Leadership That Delivers
Community Update
March 2026
Mid-Year Budget Update: Where Folsom's Finances Stand Today
Residents have asked questions recently about the City’s financial position and whether Folsom is facing a structural deficit. Following the March 10 mid-year budget review, I wanted to share a clear update on where the City stands today and what has changed over the past year.
The March 10 mid-year budget review confirmed the City is operating within its adopted budget framework and exceeded the Council’s reserve policy target range.
The City is not in a structural deficit.
Here is what changed over the past year and why this update matters.
Where we are today
The March 10 mid-year budget review confirmed measurable progress in strengthening the City’s financial position and restoring alignment between adopted budgets and actual spending.
The City is not in a structural deficit.
The City is operating within its adopted budget framework and exceeded the Council’s reserve policy target range. The City’s unassigned General Fund balance is now projected at approximately $25.6 million. After completion of the annual audit, reserves exceeded the Council’s 17 percent to 20 percent policy target range.
Consistent with the City’s financial policy, those excess reserves were transferred into capital maintenance funds supporting facility rehabilitation, park and trail maintenance, and technology needs across the city.
These results reflect a return to clearer reporting, stronger oversight, and a more stable foundation for planning ahead.
Why residents heard concerns about a structural deficit
Some residents have asked why there has been discussion in recent years about a structural deficit. For several years, the City’s budget documents projected balanced budgets even as actual expenditures consistently came in above the levels approved by the Council. Strong property tax revenue helped maintain healthy General Fund balances, but it also made it difficult to clearly see how recurring spending compared with recurring revenue.
After joining the City Council in 2022, I began raising concerns about this disconnect and asked for clearer reporting so the Council could better understand where the City stood financially. Those concerns were not widely accepted at the time, and efforts to improve transparency were met with resistance. Restoring alignment between adopted budgets and actual spending was essential to protecting the City’s long-term stability, and I remained focused on bringing greater clarity and accountability to the City’s budgeting process.
When a new City Manager joined the City in 2025, financial reporting began to more accurately reflect actual spending patterns and future obligations. That transparency revealed the structural imbalance between revenues and expenditures, and the budget initially showed the potential need to rely on reserves while a correction plan was developed.
Over the following months, the Council and staff moved quickly to address that imbalance through service reorganizations, improved tracking, and the elimination of long-standing vacant positions that had remained in the budget but were not supporting active service delivery. As a result, the City restored balance while preserving healthy reserve levels.
Planning ahead responsibly
For the first time in several years, we are entering the upcoming budget cycle with clearer reporting and greater predictability about where the City stands financially. That creates an opportunity for a more transparent community conversation about future priorities and how best to support them.
Some priorities may be achievable within existing resources, while others may require identifying additional funding sources. With better information in place, those decisions can now be made thoughtfully and together with the community.
Public safety remains my top priority alongside maintaining long-term financial stability. With clearer reporting now in place, the City is in a stronger position to evaluate deployment of engines, ambulances, and staffing based on service demand and response needs. I continue supporting efforts to strengthen response coverage across the city, including bringing engine resources back online and expanding paramedic response capacity as we align resources with the needs of our community. I look forward to upcoming discussions with our Police and Fire Chiefs as we continue evaluating how best to deploy resources to support reliable coverage citywide.
We are entering this next budget cycle with better information, stronger alignment between spending and adopted budgets, and a more stable foundation for planning ahead and supporting the services our community depends on.