Council to discuss moving to a two-year budget process

In plain English

City staff propose switching Scotts Valley from writing a new budget every year to writing one two-year (biennial) budget, starting with Fiscal Years 2027/28 and 2028/29. A yes vote would approve the change and direct staff to start building the first two-year budget during the current fiscal year. The plan keeps formal money reviews in place: a mid-year financial review in each of the two years, plus a full review and update of the second year's budget before that year begins, with amendments brought to the Council as needed.

It changes how often the Council and the public go through a full line-by-line budget build for city services, staffing, and capital projects, and staff say the freed-up time in the off year would go toward financial analysis, capital and organizational planning, grant opportunities, and Council priorities.

Key facts

Proposed start: Fiscal Years 2027/28 and 2028/29
Review schedule under the proposal: biennial budget adoption, a first-year mid-year review, a comprehensive second-year budget review before that year starts, and a second-year mid-year review
"There is no direct fiscal impact associated with transitioning to a biennial budget process."
The Budget Subcommittee reviewed the transition and recommended moving it forward; Department Heads were consulted and support it
Staff cite Watsonville, Gilroy, Pismo Beach and other special districts as nearby agencies with biennial budgets that won the Government Finance Officers Association Distinguished Budget Presentation Award

Reasons to support

Building two years at once forces departments to project staffing, operating, contractual, capital and service needs further out, giving Finance and the Council earlier warning of future costs and financial pressures.
The city has no separate budget office, so the annual build pulls heavily on Finance, the City Manager's Office and Department Heads; doing the full build every other year frees staff time in the off year for forecasting, project implementation and grant work.
Starting with FY 2027/28 falls in a non-election year and lines up the budget with the city's biennial Council strategic goals update, so priorities, work plans and dollars are set in the same two-year window.

Reasons to oppose or change it

Under an annual cycle the Council rebuilds the whole budget each year; critics of the change could argue that starting the second-year discussion from an already-adopted plan narrows the debate to adjustments rather than a fresh look at every program.
The first biennial budget is described as "a significant undertaking" requiring staff to set FY 2028/29 assumptions, detailed department budgets, and a new presentation format on top of the FY 2027/28 budget — front-loaded work that relies on "supplemental professional support" and on starting early.
Projecting revenues and costs two years out means more of the plan rests on assumptions that may shift, leaving mid-year and second-year reviews to absorb the corrections.

Official wording

Biennial Budget Process

Official agenda Staff Report

Summary written by claude-opus-5 from the agenda and the Staff report (agenda packet, pages 157-159). It can contain mistakes. The official documents govern.