Council Reviews FY26 Budget and CIP Plan

City Council met in a work session Monday, April 28, for two public hearings – the review of the City’s 2025-2026 fiscal year budget and the final hearing for the 2026 Capital Improvements Program.

Jacqueline Rubalcava, Budget and Grants Administrator for the City, presented the proposed budget for fiscal year 2025-2026 which begins July 1.

The total operating budget for FY26 is expected to be $609.6 million, a 12.25 percent or $81.1 million decrease from the 2024-2025 budget of $694.7 million.

The City projects 31 percent of the FY26 budget expenditures to be Enterprise Funds while the General Fund makes up 29 percent of the projected disbursements. Personnel costs are the City’s largest expenditure in the General Fund at approximately $120.2 million.

The FY26 General Fund is expected to increase $5.7 million from last year’s budget. New positions and a projected general wage increase for non-represented employees will add $10.4 million to the budget while operating costs and capital expenditures will decrease $4.7 million.

Expenditures in FY26 are expected to increase 3.4 percent to $174 million in the proposed budget. It’s anticipated the City will see a decrease in revenue, by about .3 percent, in FY26. Most of the City’s General Fund revenue, approximately 79 percent, comes from gross receipts taxes. The City anticipates $166.5 million in revenue for the General Fund in the upcoming fiscal year.

Council also held a public hearing on the Capital Improvements Program for fiscal year 2025-2026. CIP prioritizes capital needs, helps identify potential funding sources and submits projects for legislative funding.

Cynthia Alamillo, CIP Manager, presented the revised review. CIP works on a six-year plan for capital projects. One year is funded while five years are unfunded or projected for funding.

CIP uses several funding sources including grants, capital outlay bonds and loans for infrastructure needs.

Funded projects for FY26 are projected at $191.6 million, or 14.36 percent more than the 2024-2025 CIP. Alamillo indicated the primary reason for the increase is for projects with funding that will continue in FY26.

Most of the CIP projects, 120 of them, are carryover projects with a value of $175.6 million.

Both the FY26 Budget and the Capital Improvements Program FY26 plan will be considered by Council during a regular meeting scheduled for May 19, 2025.

Details of both public hearings are available on the City’s website and Monday’s work session can be viewed on the City’s YouTube channel.

City Council will next meet in regular session at 1 p.m. Monday, May 5, at City Hall, 700 N. Main St.