FY 2024/25 Year-End Budget
Adjustments, Year-End Audit Entries
and Transfer Recommendations
City Council Meeting
November 18, 2025
1 Background
➢ Finance Department is working on the year-end closing process. ➢ Year-End Budget adjustments for FY 2024/25 are required to close FY 2024/25. ➢ FY 2024/25 is projected to end with a $7.4M General Fund surplus. This projected surplus is primarily driven by stronger-than-expected revenues and one-time receipts. ➢ Parking citation revenue increased from $4.24M to $5.80M, due to higher enforcement activity and improved collection rates; and
➢ Received a one-time $4M litigation settlement, contributing to the positive year-end position; and
➢ Investment interest earnings exceeded budgeted estimates, reflecting higher interest rates and steady cash balances.
➢ Funding the City’s Workers’ Compensation and Equipment Replacement Fund – aligning with the City Council’s Strategic Goal of Fiscal Stability 2 Workers’ Compensation
➢ California Workers’ Compensation Law provides state mandated benefits to employees for work-related illness or injury.
➢ City is self-insured up to $1M claim.
➢ Benefits may include payments for medical treatment, salary continuation, Total Temporary Disability (TTD) benefits, and permanent disability benefits. ➢ $15.4M increase in Workers’ Compensation liability primarily due to claims driven by rising medical costs and an expanded list of injuries that are presumed to be work related under California law.
➢ Recommended Transfer: $2.5M
Description $ / %
Total WC Liability 6/30/2025 $66.7M
Increase in WC Liability FY 2024/25 $15.4M
Funded Status without Transfer ($32.2M) 48.25%
Funded Status with Transfer ($34.7M) 52.06%
Recommended Transfer $2.5M
Equipment Replacement
➢ The City’s fleet, technology systems, and major equipment are aging, and replacement costs are rising faster than current funding levels.
➢ To balance prior operating budgets, several planned replacements were deferred, creating a backlog of assets beyond their useful life.
➢ Without additional funding, the City risks higher repair costs, increased downtime, and potential disruption to essential public service.
➢ Recommended Transfer: $2.0M
General Fund Adjustments Summary
➢ Recommended transfers totaling $4.50M from the General Fund in FY 2024/25 to fund the City’s unfunded Worker’s Compensation liabilities and Equipment Replacement Fund as listed below – aligning with the City Council Strategic Goal of Fiscal Stability. ➢ Estimated FY 2024/25 surplus after appropriation $2.9M (subject to change) Fund Amount
Workers’ Compensation $2,500,000
Equipment Replacement 2,000,000
Total $4,500,000
Other Fund Adjustments
7 Bella Terra Parking Structure (711)
➢ $94k to align budget with actual FY 2024/25 expenditures. The City owns the parking structure in the Bella Terra retail center. The City collects a maintenance fee from the owners of the center through a special assessment which is used to fund maintenance and operation expenditures for the structure.
Community Development
➢ $117k Revolving Loan Fund transfer to CDBG Fund to properly record usage of program income.
➢ $185k HOME Program Fund to transfer to HOME Fund to properly record usage of program income.
Questions?