The new budget preparation season is here! A memo to all departments with instructions for the FY26 budget planning process was distributed today. To review memo click here.
While departments work on their first draft budget requests, just like in previous years, the Mayor will be connecting with City Councilors one-on-one to go over their objectives and priorities. Their input helps the Mayor identify what some of the shared goals are and plan accordingly so that we are hitting our targets or getting close to them.
To keep the public informed of our process, once departments submit to me their requests, the Auditor and the Mayor meet with the department heads to go over their requests in detail. At that point the Mayor begins to prepare his version of the budget which then gets submitted to the City Council during a State of the City Address. The Mayor anticipates submitting a proposed balanced budget to the City Council by April or early May for their review and approval. At that time, the City Council schedules meetings with department heads and the Mayor for budget hearings to understand the budget and make their proposed cuts, if any. The Council can only subtract from the budget but not add. Finally, the City Council approves the final budget so that we can continue to operate our local government for FY26 which begins on July 1.
To see the budget calendar and timeline, click here.
In past budget seasons, the City has made strides to reach its goal of helping departments ‘build-up’ and have made significant structural changes to department budgets to better meet objectives and limit impact to services. The City’s greatest challenge however is managing costs that can’t controlled. Costs such as net school aid are making an impact on our local contribution to fund our public schools due to the Student Opportunity Act. Transportation costs continue to climb. The City is curious to see what its health insurance costs will be since the City moved to self-funding to better control cost increases. In the current FY25 budget year, the little bit of excess capacity built was absorbed by increases in these areas coupled with the City’s contractual obligations and COLA increases for retirees and Schedule A employees of the City Ordinances. For these reasons, last year the Mayor tried to keep department budget requests within a 2% increase or close to it. Because of these unknowns in these areas going into the new fiscal year, it’s important the City continues to budget conservatively as it prepares for FY26.
In the budget process, it is expected for departments to be ready to explain in detail the thought behind their budget requests. The information they provide will assist the Mayor, the City Auditor, as well as the City Council in understanding each department’s essential needs, preferences, and priorities in order to balance all funding requests. It will also help the City identify any potential duplicate requests, or omissions. The deadline for departments to submit their budget is February 28, 2025.
More updates to come as the process progresses.