Adoption Hearing: June 16, 2026
8 9
Open Public Hearing on
Budget Priorities