AGENDA
ITEM
4 AGENDA
CALEXICO California ITEM
WHERE CALIFORNIA AND MEXICO MEET
CITY COUNCIL
AGENDA STAFF REPORT
DATE: June 26, 2025
TO: Mayor and City Council
APPROVED BY: Armando Orozco, Interim City Manager o
PREPARED BY: Karla Chaparro, Finance Director Je
SUBJECT: Annual Budget Resolution for Fiscal Year July 1, 2025 to June 30, 2026 ===== ==
Recommendation:
It is recommended that the City Council consider a resolution to adopt the 2025-26 Annual Budget.
Background:
The City Council received a presentation on the 2025-26 Proposed Budget on June 24, 2025.
City staff responded to a series of questions from the City Council about the proposed budget.
Discussion & Analysis:
Updates to Proposed Budget
No updates to the proposed budget have been requested as of the time of agenda publication.
Budget Recommendations Based Upon Current Financial Information The City's budget resolution requires that the annual budget adoption agenda report include information about the status of the City's annual audited financial statements, general ledger analysis, and bank reconciliations to endure that budget recommendations are based upon current financial information. The City Council received the June 30, 2024 audited financial statements along with a presentation from the City's auditor on April 16, 2025. General ledger analysis and bank reconciliations are complete through the 3rd quarter of the 2024-25 fiscal year.
A 2024-25 3rd quarter budget status result was presented to the City Council on May 21, 2025.
Accordingly, the 2025-26 budget recommendations are based upon current financial information.
Fiscal Impact
The budget resolution provides staffing and expenditure authority for the upcoming 2025-26 fiscal year. The resolution also establishes reserve policies as a framework for the City's financial targets. The supporting budget book provides detailed revenue and expenditure data, historical trends, and future projections for each fund of the City as the basis for the proposed budget.
Collectively, the budget informs the City Council and the public about the financial status of the City's various programs and the impact of the proposed budget.
Attachments:
1. Resolution
2. Exhibit 1 to the Resolution
2 ATTACHMENT 1
RESOLUTION NO. 2025-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALEXICO APPROVING THE BUDGET FOR FISCAL YEAR JULY 1, 2025 TO JUNE 30, 2026 WHEREAS, the City of Calexico is a general law city that operates under the council- manager form of government; and
WHEREAS, the City Council of the City of Calexico annually adopts a budget that estimates revenues and authorizes expenditures, subject to the City's existing purchasing policies and procedures, employment policies and other adopted city policies; and WHEREAS, the City Council of the City of Calexico received a presentation on the 2025- 26 Proposed Budget on June 24, 2025;
NOW, THEREFORE, be it resolved, determined, and ordered by the City Council of the City of Calexico:
Section 1. Expenditure Authority
The fiscal year 2025-26 Budget, attached hereto as Exhibit 1, shall be the budget for the City of Calexico for the fiscal year 2025-26. The City Manager, or their duly appointed representative, has the authority to expend appropriated amounts subject to policies and procedures adopted by the City Council.
Section 2. Budgetary Control Levels
Budget appropriations shall be controlled at the department level within the General Fund, at the fund level for other funds, and at the capital project level within the capital improvement program.
The City Manager is authorized to transfer appropriations between accounts within a General Fund Department, and within other individual funds, to meet the operating needs of the City. The City Manager is also authorized to carry-over any unspent capital project or grant appropriations to the following fiscal year until the projects are complete.
Section 3. Authorized Staffing
The City Manager, or their duly appointed representative, is authorized to fill staff positions as listed in the full-time staff position chart in the budget.
Section 4. Fund Balance Reserve Policies
The City's Fund Balance Reserve Policies provide contingency funds in the event of economic or other disruption in City operations, as follows:
A. General and Measure H Funds
It will be the City Council's policy to target a fund balance reserve for the combined General Fund and Measure H Funds that follows the Best Practices established by the Government Finance Officers Association (September 2015) equal to 60 days (16%) of General Fund operations.
Over the next five years, it will be the City Council's policy to further build and delineate the combined General Fund and Measure H Fund reserve as follows:
Working Capital Reserve
16% of Annual Expenditures (60 Days of operations)
The Working Capital Reserve provides a General Fund cash balance to cover anticipated cash flow requirements to sustain payroll and other operating payments during the collection period for General Fund tax and fee revenue collections, including the 2-month collection period for Sales Tax revenue from the State of California and up to 5-month Property Tax revenue collection period from the County of Imperial.
b. Emergency Reserve
10% of General Fund Sales Tax (8 Days of operations)
The Emergency Reserve will be targeted by the continued phase in of the Measure H policy to reserve 10% of annual Measure H revenues (Adopted September 2011, Resolution #2011-99).
B. Street Maintenance Funds (Gas Tax and RMMA Funds)
The Fund Balance Reserve will be 8% of Annual Expenditures (30 Days of operations).
