City Council Agenda and Packet 2024 07 24 - SP

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SUBJECT: 2025/2026 BUDGET RETREAT DATE: J U LY 24, 2024 PAGE 3 OF 16 BUDGET GUIDELINES The Finance Department facilitates budget development, in coordination with the City Manager's Office. Department Heads are asked to submit operational and capital project requests with the following budget guidelines in mind: • The City is developing a two year, 2025-2026, biennial budget and Six Year Capital Improvement Plan. • Budget prioritization is given towards functions and programs we are currently performing over adding new services/programs/amenities. • One-time funding, if available, should fund one-time expenditures, not on -going expenditures. While our legal requirement is a balanced budget, our goal is to achieve a structurally balanced budget, where annual recurring revenue will be projected to equal or exceed annual recurring expenditures for each fund. • Directors are expected to review all of their operations, programs and projects and to identify any potential cost savings. • Line -item adjustments should be based on analysis and projections, not simple percentage increases. • Any new staffing requests should include detailed and specific information defining the need for the position(s). • Given existing and potential fiscal challenges, the community's expectation for a high level of service delivery, and the significant level of capital project expenditures within the Six Year CIP Program, we expect the budget development process to generate challenging conversations and difficult decisions. REVENUE ESTIMATES AND ASSUMPTIONS Finance Department prepares most projections for general revenue sources, such as sales taxes, use taxes, intergovernmental revenue, etc. Departments were asked to review and update projections for all revenue sources that they collect, assess, or are thought to have the best information to make the projections. For example, projections for building -related revenue are based on forecasts from the Planning & Building Safety Department. Projections for Recreation Center Fees and Golf Course Fees are based on forecasts from the Parks and Recreation Departments. Projections will be updated as needed during the budget development process. The following table from the Long -Term Financial Planning Model summarizes revenue assumptions for major revenue sources through 2030. CITY COUNCIL COMMUNICATION 4