The Folsom City Council voted Tuesday night to adopt a $123.5 million general fund budget for fiscal year 2025–26, relying on approximately $3 million in emergency reserves to bridge a projected shortfall. The move reflects the city’s effort to maintain core services in the face of rising operational costs and slower-than-expected revenue growth.
The adopted budget includes several cost-saving measures, including the suspension of the city’s $427,000 annual contribution to its retiree health trust and the elimination of various non-essential expenses. These changes collectively reduce general fund expenditures by $452,000, helping to trim the original projected deficit from $3.5 million to approximately $3 million.
City Manager Brian Whitemyer described the strategy as a short-term approach to buy time for more sustainable fiscal planning. “We’re going to live within our means,” Whitemyer told councilmembers. “So this year, we’re recommending utilization of general fund reserves to allow ourselves more time to actually prudently plan for whatever those reductions end up being.”
The reserve drawdown is expected to reduce the city’s unassigned fund balance to $19.1 million by the end of the fiscal year—equal to 15.5% of general fund expenditures and below the City Council’s established reserve policy range of 17% to 20%.
Finance Director Stacey Tamagni outlined the factors contributing to the shortfall. “We’re projecting that the increase to total general fund revenues over last year’s budgeted figure will be an increase of about $4.7 million,” Tamagni said. “When we added in the salary and benefit increases, the true-ups, that was total expenditures of about $123.5 million. We had $120 million in revenue. So that created a total deficit of about $3.5 million that would have come from your unassigned fund balance, otherwise known as the emergency reserve.”
The reserve has gradually declined from above 20% in recent years and could come under further strain next year as temporary federal aid sunsets and citywide personnel costs continue to rise.
Staffing, services, and what’s next
Among the cost-saving measures, the Council approved the removal of on-site supervision at the Cummings Family Skate and Bike Park, saving approximately $41,000 annually. An additional $14,500 will be used to install automated lighting controls. While the city denied a separate petition to relax required safety gear rules—such as helmets and pads, which are mandated by state law—new signage will be posted to ensure compliance. The Parks and Recreation Commission will review the impact after one year, with enforcement focused on education rather than citations.
Aside from the skate park staffing cut, the adopted budget does not specify any additional layoffs or specific formal plans for workforce reductions. However, it continues the city’s cautious approach to staffing and departmental spending. While essential services remain intact for now, the budget reflects a $3 million structural gap that will need to be addressed in the coming year. City Manager Brian Whitemyer acknowledged that service reductions may be necessary as the city moves toward long-term financial stability. “Ultimately, to live within our means, we’re going to have to find a way to reduce our expenditures, which will ultimately translate into reductions in services,” Whitemyer said.
Although the operating budget remains tight, the city continues to fund large-scale infrastructure investments through its multi-year Capital Improvement Plan (CIP). These projects—including road repairs and park upgrades—are supported by restricted revenues or one-time grants, not general fund dollars. Nonetheless, the contrast highlights the difficulty of balancing long-term growth with short-term financial stability.
Community feedback was essential
Whitemyer emphasized that public input played a vital role throughout the budget process. “I value the community’s input,” he said. “Just last night, I got an email and then dropped off today a handwritten note from members of the community saying, hey. What about this? What about that? I mean, I really appreciate the time. They had to spend a significant amount of time to handwrite salary schedules and positions and identifying in their mind what was a vital service and what was nonvital. I’m optimistic from the standpoint that this community cares.”
The Council will revisit the budget in the fall during its mid-cycle review. At that time, updated revenue forecasts will be presented, and staff will explore additional cost-saving strategies or potential revenue options to close the city’s ongoing structural gap.
“With the proposed cuts, there’s still a projected $3,040,000 shortfall for 25–26,” Whitemyer added. “Ultimately, to live within our means, we’re going to have to find a way to reduce our expenditures, which will ultimately translate into reductions in services. However, going forward, we will aggressively pursue options to reduce costs and services in preparation for the fiscal year 2026–27 budget.”
The public can review all of the information presented at Tuesday’s meeting on the city’s official website at https://www.folsom.ca.us.
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