AGENDA
SPECIAL MEETING OF THE
CITY OF KING CITY COUNCIL
AND
Sitting as SUCCESSOR AGENCY OF
THE FORMER CDA FOR THE CITY OF KING
AND
Sitting as PUBLIC FINANCING AUTHORITY
FOR THE CITY OF KING
THURSDAY MAY 29, 2025
4:00 P.M.
CITY HALL
212 S. VANDERHURST AVENUE
KING CITY, CALIFORNIA 93930
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1. CALL TO ORDER
2. ROLL CALL: Council Members Oscar Avalos, Robert Cullen, Carlos Victoria, Mayor Pro Temp. Carlos DeLeon, and Mayor Mike LeBarre
3. FLAG SALUTE
4. PUBLIC COMMENT
Any member of the public may address the Council for a period not to exceed three minutes’ total on any item of interest within the jurisdiction of this Council that is not on the agenda. The Council will listen to all communications; however, in compliance with the Brown Act, the Council cannot act on items not on the agenda. Comments should be directed to the Council as a whole and not to any individual Council Member. Slanderous, profane or personal remarks against any Council Member, staff member or member of the audience is not permitted.
5. REGULAR BUSINESS
A. Consideration of Recommended FY 2025-26/FY 2026-27 Biennial Budget Recommendation: 1) receive a presentation of the proposed FY 2025-26/ FY 2026-27 Biennial Budget; 2) provide direction on any desired changes; 3) provide direction on options involving restoration of the King City Golf Course; and 4) direct staff to draft a Resolution for adoption of the Budget at the June 10, 2025 meeting.
6. ADJOURNMENT
Item No. 5 (A)
REPORT TO THE CITY COUNCIL
DATE: MAY 29, 2025
TO: CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF RECOMMENDED FY 2025-26/FY 2026-27
BIENNIAL BUDGET
RECOMMENDATION:
It is recommended the City Council: 1) receive a presentation of the proposed FY 2025-26/ FY 2026-27 Biennial Budget; 2) provide direction on any desired changes; 3) provide direction on options involving restoration of the King City Golf Course; and 4) direct staff to draft a Resolution for adoption of the Budget at the June 10, 2025 meeting.
BACKGROUND:
Staff are pleased to present the Recommended Biennial Budget for FY 2025-26/ FY 2026-27 for the Committee’s consideration. The budget document is attached, which includes a budget message, overview information, summary of General Fund accounts, summary of enterprise funds, summary of special funds, the Capital Improvement Program (CIP), and the Long-Range Financial Plan.
Please review the budget message for a more detailed discussion of the contents and analysis of the proposed budget. The City Budget Advisory Committee reviewed the recommendations at their meeting on May 21, 2025 and unanimously recommended the City Council adopt the budget as proposed.
DISCUSSION:
The budget document is a proposed work plan for the upcoming two fiscal years based upon the collective expertise and consensus of the City staff leadership team. The budget was drafted based upon the major budget goals/priorities that were approved by the City Council in the first step of the budget process. They include the following:
CITY COUNCIL
CONSIDERATION OF RECOMMENDED FY 2025-26/FY 2026-27 BIENNIAL BUDGET
MAY 29, 2025
PAGE 2 OF 5
• Maintain existing staffing and service levels for core priority services. • Maintain the City’s reserve policy goal of 20% of the General Fund operational budget.
• Complete the roundabout and bike path projects.
• Pursue additional grant funding and obtain approvals for the multimodal transit project, completion of the streetscape project, and the citywide planting strip project.
• Promote new housing development.
• Fund professional consultant services to assist the City in developing the proposed 2026 sales tax measure and outreach effort.
In addition, the City Council approved operational goals for each department which are also addressed in the proposed expenditures. They are presented with the overview for each department in the General Fund section of the budget document along with FY 2023-24/ FY 2024-25 Accomplishments.
In the General Fund, expenditures are proposed to exceed revenues by $1,434,291 in FY 2025-26 and by $120,871 in FY 2026-27. This is due a combination of diminishing revenues, increasing costs outside the control of the City, and the proposed use of reserves for large and unique one-time expenditures.
Some of the primary budget impacts include the following:
• Reduction in sales tax projections
• Increase in liability, workers’ compensation and property insurance costs • Increase in legal costs
• Increase in emergency dispatch costs
• Increase in medical insurance costs
• Increase in police overtime costs
• One-time unanticipated expenditures (use of reserves) When funding for one-time expenditures and capital improvements is removed, the remaining ongoing operation revenues and expenditures are balanced. It is typically not recommended to use reserves for ongoing operational costs because it will create a structural budget imbalance.
