City Council Agenda Report
June 17, 2025
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/City Treasurer
Carina Montes, Director of Human Resources/Risk Manager SUBJECT: PUBLIC HEARING - RESOLUTION NO. 25-27 - ESTABLISHING AND
ADOPTING THE CITY'S ANNUAL BUDGET FOR THE FISCAL YEAR
2025/26; AND RESOLUTION NO. 25-28 - AMENDING AND ADOPTING THE FISCAL YEAR 2025/26 SALARY SCHEDULE FOR GENERAL AND
HOURLY UNIT EMPLOYEES AND EXECUTIVE MANAGEMENT AND
MID-MANAGEMENT EMPLOYEES
Background:
On May 31, 2025, City Council discussed the proposed Fiscal Year (FY) 2025/26 budget. The presentation covered the Revenues, Operations, and Capital Projects. During budget deliberations, City Council made comments and inquiries about the programs and activities included in the proposed financial plan and made no revisions to the proposed budget. If there are any further modifications from City Council at this meeting they will be incorporated into the final budget document.
Summary of Proposed Budget
The proposed budget represents the City’s financial plan for the upcoming fiscal year. It incorporates four goals set by City Council in its 2023-2025 Strategic Plan:
1. Provide High Quality Customer Service to the Community
2. Partnership with the Community to Achieve Safe and Livable Neighborhoods
3. Create and Sustain a Resilient and Economically Prosperous City
4. Support Sustainability and Climate Resilience throughout the Community The financial plan for the upcoming fiscal year has been prepared during a time of uncertainty about the economy and future actions of the current Federal administration that can negatively impact the City’s ability to continue providing federally funded services and programs. Staff used certain estimates and assumptions using data and information currently available, anticipating
City Council June 17, 2025
Resolution No. 25-27 - Annual Budget for FY 2025/26 and Resolution No., 25-28 - Salary Schedule
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the economy heading into a recession in the latter part of the 2025 calendar year, and maintaining the current levels of federal funding. During the upcoming fiscal year, staff will monitor the revenue sources and recommend revisions to the FY 2025/26 budget accordingly.
The FY 2025/26 operating budget of all City funds is balanced using the available resources, including the operating reserves. This report presents a summary of the proposed budget, exclusive of any City Council revisions made during the course of this public hearing.
As summarized in the following table, the City’s FY 2025/26 budget includes all funds and totals $303.7 million in expenditures. The table below highlights the spending plan for various City functions and funding sources.
FY 2026 GENERAL FUND RESTRICTED FUNDS CITY TOTAL BUDGET GENERAL GOVERNMENT 16,040,582 6,160,498 22,201,080PUBLIC SAFETY 27,380,784 1,075,086 28,455,871HOMELESS SERVICES 1,128,609 138,355 1,266,964PUBLIC SERVICES 16,871,113 17,350,172 34,221,285SOCIAL SERVICES 4,397,979 10,343,267 14,741,246RECREATION & PARKS SERVICES 7,257,101 277,700 7,534,801COMMUNITY DEVELOPMENT 5,475,874 16,957,824 22,433,698TRANSIT & VEHICLE MAINTENANCE - 30,595,153 30,595,153DEBT SERVICE 772,596 2,635,206 3,407,802TOTAL OPERATIONS & CAPITAL OUTLAYS 79,324,638 85,533,262 164,857,901CAPITAL PROJECTS - 136,045,733 136,045,733TRANSFER TO COMMUNITY IMPROVEMENT GRANT 530,000 - 530,000TRANSFER TO CAPITAL RESERVE FUNDS 2,250,000 - 2,250,000TOTAL PROPOSED BUDGET 82,104,638 221,578,995 303,683,634 The City’s operating budget is $164.9 million and covers: $58 million in personnel cost funding for 304 full-time positions and 354,239 part-time hours; $90 million covers other operating costs; and $3.4 million is spent on debt service. The City plans to spend $12.2 million on capital outlays.
These purchases are addressing the replacement of tools, equipment, buses, vehicles, computers, and upgrades of software and information technology. The financial plan also includes an allocation of $136 million for 68 capital improvement projects, 65 carry-over, and 3 new.
