City Council Agenda Report
June 16, 2026
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. 26-35 - ESTABLISHING AND
ADOPTING THE CITY'S ANNUAL BUDGET FOR THE FISCAL YEAR
2026/27; AND RESOLUTION NO. 26-36 - AMENDING AND ADOPTING THE FISCAL YEAR 2026/27 SALARY SCHEDULE FOR GENERAL AND
HOURLY UNIT EMPLOYEES AND EXECUTIVE MANAGEMENT AND
MID-MANAGEMENT EMPLOYEES
Background:
On May 23 and June 2, 2026, the City Council reviewed the proposed Fiscal Year (FY) 2026/27 Budget, including projected revenues, operating expenditures and capital improvement projects.
During these budget discussions, the City Council provided direction to staff regarding various programs, services and funding allocations included in the proposed financial plan. Staff have incorporated the Council’s requested revisions into the proposed budget presented for adoption.
Any additional direction provided by the City Council at this meeting will be reflected in 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
City Council
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The Proposed FY 2026/27 Budget has been prepared during a period of economic uncertainty and potential changes at the State and Federal levels that may affect the City's financial resources and ability to maintain current service levels. Staff prepared the budget using the most current data and information available, incorporating estimates and assumptions that reflect a slowing local economy and continued inflationary pressures.
Throughout FY 2026/27, staff will closely monitor revenue trends and expenditure activity, and as necessary, recommend budget adjustments to address changing economic conditions.
The Proposed FY 2026/27 operating budget is balanced across all City funds using available resources, including operating reserves. This report presents a summary of the proposed budget and reflects all revisions directed by the City Council to date.
In addition, as the City has recently successfully concluded labor negotiations with both bargaining units, cost of $1.305,624 resulting from two new memorandums of understanding (MOU) have also been included in the FY 2026/27 budget presented for adoption. Table below details these costs by bargaining unit and funding sources:
NCE A NAME COMBINE D T OT AL
Full-T ime & Part -T ime
E mployees
E xecutive & Mid -
Ma na g em ent All E m oloyees
Genera l Fund 664,878$ 211,320$ 876,198$ Ot her Fund s 376,598$ 52,829$ 429,426$ T OT AL 1,041,475$ 264,149$ 1,305,624$ FY 2027Ad d itiona l Cost of MOU
Any additional modifications or Council direction resulting from this public hearing will be incorporated into the final adopted budget document.
As summarized in the following table, the City’s FY 2026/27 budget includes all funds and totals $293 million in expenditures. The table below highlights the City’s spending plan for various functions and funding sources.
FY 2027 GENERAL FUND RESTRICTED FUNDS CITY TOTAL BUDGET PERSONNEL COST40,831,44320,454,78761,286,230OPERATIONS37,698,35250,727,31088,425,662DEBT SERVICE 1,297,3142,637,0153,934,329MINOR CAPITAL OUTLAYS131,40012,076,70412,208,104TOTAL OPERATIONS & CAPITAL OUTLAYS79,958,50885,895,816165,854,324CAPITAL PROJECTS- 117,832,889117,832,889TRANSFER TO CAPITAL RESERVE FUNDS9,300,000- 9,300,000TOTAL PROPOSED BUDGET89,258,508203,728,705292,987,213 City Council
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The City’s operating budget is $166 million and includes $61 million in personnel costs to support 304 full-time positions and 352,883 part-time hours, $88 million for operating expenditures and $3.9 million for debt service. In addition, the City has budgeted $12.2 million for capital outlay expenditures, including the replacement of tools, equipment, buses, vehicles and computers, as well as software and information technology upgrades.
The financial plan also includes an allocation of $118 million for 60 capital improvement projects, consisting of 57 are carry-over projects, and 3 new projects.
PR OJE CT T YPE CAR R Y-OVE R AMOUNT NE W AMOUNT S treet Projec ts 16 30,777,1672 2,617,000T raffic Im provem ents 9 8,497,836Park Im provem ents 9 25,068,476Water 4 3,124,418S ewer 5 1,852,9071 550,000S torm Water & Environm ental2 34,096,462Fac ilities & Misc ellaneous Im provem ents12 11,248,627T OT AL 57 114,665,893$ 3 3,167,000$ 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 $21.6 million from its capital reserve funds to complete various capital projects, upgrade technology, replace vehicles and equipment, 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 2027, the combined ending capital reserves are estimated at $29 million, out of which $12.6 million is reserved for future local street and traffic improvement projects.