CITY COUNCIL
CONSIDERATION OF RECOMMENDED FY 2025-26/FY 2026-27 BIENNIAL BUDGET
MAY 29, 2025
PAGE 3 OF 5
The one-time expenditures and capital improvements addressed in the budget with reserves include the following:
Item FY 2025-26 FY 2026-27
Sales tax consultant $50,000 $25,000
Completion of homeless projects $297,000 $0
Carryover for approved outdoor dining grant $100,000 $0 Golf course operation subsidy until renovated $180,000 $90,000 Golf course renovation local share $551,000 $0
Carryover for pool fence project (grant received) $240,000 $0 Sidewalk improvements CIP $50,000 $50,000
Total $1,468,000 $165,510
The majority of homeless project funding is designated as contingency funds for the construction of improvements to the Homekey project at the former Days Inn site. Therefore, it may not be used if the project is completed within the budget.
The primary cause of the need to use a large portion of reserves is the flood damage to the Golf Course. Staff are studying options on how to proceed with that project, so it is possible that some of that funding won’t be used depending upon the strategy selected by the City Council. Options will be presented in more detail for discussion at the Budget Workshop.
Despite the recommended use of reserves, the ending General Fund balance for FY 2026-27 is projected to be $2,466,911 which represents 21% of the General Fund Budget and maintains the City’s reserve policy goal. It also continues to represent substantial progress when compared to the roughly $5 million negative fund balance in 2016.
The recommended General Fund allocations represent what can be described as a “bare bones” budget aimed primarily at maintaining basic service levels while preventing layoffs. Little discretionary spending or projects are proposed, which is necessary to maintain operational expenses balanced with operational revenues.
The following budget reductions and revenue enhancement measures have been incorporated to achieve the goal of balancing ongoing costs and revenues and minimizing the use of reserves:
• Elimination of a vacant customer service representative position in the Police Department.
• Reduction of the façade improvement grant program.
CITY COUNCIL
CONSIDERATION OF RECOMMENDED FY 2025-26/FY 2026-27 BIENNIAL BUDGET
MAY 29, 2025
PAGE 4 OF 5
• Reductions in consultant services for engineering, grant writing, disaster preparedness and training.
• Reduction in community promotion and event funding, including elimination of the fireworks show contribution and block party program and reduction of funding for Ciclovia. This will require the elimination of some programs and more reliance on grants and sponsorships for others.
• Elimination of General Fund revenues budgeted for capital projects, including streets and ADA improvements.
• CPI increases to the City’s Master Fee Schedule.
• Proposed increase to the refuse and recycling franchise fee. • Increases to airport hangar lease rates.
Other funds are balanced. Despite budget constraints, the City has been able to maintain an extensive list of planned projects in the capital improvement program funded primarily through grants and special funds. Major projects proposed include the annual Street Improvement Program; Multimodal Transit Center, Broadway Street/San Antonio Drive Roundabout, design and construction of the San Antonio Drive Bike Path Project, downtown electric vehicle charging station and pool complex fence.
Two scenarios of the Long-Range Financial Plan are presented again this year.
The Scenario I – Base Plan demonstrates that the recommended expenditures cannot be maintained over the next 10-year period. The fund balance decreases under these projections and becomes negative by FY 2032-33. To address the long-term unsustainability of the budget, staff recommends an additional ½ cent sales tax measure be considered. Measures were proposed on the ballot in 2022 and 2024, but both were narrowly defeated. Scenario II demonstrates that approval of the sales tax measure will address the funding shortfall and generate excess revenue available to meet important unfunded needs, such as increased public safety staffing and street improvements.
The Long-Range Financial Plan scenarios demonstrate that the City Council can adopt the current recommended revenue and expenditure allocations without the fund balance dropping below the City’s policy level of 20% prior to consideration of another sales tax measure. Under Scenario I, that would occur in FY 2028-29 if the sales tax measure is unsuccessful. Therefore, it is recommended to undertake significant cost and staffing reductions in the next biennial budget if a sales tax increase is not approved in the 2026 election. Unfortunately, since the
BIENNIAL
BUDGET
FY 2025–26/FY 2026–27