City Council Agenda Report
February 17, 2026
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/City Treasurer
SUBJECT: RESOLUTION NO. 26-13 – FISCAL YEAR 2025/26 MID-YEAR BUDGET REVIEW
AND REVISIONS
Background:
Enclosed are mid-year budget projections for the Fiscal Year (FY) 2025/26 Budget. The projections and recommended budget adjustments are based upon the final Audited Financial Statements for the fiscal year ending June 30, 2025 and six months’ actual expenses and revenues during the current fiscal year.
General Fund:
FY 2024/25
Based on audited results for FY ending June 30, 2025, net of accounting Governmental Accounting Standards Board (GASB) adjustments; overall revenues of $77.9 million outperformed the City’s estimates by 2%, or $1.4 million. Revenue categories, such as sales tax, utility user tax and business license revenues were the main contributors to the overall increase. Expenditures were $5.67 million, 7% under the budget, due mainly to savings realized under: Personnel ($3.2 million), Sheriff’s Contract ($1.3 million) and other expenditures ($1.2 million).
The outcome of the above mentioned financial impacts is the General Fund ending available balance of $22.3 million, which is $3.5 million higher than anticipated during the preparation of the FY 2025/26 Budget.
FY 2025/26
The current FY 2025/26 budget year-to-date results indicate that the City is on target with the projections, except for the following:
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Revenue Adjustments:
Even though the overall General Fund revenues are expected to outperform the original budget estimates by a total of $2.57 million, or 3%, and reach $81.9 million.
The proposed increase in General Fund revenues estimate encompasses a combination of the following revisions:
Property value derived revenues represent the first most significant portion of General Fund revenues. Projections for all categories combined are proposed to be increased by $1.1 million. The detail of adjustments is as follows:
Property Tax In Lieu of VLF: This category is estimated to increase by 6% from the original FY 2025/26 projections. The City receives two equal allocations from the State in January and May. Based on the amount received in January, staff estimates this revenue will be $960 thousand higher than projected.
Other Property Tax: revenues are in general on target with budgetary projections. Staff recommend a slight increase of $172 thousand to the estimates.
Sales Taxes – Local Tax & Measure P: The City’s second largest revenue category is expected to reach a combined total of $26.19 million, or $1.2 million over the original budget estimate. Some categories contributing to the projection increase are: auto sales, general consumer goods, and allocations received from online sales.
Utility User Tax (UUT): UUT will generate about $5.8 million in revenues, $350 thousand under the original budget estimates. All but, gas category, are underperforming when compared with prior year’s actual and current fiscal year projections. The most significant decrease is under electric utilities category.
Transient Occupancy Tax: Year-to-date receipts from local hotels are trending to reach $1.5 million, which is $170 thousand lower than the original estimates.
Franchise Fees: Actual receipts indicate lower than anticipated collection under Cable TV category, however a positive adjustment under oil pipelines and trash hauler categories, with the result of a net estimate increase of $187 thousand.
Other General Fund revenues are anticipated increasing by a net amount of $541 thousand. Out of which $1.2 million will be generated from Building & Safety plan check fees related to development projects. About 65% of these plan check fees collected will cover the increased cost of contractual plan check services. Details of revenue budget revisions can be found in Exhibit A attached to Resolution No. 26-13.
Expenditure Adjustments:
The proposed mid-year budget revisions increase the operational spending by a net of $1.5 million thousand. The most significant changes are as follows:
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oVarious personnel changes under part-time, overtime, and related benefits will add about $561 thousand to additional personnel cost for the remainder of the fiscal year.
Revisions are requested by Public Safety, Public Services, and Recreation departments.
The proposed personnel changes are detailed in Exhibit C to Resolution No. 26-13. • Operations and maintenance budget requests resulting in a $581 thousand budget increase are requested to cover various departmental needs. Among the most significant requests are: $847 thousand for plan check services that are offset by increased revenues; $600 thousand decrease in Los Angeles Sheriff’s contract due to savings from vacant contracted positions; additional $247 thousand is requested to cover various expenses city-wide. • Minor capital outlays total $365 thousand and among others include two sets of meridian road barriers ($270 thousand) carried over from the prior fiscal year, and $39 thousand in funding for two Public Safety courtesy cars.
• City’s capital reserve funds will be replenished with additional $4 million to secure funding for the ongoing street and park renovation projects, repairs of buildings as well as replacement of technology and automotive equipment.
Proposed revisions to the General Fund expenditure budget are detailed in Exhibit B attached to Resolution No. 26-13.
Taking into consideration the proposed budget revisions, the estimated unassigned General Fund balance will be approximately $16.4 million, which is about $260 thousand over the City’s reserve policy, currently set at 20% of operating and minor capital outlays budget. Exhibit D to Resolution No. 26-13 provides more detail of the General Fund balance projections.
Special Revenue Funds:
Based on the actual results, staff also propose various adjustments to expenditures and revenues from Special Revenue Funds, identified in the Exhibit E attached to Resolution No. 26-13.
Significant budget revisions are proposed in the following funds:
Child Care: City will program additional $594 thousand in federal and state entitlements to provide childcare services to qualified families.
Other Special Revenue Funds: In addition to the GASB Statement 87 adjustment of $0.7 million in both revenues and expenditures, staff proposes various budget adjustments, among which are:
$271 thousand to complete replacement of furniture and office remodel in both sports and cultural arts centers; repairs of Public Safety office at Transportation/Metrolink station ($150 thousand); refurbishment of City entry monuments ($124 thousand).
Exhibit F attached to Resolution No. 26-13 details proposed revisions to Various Capital Improvement Projects funded by Special Revenue Funds.
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Enterprise Funds:
Transportation: Staff is projecting a decrease of $587 thousand in operating revenues and a $446 thousand net increase in operating expenses. Expense revisions include a request to add one full- time position of Transit Operations Supervisor and minor part-time hours adjustment.
Transportation budget revisions are summarized in Exhibits C and G attached to Resolution No. 26-13.
Water: Revenue estimates can be increased by $385 thousand, and expenses are requested to be increased by a net of $90 thousand.
Sewer: Various operating expenses are expected to increase by $118 thousand.
The requested budget revisions for both Water and Sewer funds are detailed in Exhibit H attached to Resolution No. 26-13.
Conclusion:
Staff is confident that the proposed mid-year revisions highlighted above and detailed in the Exhibits attached to Resolution No. 26-13 are reasonable and within the guidance of preparing a financial plan that will maintain required services within the City’s available resources.
Fiscal Impact:
The requested mid-year adjustments to the General Fund estimated revenues total a net increase of $2.7 million. The net increase in appropriations is $5.5 million. The Budgetary Unassigned General Fund balance as of June 30, 2026, is expected to be $16.4 million absent any future budget amendments approved by City Council.
The proposed revisions to the FY 2025/26 budget are subject to City Council review and consideration and any approved modifications will be reflected in the balances of the appropriate funds.
Citizens Advised:
N/A
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.
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Recommended Action:
Staff recommend City Council adopt Resolution No. 26-13, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF NORWALK AUTHORIZING AMENDMENTS TO THE FISCAL YEAR 2025/26 BUDGET.
Attachments:
1. Resolution No. 26-13 with Exhibits A-H as follows:
A. General Fund – Revenue Revisions
B. General Fund Expenditures – Mid-Year Revisions
C. Personnel Changes – Fiscal Year 2025/26
D. General Fund Unassigned Fund Balance Projection
E. Special Revenue Funds – Revisions
F. Special Revenue Funds – Capital Improvement Projects Revisions G. Transit & Vehicle Maintenance Funds – Revisions
H. Water and Sewer Fund – Revisions