Agenda Item #4.1
For Council Meeting of: May 5, 2026
CITY OF SANTA ROSA
CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: SCOTT WAGNER, CHIEF FINANCIAL OFFICER, FINANCE DEPARTMENT SUBJECT: REVIEW OF PROPOSED FISCAL YEAR 2026-27 OPERATIONS AND MAINTENANCE BUDGET AND CAPITAL IMPROVEMENT PROGRAM BUDGET AGENDA ACTION: STUDY SESSION
RECOMMENDATION
The Finance Department recommends that the Council hold a study session intended to provide City Council with the opportunity to receive information and ask questions related to the City’s overall financial stability and the proposed Fiscal Year (FY) 2026-27 Operations and Maintenance Budget and the Capital Improvement Program budget. This item is provided for Council’s information, and no action is required. This item has no impact on current fiscal year budget.
EXECUTIVE SUMMARY
In this Study Session, staff will present City Council with an overview of the funding requests and proposed reductions for FY 2026-27, across All Funds, including the General Fund. The Study Session is held in advance of the Budget Hearing(s) in June 2026 to provide the opportunity for City Council to ask questions, provide direction, and gain a full understanding of the budget and resulting financial implications for the City ahead of formal budget adoption in June.
GOAL
This item relates to Council Goal #1 - Achieve and Maintain Budgeting Excellence and Fiscal Stability by providing Council with an in-depth, detailed view of the City’s operating and capital budgets and soliciting feedback and direction prior to adoption.
BACKGROUND/PRIOR COUNCIL REVIEW
The City’s budget process began in January. The City held a public hearing on budget priorities on January 27, 2026, to solicit community input for proposed considerations.
City departments completed entry of their proposed budgets, and those submissions have been reviewed by the City Manager, Chief Financial Officer, and budget staff. On April 21, 2026, the Finance department presented a preliminary, high-level overview of the FY 2026-27 Budget to City Council including the Two-Year Strategy to address the estimated $17.5 million General Fund deficit, with Year One of the strategy being adopted in June 2026 for the Fiscal Year starting July 1, 2026, and the Year Two Strategy regarding expenditure reductions being adopted for the fiscal year starting July 1, 2027, unless additional General Fund revenue is identified.
ANALYSIS
During the Study Session, the City Council will receive an overview of the City’s financial condition and an overview of the City’s proposed Operations and Maintenance budget. With the General Fund facing a substantial deficit, the focus of this presentation will be on proposed reductions and Citywide cost saving strategies. The presentation will also include a presentation of the City’s proposed Capital Improvement Program Budget, the Proposed Enterprise Budgets and the funding proposed for the City’s Internal Services Funds (Risk Management, Insurance, Information Technology, to name a few). A discussion will also be held regarding the need for additional General Fund revenue to help support existing City services for the Fiscal Year starting July 1, 2027 (Year Two).
The City Council may ask questions and provide direction to staff.
FISCAL IMPACT
The study session does not create a fiscal impact for the organization.
ENVIRONMENTAL IMPACT
The recommended action does not constitute a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b)(5), as it involves an organizational or administrative activity of government that will not result in a direct or reasonably foreseeable indirect physical change in the environment. In the alternative, the recommended action is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility that the recommended action may have a significant effect on the environment.
BOARD/COMMISSION/COMMITTEE REVIEW AND RECOMMENDATIONS
Not applicable.
NOTIFICATION
Not applicable.
ATTACHMENTS
Attachment 1 – April 21st Study Session Staff Report
PRESENTER(S)
Scott Wagner, Chief Financial Officer
REVIEW OF THE FISCAL YEAR 2026-27 OPERATIONS AND MAINTENANCE BUDGET AND CAPITAL IMPROVEMENT PROGRAM BUDGET PAGE 3 OF 3