City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: June 16, 2025
FROM: Carmen Gil, City Manager
THROUGH: Carmen Gil, City Manager
SUBJECT: FY 2025-2026 City and Successor Agency Budget
RECOMMENDATION
It is recommended that your Council and Successor Agency Board:
• Consider and Adopt Resolution No. 2025-47, A Resolution of the City Council of the City of Gonzales Adopting an Operating Budget for the City for the Fiscal Year July 1, 2025, through June 30, 2026, providing for the Appropriations and Expenditures of All Sums Set Forth Therein; • Consider and Adopt Resolution SA-2025-02, A Resolution of the City Council of the City of Gonzales Acting as Successor Agency for the Gonzales Redevelopment Agency Approving and Adopting a Successor Agency Budget for the Period Between July 1, 2025, and June 30, 2026; • Included in the 2025-2026 Recommended Budget; Approve the Position Allocation and the Salary Schedule of the City Classification and Compensation Plan; • As Included in the 2025-2026 Recommended Budget, Affirm the City’s Reserve (Fund) Balances for all Funds;
• Authorize the City Manager and Finance Director to Realign the Budget for Fiscal Year 2024- 2025 to Reflect the Actual Revenues and Expenditures for the 2024-2025 Fiscal Year; and • If needed, direct staff to make changes as necessary and schedule adoption of the Recommended Budget for the City and Successor Agency on June 23, 2025, at 5:30pm.
BACKGROUND
The annual adoption of the City Budget before the end of the fiscal year (June 30), is a very important step and required by the State Budget Act to establish the fiscal road map for the new fiscal year, which begins July 1st. The budget not only conveys to everyone the spending priorities of the City and fiscal plan, but at its most basic level, it allows the City to continue to operate after July 1st of every year.
AGENDA
ITEM
6 REVIEW AND ANALYSIS
The Recommended City and Successor Agency Budget for FY 2025-2026 is balanced using $104,440 of the contingency reserve and maintains Council priority. As is mentioned in the FY 2025-2026 Budget Message, the Recommended Budget sets forth total Budget Requirement in the amount of $37.6 million, which is $17.2 million lower than the FY 2024-2025 amount. The main reason for the change is the net result of (a) the Community Center Complex Project, (b) the wastewater expansion and rehabilitation project, (c) increases in workers’ compensation and liability insurance costs, and (d) funding for the first full year of recently approved cost-of-living-adjustments for all employees.
Of the overall budget amount, the General Fund appropriations total $7,424,056, which is $69,417 or 1% lower than the FY 2024-2025 Budget amount of $7,354,639. The change is being driven primarily by the Community Center Complex Project, increase in insurance costs, the recently approved cost-of-livingadjustments for all employees, and removal of General Fund Capital Projects and Measure K supporting more recreation operating costs.
Overall, revenues are $32.8 million; of that, the General Fund is $7,555,630, which is $603,557 or 7% lower than FY 2024-2025.
While the FY 2025-2026 is balanced, it will require cost containment throughout the fiscal year. The City will need to also look for new revenue sources to support the ongoing staffing and services currently provided.
On the capital infrastructure side, the Recommended Budget reflects funds for the construction of the Wastewater Treatment Facility expansion and rehabilitation project and completion the construction of phase 1 of the Dennis and Janice Caprara Community Center Complex.
The Recommended Budget also maintains great emphasis on the City’s youth initiatives.
The General Fund does contemplate the use of Fund Balance in the amount of $104,440, as your Council reviews the budget document, please keep in mind that any increases in expenditures or funding new programs and/or initiatives should be done so cautiously because they will need to be taken from another section of the budget. This approach is recommended, because it is important to preserve our General Reserve and Fund Balance amount.
NOTE: Please refer to the FY 2025-2026 City and Successor Agency Recommended Budget document for a more detailed look at the City’s Budget.
In addition, while included in the Recommended Budget, the recommended actions call out (a) approving the Position Allocations and the Salary Schedule of the City Classification and Compensation Plan and (b) affirming the City’s Reserve (Fund) Balances for all funds.
General Fund include;
1. Maintaining the “Status Quo” with an emphasis on cost containment and declining revenue.
Other Funds include;
1. Changes in both the Water and Sewer Enterprise Funds are driven by actual and expected activity.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Obtaining approval and/or policy direction on the Recommended Budget, is important because it allows staff to obtain the necessary policy direction to maintain a healthy financial position for the City and continue the work on a sustainable long-term budget. A sustainable long-term budget is important because it assures the financial health of the City is maintained, which is necessary to assure a safe, clean, and family-friendly community.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ___No ___ NA
Explain: Please see Vision above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see explanation above.
ALTERNATIVES
Alternatives include directing staff to modify and/or change the FY 2025-2026 Recommended City and/or Successor Agency Budget.
BUDGET IMPACT
Please refer to the FY 2025-2026 Recommended City and Successor Agency Budget. In addition, based on the direction received from Council, the budget impacts may change, and will ultimately be reflected in the approved budget.
CONCLUSION
I would like to take this opportunity to express my appreciation to all City staff and Michael Rodriguez (City Attorney), whose dedicated service, cooperation, and commitment to excellent Public Service “Gonzales Way” make all the programs, initiatives, and services funded in the FY 2025-2026 Recommended Budget a possibility. In particular, I would like to acknowledge Mrs. Mary Villegas for her amazing work on this document.
It is recommended that your Council and Successor Agency Board:
• Consider and Adopt the Resolution No. 2025-47, A Resolution of the City Council of the City of Gonzales Adopting an Operating Budget for the City for the Fiscal Year July 1, 2025, through June 30, 2026, and providing for the Appropriations and Expenditures of All Sums Set Forth Therein;
• Consider and Adopt the Resolution SA-2025-02, A Resolution of the City Council of the City of Gonzales Acting as Successor Agency for the Gonzales Redevelopment Agency Approving and Adopting a Successor Agency Budget for the Period Between July 1, 2025, and June 30, 2026; • Included in the 2025-2026 Recommended Budget; Approve the Position Allocation and the Salary Schedule of the City Classification and Compensation Plan; • As Included in the 2025-2026 Recommended Budget, Affirm the City’s Reserve (Fund) Balances for all Funds;
• Authorize the City Manager and Finance Director to Realign the Budget for Fiscal Year 2024- 2025 to Reflect the Actual Revenues and Expenditures for the 2024-2025 Fiscal Year; and • If needed, direct staff to make changes as necessary and schedule adoption of the Recommended Budget for the City and Successor Agency on June 23, 2025, at 5:30pm.
Attachments:
1. Resolution No. 2025-47
2. Resolution No. SA-2025-02
3. FY 2025-2026 Budget