Citrus Heights Development News

City Council Reviews Mid-Cycle Budget, Projects Operating Surplus and Addresses Revenue Trends

The City Council reviewed the mid-cycle budget for fiscal year 2025-2026 and the proposed budget for fiscal year 2026-2027. For FY 2025-2026, revenues are projected to exceed budget by $536,000, and expenditures are projected to be under budget by $1.09 million, resulting in an operating surplus of approximately $3.8 million, largely due to salary and benefits savings from vacancies. For FY 2026-2027, revenues are projected to be $172,000 above the adopted budget, and expenditures are projected to be $350,000 above budget. Declining sales tax revenue trends were noted, with an average dip of $300,000 annually over the past four years. Investment revenues from higher interest rates are helping to offset these declines. The city also reviewed its ARPA funds, with $15.2 million of the $15.6 million committed funds expended, leaving $430,000 remaining. The appropriations limit for FY 2026-2027 was set at $77.7 million, with $47.5 million in available capacity, well below the limit. The long-range financial forecast projects an ending reserve balance of approximately $36.5 million for the general fund, well above policy targets. The FY 2026-2027 budget projects a net operating position of $1.1 million with significant investment in street repairs, bringing the projected ending reserve balance to $33.7 million, with a further projected draw of $1 million resulting in an estimated $33.9 million reserve balance.