ITEM 4. 5
CITY MANAGER' S REPORT
APRIL 14, 2025 CITY COUNCIL REGULAR MEETING
ITEM: RATIFY SAN JOAQUIN COUNCIL OF GOVERNMENTS
ANNUAL FINANCIAL PLAN
RECOMMENDATION: Adopt Resolution to Ratify the San Joaquin Council of Governments ( SJCOG) Annual Financial Plan for
FY 2025-6
BACKGROUND:
Every year pursuant to Section 7(b) of the San Joaquin Council of Governments SJCOG) Joint Powers Agreement, in anticipation of the new fiscal budget year, SJCOG requests that each member city ratify SJCOG' sAnnual Financial Plan ( AFP) for the upcoming fiscal year.
Attached and referenced herein as Attachment B, is the Approved SJCOG Fiscal Year FY) Budget for 2025-026. Similar requests from SJCOG have been submitted to participating cities and ratified annually since the Joint Powers Agreement went into effect December 7, 2000.
The SJCOG AFP for FY 2025- 2026, was adopted by their Board on March 27, 2025, by Board Resolution No. R- 2025-4. The AFP provides a detail of expenditures by cost category and line item comparing the proposed FY 2025-026 budget with the current FY 2024-025 adopted budget.
REASON FOR RECOMMENDATION:
The SJCOG Joint Powers Agreement requires that the Annual Financial Plan be delivered to its jurisdictional member agencies for ratification. Therefore, it is recommended that the City Council ratify the SJCOG' sAnnual Financial Plan for FY 2025-026.
FISCAL IMPACT:
No fiscal impact to Lathrop. However, the SJCOG letter dated March 31, 2025, highlights the following significant changes for FY 25-6 when compared to FY 24- 25:
SWCOG Annual Financial Plan Summary
Revenue Funds
Federal Grants
State Grants
Local Funding
Interest & Other
Total Revenues
FY 2024-025
31,08, 903
21,42, 553
8, 163, 438
80, 000
60, 794, 894
FY 2025-026
30, 187, 954
15, 686, 997
9, 292, 126
100, 00
55, 267, 077
CITY MANAGER' S REPORT
APRIL 14, 2025 CITY COUNCIL REGULAR MEETING
RATIFY SJCOG ANNUAL FINANCIAL PLAN FOR FY 2025-6
SJCOG Annual Financial Plan Summary
Expenditure Funds
Salary & Benefits
Services & Supplies
Professional Services
Capital Outlay
Total Expenditures
FY 2024-025
6, 944, 063
1, 572,00
50, 997, 831
380, 50
59, 894,94
FY 2025-026
7, 137, 261
1, 666, 500
45,12, 816
450, 50
54, 667, 077
Highlights:
o General Fund Operating Revenues decreased by $ 5,27, 817 Federal Funding decreased by - 3. 58%
State Funding Sources decreased by - 26. 15%
Local Revenues increased by 13. 83%
o Budgeted Expenditures are $ 55, 267, 077
Salaries and Benefits increased 2. 78%
Services and Supplies increased by 5. 98%
Training & Travel increased by 4.8%
o Professional Services decreased by - 33.3%
o Fixed Assets increased by 18. 40%
ATTACHMENTS:
A. Resolution to Ratify the San Joaquin Council of Governments Annual Financial Plan for FY 2025-6.
B. Letter from SJCOG Dated March 31, 2025, including SJCOG Resolution R- 2025- 24, and Board Report Adopting the FY 2025-6 Annual Financial Plan.
CITY MANAGER' S REPORT
APRIL 14, 2025 CITY COUNCIL REGULAR MEETING
RATIFY SJCOG ANNUAL FINANCIAL PLAN FOR FY 2025-6
APPROVALS:
eresa Vargas
Government Services Director
City Clerk
Cari Ja
Financ Director
Date
7/ 220025
Date
Salvador Navarrete Date
City Attorney
Stephen J. Salvatore Date
City Manager
RESOLUTION NO. 25-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP TO RATIFY
THE SAN JOAQUIN COUNCIL OF GOVERNMENTS ANNUAL FINANCIAL PLAN FOR FISCAL YEAR 2025-026
WHEREAS, every year pursuant to Section 7(b) of the San Joaquin Council of Governments ( SJCOG) Joint Powers Agreement, in anticipation of the new fiscal budget year, SJCOG provides a letter, resolution, and report requesting that each City ratify SJCOG' sAnnual Financial Plan for the upcoming fiscal year; and WHEREAS, the Annual Financial Plan provides a detail of expenditures by cost category and line item comparing the proposed 2025-6 budget with the current fiscal year' s (FY 2024-5) adopted budget; and
WHEREAS, the SJCOG Board approved the Annual Financial Plan for FY 2025- 2026 on March 27, 2025, by Board Resolution No. R- 2025-4; and WHEREAS, the SJCOG Joint Powers Agreement requires that the Financial Plan be delivered to its member agencies for ratification; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lathrop hereby ratify the FY 2025-026 Annual Financial Plan for the San Joaquin Council of Governments.
