At the March 17, 2026, City Council meeting, City staff presented an agenda item titled “Second Quarter Financial Report for Fiscal Year (FY) 2025–26 and Mid-Year Budget Adjustments.” The purpose of this item was to provide an overview of the City’s financial position through mid-year FY 2025–26, report on revenues and expenditures from July 1, 2025, through December 31, 2025, and present the updated financial position based on the finalized FY 2024–25 Annual Comprehensive Financial Report (ACFR). Following this presentation, the City would like to provide additional context and clarification to support a clear and shared understanding of the information discussed.
The City Council adopted the Fiscal Year 2024–25 budget on June 4, 2024, which included a planned structural deficit of approximately $9.4 million. As part of that budget, it was understood that the City would utilize a portion of its reserves—similar to drawing from savings—to balance the difference between revenues and expenditures. This approach was discussed publicly during the budget adoption process.
Throughout FY 2024–25, the City took steps to manage costs, including holding vacant positions and limiting expenditures where feasible. As a result of these efforts, the City reduced the actual year-end operating deficit to approximately $5.7 million, reflecting ongoing attention to fiscal responsibility…