Agenda Date: 04/07/2026
Subject:
Title
2026 Budget Update and 2027 Budget Process overview and Policy Goals Discussion
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Laurie Matta, Finance Director |
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Kevin Orton, Budget Manager |
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Presentations: |
Kevin Orton, Budget Manager |
PURPOSE:
Informational briefing updating City Council on preliminary 2025 actuals, an update to the 2026 budget and five-year model, briefing on the 2027 budget process and policy discussion, and an update on the Priority Based Budgeting Process.
LONG-TERM OUTCOME(S) SERVED:
High-Quality Governance
DISCUSSION:
This briefing will provide City Council a budget update:
• Budget and five-year model update
• 2027 budget process and policy discussion
• Update on the Priority Based Budgeting process
Budget and five-year model update
An informational briefing will be provided to City Council on an update to the 2026 budget and five-year model.
2027 budget process and policy discussion
The City Charter requires the City Manager to present the annual proposed budget by September 15th and City Council is required to adopt the budget 30 days prior to the beginning of the fiscal year. This briefing will include a discussion on the budget strategy for 2027 budget planning.
Update on the Priority Based Budgeting process
The City launched Priority Based Budgeting (PBB) in 2017 to enhance the connection of budget to with Council priorities. The program was paused in 2022 to focus on completing Horizon 2027 and implementing the Workday ERP, based on competing workload requirements for these initiatives and workload that would be required to advance PPB to the next steps of functionality for the organization.
Since then, the City continued applying PBB principles, voters approved new funding sources and subsequent programs (Capital Improvement Sales Tax, Lodgers Tax, and an additional dedicated Marijuana Tax), completing the Horizon 2027 Strategic Plan, undertaking the Project Downtown public engagement process, implementing a new procurement policy, ERP (Workday) implementation, developing a Project Management Information System (PMIS), and identifying delivery methods and funding mechanisms for major capital projects.
Several current initiatives will further strengthen the organization's capacity: the Workday Finance Tenant Optimization Project, the Project Management Information System (PMIS) development, the Public Works Engineering Re-Imagining Project (completion of this project will inform how staff and funds are allocated across the capital improvement program), and the Transportation Master Plan, which will identify projects and resources needed to address the City's transportation priorities.
The goal remains to integrate budgeting processes with the City’s strategic plan. As the city has grown and added new funding resources, it has evolved beyond the original PBB model. PBB is one method for connecting the budget to decision making, but once the aforementioned initiatives are complete, the city will be better positioned to determine the best path forward. At that time, city staff will seek policy direction from City Council to determine whether to return to PBB or adopt a different budgeting approach.
BACKGROUND:
An integral part of the city’s budget planning process is the simultaneous development of a five-year model to ensure long-term financial stability. The five-year model has been updated with activity since the 2026 adopted budget.
• 2025 actuals and carry forward
• Revised large retail development revenue
2025 Actuals and Carry Forward
The fiscal year for 2025 was from January 1 to December 31. During the 2026 budget process, the city estimates revenues and expenditures for 2025 to determine available fund balance for 2026 budget planning. After December 31 of each year, the Finance Department works to close the fiscal year to in accordance to General Accepted Account Principles (GAAP). All actuals are then audited by an independent auditing firm. Actuals in this briefing are currently unaudited and may be adjusted after this briefing upon completion of the independent audit.
On April 21, 2026, the 2026 budget was amended to add $1.2 million of 2025 remaining encumbrances and other carryforwards.
Revised large retail development revenue
During the 2026 budget, the city planned revenue for the new mineral place development to begin August 2026. However, due to delays in construction, the city has adjusted the projection to April 2027.
Prior Actions or Discussions
The 2026 budget was adopted by City Council on October 21, 2025.
The 2026 budget was amended on April 21, 2026.
FISCAL IMPACTS:
N/A
STAFF RECOMMENDATION:
N/A