"Rainy Day" Reserves to Address Priority Needs
Folsom, Calif. – At its June 25 meeting, the Folsom City Council adopted a $247 million operating budget and capital improvement plan for the 2024-25 fiscal year that took effect July 1.
The spending plan maintains essential services in a constrained fiscal environment. For the first time in over 20 years, the budget draws from emergency "rainy day" reserves, outside of a recession, to fund high priority needs.
"This financial situation is arguably the biggest challenge facing our city and our community."
Mayor Mike Kozlowski
$20 million needed annually
The city's five-year projection predicts a $5.25 million annual structural deficit by FY 2029-30 that will continue to grow as the cost of delivering services outpaces revenue growth. The city faces a shortfall in many service areas, and it is estimated that at a minimum, an additional $20 million in funding is needed annually to maintain current levels of service to provide public safety, street and infrastructure maintenance, park and facility repairs, equipment maintenance and replacements, trail maintenance and repairs, and associated staffing needs.
Sales tax projected to fall short
Sales tax revenue, one of the city's core funding sources, is projected to fall short of original estimates by $1.7 million for FY 2023-24. Budget pressures on the expenditure side include but are not limited to labor costs, maintenance of aging infrastructures, equipment, facilities, and amenities, and overall increase in operating costs due to continued high levels of inflation.
"We face a challenging fiscal environment where expenses are outpacing revenues, and the city is dealing with increasing infrastructure and maintenance demands that lack dedicated funding," said City Manager Elaine Andersen. "Continued control over expenditures and a focus on core priorities has been and will continue to be critical in delivering high-quality services to our community while remaining fiscally sustainable."
Additional Police
Despite financial constraints, the budget focuses on maintaining essential services and addressing immediate community needs. More than half of the city's General Fund is allocated to public safety services. The FY 2024-25 budget adds six new positions to the Folsom Police Department to provide homeless outreach and address other safety needs.
The FY 2024-25 budget includes an operating budget for day-to-day city programs and services, and a capital improvement budget that funds long range public construction projects and infrastructure improvements. The majority of the CIP projects come from sources other than the General Fund.
Highlights of the FY 2024-25 budget include:
- Benevento Family Park Phase 1, design and construction
- Davies Park improvements, including a ball field, parking lot, and pathways
- Folsom Fire Department Division Chief to oversee all department training
- Folsom Fire Station 33 planning and design
- Folsom Fire Station 34 construction
- Folsom/Placerville Trail
- Intelligent Transportation System Master Plan
- Kids Play Park replacement and renovation
- Mangini Ranch trails
- New software systems to improve efficiencies
- Orangevale Avenue and Mountain Oak Pump Station Rehabilitation Project
- Parks & Recreation Department – one park planner and one maintenance worker position
- Prospector Park construction
- Public Works Department – two maintenance worker positions
- Police Department – six positions
- Storm Water Basins Rehabilitation Project
- Street resurfacing, sewer, and drainage improvements
- Water system flow control facilities rehabilitation and replacement
- Water Tower Tank Rehabilitation Project
- Water treatment plant system improvements
Projects funded with emergency "rainy day" reserves: - $800,000 for urgent replacements and renovation at Kids Play Park.
- $498,000 to replace the failing kitchen equipment, tables, and chairs at the Folsom Community Center.
- $300,000 for park maintenance contracts
- $80,000 to replace malfunctioning doors and the lighting control system at the Folsom Public Library.
- $60,000 for the replacement of the city's primary data storage system in the Information Systems Department that has reached its end of life.
"For decades, the city has kept a watchful eye on our spending and has prudently saved funds for a rainy day, all while providing the highest level of service to our community. While our current budget funds essential programs and services, we stand at a financial crossroads," said Mayor Mike Kozlowski. "This financial situation is arguably the biggest challenge facing our city and our community. The City Council's biggest priority is to fiercely protect our essential services and Folsom's quality of life. As always, you have our full commitment to transparency and public involvement as we address these challenges together."