REVENUESTRANSFERS IN FROM GFRESERVE FUNDS7/1/2026FY 2027 FY 2027FY 20276/30/2027City General Plan1,285,33720,000 - - 1,305,337Parks Equipment & Renovation 6,715,38050,0001,000,000(6,644,158)1,121,222NASC Equipment Replacement 247,7668,000500,000(72,200)683,566Computer & Technology Replacement4,033,20550,0001,000,000(730,350)4,352,855Vehicle & Equipment Replacement5,431,152160,0001,800,000(2,128,435)5,262,717Building/Facilities Renovation6,303,115100,000- (2,734,235)3,668,880Street & Traffic Improvement 16,678,335230,0005,000,000(9,312,791)12,595,544Total Reserve Funds40,694,290$ 618,000$ 9,300,000$ (21,622,169)$ 28,990,121$
FUND BALANCEESTIMATE EXPENDITURE BUDGETESTIMATED FUND BALANCE City Council
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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 FY 26/27 operating budget is balanced and does not require use of reserves. The City will replenish its capital reserve funds, reflecting $9.3 million. Absent any changes, the anticipated ending fund balance as of June 30, 2027, is estimated at $17.9 million.
Key components of the FY 2026/27 Budget include:
•The General Fund revenues are projected to increase slightly, 1%, or $0.7 million, to a total amount of $82.6 million. The major revenue categories follow the national and regional trends and are estimated to perform as follows:
oProperty Taxes – Property tax revenue is projected to increase by $1.7 million, or 6%, reflecting continued growth in assessed property values resulting from the City's ongoing economic development efforts.
oSales Tax – As the second-largest General Fund revenue source, sales tax remains highly sensitive to economic conditions. Given continued economic uncertainty, sales tax revenue is projected to decline by approximately $0.4 million, marking the third consecutive year of decreases.
oOther General Revenues – This category no longer includes $1.6 million in interest loan repayment from the Successor Agency to the Redevelopment Agency, as loan was fully repaid in current fiscal year.
The table on the following page summarizes the General Fund estimated Revenues.
City Council
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% AMOUNT PROP TAX-S.E. REC & PARK AREA4,424,4004,861,80010%437,400PROPERTY TAX IN-LIEU/VLF17,449,86018,049,0003%599,140NO/LOW PROPERTY TAX - COUNTY5,899,2006,482,40010%583,200SA RDAs - AB 1484 ALLOCATIONS1,400,0001,500,0007%100,000REAL-PROPERTY VALUE DERIVED REVENUES: 29,173,46030,893,2006%1,719,740SALES & USE TAXES (STATE)15,344,00014,928,000-3%(416,000)SALES & USE TAXES (MEASURE P)10,842,00010,842,0000% -UTILITY USER TAX5,830,0006,285,0008%455,000TRANSIENT OCCUPANCY TAX1,458,6001,500,0003% 41,400FRANCHISE FEES3,850,0004,078,0306%228,030FRANCHISE - CABLE TV346,000361,2704% 15,270BUSINESS LICENSE1,000,0001,100,00010%100,000REAL PROPERTY TRANSFER TAX236,000220,000-7%(16,000)OTHER TAXES & FRANCHISES: 38,906,60039,314,3001%407,700OTHER GENERAL REVENUES 7,320,2446,427,337-12%(892,907)PUBLIC SAFETY REVENUES1,542,2101,306,500-15%(235,710)PUBLIC SERVICES REVENUES334,368333,7140% (654)SOCIAL SERVICES REVENUES29,00035,00021%6,000RECREATION & PARKS REVENUES 968,1601,022,0006% 53,840COMMUNITY DEVELOPMENT REVENUES3,637,9103,307,100-9%(330,810)TOTAL - GENERAL FUND REVENUES81,911,952$ 82,639,151$ 1%727,199 REVENUE DESCRIPTION FY 25-26ADOPTEDBUDGET FY 2027BUDGET BUDGET VARIANCE FY 2027 vs FY2026 •The FY 2026/27 proposed General Fund operating and capital outlay expenditures total $80 million and are within the operating revenues. The City will continue providing essential services and programming, maintain its infrastructure, however selected recreational programs and events will be scaled down.
