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2/9/2026 <br />2 <br />Economic Outlook <br />•The U.S. economy is projected to soften through the first part of 2026 <br />before rebounding <br />•Growth is expected to be driven by AI investment, tax incentives, and <br />potential rate cuts by the Federal Reserve <br />•However, risks remain due to policy uncertainty, inflationary pressure, and <br />a cooling labor market <br />3 <br />Budget Highlights – General Fund <br />•A balanced budget maintaining essential City services <br />•Lower revenue and expenditure projection <br />•Increase in contribution from Capital Reserve <br />•Eliminating the use of Pension Trust Funds <br />•Out-year operating deficits close to prior forecast <br />4 <br />3 <br />4 <br />Page 88 of 144