During a recent city council meeting, the city manager presented preliminary revenue estimates for the 2025 and 2026 budget, emphasizing the importance of accurate financial forecasting as the city prepares for upcoming budget discussions. The city manager acknowledged the inherent uncertainties in budget planning, stating, \"Our budget will be wrong the minute we adopt it,\" but stressed the necessity of a financial plan that reflects realistic expectations.

The finance team, led by Quan, provided an overview of the revenue projections, which include general fund revenues, real estate excise taxes, and utility revenues. For the general fund, the forecast estimates $75.5 million for 2025 and $78 million for 2026, indicating a modest growth of 1.37% and 3.28%, respectively. The real estate excise tax is projected at $4.4 million in 2025 and $4.5 million in 2026, while utility revenues are expected to reach $25 million in 2025 and $26.6 million in 2026.

The city manager and finance team highlighted the significance of these flexible revenue sources, which allow for more discretionary spending compared to restricted state and federal grants. They noted that the city is recovering from the economic impacts of the COVID-19 pandemic, with surrounding businesses still in the process of recovery. The finance team utilized regional forecasts to inform their estimates, indicating a cautious outlook for growth, particularly in sales tax revenues, which are projected to increase by 5.4% in 2025 and 8.7% in 2026.

The meeting served as an initial step in the budget planning process, with further discussions scheduled for October 8th and 15th, where council members will have the opportunity to provide feedback and engage in deeper discussions regarding the city's financial outlook.