PROJECT TYPE CARRY-OVER AMOUNT NEW AMOUNT Street Projects 20 44,683,502 1 536,700Traffic Improvements 9 12,502,933Park Improvements 9 13,473,390Water 6 7,362,715Sewer 5 2,151,012Storm Water & Environmental 3 30,065,172Facilities & Miscellaneous Improvements 13 23,470,309 2 1,800,000TOTAL 65 133,709,033$ 3 2,336,700$ City Council June 17, 2025
Resolution No. 25-27 - Annual Budget for FY 2025/26 and Resolution No., 25-28 - Salary Schedule
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The City continues to invest in the street and traffic improvement projects, which are primarily funded from federal, state grants, or local special revenue transportation funding. The City will use a combined total of $24.8 million from its capital reserve funds to complete various capital projects, upgrade technology, replace vehicles and equipment, install solar photovoltaic systems at six sites, implement energy saving measures at city facilities, and continue undertaking park renovation projects citywide.
As demonstrated in the table below, at the end of June 2026, the combined ending capital reserves are estimated at $22 million, out of which $7.7 million is reserved for future local street and traffic improvement projects.
REVENUES TRANSFERS IN FROM GFRESERVE FUNDS 7/1/2025 FY 2026 FY 2026 FY 2026 6/30/2026City General Plan 1,236,528 20,000 - - 1,256,528Parks Equipment & Renovation 6,951,534 50,000 250,000 (6,010,252) 1,241,282NASC Equipment Replacement 433,316 8,000 - (171,500) 269,816Computer & Technology Replacement 4,045,384 50,000 - (385,000) 3,710,384Vehicle & Equipment Replacement 4,833,739 80,000 1,000,000 (1,668,971) 4,244,768Building/Facilities Renovation 9,679,640 100,000 - (6,182,886) 3,596,754Street & Traffic Improvement 16,785,396 230,000 1,000,000 (10,336,137) 7,679,259TOTAL 43,965,537$ 538,000$ 2,250,000$ (24,754,746)$ 21,998,791$
FUND BALANCE EXPENDITURE BUDGET ESTIMATED FUND BALANCE
The General Fund represents 48% of the City’s operating budget. As Special Revenue and Enterprise Funds are restricted to special purposes and are generally self-sustained, this report primarily focuses on the General Fund Budget.
General Fund:
The proposed operating budget is balanced with the use of reserves, specifically the Pension Stabilization Trust Fund ($0.65 million). The City will minimally replenish its capital reserve funds ($2.25 million), and the Community Improvement Grant ($0.53 million). Absent any changes, the anticipated ending fund balance as of June 30, 2026, is estimated at $16.26 million. Some major components of the FY 2025/26 Budget include:
•The General Fund revenues are projected to increase 3%, or $2.1 million, to a total amount of $78.7 million. The major revenue categories follow the national and regional trends and are estimated to perform as follows:
oProperty Taxes – this important revenue category is growing with increasing real property values in the City and is anticipated to rise by $0.9 million, or 3%. oSales Tax – the second largest general fund revenue source is highly susceptible to changes in economy and in this time of economic uncertainty it is expected to decrease by a combined total of $0.2 million for a second consecutive year.
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oOther general revenues include $1.6 million in interest loan repayment from the Successor Agency to the Redevelopment Agency and $2.9 million in administrative cost reimbursement revenues received from grant and enterprise funds.