C. Capital Reserve (Local Capital Fund)
The Fund Balance Reserve will be $250,000.
D. Water and Wastewater Enterprise Funds
The Operating Fund Balance reserve will be 50% of Operating Expenditures.
Water and Wastewater revenues that exceed the amounts needed to maintain this operating reserve will be transferred to the respective Water and Wastewater Capital Funds for investment in their long-term capital improvement programs.
E. Airport Enterprise Fund
The Fund Balance Reserve will be 8% of Annual Expenditures (30 Days of operations) F. Internal Service Funds (Active and Retiree Medical, Workers Compensation, Unemployment, and General Liability Programs)
The Fund Balance Reserve will be 8% of Annual Expenditures (30 Days of operations).
The Workers Compensation and General Liability Claim Reserves will be accrued at the Actuarial 70% confidence level.
G. Unfunded Liabilities
Unfunded retiree medical (OPEB) liabilities will be amortized over 30 years through annual contributions to an OPEB Section 115 Trust.
Unfunded employee compensated absence liabilities (accrued vacation and other leave balance payable upon separation) will be funded from one-time sources or annual year- end operating surplus as available.
Fund Balance Reserves may be drawn at City Council direction to fund one-time or other unplanned expenditure requirements. Reserves that are drawn or otherwise fall below policy targets will be replenished by adjusting revenues and/or expenditures to cause operating surpluses during the subsequent three annual budget cycles.
Section 5. User Fee Policy
To ensure that City fees and rates are sufficient to pay for the costs of providing services, an annual report will be provided to City Council with a listing of user fees, the schedule for fee and rate study updates, and the status of fee updates and adjustments.
Section 6. Spanish Translation Policy
To facilitate public participation in the budget process, key portions of the annual budget and quarterly budget presentations will have Spanish translation.
Section 7. Current Financial Information Policy
To ensure that budget actions are based upon current financial information, the agenda reports proposing annual budget adoption and quarterly budget updates will include information about the status of the City's annual audited financial statements, general ledger analysis, and bank reconciliations.
Section 8. 2024-25 Budget Update
The 2024-25 Budget is updated to reflect the following current projections. The net General Fund impact of the proposed adjustments is positive. The June 30, 2025 combined General Fund/Measure H Fund Balance continues to be projected to exceed the 68-day Fund Balance reserve policy.
General Fund Revenues
$23,125,804 Current Budget
15,500 Program Revenues - Police
57,885 Program Revenues — Planning, Engineering, Building $23,199,189 Adjusted Budget
PASSED, ADOPTED and APPROVED this 26" day of June, 2025, by the City Council of the City of Calexico.
Diana Nuricumbo, Mayor
ATTEST:
Veronica L. Alvarado, City Clerk
STATE OF CALIFORNIA)
COUNTY OF IMPERIAL ) SS.
CITY OF CALEXICO
1, Veronica L. Alvarado, Interim Deputy City Clerk of the City of Calexico do hereby certify that the foregoing Resolution No. 2025-xx was passed and adopted by the City Council on the 26th day of June 2025 by the following vote to-wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Veronica L. Alvarado, City Clerk
ATTACHMENT 2
EXHIBIT 1 to Resolution City of Calexico
2025-26 Budget
City-wide Expenditures
Summary of Expenditures by Fund
2024-25 2025-26
Gross Projection Salaries/ Other Capital/ Debt Inter-fund Including Transfers Benefits Operations One Time Items Service Transfers Total General Fund
111 $ 23,054,002 $ 17,849,975 $ 5,929,984 $ $ 232,804 $ 98,000$ 24,110,764 120 4,403,000 3,910,350 3,910,350
221
222 :
224
231
237 .....
241
242
243 :
245 HIDTA
246
258
281
299
712
Housing Funds
802 100,000 100,000 100,000
840 8,500 8,500 8,500
841 6,000 6,000 6,000
61,500 61,500 61,500
846 1,000 1,000 1,000
223 26,500 21,000 117,000
233 1,889,847 150,000 11,732,765
41,116 282,000
2,517,566 3,163,942
402 2,951,905
411 695,995 2,862,969
412 2,954,482 10,990,116
33,000 2,258,868
13,000 1,654,565
475 9,546,327 9,599,500
310 1,002,000 999,750
515
516
522
544
545
546
547
261 962,940 145,000 745,000
903 409,993 737,149 : 737,149
906 535,082 533,302 533,302
4,073,000 5,247,376 5,247,376
603 1,399,000 1,601,000 : 1,601,000
604 73,574 74,763 74,763
605 1,458,877 1,649,400 1,649,400
(7,004,451) (8,572,539) (8,572,539)
Total 72,140,012 [S 26,430,993 $ 17,401,699 $ 111,635,130 $ 4,530,751 $ 7,198,551 $ 167,197,123 64,457,494 Net Citywide Budget 159,998,572