09-22-2025 - Agenda Packet City Council - Regular Meeting

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AGENDA ITEM Date: September 22, 2025 Title: Adopt 2026 Preliminary General Fund Budget - Resolution 7623 Presenter: Maggie Jin, Finance Director Section: Finance Report Purpose: The purpose of this agenda item is to adopt the 2026 Preliminary General Fund Budget. Item: 17 2. Background: Work on the 2026 General Fund budget began in May and have since been updated and refined. As part of the budget process, staff met with City Council during work sessions in July and September for the preliminary General Fund Budget. General Fund Revenues. The 2026 General Fund Revenue Budget totals $12,490,550 an increase of $555,550 (4.7%). Property taxes makes up approximately 60% of the budget, with an increase of $510,900 (4.7%). The remainder of the General Fund revenue is made of non -tax sources with the next largest revenue source coming from public safety charges at 24%. Public safety charges comes from service contracts with neighboring cities for police protection. By working cooperatively with neighboring cities, the police department is able to provide an enhanced service at a lower cost by eliminating overhead and duplication of services. The fire department is anticipated to transition to a joint power agreement (JPA) on January 1, 2026. The remaining 16% of revenue is made of. licenses, permits, intergovernmental revenue, general government service charges, fines and forfeitures, interest, and miscellaneous charges. General Fund Expenditures. The 2026 expenditure budget is $12,490,550 which is an increase of $555,550 (4.65%) over the 2025 budget. By category, the largest increase is in Professional Services in the amount of $741,950 (41.28%). IT services charge, facilities services charge and contracted fire service makes up the majority of this increase. IT services charge is increasing by $124,050 due to reallocating IT personal wage and benefits, subscription costs, telephone cost and other IT supplies and equipment. For 2026 budget, each department will be charged facilities services charge, totaling an increase of $267,750 in the General Fund. Contracted fire service is also increasing $389,400 with the transition to a joint powers agreement (JPA). Offsetting the large increase is Personal Services, which is decreasing by $262,150 (-3.22%). Within the Central Service department, wages and benefits are decreasing by $145,700 due to transition cost to the Facilities Services Fund. Fire department wages and benefits are decreasing by $667,800 with the transition to a JPA fire department. The remaining offset is an increase in overall General Fund wages and benefits of remaining City staff of $541,350. Significant changes within each department in the General Fund budget are as follows: • Administration — staff is seeking to revise the employee recognition policy in the Employee Handbook to incorporate additional items. Employee Handbook updates will be brought to Council after union negotiations are completed. 150