2027 Budget Development

Budget Team sitting around conference table, working on laptops, talking and laughing

Each year, the Budget & Policy Department leads the City in a multi-month process to develop next year's budget. Each department has representatives who work on the budget for their department, ultimately coming together to create the City Manager's Proposed Budget. City Council will review the proposed budget, make requests, and eventually approve the budget.

This year, this process looks different in order to solve for the City's structural budget deficit. The City has officially begun the development of the 2027 budget. This process will use a target-based approach to focus on addressing a projected structural deficit and establishing long-term financial sustainability. This page has information regarding the City's financial status, as well as information on the budget development process.

Understanding the Budget Deficit

The City has been operating with a structural deficit since 2023, meaning ongoing expenses have exceeded ongoing revenues. To maintain services, the City has used reserves to fill the gap. While this has allowed operations to continue, it is not a sustainable long-term solution.

For the 2027 budget cycle, the projected gap between expected revenues and the cost to maintain current service levels is approximately $20 million. This estimate is based on:

Projected General Fund revenues for 2027
The cost of continuing current services, based on the 2026 base budget
Known cost drivers impacting operations

Addressing this gap is a key priority for the organization.

Approach to Closing the Gap

To address the budget deficit, the City is using a target-based budgeting approach. Rather than applying the same percentage reduction across all departments, individual targets have been assigned. During a retreat, City Council grouped departments into three categories, which were later assigned a budget reduction percentage:

Category A: 25% budget reductions
Category B: 17% budget reductions
Category C: 4% budget reductions (only Police and Fire departments are in this category)

Departments may meet their targets through expenditure reductions, revenue increases, or a combination of both.

What the Process Looks Like

The budget development process is now underway. Target budget proposal development will take place over the coming weeks:

Now – April 24: Departments develop and submit draft budget proposals
Late April – Early May: Director peer review and internal evaluation
May 15: Final departmental proposals due
May - October: Review and refinement; department proposals are reviewed and refined through a series of internal meetings and input from the City Manager. This phase results in a proposed budget (called the City Manager's Proposed Budget that will be presented to City Council), development of the budget book, and final adoption by City

Resources

Check out the 2027 Budget Development Videos on YouTube!