Department of City Manager
Reference: Resolution Approving the Fourth Amendment to the 2025 Budget
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Kathryn Mortensen, Director of Budget and Innovation
Date Prepared: February 6, 2026
PURPOSE
To amend the 2025 budget to account for expenditures concerning end of year changes to accounting of vehicles involved in insurance claims, final PTO payout costs, and an increase in water charges to City Departments.
BACKGROUND
The City Council adopted the 2025 Budget on October 15, 2024, at $255,284,504. In March, as per the 2025 Budget Resolution, capital carryover was administratively adjusted to reflect final year end amounts, adding an additional $54,144,083 and bringing the City's total budget to $309,428,587. The 2025 budget included three previous amendments throughout the year for a total increase of $9,030,211, bringing the total revised budget for 2025 as of December 31, 2025, to $318,458,798.
This fourth amendment to the 2025 budget includes some end of year items that were not anticipated prior to the end of the 2025 fiscal year. These unanticipated costs in the Fleet Fund relate to additional insurance costs. While we added the costs that had incurred thus far in the Fleet Fund regarding the new process for charging insurance claims directly to the Fleet Internal Service Fund, the City did not include budget for future costs related to this.
The General Fund is also impacted by this fourth amendment. In December 2025, it was determined that there were some charges for water use by City Departments that were not being properly recorded in the new ERP system. Once this was corrected, City staff realized there were unaccounted costs.
Additional appropriation is also included in this fourth amendment to cover the PTO payout for employees over the PTO cap across the General Fund. After this fiscal year, a new policy will mitigate the impact of PTO pa...
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