The overall General Fund operating budget decreases by $1.0 million, or 1.3% from the current fiscal year. Budget changes under major expenditure categories are as follows:
oPersonnel Expenditures will increase by 5%, or $2 million, to a total cost of $40.8 million that covers funding for 191 full-time positions and 269 thousand part-time hours. 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. 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 million.
City Council
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oLos Angeles County Sheriff’s Department Contract is budgeted at $17.6 million – it maintains the same level of service and takes in consideration budget savings from current contract vacancies. The City will continue the quadrant patrolling model that works in tandem with the City’s Public Safety Officers in all four Public Safety quadrants. The FY 2026/27 contract rate is estimated to increase by 3% and the Liability Trust fund by 1% to a 14% rate.
oOther contractual agreements funded by the General Fund will decrease by a combined total of $1.3 million.
The table on the following page summarizes the General Fund spending plan for FY2026/27.
City Council
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The General Fund Unassigned Budgetary Fund Balance is projected to be $17.9 million as of June 30, 2027. This amount exceeds the City’s reserve policy requirement of 20% of annual operating and capital outlay expenditures by 2%.
The table on the following page summarizes the General Fund 2026/27 Budget.
EXPENDITURES BY TYPE BUDGETFY 2026 BUDGETFY 2027
VARIANCE BUDGET FY27vs. BUDGET FY26
Variance%
FULL TIME:SALARIES 16,732,92917,754,1961,021,2676%MEDICAL BENEFITS 3,460,2743,488,33928,0651%PENSION (from 33.76% to 35.83% in FY2027)5,943,7076,531,914588,20710%OTHER POST EMPLOYMENT BENEFITS1,000,000500,000(500,000)-50%OTHER BENEFITS (MEDICARE, LIFE, LTD, WORKERS COMP)1,422,9611,548,577125,6179%OTHER COMPENSATION & LEAVE PAYOUTS1,450,7031,866,983416,28029%RETIREE MEDICAL 1,445,3001,643,300198,00014%SUBTOTAL FULL TIME EMPLOYEES & RETIREES31,455,87433,333,3091,877,4366%PART TIME:SALARIES & OTHER COMPENSATION7,152,9297,248,97796,0481%MEDICAL BENEFITS 108,848144,43835,59033%MEDICARE 103,717104,719 1,0011%SUBTOTAL PART-TIME EMPLOYEES 7,365,4947,498,134132,6402%SALARIES & BENEFITS 38,821,36840,831,4432,010,0755%LA COUNTY SHERIFF'S CONTRACT16,638,67115,303,008(1,335,663)-8%LA COUNTY SHERIFF'S LTF2,066,9502,300,950234,00011%CONTRACT SERVICES 13,481,31512,208,030(1,273,285)-9%UTILITIES 3,427,3602,852,000(575,360)-17%INSURANCE 1,117,4001,737,200619,80055%VEHICLE MAINTENANCE 1,115,9001,066,900(49,000)-4%DEBT SERVICE 772,5971,297,314524,71768%TRANSFER OUT TO SR. PROGRAMS311,399568,901257,50283%TRANSFER OUT TO PARKING STRUCTURE622,465436,344(186,122)-30%OTHER OPERATING COSTS4,493,6694,412,583(81,086)-2%SUBTOTAL OPERATIONS 44,047,72642,183,229(1,864,497)-4%MINOR CAPITAL OUTLAYS 643,111131,400(511,711)-80% GAS TAX FUNDS (2,735,000) (3,100,000)(365,000)13%OTHER SPECIAL REVENUE FUNDS (AQMD & SA Housing) 217,022 (87,564)(304,586)-140%TOTAL OPERATIONAL TRANSFERS (IN) (2,517,978) (3,187,564) (669,586)27% NET OPERATIONS & CAPITAL OUTLAY BUDGET80,994,227$ 79,958,508$ (1,035,719)$ -1% TRANSFERS TO CAPITAL RESERVES6,250,0009,300,0003,050,00049% TRANSFER TO COMMUNITY GRANT FUND & HOUSING TRUST780,000 - (780,000)TOTAL GENERAL FUND EXPENDITURES88,024,227$ 89,258,508$ 1,234,281$ 1% Less Transfers In From Special Revenues Funds To Offset General Fund Street Maintenance Cost:
City Council
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24,313,104$ F IS CAL YE AR 2026-2027T OT AL OPE R AT ING BUDGE T :T OT AL R E S OUR CE S82,639,151$ E xpenditures - Operations(79,827,108)Capital Outlays (131,400)T OT AL OPE R AT ING & CAPIT AL OUT LAY(79,958,508)Net Operating S urplus/ (Defic it)2,680,643$ T OT AL US E OF NON OPE R AT ING R E S OUR CE S :NON-OPE R AT ING R E S OUR CE S173,054$ LE S S T R ANS F E R T O CAPIT AL R E S E R VE F UNDS(9,300,000)$ F IS CAL YE AR 2027 - T OT AL US E OF AVAILABLE F UND BALANCE(6,446,303)$ 17,866,801$ July 1, 2026- Beginning E stimated F und Balanc e
