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<br />
<br />note that the budget shortfall is projected to increase significantly if there is an economic
<br />slowdown.
<br />
<br />Based on City Council direction, approximately $2.0 million in one-time funds
<br />(anticipated interest from the Section 115 Trust) has been applied to the preliminary
<br />structural deficit in FY 2025/26 and again in FY 2026/27. That resulted in a baseline
<br />reduction target of $8.4 million in General Fund spending reductions (services,
<br />programs, personnel) in FY 2025/26 and $10.0 million in FY 2026/27 using preliminary
<br />baseline assumptions.
<br />
<br />Table 1 below shows the reductions by category as a percentage of the total General
<br />Fund budget for each program and service area. Each of the recommended reduction
<br />categories includes multiple non-personnel (e.g., equipment, temporary staffing,
<br />contracts) and personnel (staff positions) expenses, offset by lost revenue, where
<br />applicable. A summary list of the potential reductions has been included as Attachment
<br />1. A list of potential personnel impacts is included as Attachment 3.
<br />
<br />Table 1. Summary of Preliminary General Fund Reduction Recommendations
<br />
<br />Total
<br />Program
<br />Budget
<br />Year 1
<br />Reduction
<br />Year 2
<br />Reduction*
<br />% of Total
<br />Program
<br />Budget**
<br />Internal Services and
<br />Operational Support 25,924,566 2,560,000 2,830,000 11%
<br />Library and
<br />Recreation Services 11,577,926 1,820,000 2,050,000 18%
<br />Community Support
<br />and Human Services 8,712,500 1,510,000 1,660,000 19%
<br />Parks, Streets, and
<br />Facilities 31,065,327 1,730,000 1,750,000 6%
<br />Planning & Building 11,146,353 380,000 380,000 3%
<br />Police and Fire 66,049,103 880,000 920,000 1%
<br />TOTAL 154,475,775 8,880,000 9,590,000 6%
<br /> +480,000 (-410,000)
<br />* Savings are not cumulative – the Year 2 savings represents the highest (not
<br />additional) annual reduction amount in each of the two budget years.
<br />** For this reason, all reduction percentages are based on the highest/ Year 2 amount.
<br />
<br />As the table shows, the preliminary recommendation includes an additional $480,000 of
<br />savings beyond the $8.4 million target in Year 1, and a gap of $410,000 below the
<br />reduction target of $10.0 million in Year 2. As discussed above, the target reduction
<br />may adjust (up or down) from the preliminary baseline assumptions in the final
<br />proposed budget. The recommendation is to take the additional savings in Year 1 to
<br />offset the gap in Year 2. Other options are discussed in the Alternatives section below.
<br />
<br />Page 8 of 40
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