The table below summarizes the General Fund estimated Revenues. % AMOUNT PROP TAX-S.E. REC & PARK AREA 4,206,900 4,206,900 4,333,110 3% 126,210PROPERTY TAX IN-LIEU/VLF 16,009,580 16,009,580 16,489,860 3% 480,280NO/LOW PROPERTY TAX - COUNTY 5,648,600 5,648,600 5,818,100 3% 169,500SA RDAs - AB 1484 ALLOCATIONS 1,277,950 1,277,950 1,400,000 10% 122,050REAL-PROPERTY VALUE DERIVED REVENUES: 27,143,030 27,143,030 28,041,070 3% 898,040SALES & USE TAXES (STATE) 14,662,000 14,764,300 14,562,000 -1% (100,000)SALES & USE TAXES (MEASURE P) 10,468,000 10,454,000 10,398,000 -1% (70,000)UTILITY USER TAX 5,800,000 5,800,000 6,180,000 7% 380,000TRANSIENT OCCUPANCY TAX 1,628,300 1,558,300 1,628,300 0% -FRANCHISE FEES 3,467,500 3,467,500 3,512,000 1% 44,500FRANCHISE - CABLE TV 494,700 494,700 497,000 0% 2,300BUSINESS LICENSE 840,000 1,100,000 1,000,000 19% 160,000REAL PROPERTY TRANSFER TAX 240,000 240,000 245,000 2% 5,000OTHER TAXES & FRANCHISES: 37,600,500 37,878,800 38,022,300 1% 421,800OTHER GENERAL REVENUES 6,465,200 6,368,491 7,421,244 15% 956,044PUBLIC SAFETY REVENUES 1,333,500 1,180,955 1,600,510 20% 267,010PUBLIC SERVICES REVENUES 302,596 363,596 334,368 10% 31,772SOCIAL SERVICES REVENUES 28,000 32,000 29,000 4% 1,000RECREATION & PARKS REVENUES 1,005,880 991,420 961,960 -4% (43,920)COMMUNITY DEVELOPMENT REVENUES 2,674,400 2,749,610 2,284,910 -15% (389,490)TOTAL - GENERAL FUND REVENUES 76,553,106$ 76,707,902$ 78,695,362$ 3% 2,142,256 REVENUE DESCRIPTION FY 24-25ADOPTEDBUDGET FY 24-25ESTIMATED ACTUAL FY 2026PROPOSEDBUDGET BUDGET VARIANCE FY 2026 vs FY2025
•The FY 2025/26 proposed General Fund operating and capital outlay expenditures total $79.3 million and are $0.65 million higher than operating revenues. The City will maintain services and programming as in the prior fiscal year, with enhancements in full-time staffing levels in the Public Services department by adding a new position of Signal Technician III, and in the Finance department by upgrading one vacant position of Financial Analyst to the position of Administrative Services Supervisor. A total of 14,176 part-time hours have been added primarily under the Public Safety, Social Services, and Recreation departments. In FY 2025/26 homeless outreach provided by the HOPE team will be paid entirely from the General Fund. Support to local businesses through the business attraction, retention, and expansion program (B.A.R.E) will continue with additional funding of $125 thousand.
The overall General Fund operating budget increases by $3.4 million, or 7%. Major contributors to this increase are:
oPersonnel Expenditures will increase by 8%, or $2.8 million, to a total cost of $38.3 million that covers funding for 180 full-time positions and 317 thousand part-time hours.
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Resolution No. 25-27 - Annual Budget for FY 2025/26 and Resolution No., 25-28 - Salary Schedule
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However, this year’s proposed budget does not include any additional contribution to pay down unfunded pension liabilities, only payment of the required unfunded accrued pension liability to CalPERS is included in the budget, and due to the budgetary shortfall, it is partially funded from the Pension Stabilization Trust Fund. The payment to the Other Post-Employment Benefits (OPEB) Trust Fund has been reduced by $0.5 million from prior fiscal year’s amount of $1.5 million.
oLos Angeles County Sheriff’s Department Contract amounts to $19.3 million – it maintains the same level of service for a total of 35.77 units and continues the quadrant patrolling model that works in tandem with the City’s Public Safety Officers in all four Public Safety quadrants. The FY 2025/26 contract rate is estimated to increase by 4% and the Liability Trust fund by 0.5% to a 13% rate.
oOther contractual agreements funded by the General Fund will increase by a combined total of $0.9 million.
The table on the following page summarizes the General Fund spending plan for FY2025/26.