E stimated E nding F und Balanc e at June 30, 2027
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 8% to a total amount of $0.7 million, however the budgeted operating expenses are projected to exceed revenues by $0.8 million. This shortfall is covered by existing Water Fund reserves. Expenses maintain the staffing levels and cover operating and debt service expenses in the amount of $7.1 million.
Four carry-over improvement projects are budgeted at a total cost of $3.1 million, out of which one project will be funded from a State Capital Grant in the amount of $2.1 million. The Water Fund estimated working capital as of June 30, 2027, is about $0.7 million.
Sewer System:
The revenues are estimated at $2.9 million, and the operating cost is anticipated to be $2.4 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 $2.4 million and includes appropriations for the 14th year of the 50-year plan to replace the City’s aging Sewer System. The Sewer Fund estimated working capital as of June 30, 2027, is about $14.4 million.
City Council
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Norwalk Transit System (NTS):
The NTS operating budget is supported by approximately $18.5 million in revenues from federal, state and local transportation funding sources, as well as annual transfers from other special revenue funds. These revenues are projected to be $3.2 million below budgeted operating expenditures. The resulting operating deficit will be funded through available Transit Fund reserves.
Operating expenditures total $21.7 million and include routine transit operations, as well as funding for the Community Link on-demand transportation service, annual NTS rodeo events, a comprehensive operational analysis study and updates to required Federal Transit Administration (FTA) plans.
The NTS capital improvement and equipment replacement program totals $11.7 million. Planned investments include bus stop improvements, Phase III Transit Facility improvements, replacement of three zero-emission electric buses and the acquisition of one electric forklift. Capital expenditures are primarily funded through federal grants, with local transportation funds providing the required matching contributions.
As of June 30, 2027, NTS working capital is projected to have an ending balance of approximately $8.5 million.
Summary:
The purpose of this public hearing is to review and adopt the City’s annual Budget for a period starting July 1, 2026, ending June 30, 2027. Copies of the FY 2026/27 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, 2027.
Citizens Advised:
FY 2026/27 Proposed Budget document was posted on the City’s website on May 22, 2025, for public review. Notice of Public Hearing regarding FY 2026/27 Budget was published in The Norwalk Patriot on June 5, 2026, as well as the City’s three designated posting places and the website.
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.
City Council
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Recommended Action:
Staff recommends City Council adopt:
a. RESOLUTION NO. 26-35, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NORWALK ESTABLISHING AND ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR 2026/27; and
b. RESOLUTION NO. 26-36, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORWALK AMENDING AND ADOPTING FISCAL YEAR 2026/27 SALARY SCHEDULE
FOR GENERAL AND HOURLY UNIT EMPLOYEES AND EXECUTIVE MANAGEMENT AND MID-MANAGEMENT EMPLOYEES.
Attachments:
1. Resolution No. 26-35
2. Resolution No. 26-36
3. FY 2026-27 Budget in Brief