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18 <br /> <br />As an alternative, the City Council could include one or more of these items to reduce in <br />Year 1 or Year 2 of the budget. The City Council could also consider partial or modified <br />reduction of any of the 21 items recommended above, although, given the many <br />components that go into each program, modified reductions will require recalculation <br />and analysis of true costs and impacts and may not yield proportional savings or be <br />feasible in all cases. <br /> <br />Due to resource constraints, even with cost reductions, the General Fund cannot <br />support many critical program areas at the required level. Insufficient resources will <br />continue to negatively impact service delivery, and the City’s ability to properly invest in <br />facilities and other infrastructure used to serve the community. For example, the City’s <br />Repair and Replacement Program, including many areas such as buildings and <br />facilities, parks and medians, storm drain systems, police and fire vehicles, equipment, <br />information technology, streetlights, and traffic signals, remains significantly <br />underfunded. Other program areas, such as streets and roads, sound walls, traffic <br />poles, and workers’ compensation insurance, are also underfunded. <br /> <br />It is also important to note that any changes to the Preliminary Reduction <br />Recommendation will necessitate the inclusion of other reduction alternatives or the use <br />of one-time funds that will have negative impacts on the City’s financial stability and <br />other programs. <br /> <br />Developing the Revised General Fund Budget Forecast <br />As the budget development process progresses, new information will continue to allow <br />staff to recommend a balanced budget closer to the May timeframe. As previously <br />mentioned, the preliminary budget proposal was built based on the baseline forecast <br />assumptions presented to the City Council on March 4. Since then, the forecast has <br />been revised slightly and those updated numbers are shared below for initial reference <br />only. The total revised budget with updated forecast will be presented in total at the May <br />20 City Council meeting. Note that in addition to the numbers included below, the City is <br />anticipating other key information, such as the LPFD budget and updated liability- <br />related insurance costs, which will need to be taken into account. <br /> <br />For FY 2025/26, General Fund revenues, excluding additional adjustments/budget <br />balancing strategies, are projected at $159.8 million. General Fund expenditures, <br />excluding additional adjustments/budget balancing strategies, are projected at $161.0 <br />million. The net transfer is projected at $8.3 million. Net transfer represents transfers <br />between funds to support various City programs such as Senior and LowIncome Water <br />& Sewer Discounts, the Transit Program, and the Capital Improvement Program. The <br />deficit is projected at approximately $9.5 million. <br /> <br />For FY 2026/27, General Fund revenues, excluding additional adjustments/budget <br />balancing strategies, are projected at $164.6 million. General Fund expenditures, <br />excluding additional adjustments/budget balancing strategies, are projected at $168.1 <br />Page 20 of 40