Title
Work Session: Proposed FY 2027 Mid-Cycle Update
Staffreport
SUMMARY
The City budgets on a biennial cycle every two years. At the midpoint of each biennial, staff reviews revenues and expenditures, recommending necessary adjustments.
The FY 2027 Mid-Cycle update includes proposed changes that will result in a balanced budget. During the FY 2026-27 biennial budget process, City Council provided clear directive to ensure long-term fiscal stability. The proposed changes for consideration will result in a positive outlook on the City’s long-term financial position. The proposed FY 2027 Mid-Cycle update provides projected increases in revenue and reductions in operating expenditures, and interfund transfers.
The proposed FY 2027 Mid-Cycle Update presents adjustments for the City Council to consider and provide input before subsequently being considered for adoption by City Council.
RECOMMENDATIONS
Staff recommend that the City Council review and provide direction on proposed changes to the FY 2027 Mid-Cycle update, and proposed changes planned for FY 2028 and FY 2029.
Committee Review and Actions
City Council Finance Committee (March 25, 2026)
• Unanimously agreed to recommend the proposed FY 2027 Mid-Cycle update be presented to the full City Council for further discussion and direction.
Financial Impacts
Proposed FY 2027 Mid-Cycle update reflects the following cumulative changes over the next three fiscal years, which will result in closing the $11.6 million structural deficit:
• Increase in General Fund Revenue of $0.7 million
• Reduction in General Fund Expenditures of $7.9 million
• Reduction in General Fund Transfers of $3.0 million
ATTACHMENT
A: Proposed FY 2027 Mid-Cycle Update Presentation
PREPARED BY: Nicole Gonzales, Finance Director