The foregoing resolution was passed and adopted this 14th day of April 2025, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Paul Akinjo, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Resolution No. 25-
Docusign Envelope ID: 90608D83- A233- 4A5C- BF2B- F57B370F46B2 Attachment B
UP.
Paul Akin/ o
CHAIR
Christina Fugazi
VICE CHAIR
Diane Nguven
EXECUTIVE DIRECTOR
Member Agencies
CITIES OF
ESCALON,
LATHROP,
LODI,
MANTECA,
MOUNTAIN HOUSE,
RIPON,
STOCKTON,
TRACY,
and
THE COUNTY OF SAN
JOAQUIN
SAN JOAQUIN COUNCIL OF GOVERNMENTS
555 E. Weber Avenue • Stockton, California 95202 • P 209.35. 0600 • F209. 235. 0438 • www. sjcog. or March 31, 2025
Stephen Salvatore
City of Lathrop
390 Towne Centre Dr.
Lathrop, CA 95330
Dear Mr. Salvatore:
On March 27, 2025 the SJCOG Board adopted the Annual Financial Plan for FY 2025-6.
Attached is the board staff report as well as a
copy of the adopting resolution. Pursuant to
SJCOG' sJoint Powers Agreement, following adoption of the budget by the SJCOG Board, it is to be delivered to member agencies for ratification by each governing body. Approval by a majority of the governing bodies representing 55% or more of the county' s population is considered ratification.
Therefore, SJCOG requests you place SJCOG' sAnnual Financial Plan for FY 2025-6 on a forthcoming consent agenda prior to June 30, 2025, for ratification.
The Annual Financial Plan implements the FY 2025-6 Overall Work Program ( OWP) that was also adopted by the SJCOG Board on March 27, 2025.
The attached excerpt of the Annual Financial Plan ( AFP) provides a summary of revenues and
expenditures by cost category and line item comparing the approved FY 2025-6 budgets with the current year ( FY 2024-5) adopted budget, as most recently amended, along with FY 2023-4 actual expenditures. Revenues and expenditures total $ 55, 267, 077.0. The approved AFP represents the general fund budget for SJCOG. The revenues and expenditures in the AFP are the same as the Overall Work Program ( OWP), however, presented in a traditional line -item format compared to the work element format of the OWP.
Readers should note several differences between SJCOG and its member agencies' budgets:
SJCOG revenue sources are quite different from our member agencies.
SJCOG employs staff on an at -will basis, vis- a- vis civil service and has its own employee handbook and policies.
SJCOG has its own Financial and Accounting Policy guiding our financial matters including procurement procedures.
SJCOG employees are exempted from Social Security except for Medicare.
As noted below, SJCOG offers a defined contribution retirement plan to its employees.
SJCOG has no CaIPERS or post employments benefit obligations except limited sick leave conversion as noted.
The following assumptions are incorporated in the budget:
1. Work will not begin, and expenses will not be incurred unless anticipated revenue sources are secured.
2. The AFP anticipates SJCOG to be fully staffed. The budget includes a 7. 5 °/0 pool that can be drawn upon for merit -based increases and potential promotions. The full impact of that pool is incorporated into the salary -driven benefits ( retirement, Medicare, disability).
3. SJCOG has no significant liability exposure for post -employment benefits. a. The employee retirement program is a defined contribution program managed by the International City Managers Association Retirement Program ( Mission Square Retirement).
b. SJCOG
annual leave.
employee vacation accruals are capped at two times the individual' s c. Upon separation with 50 years of age or 20 years of SJCOG employment, an employee can convert accrued sick leave hours to be deposited into a Retirement Health Savings Account to pay for health -related expenses. The conversion is based upon the employee' ssalary at retirement.
