Proposed Annual Operating Budget & CIP
Fiscal Year 2025-26
May 20, 2025
City of Placentia
Presentation Overview
2 •Economic Challenges
•FY 2025/26 Proposed Budget Overview (All Funds)
•FY 2025/26 Proposed General Fund Budget
•Position Allocation (staffing)
•Measure U
•Fund Balance Projections
•Capital Improvement Program (CIP)
•Next Steps
Economic Challenges
• Uncertainty in the market due to tariffs
•Low consumer confidence
•Impact of market volatility on CalPERS
•Lack of funding for capital projects
Economic Challenges
•Sales tax trending downward Statewide
•Statewide sales tax projected to be down 1.0% in current fiscal year
•Persistently high interest rates and threat of tariffs have negatively impacted purchase of new and used vehicles
•Consumer spending patterns have changed as costs of
utilities, restaurant prices and threat of recession
•Gas prices down compared to last year in current fiscal year
•6 of the City’s top 25 sales tax producers are gas stations •Gas prices are projected to increase in FY25/26 due to strict environmental regulations in California and looming
shuttering of two refineries over next two years
Economic Challenges- Specific to Placentia
•Expense increases outside the City’s control:
•Increase in Unfunded Actuarial Liability (UAL) payment from $447,000 to $917,000 CalPERS required due to their recent rate of returns •Increase of approx. $1.5 million in personnel expenses due to Memoranda of Understandings and merit increases
•Increased insurance costs- $463,000
•Workers Compensation- $228,000
•General Liability/ Property- $235,000
•Increased animal care services contract- $52,000
•Higher costs of goods and services citywide
•Unfunded capital needs identified in recently completed facility and IT assessments
Response to Economic Challenges & Key
Assumptions in Budget
•Preliminary deficit identified initially due largely to nominal revenue increases and increased expenses
•Department budgets held to current fiscal year’s budget and/ or reduced wherever possible
•Elimination of several vacant positions
•Use of $1,000,000 in Section 115 trust funds and $500,000 in one time revenue
•$125,000 allocated to the City’s Centennial celebration, with possible need for less General Fund funding based on fundraising efforts •Consolidation of Tamale Festival & Annual Tree Lighting in December ($30,000 savings)
6 Proposed FY 2025/26 Budget All Funds
Total Proposed Revenues- $89,665,708
Total Proposed Expenditures- $92,686,878
CIP
12%
Operating
88%
General
Fund
57%Enterprise
Funds
6%Fiduciary
6%
Internal
Service
6%
Special
Revenue
23%
Debt Service
0%
Agency
2%
FY 2025/26 Proposed Budget Overview (All Funds)
Fund Type
Revenues &
Transfers In
Expenditures &
Transfers Out
Net Incr/ (Decr) to
Fund Balance
General Fund $53,543,058 $52,654,458 $888,600
Special Revenue 18,017,996 20,996,497 (2,978,501)
Debt Service 403,300 403,300 -
Capital Projects Fund -355,700 (355,700)
Enterprise 6,392,880 5,850,885 541,995
Internal Service 5,548,700 5,662,700 (114,000)
Fiduciary 4,290,600 5,290,600 (1,000,000)
Agency 1,469,174 1,472,738 (3,564)
Totals $89,665,708 $92,686,878 ($3,021,170)
Proposed FY 2025/26 Budget
General Fund Revenues - $53,543,058
Sales Tax
16%
Property Tax
42%
TOT
4%
UUT
6%
Other Taxes
7%
Fines & Forfeitures
1%
Misc. Revenue
4%
Charges for Services
3%
Intergovernmental
1%
Transfers In
10%
Permits
6%
General Fund Revenue - Top Sources
15,000,000
17,000,000
19,000,000
21,000,000
23,000,000
25,000,000
Property Tax
Property Tax
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 Projected
FY25/26
Proposed
Sales Tax
Sales Tax
General Fund Operating Revenues
Revenue Type
FY 2024/25 Amended
Budget
FY 2025/26 Proposed
Budget
Variance to FY24/25
Amended Budget
Property Taxes $21,796,023 $22,755,799 4.4%
Sales & Use Taxes 8,333,000 8,449,079 1.4%
Other Taxes 8,396,040 8,852,995 5.4%
Permits 3,003,903 3,073,242 2.3%
Fines & Forfeitures 575,000 644,200 12.0%
Intergovernmental 1,464,103 329,015 (77.5%)
Charges for Services 1,945,786 1,885,975 (3.1%)
Miscellaneous 2,254,237 2,159,260 (4.2%)
Total Operating Revenues 47,768,092 48,149,565 0.8%
Transfers In 465,100 950,493 104.4%
Measure U Transfers In
Employee Retention 2,665,800 2,665,800 -
OPEB 888,600 888,600 -
