Agenda Item Wording:
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Fiscal Year 2025/2026 Mid-Cycle Financial Report - Receive the Fiscal Year 2025/2026 mid-cycle financial report, appropriate funds for capital projects, and discuss possible revisions to the surplus policy.
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Prepared by: Renee Nagel, Finance Director 713-4475, renee.nagel@visalia.city Amee Swearingen, Budget Analyst 713-4170, amee.swearingen@visalia.city.
Department Recommendation: Receive the FY 2025/26 mid-cycle financial report, appropriate funds for capital projects, and discuss possible revisions to the surplus policy.
Summary:
The City operates under a two-year budget and FY 2025/26, which is the second year, will begin July 1, 2025. This mid-cycle report is to request any necessary budget amendments and to report any changes from the mid-year report which was presented in April 2025. In addition, staff will return to Council with FY 2025/26 mid-year projections in March 2026.
Background Discussion:
In April 2025, staff presented to Council budget projections for FY 2024/25 and 2025/26 for all operating funds. On off budget years, staff brings a Mid-Cycle report in June which reports any updates to the current fiscal year and the upcoming fiscal year. No significant changes have been made to the budget projections since the Mid-Year presentation to Council in April 2025 for FY 2024/25. The projection for FY 2025/26 builds upon the 2024/25 budget forecast and expected growth in revenues and expenditures.
This report focuses on the General Fund since it is the City's largest account that funds the majority of the City's essential services. The growth projection for the General Fund's two primary revenue sources (78% of total revenues) for FY 2025/26 is the following:
Budget 25/26 Projection
* Sales Tax 1.0% 1.0%
* Property Tax 2.0% 3.0%
Sales Tax revenue is the most volatile because it is based on consumer spending. This projection is also being conservative due to the continued inflation and econo...
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