TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Adoption of the fiscal year (FY) 2026 City of Salem budget
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Natural Environment Stewardship; Safe and Healthy Community; Safe, Reliable and Efficient Infrastructure; Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
The City of Salem budget for FY 2026 is required to be adopted by Oregon budget law prior to July 1, 2025. Adoption of this resolution will allow authorized spending in the coming fiscal year.
end
ISSUE:
Shall City Council adopt Resolution No. 2025-16 to adopt the FY 2026 City of Salem budget?
RECOMMENDATION:
recommendation
Adopt Resolution No. 2025-16 to adopt the FY 2026 City of Salem budget.
body
FACTS AND FINDINGS:
Resolution No. 2025-16 and Exhibit A (Attachments 1 and 2) establish a total expenditure budget of $785,062,410 as represented in the display below.
Working capital: $406,581,480 Expenditures: $785,062,410
Revenues: $644,619,350 Unappropriated Balance: $266,130,420
Total Resources: $1,051,200,830 Total Expenditures: $1,051,200,830
The City of Salem FY 2026 City Council Amendments Summary (Attachment 3) provides a financial summary of budget changes following the Budget Committee recommendation including a Council action on June 9, 2025, and carryovers from the FY 2025 budget.
Rebudgeted Purchase Orders and Reappropriated Expenditures
Each year, the City reviews and carries over budget authority from one fiscal year to the next for some equipment, or services. Carryovers occur for purchases or projects that are started but will not be completed before the end of FY 2025 and additional expenditure authority is needed to pay for those purchases or projects in FY 2026. City Council authorized budget appropriation for these outstanding purchases as part of the FY 2025 budget or through a mid-year action. A detailed list of carryover items for the General Fund totaling $594,390 are shown in Attachment 4. Carryover items for all other City funds totaling $3,332,130 are shown in Attachment 5. These amendments were reviewed and remain within the 10 percent limit for changes to the Budget Committee’s recommendation for each affected City fund as prescribed in Oregon budget law.
Working Capital
For the FY 2026 budget, the additional working capital for reappropriated purchase orders, projects, and items is considered restricted because of the addition of equivalent expense. With the approval of the carryover requests, General Fund working capital will increase from the Budget Committee recommended amount of $30,553,610 to $30,721,980.
Additional Budget Adjustments
City Council made one adjustment on June 9, 2025, allocating $50,000 of state grant funding to the Safe Parking program. This action necessitated a transfer from the trust fund to reimburse the General Fund where the Safe Parking program expenses are incurred (detail on Attachment 3, item 2.C.).
Urban Development Division Staff Reimbursement
As a result of the recently completed performance assessment of the Urban Renewal Agency (URA), the Finance Department has reviewed the staff allocation model. Based on that review, Finance is recommending several changes that will likely result in additional cost recovery for the General Fund. This change will be made administratively and reflected in ongoing budget monitoring and reporting. The precise amount will depend on actual time spent on URA activities, staff time charged to each area, and position vacancies. The additional reimbursed staff costs could range from $500,000 - $700,000. Additional budget authority is not necessary for the Urban Renewal Agency funds. This new methodology will be fully incorporated into the Fiscal Year 2027 budget for both the City and the Urban Renewal Agency.
BACKGROUND:
The Budget Committee reviewed the City budget this spring and recommended a budget to City Council on May 28, 2025.
Kali Leinenbach
Budget Manager
Attachments:
1. Resolution No. 2025-16
2. Resolution No. 2025-16, Exhibit A
3. City of Salem FY 2026 City Council Amendments Summary
4. City of Salem FY 2025 Carryovers for the FY 2026 Budget, General Fund
5. City of Salem FY 2025 Carryovers for the FY 2026 Budget, All Other Funds