Measure U Reserve 888,600 888,600 -
Total Transfers In 4,019,500 5,393,493 9.9%
Total Resources 52,676,192 53,543,058 1.6%
Proposed FY 2025/26 Budget
General Fund Expenditures - $52,654,458
Operating
$46,292,358
88%
Transfers
Out
$61,000…
Debt
Service
$6,301,100
12%
FY 2025/26 General Fund Expenditures by
Department
Department FY 2024/25
Amended Budget
FY 2025/26
Proposed Budget
Variance to
FY24/25 Amended
Budget
Legislative $1,175,316 $1,006,073 (14.4%)
City Administrator 1,536,501 752,975 (51.0%)
Administrative Services 5,780,344 5,548,750 (4.0%)
Community Services 3,441,650 3,548,786 3.1%
Development Services 1,935,400 1,955,352 1.0%
Finance 1,432,100 1,495,000 4.4%
Fire & Life Safety 5,492,918 5,402,550 (1.6%)
Human Resources 968,700 880,400 (9.1%)
Police 14,638,308 14,716,986 0.5%
Public Works 4,841,256 4,685,350 (3.2%)
General Government 5,259,700 6,300,136 19.8%
Total Expenditures $46,502,193 $46,292,358 (0.5%)
Position Allocation
•Proposed budget includes funding for 197.0 FTE
employees, and authorization for 4.0 FTE overhires in
Police and Public Safety Communication Departments
•Hiring “Frost” continues to remain in place. Public Safety and revenue generating positions will be prioritized, all others will remain vacant as long as possible and
reviewed for possible consolidation or elimination
Proposed Staffing Changes
Reductions
1.Elimination of one Recreation Coordinator ($93,124) in Community Services
2.Elimination of one Management Assistant ($82,600) in Public Works
3.Elimination of one Engineering Aide ($75,600) in Public Works
4.Elimination of one Senior Management Analyst in the City Administrator’s office -Economic Development ($148,815)
1.Position officially eliminated in FY 2024-25, but savings used to balance proposed budget
Proposed Staffing Changes
Reclassifications
1.Reclassification of one Public Works Manager to Deputy Director of Public Works (Operations) to reflect duties currently being performed and span of control for entire operations division including facility and landscape maintenance and fleet operations ($9,626 annual costs).
2.Reclassification of one vacant Maintenance Worker to a Facilities Maintenance Technician in Public Works to allow the department to recruit for skills needed including irrigation repair needed citywide ($6,000 annual salary increase offset by equal reduction in contract costs)
Proposed Staffing Changes
Reclassifications
3.Reclassification of three Office Specialists in the Police Department to Police Records Technicians to more appropriately classify the position based on duties being performed. ($24,143 annual cost)
4.Reclassification of one Police Services Supervisor to Support Services Administrator in the Police Department to more appropriately classify the position based on duties being performed ($8,056 annual costs)
Proposed Staffing Changes
Reclassifications
5.Reclassification of one Building Permit Technician to Senior Building Permit Technician in the Development Services
Department to reflect the higher level duties and oversight needed and being performed at the front counter. ($4,600 annual costs)
Citywide FTE by Department
Excludes Over-hires
-45
5 55
105
155
205
FY24/25 Adopted FY25/26 Proposed
27 27
11 11
9 955
30 30
12 12
76 76
29 27
5 4
Admin. Svcs Comm Svcs Finance
Human Resources Fire Dev Svcs
Police PW City Administrator
200.0 FTE 197.0 FTE
General Fund Reserve Policy
General Fund Reserve Policy 460 was designed as a result of approval of Measure U by voters and establishes:
•Guidelines for reserves
•Minimum contingency reserve of 25% of operating
expenditures
•Allocation formulas for new, unrestricted on-going and one-time revenues for specific purposes
•Purposes and uses of reserves
FY 2025/26 - Measure U
Contributions to Reserves
2025-26 Proposed Measure U Budget - $8,886,000
Current Allocations
After GF
Reserve Target
Met*
Amount
Infrastructure, Vehicles, and Equipment 50%$4,443,000
Post-Employment Benefits Sustainability*10%$888,600
Employee Recruitment and Retention (including
additional staff)30%$2,665,800
Measure U Contingency Reserve 10%$888,600
•The Proposed FY 2025-26 Budget
DOES NOT include the use of the
10% contribution to the Measure
U-Contingency Reserve
($888,600), to support operations.
