AGENDA
ITEM
16 AGENDA
CALEXICO California ITEM
COUNTY C WHERE CALIFORNIA AND MEXICO MEET
16 CITY COUNCIL
AGENDA STAFF REPORT
DATE: June 17, 2026
TO: Mayor and City Council
APPROVED BY: Benjamin Martinez, City Manager ju
PREPARED BY: Karla Chaparro, Finance Director Le
SUBJECT: Annual Budget Resolution for Fiscal Year July 1, 2026 to June 30, 2027 ====- ===
Recommendation:
It is recommended that the City Council consider a resolution to adopt the Fiscal Year 2026-27 Annual Budget.
Background:
The City Council received a presentation on the Fiscal Year 2026-27 Proposed Budget on June 10, 2026. City staff responded to a series of questions from the City Council regarding 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.
City Council Feedback and Future Follow-Up
During the June 10, 2026 budget presentation, City Council members raised several topics for future discussion, including revenue enhancement opportunities, Airport operations, CaPERS unfunded liability costs, overtime management, Community Facilities District (CFD) financial status, Water and Wastewater funding needs, and opportunities to generate additional revenue from City assets and economic development activities.
While no modifications to the proposed Fiscal Year 2026-27 budget have been requested at this time, staff will continue to evaluate these issues and may return to the City Council with future reports, workshops, analyses, and recommendations as appropriate.
The proposed Fiscal Year 2026-27 budget remains balanced and financially sustainable based on current revenues, expenditures, and available financial information. Staff recommends adoption of the budget as presented while continuing to evaluate opportunities to strengthen the City's long-term financial position.
Budget Recommendations Based Upon Current Financial Information The City's budget resolution requires that the annual budget adoption agenda report include information regarding the status of the City's annual audited financial statements, general ledger analysis, and bank reconciliations to ensure that budget recommendations are based upon current financial information.
The City Council received the June 30, 2025 audited financial statements and presentation from the City's independent auditor on May 20, 2026. General ledger analysis and bank reconciliations are complete through the third quarter of Fiscal Year 2025-26. In addition, the Fiscal Year 2025-26 Third Quarter Budget Status Report was presented to the City Council on May 20, 2026.
Accordingly, the Fiscal Year 2026-27 budget recommendations are based upon current financial information.
Fiscal Impact
The budget resolution provides staffing and expenditure authority for the upcoming 2026-27 fiscal year. The resolution also establishes reserve policies as a framework for the City's financial targets. The supporting budget document provides detailed revenue and expenditure information, historical trends, and future projections for each City fund and serves as the basis for the proposed budget. Collectively, the budget informs the City Council and the public regarding the financial status of City programs and the impact of the proposed budget.
Attachments:
1. Resolution
2. Exhibit 1 to the Resolution
2 ATTACHMENT 1
RESOLUTION NO. 2026-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALEXICO ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR JULY 1, 2026 TO JUNE 30, 2027 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 and considered a presentation on the Fiscal Year 2026-27 Proposed Budget on June 10, 2026; NOW, THEREFORE, be it resolved, determined, and ordered by the City Council of the City of Calexico:
Section 1. Expenditure Authority
The fiscal year 2026-27 Budget, attached hereto as Exhibit 1, shall be the budget for the City of Calexico for the fiscal year 2026-27. The City Manager, or designee, 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 forward 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 designee, 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 is the City Council's policy to maintain 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, plus an additional Emergency Reserve equal to 8 days of operations, as further described below.
a. 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 annual General Fund Sales Tax revenues (8 Days of operations) 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 appropriately recover 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 be translated into Spanish.
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.
PASSED, ADOPTED and APPROVED this 17" day of June, 2026, by the City Council of the City of Calexico.
Victor Legaspi, Mayor
ATTEST:
Veronica L. Alvarado, City Clerk
APPROVED AS TO FORM:
Laura Estrada, City Attorney
STATE OF CALIFORNIA)
COUNTY OF IMPERIAL ) SS.
CITY OF CALEXICO
1, Veronica L. Alvarado, City Clerk of the City of Calexico do hereby certify that the foregoing Resolution No. 2026-xx was passed and adopted by the City Council on the 17th day of June 2026 by the following vote to-wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Veronica L. Alvarado, City Clerk
ATTACHMENT 2
EXHIBIT 1 to Resolution City of Calexico
202-2Budget
City-wide Expenditures
Summary of Expenditures by Fund
2025-26 2026-27
Gross Projection Salaries/ Other Capital/ Debt Inter-fund Including Transfers Benefits Operations One Time Items Service Transfers Total General Fund
111 $ 25,824,314 $ 18,549,272 $ 6,097,384 $ 214,268 $ $ 24,860,924
120 3,685,350 85,092 3,698,349 3,783,441
Operat
221 N
222 :
224
231 Gas Tax
237 tehab
241 ture ........
242
243 :
245 HIDTA
246
258 Coold Settlement Fund
281 2,859,366
299 105,954
712
Housing Funds
802 100,000
840 8,500
841 6,000 6,000
61,500
1,000 1,000
223 21,000 96,000
233 890,151 153,000 9,769,443
30,040 16,000.00 132,000
255 540,112 2,358,724
402 974,885 2,118,115
111 1,588,367 1,329,032
412 709,950 12,709,703
430-6 (300,000) 3,406,840
3,229,875
475 2,326,967 9,362,353
310 999,750 4,000 996,750
Enterprise Funds
513 3,572,603
514 4,000 823,250
515
516 14,839,289
522 LO 185,157
525 78,850
544 D N 2,905,741
545 4,000 1,147,800
546
547 48,173,395
461,939 172,483 583,061
903 788,149 142,051 650,000
906 531,466 32,908 504,400
4,731,400 5,320,866 5,320,866
603 1,435,985 1,521,000 1,521,000
36,000 : 45,448
•.... 45,448
605 1,815,908 1,645,300 1,645,300
607 rve :
(8,019,293) (8,532,614) (8,532,614)
Total 669496671526,432,299518,209,972 109,943,535 4,336,468 5 6,748,966 165,671,240 $ 61,267,847 Net Citywide Budget $ 158,922,274