Docusign Envelope ID: 90608D83- A233- 4A5C- BF2B- F57B370F46B2 SJCOG staff would be pleased to appear before your policymakers to answer any questions they might have regarding this matter. We request ratification prior to June 30, 2025.
Please let me know when this will be on your agenda. If you have any questions regarding this matter, don' thesitate to contact me at ( 209) 235- 0454.
Thank you for your assistance.
Sincerely,
r—DocuSlgned by:
arm, New
4B604696 D A544 F 7...
GRACE OROSCO
Interim Deputy Director of Finance
Attachments:
FY 2025-6 Annual Financial Plan
FY 2025-6 Annual Financial Plan
R- 2025-4
Administration
Board Summary
Staff Report
P. 56
San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2024/5
Proposed Final March 27, 2025
CHAIR
Mayor Paul Akinjo, City of Lathrop
VICE -CHAIR
Mayor Christina Fugazi, City of Stockton
BOARD OF DIRECTORS
Councilmember Jeremy Engle
Councilmember Lisa Craig
Mayor Gary Singh
Mayor Andy Su
Councilmember Leo Zuber
Councilmember Mario Enriquez
Councilmember Mariela Ponce
Mayor Dan Arriola
Supervisor Sonny Dhaliwal
Supervisor Steven Ding
Supervisor Robert Rickman
Grace Magsayo, Director
Gary Giovanetti, Vice Chair
William R. Trezza, Vice Chair
EX OFFICIO DIRECTORS
City of Escalon
City of Lodi
City of Manteca
City of Mountain House
City of Ripon
City of Stockton
City of Stockton
City of Tracy
County of San Joaquin
County of San Joaquin
County of San Joaquin
Caltrans District 10
San Joaquin Regional Transit District
Port of Stockton
SUBMITTED BY:
Diane Nguyen
Executive Director
Grace Orosco
Interim Deputy Director of Finance and Administration
San
Joaquin
of
Council
G
overnments
ANNUAL
FINANCIAL
PLAN
Fiscal
Year
2025/6 osed
Prop
Final
March
27,
2025
REVENUES
FY
2023-4 Actual
FY
2024-5 Amendment #
4 FY
2025-6 Proposed
Final
Change
Federal
Grants
3, 849, 138
31,08, 93
30, 187 954
949) 1,20
State
Grants
5, 307, 886
21,42, 553
15, 686, 997
556)5,
Local
6, 741,38
8, 163, 438
9, 292, 126
1,28 68
Interest
113, 574
20, 000
40, 000
20, 000
Other
56, 140
60, 000
60, 000
SJCOG
OPERATING
REVENUE
16, 068 475
60, 794 8
55, 267 07
817) 527,
EXPENDITURES
Salaries &
Benefits
681, 144 5
6, 944, 063
7, 137, 261
193,8
Services &
Supplies
1, 418 632
1, 572,00
1, 666, 500
94, 000
Office
Expense
303, 491
367, 000
367, 000
Communications
60, 225
60, 000
60, 000
Memberships
41, 733
45, 000
45, 000
Maintenance -
Equipment
5, 413
10, 000
10, 000
Rents &
Leases -
Equipment
66,42
131, 000
131, 000
Transpo Travrtation,
el &
Training (
In &
Out
of
State)
205, 943
223, 000
233, 000
10, 000
Publications &
Legal
Notices
7, 102
7, 500
7, 500
Insurance
257, 549
258, 000
278, 000
20, 000
Building
Operations &
Maintenance
337, 156
271, 000
335, 000
64, 000
SJCOG
Building
Se
Debt
rvice
Principal
and
Interest
133, 377
200, 0
200, 0
Pro
fessional
Services
8, 465, 101
50, 997, 831
45,12 86
5,85, 01)
Professional
Services( Staff
Augmentation)
86,70
900, 0
600, 0
000) 30,
Capital
Outlay
465, 846
380, 50
450, 50
70, 000
Un
allocated/ Reserve
SJCOG
OPERATING
EXPENDITURES
1 16,17
592.
