Item 15 - Early Direction for the Fiscal Year 2025-26 Budget

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Early Direction for the Fiscal Year 2025-26 Budget March 18, 2025 Page 3 The Outlook's graphical results indicate that expenditures are growing faster than revenue, leading to a potential deficit starting in FY 2025-26. When the Measure X rate decreases in 2029, the deficit is expected to widen significantly. $670 $630 $590 $550 $510 $470 $430 $419.6 $390 $350 FY25-26 FY26-27 FY27-28 FY28-29 FY29-30 FY30-31 FY31-32 FY32-33 FY33-34 FY34-35 -*-Revenue (Spending The FY 2024-25 Measure X spending plan is attached to this report as Exhibit 1. The detailed plan outlines expenditures that may be considered should it become necessary to reduce costs in order to rebalance the budget. Recommendations from the Measure X Oversight Committee The Measure X Citizens Oversight Committee met on March 12 to formulate recommendations for the FY 2025-26 budget. Staff anticipates incorporating these recommendations into the presentation to the City Council on March 18. One -Time General Fund Spending As reported in the Mid -Year Update on March 4, 2025, the estimated spendable fund balance for one-time expenditures in the General Fund is $16,080,348. The following are potential options for utilizing this one-time funding.