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EXPENDITURES BY TYPE BUDGETFY 2025
ESTIMATED ACTUAL FY2025
BUDGETFY 2026
VARIANCE BUDGET FY26vs. BUDGET FY25
Variance%
FULL TIME:SALARIES 14,527,126 14,091,167 16,732,929 2,205,803 15%MEDICAL BENEFITS 3,168,527 2,611,924 3,460,274 291,747 9%PENSION (from 36.57% to 33.76% in FY2026) 5,760,055 5,013,222 5,943,707 183,652 3%OTHER POST EMPLOYMENT BENEFITS 1,500,000 1,500,000 1,000,000 (500,000) -33%OTHER BENEFITS (MEDICARE, LIFE, LTD, WORKERS COMP) 1,217,504 1,101,072 1,422,955 205,451 17%OTHER COMPENSATION & LEAVE PAYOUTS 1,513,831 1,572,939 1,220,701 (293,130) -19%RETIREE MEDICAL 1,356,200 1,536,500 1,445,300 89,100 7%SUBTOTAL FULL TIME EMPLOYEES & RETIREES 29,043,243 27,426,825 31,225,865 2,182,623 8%PART TIME:SALARIES 6,227,862 5,770,637 6,826,834 598,972 10%MEDICAL BENEFITS 77,479 91,842 108,848 31,369 40%MEDICARE 90,304 83,674 98,989 8,685 10%SUBTOTAL PART-TIME EMPLOYEES 6,395,645 5,946,154 7,034,671 639,026 10%SALARIES & BENEFITS 35,438,888 33,372,978 38,260,537 2,821,649 8%LA COUNTY SHERIFF'S CONTRACT 16,526,620 16,332,000 17,238,671 712,051 4%LA COUNTY SHERIFF'S LTF 1,904,810 1,888,000 2,066,950 162,140 9%CONTRACT SERVICES 11,347,281 11,128,631 12,282,465 935,184 8%UTILITIES 3,886,200 3,273,288 3,444,160 (442,040) -11%INSURANCE 1,082,360 1,082,052 1,117,400 35,040 3%VEHICLE MAINTENANCE 1,102,698 1,054,082 1,115,900 13,202 1%DEBT SERVICE 1,476,394 1,503,454 772,597 (703,797) -48%TRANSFER OUT TO SR. PROGRAMS 383,934 526,426 311,399 (72,535) -19%TRANSFER OUT TO PARKING STRUCTURE 493,933 434,402 524,465 30,532 6%OTHER OPERATING COSTS 4,419,205 3,762,140 4,749,647 330,442 7%SUBTOTAL OPERATIONS 42,623,435 40,984,474 43,623,654 1,000,219 2%MINOR CAPITAL OUTLAYS 610,204 610,292 263,011 (347,193) -57% GAS TAX FUNDS (3,075,000) (2,700,000) (2,735,000) 340,000 -11%OTHER SPECIAL REVENUE FUNDS (AQMD & SA Housing) 315,916 256,617 (87,564) (403,480) -128%TOTAL OPERATIONAL TRANSFERS (IN) (2,759,084) (2,443,383) (2,822,564) (63,480) 2% NET OPERATIONS & CAPITAL OUTLAY BUDGET 75,913,443$ 72,524,362$ 79,324,638$ 3,411,195$ 4% Less Transfers In From Special Revenues Funds To Offset General Fund Street Maintenance Cost:
The General Fund Unassigned Budgetary Fund Balance is projected to be $16.3 million as of June 30, 2026. It is 0.5% over the City’s reserve policy of 20% of operations and capital outlays total budget amount.
The table on the following page summarizes the General Fund 2025/26 Budget.