19 60, 794 8
55, 267 07
817) 527,
P. 52
March 2025
SJCOG Board
STAFF REPORT
SUBJECT: FY 2025-026 Proposed Annual
Financial Plan ( AFP)
RECOMMENDED ACTION: Adopt Resolution 2025-4 Approving
the FY 2025-026 Annual Financial Plan
The attached proposed Annual Financial Plan ( AFP) provides a detail of revenues and expenditures by cost category and line item. The proposal compares the FY 2025-026 budget with the most recently adopted FY 2024-025 AFP. In addition, it compares the proposal to the FY 2023-024 actual expenditures. The total revenues and expenditures amount to $ 55, 267, 077. The proposed AFP represents the general fund budget for SJCOG. The revenues and expenditures in the AFP are the same as the Overall Work Program ( OWP), however, presented in a traditional line -item format compared to the work element format of the OWP.
Below is a summary of revenues and expenditures in the AFP. For details on each of those categories please refer to the attachment.
Readers should note several differences between SJCOG and its member agencies' budgets:
SJCOG revenue sources are quite different from our member agencies.
SJCOG employs staff on an at -will basis, vis- a- vis civil service and has its own employee handbook and policies.
SJCOG has its own Financial and Accounting Policy guiding our financial matters including procurement procedures.
SJCOG employees are exempted from Social Security except for Medicare.
As noted below, SJCOG offers a defined contribution retirement plan to its employees. SJCOG has no CaIPERS or other post employments benefit obligations except limited sick leave conversion as noted.
Upon adoption by the board, pursuant to the SJCOG Joint Powers Agreement, the AFP will be sent to the member agencies for ratification. Ratification is achieved when a majority of the member agencies representing 55% of the county population approve the AFP.
The following assumptions are incorporated in the budget:
1. Work will not begin, and expenses will not be incurred unless anticipated revenue sources are secured.
2. The budget includes a
longevity incentive program to attract and maintain an
experienced and knowledgeable workforce. In addition, long- term staff can reach P. 53
their maximum salary and only receive cost of living adjustments annually. The incentive is structured to recognize and reward the length of staffs tenure. The longevity pay targets will be 10, 15 and 20 years ( of continuous service), with an increase in base salary of 1%, 2% and 3% respectively. Currently, this benefit will apply to ten ( 10) noncontract employees and the estimated financial impact for FY 2025-026 is $ 34, 815. 00. This longevity pay does not apply to the contract position of the Executive Director.
3. The budget includes a pool equaling 7.5% of current salaries that can be drawn upon for merit -based increases and potential promotions. The full impact of that pool is incorporated into the salary -driven benefits ( retirement, Medicare, disability).
4. SJCOG has no significant liability exposure for post -employment benefits. a. The employee retirement program is a defined contribution program managed by Mission Square Retirement, formerly the International City Managers Association Retirement Program.
b. SJCOG employee vacation accruals are capped at two times the individual' sannual leave.
c. Upon separation, an employee can convert accrued sick leave hours to be deposited into a Retirement Health Savings Account to pay for health - related expenses, with the qualification of being 50 years of age or 20 years of SJCOG employment. The conversion is based upon the employee' ssalary at retirement and alleviates SJCOG of any further liability.
REVENUES
Compared to the current year amended AFP, SJCOG general fund operating revenues are proposed to decrease from $ 60, 794, 894 to $ 55, 267, 077, a decrease of $5,27, 817 w
cc
a
FY25/ 26 Revenue Budget Total Budget $ 55, 267, 077
30, 187, 954
100, 00
2 4
Funding Category
Federal Grants • State Grants • Local s Interest & Other Federal funding for general fund
activities is $ 30, 187, 954 which is 3. 58%
lower than FY 2024-025 primarily due
to the consumption of FTA 5304 pass
through funds and drawdown of
Congestion Management Air Quality
grant
State funding sources are budgeted at $ 15, 686, 997 or 26. 15% Tower primarily due to:
1, 890, 378 drawdown on REAP 2. 0
Consumption of $2, 424, 106 from the state grant for Sustainable Transportation Equity Project (STEP).
515, 207 drawdown on Regional Climate Collaborative grant. 1,19,58 drawdown on prior year' s Freeway Service Patrol funding.
P. 54
1, 067, 489 is available for FY 2025-026 future years of Freeway Service Patrol funding.
