At its April 9 meeting, the Folsom City Council directed staff to begin a public education effort to inform the community about the city's finances and projected deficit.

While the City of Folsom currently has a stable financial status, an Aa2 credit rating, and reserves in the rainy-day fund, fiscal projections reveal upcoming challenges. 

The city is facing a financial shortfall that could impact public safety, public services, and the quality of life in Folsom. The Folsom City Council will soon weigh options to address a structural deficit as the city prepares its FY 2024-25 annual budget.

Amidst the projected structural deficit, the city faces compounding infrastructure and building maintenance needs that require a dedicated funding source. There is an estimated $20 million annual shortfall in funding for infrastructure improvements, park and facility repairs, equipment maintenance and replacements, trail maintenance and repairs, and staffing needs.

Sales tax revenue—one of the city's primary revenue sources—no longer covers the cost of providing services or maintaining the city's aging infrastructure. The five-year projection predicts this structural deficit will grow as the cost of delivering services outpaces revenue growth. A multimillion-dollar annual shortfall is projected by 2026.

"The financial situation is arguably the biggest challenge facing our city and our community," said Mayor Mike Kozlowski. "This year will bring difficult decisions and challenging community conversations about addressing a structural budget deficit. Our City Council's priority is fiercely protecting our essential services and Folsom's quality of life. As always, you have our full commitment to transparency and public involvement as we address these challenges together."

City staff is developing the FY 2024-25 proposed budget, which must be balanced. The budget will be presented to the City Council at its May 28 meeting, and the Council will adopt a final budget by June 30. 

Learn more about the city's financial challenges:

Frequently Asked Questions

City Manager Presentation