2025/2026 Budget Draft Discussion

[Shane Saum]

Colleagues,

Thank you to Council Prince who sent over his preliminary notes on the Budget. I will add his comments below. Attached are my initial questions back to Charles and staff on individual line items and the exceptional items that we have received. I can share the spreadsheet with you if you would like to use a similar format and I will send the spreadsheet to Charles for staff to provide their notes. I had to turn it into PDF form to attached it here.

As we continue reviewing the FY 2025–2026 proposed budget, I want to reiterate what I believe should be our guiding principle: we are close enough to the Voter Approval Rate (VAR) that we should be aiming to hold the current tax rate or reduce it—not increase it. The revenue difference is around $130,000. I believe we can find that and more through common-sense reductions.

Here are several areas I’m closely analyzing for potential savings:

Bank and Credit Card Fees​

• We’re spending over $160,000 in bank fees and an additional $250,000+ in credit card processing fees across multiple funds.
• We should explore if we can negotiate with our bank to consolidate sub-fund accounts under the broader City umbrella and seek fee waivers.
• We should explore reducing credit card fees—many cities encourage low-cost ACH transactions.

Personnel Budgeting Overages​

• Several departments appear to be consistently overbudgeting personnel costs when compared to actuals from prior years.
• I’ve flagged examples where the difference adds up to six figures in potential savings if we budget more accurately.
• Councilor Paul Prince has noted this trend for years at the Golf Course, especially around P&B line items.

Overlapping or Excessive Maintenance Lines​

• In several departments, I’m seeing large increases to repair and maintenance budgets, followed by an additional line for ‘unanticipated’ maintenance.
• If we’re already building in a sizable cushion in the base budget, why are we layering in more for “unexpected” expenses? Let’s be disciplined here.
• I think some of this increases in Maintenance and Repairs need to be better justified.

IT Costs and Shared Services​

• If we transition away from city-owned servers and hardware, what savings can we realize by using the State DIR shared cloud services?
• Let’s be sure we’re actually reducing costs and not simply layering new contracts over old infrastructure.

Nonprofit Grants Program​

• This program has grown significantly, and while many of these organizations do great work, we need to ask: Is this something the City would otherwise provide as a public service?
• I spoke to another City who said they have not heard of a nonprofit grants program like ours.
• If not, it’s hard to justify taxpayer funding. These groups are worthy of support—but that support should come from individuals and donors, not the property tax base.

Exceptional Items​

• I’ve asked staff to provide multiple bids for large exceptional item requests to ensure we’re getting the best deal.
• I also want to know whether MOUs or interlocal agreements (ILAs) with the County or State were considered before pursuing new City expenditures—especially for equipment or one-time capital costs.

Let’s sharpen our pencils and send a message to our citizens that we are fiscally responsible and capable of delivering quality services without raising taxes.

I welcome any additional feedback from Council or staff on areas we may still be overbudgeting. I also acknowledge this was a first draft budget and it is significantly better than what we got last year. Thank you to Charles and staff for starting us off so well!

Here is what Councilor Prince provided:

Overall, I think this is a good starting point. Plenty of pencil sharpening to be done of course. Looking forward to having the excel file to do that. I also went through the Tax calculations sheets carefully and understand why the VAR rate is lower than the NNR. I believe our choices are to go with VAR (0.428355) or stick with this years rate (0.4231). I personally lean towards going with the VAR rate but am open to discuss this further as the budget details sharpen up. It's ~$130K different in revenue so it may not be worth the political pain to change it.
Major comments:

1. From the Consolidated statement P. 4 (summary table)
   1. Revenue for GenF includes $3.6M xfer from UF. I think it should be ~$11.6M (not $15.2M)
      1. Expense for UtilF does NOT include xfer to GF. This is correct.
2. From GF Revenue... assuming $6M for AdV tax is low. I believe the VAR amount is $6.326M (line 21 [TAV] * line 41 [VAR M&O])
   1. Even if we keep the same tax rate as last year this will be $6.195M
3. LVGC... Total Exp $1,502,477, Revenue $910,700 [$592K loss]
   1. Expense budget is way too high again. I've pointed this out for 2 years running. Actual expenses last year and the trend for this year is $1.25M. The Budgeted amount is about $250K above what will actually be spent based on last 3 years history. The largest driver is P&B which has consistently been under budget by a large amount. I'm expecting $1.25M expense here.
   2. Revenue this year is trending to ~$900K. We've had over 30% revenue growth per year the last two years (thank you Greg). Assuming similar revenue growth again, a target of $1.2M is appropriate.
4. ...NOTE: This is consistent with Greg's ongoing message to GCAC that assuming the irrigation gets done he believes he has a shot at near break-even.
5. After transfer to the GenF, the UtilF will roughly lose ~$2M (as expected). We may be able to transfer significantly less.
   1. $326K upside on M&O AdV [#2]
   2. $550K upside on LVGC [#3]

Paul