468, 637 drawdown has occurred on three years of Senate Bill 1 ( SB1) Sustainable Transportation Planning Grants offset by a FY 2025-026 allocation of $353, 501.
Local revenues are primarily higher by $ 1,28, 688 or 13. 83% due to the annual allocation of Measure K for dibs program.
EXPENDITURES
Salaries and Benefits are anticipated to increase by $ 193,98 or 2. 78%.
The budget will increase from $ 6, 944, 063 to $ 7, 137, 261 compared to the FY 2024-025 amended budget. It includes $ 34, 815for longevity pay and $ 319, 630 or 7.5% of total salaries pool for merit -based raises. The salary -driven benefits adjust accordingly.
Services and Supplies are proposed to increase by $ 84, 000.
Liability insurance is increasing by $ 20, 000 due to increased premiums. Building maintenance is increasing by $ 64, 000 due to increased utilities, inclusion of the 3rd floor, security upgrades, and vandalism repairs.
Transportation, Travel, and Training increase by $ 10, 000.
With several new board members and new employees, more training expenses are expected. This budget has increased by $ 10, 000 up from $ 223, 000to $ 233, 000. This will help to support such activities to represent SJCOG at regional, state, and national conferences and events where SJCOG is a member such as California Councils of Governments, San Joaquin Valley Policy Council, and the Self Help Coalition..
Professional Services and Staff Augmentation will decrease by $5, 885, 015 from FY 2024-025 $51, 897,31to $46, 012, 816.
There are consumptions of various grants and new funding sources, which directly correlate to professional services. For example, the prior years' SB- 1 Sustainable Communities grants used $ 475, 106 and we are budgeting the new SB- 1 allocation of 350, 00. The I-205 Managed Lanes Widening project consumed $ 366, 057, and we drew down on $ 106, 355 of SB 125. The Sustainable Transportation Equity Project STEP) consumed $ 2, 424, 106. The San Joaquin Regional Climate Collaborative used 515, 207 while the Regional Early Action Plan ( REAP 1.0) and ( REAP 2.0) expended 1, 990,86.
Position Classification and Salary Schedule
Per board policy, the salary ranges at both the minimum and maximum levels and are adjusted by the CPI change of 2. 9606%.
FISCAL IMPACT
All revenues from the AFP are secured and available. The Annual Financial Plan is required to be adopted by the Board of Directors prior to April 1 each year and P. 55
disseminated to the member agencies for ratification. The Annual Financial Plan is the traditional line -item budget identifying estimated revenues and expenditures for the fiscal year. The Annual Financial Plan is complementary to the Overall Work Program.
RECOMMENDATION
That the Board adopt Resolution 2025-4 approving the FY 2025-026 Annual Financial Plan.
Prepared by: Grace Orosco, Interim Deputy Director of Finance & Administration, and Lynnetta Castle, Interim Manager of Finance
RESOLUTION
SAN JOAQUIN COUNCIL OF GOVERNMENTS
R- 2025-4
RESOLUTION APPROVING THE ADOPTION OF THE 2025-026
ANNUAL FINANCIAL PLAN
FOR THE SAN JOAQUIN COUNCIL OF GOVERNMENTS
WHEREAS, the San Joaquin Council ofGovernments is required by the Joint Powers Agreement to adopt a budget ( Annual Financial Plan) annually, and WHEREAS, the adopted budget is to be sent to the member agencies for ratification.
NOW THEREFORE BE IT RESOLVED, that the San Joaquin Council of Governments adopts the FY 2025-026 Annual Financial Plan and directs the Executive Director to transmit it to the member agencies for ratification.
PASSED AND ADOPTED this 27th day of March 2025 by the following vote of the San Joaquin Council of Governments, to wit:
AYES: Mayor Arriola, Lathrop; Councilmember Craig, Lodi; Supervisor Dhaliwal, SJ County Supervisor Ding, SJ County; Councilmember Engle, Escalon; Mayor Fugazi, Stockton; Councilmember Enriquez, Stockton; Councilmember Ponce, Stockton; Supervisor Rickman, SJ County; Mayor Singh, Manteca; Mayor Su, Mountain House; Councilmember Zuber, Ripon NOES:
ABSENT: Mayor Akinjo, Lathrop
PAGE LEFT
INTENTIONALLY
BLANK