Item 10 - Fiscal Year 2025-26 First Quarter Budget Update and Proposed Appropriation Adjusments

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FY 2025-26 First Quarter Budget Update and Proposed Appropriation Adjustments December 2, 2025 Page 6 5 4 5 4 Community Development Block Grant (Fund 135) The Community Development Block Grant (CDBG) is a federal grant that funds activities such as housing rehabilitation, infrastructure improvements, public services, and initiatives to prevent blight or address urgent community needs. The Federal Government did not release FY25-26 award amounts until late in the process, leaving insufficient time to make necessary adjustments. To align the budget with the actual award amount, staff is recommending a $27,908 increase in revenues and a $563,092 decrease in expenditures. The revenue increase aligns the budget with the actual grant award, while the expenditure decrease removes costs that were overstated during the initial budget development. The final CDBG allocation is determined based on a community’s overall conditions. As community indicators improve—such as reductions in poverty, improved housing conditions, and faster population growth—the City receives a smaller allocation, as it is assessed to have comparatively lower need than other jurisdictions. Additionally, though to a lesser extent, a $45,250 reduction to the CDBG Emergency Solutions Grant (ESG) allocation is required to align with the actual grant award. Further detail is provided in Exhibit 1. Housing Authority- Housing Assistance Payment (Funds 136 & 140) On September 18, 2025, the Housing Authority received a funding notification from the Federal Government awarding additional funds of $464,445 for FY25-26 to support the Foster Youth to Independence (FYI) Program under the Housing Authority – Voucher HAP Fund (Fund 136). The Housing Authority – Voucher Admin Fund (Fund 140) also received an additional allocation of $18,750 to support the continued administration and expansion of these services. To align the budget with the actual award amounts, staff is recommending an increase in revenues paired with a corresponding increase in expenditures. Further detail is provided in Exhibit 1. Vacancy Report Exhibit 2 includes the staff vacancy report as of September 30, 2025. It reflects all authorized staffing changes to date across City departments. As of September 30, there is a total of 193 funded vacancies, which does not include the 23 unfunded positions. Of the funded vacancies, 123 are General Fund positions and 70 are Non-General Fund positions. The overall vacancy rate across the organization is 13%. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action.