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18,859,031$
FISCAL YEAR 2025-2026
TOTAL OPERATING BUDGET:Estimated Revenues 78,695,362$ TOTAL RESOURCES 78,695,362$ Expenditures - Operations (79,061,627)Capital Outlays (263,011) TOTAL OPERATING & CAPITAL OUTLAY (79,324,638)
Net Operating Surplus/(Deficit)* (629,276)$
650,000$
TOTAL USE OF NON OPERATING RESOURCES:
NON-OPERATING RESOURCES 164,814$
RELEASE OF FUND BALANCE:Water Fund Loan - principal repayment 164,814 LESS TRANSFER TO COMMUNITY GRANT & CAPITAL RESERVE FUNDS (2,780,000)$ Community Improvement Grant (530,000)Parks Renovation (250,000)Vehicle Equipment Replacement (1,000,000)Street Renovation (1,000,000) FISCAL YEAR 2026 - TOTAL USE OF AVAILABLE FUND BALANCE (2,594,462)$ Estimated Ending Fund Balance at June 30, 2026 20.50% 16,264,569$ July 1, 2025- Beginning Estimated Fund Balance
*Use of Pension Stabilization Trust Fund to partially cover payment of PERS Unfunded Acrrued Liability The following information summarizes the proposed budgets for the City’s enterprise funds:
Norwalk Municipal Water System (NMWS):
Projected revenues are estimated to decrease by 9% to a total amount of $6.3 million, however the budgeted operating expenses are projected to exceed revenues by $1.1 million. This shortfall is covered by existing Water Fund reserves. Expenses include additional 1,300 hours for a new Utility Assistant position, allocation of $0.4 million for the 2025 Urban Water Management Plan update, and carry-over funding for water master plan and rate studies.
Six carry-over improvement projects are budgeted at a total cost of $8.1 million, out of which one project will be funded from a State Capital Grant in the amount of $2.4 million. The Water Fund estimated working capital as of June 30, 2026, is about $26 thousand.
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Sewer System:
The revenues are estimated at $2.6 million, and the operating cost is anticipated to be $2.3 million. Operating budget includes biannual cleaning of the entire sewer system, cleaning of hotspots four times a year, the carry-over funding for the sewer master plan, and a sanitary sewer system management plan update. The total capital improvement budget is $2.2 million and includes appropriations for the 13th year of the 50-year plan to replace the City’s aging Sewer System. The Sewer Fund estimated working capital as of June 30, 2026, is about $12.8 million.
Norwalk Transit System (NTS):
The estimated operating revenues of $19.7 million, comprised of federal, state, local transportation funding, and annual transfers from other special revenue funds, are $0.3 million under the NTS operating budget. This operating budget shortfall will be covered by the available Transit Fund reserves.
The operational expenses amount to $20 million and in addition to the typical operating costs include expenses for the annual NTS rodeo events, comprehensive operational analysis study, and the cost of the Federal Transportation Agency (FTA) plan updates.
NTS’s capital purchase plan is $14.6 million. Among other capital purchases, it includes bus stop improvements, Phase III of Transit Facility improvements, replacement of three zero emission electric buses, and one electric forklift. Capital expenses are primarily funded by federal grants and local transportation monies provide the local match.
The NTS working capital as of June 30, 2026, is estimated to have a balance of $13.2 million.
Summary:
The purpose of this public hearing is to review and adopt the City’s annual Budget for a period starting July 1, 2025, ending June 30, 2026. Copies of the FY 2025/26 Proposed Budget have been available for public inspection on the City’s web page and in the Office of the City Clerk.
Fiscal Impact:
Establishment of the City’s budget for fiscal year ending June 30, 2026.
Citizens Advised:
FY 2025/26 Proposed Budget document was posted on the City’s website on May 22, 2025, for public review. Notice of Public Hearing regarding FY 2025/26 Budget was published in The Norwalk Patriot on June 6, 2025, and posted at the City’s three designated posting places and the website on June 5, 2025.
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Strategic Plan 2023 Implementation:
The recommended action will further the City’s Strategic Plan Goal 3: Create and sustain a resilient and economically prosperous City.
Recommended Action:
Staff recommends City Council adopt:
a. RESOLUTION NO. 25-27, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NORWALK ESTABLISHING AND ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR 2025/26; and
b. RESOLUTION NO. 25-28, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORWALK AMENDING AND ADOPTING FISCAL YEAR 2025/26 SALARY SCHEDULE
FOR GENERAL AND HOURLY UNIT EMPLOYEES AND EXECUTIVE MANAGEMENT AND MID-MANAGEMENT EMPLOYEES.
Attachments:
1. Resolution No. 25-27
2. Resolution No. 25-28
3. FY 2025-26 Budget in Brief