•Replenishes reserves to 25.03%
Measure U Historical Performance
1,000,000
4,000,000
7,000,000
10,000,000
FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 Proj.FY25/26 Prop. $5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Sales Tax
FY 2025/26 Proposed General Fund –
Fund Balance
Estimated Beginning Fund Balance
7/1/2025 $11,609,800
Projected Change in Fund Balance 888,600
Projected Ending Fund Balance at
6/30/26 12,498,401
Fund Balance Designations
Non-Spendable 895,672
General Fund Reserve 5,861,619
Contingency Reserve 5,726,721
Unassigned Fund Balance 14,389
Estimated Ending Fund Balance
6/30/26 $12,498,401
Projected Operating Expenditures 46,353,358
25% FB Target 11,588,339
Reserve total (FB less Non-Spendable)11,602,729
General Fund Operating Reserve %25.03%
Capital Improvement Program (CIP)
What is the CIP?
The City’s Capital Improvement Program
(CIP) identifies major public improvements
to the City’s infrastructure for the next year
and includes new projects and carryover
projects from previous years encompassing
upgrades to existing facilities as well as
rehabilitation of streets and roadways.
CIP by Project Types
Project Type
New Project
Count Amount
% Of Total
New CIP
Funding
Total
Projects
with
Carryover
Streets & Streetscapes 4 $8,400,546 73.7%10
Traffic and Transportation 1 $154,848 1.4%10
Sewer 0 $0 0%0
Storm Drain 0 $0 0%0
City Buildings & Facilities 5 $1,402,350 12.3%16
Technology 4 $295,535 2.6%10
Parks 5 $1,095,000 9.6%15
Vehicles & Equipment 2 $52,200 0.4%9
Major Studies 0 $0 0%10
Total 21 $11,400,479 80
CIP Projects by Funding Source
SB 1/Gas Tax
$1,483,470
Dev. Impact
Fees
$1,152,583
Measure U
$4,379,172
Measure M
$665,857
Misc. Other
Sources
$3,719,397
Dev Impact
Fees
$1,152,583
Total New CIP Funding:
$11,400,479
FY 2025/26 Gas Tax Projections
•Measure M and Gas Tax projections down
Gas Tax reduced by $97,690
Measure M reduced by $297,465
Total reduction in anticipated street budget: $395,155 •$880,000 of Measure U funds previously identified for use by the Underground Storage Tank (UST) replacement could:
Be allocated towards tank installation
Be allocated toward the City Hall roof repair project. Combined with $220,000 from Public Safety DIF to fully fund project (Staff recommendation)
$395,155 to backfill street project deficit
Or remain unallocated
FY 2025/26 Gas Tax Projections
CIP Projects: Streets
Project Amount
Old Town Streetscape Improvements $150,000
FY 25-26 Annual Sidewalk and Curb Ramp
Repairs $175,000
Golden Avenue Bridge Replacement Project
Construction $3,582,340
FY 24-25 Residential Street Rehabilitation $4,493,206
Total Streets $8,400,546
CIP Projects: Traffic & Transportation
Project Amount
Citywide Signal Hardware Upgrades $154,848
Total Traffic $154,848
CIP Projects: City Buildings and Facilities
Project Amount
Fuel Tank Removal $220,000
Whitten Center Kitchen Renovation $30,000
Aguirre Building Renovation $40,000
Powell Building Improvement Project -
Windows $112,350
City Hall Roof Repairs $1,000,000
Total City Buildings $1,402,350
CIP Projects: Technology
Project Amount
Desktop Computer Replacement Program $75,000
Enterprise Camera and Security Upgrades $95,535
Public Safety Operations HW Upgrades $75,000
City Facilities Server/Network Upgrades $50,000
Total Technology $295,535
CIP Projects: Parks
Project Amount
Tynes Gym Roof Replacement $255,000
Samp and Los Vaqueros Park Playground
Renovations $600,000
Replace Park Benches $60,000
Whitten Center Pool Deck Repair $30,000
Los Vaqueros Storm Drain $150,000
Total Parks $1,095,000
CIP Projects: Vehicles & Equipment
Project Amount
Fleet Lift Replacement $35,000
Fire Department Equipment $17,200
Total Vehicles $52,200
Recommendations
It is recommended that the City Council take the following actions:
1.Review and discuss the Proposed FY 2025-26 Annual
Operating Budget and CIP and provide input and direction for final budget adoption; and
2.Set the date of the public hearing for budget adoption as June 3, 2025, at 7:00 p.m.
Questions?