SAN JOAQUIN COUNCIL OF GOVERNMENTS
555 E. Weber Avenue Stockton, California 95202 P 209.235.0600 F 209.235.0438 www.sjcog.org
Paul Akinjo
CHAIR
Christina Fugazi
VICE CHAIR
Diane Nguyen
EXECUTIVE DIRECTOR
Member Agencies
CITIES OF
ESCALON,
LATHROP,
LODI,
MANTECA,
MOUNTAIN HOUSE,
RIPON,
STOCKTON,
TRACY,
and
THE COUNTY OF SAN
JOAQUIN
March 31, 2025
Kevin Werner
City of Ripon
259 N Wilma Avenue
Ripon, CA 95366
Dear Mr. Werner:
On March 27, 2025 the SJCOG Board adopted the Annual Financial Plan for FY 2025-26.
Attached is the board staff report as well as a copy of the adopting resolution. Pursuant to SJCOG's Joint 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's Annual Financial Plan for FY 2025-26 on a forthcoming consent agenda prior to June 30, 2025, for ratification.
The Annual Financial Plan implements the FY 2025-26 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 2025-26 budgets with the current year (FY 2024-25) adopted budget, as most recently amended, along with FY 2023-24 actual expenditures. Revenues and expenditures total $55,267,077.00. 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-à-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 CalPERS 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 % 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 employee vacation accruals are capped at two times the individual’s annual leave.
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’s salary at retirement.
initiative. We look forward to witnessing the positive outcomes and benefits that the RTD and UCP Vehicle Replacement Project will bring to our communityIf 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't hesitate to contact me at (209) 235-0454.
Thank you for your assistance.
Sincerely,
GRACE OROSCO
Interim Deputy Director of Finance & Administration
Attachments:
FY 2025-26 Annual Financial Plan Board Summary
FY 2025-26 Annual Financial Plan Staff Report
R-2025-24
Docusign Envelope ID: 90608D83-A233-4A5C-BF2B-F57B370F46B2 Councilmember Jeremy Engle City of Escalon
Councilmember Lisa Craig City of Lodi
Mayor Gary Singh City of Manteca
Mayor Andy Su City of Mountain House
Councilmember Leo Zuber City of Ripon
Councilmember Mario Enriquez City of Stockton
Councilmember Mariela Ponce City of Stockton
Mayor Dan Arriola City of Tracy
Supervisor Sonny Dhaliwal County of San Joaquin
Supervisor Steven Ding County of San Joaquin
Supervisor Robert Rickman County of San Joaquin
Grace Magsayo, Director Caltrans District 10
Gary Giovanetti, Vice Chair San Joaquin Regional Transit District William R. Trezza, Vice Chair Port of Stockton
Mayor Paul Akinjo, City of Lathrop
San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2024/25
CHAIR
Proposed Final March 27, 2025
Grace Orosco
Interim Deputy Director of Finance and Administration
VICE-CHAIR
Mayor Christina Fugazi, City of Stockton
BOARD OF DIRECTORS
EX OFFICIO DIRECTORS
SUBMITTED BY:
Diane Nguyen
Executive Director
P. 56
FY 2023-24 FY 2024-25 FY 2025-26 +/- +/-
REVENUES Actual Amendment #4 Proposed Final Change % Change Federal Grants 3,849,138 31,308,903 30,187,954 (1,120,949) -3.58% State Grants 5,307,886 21,242,553 15,686,997 (5,555,556) -26.15% Local 6,741,738 8,163,438 9,292,126 1,128,688 13.83%
Interest 113,574 20,000 40,000 20,000 100.00%Other 56,140 60,000 60,000 - 0.00% SJCOG OPERATING REVENUE 16,068,475 60,794,894 55,267,077 (5,527,817) -9.09%
EXPENDITURES
Salaries & Benefits 5,681,144 6,944,063 7,137,261 193,198 2.78% Services & Supplies 1,418,632 1,572,500 1,666,500 94,000 5.98% Office Expense 303,491 367,000 367,000 - 0.00%
Communications 60,225 60,000 60,000 - 0.00%
Memberships 41,733 45,000 45,000 - 0.00%
Maintenance - Equipment 5,413 10,000 10,000 - 0.00%
Rents & Leases - Equipment 66,642 131,000 131,000 - 0.00% Transportation,Travel & Training (In & Out of State) 205,943 223,000 233,000 10,000 4.48% Publications & Legal Notices 7,102 7,500 7,500 - 0.00%
Insurance 257,549 258,000 278,000 20,000 7.75%
Building Operations & Maintenance 337,156 271,000 335,000 64,000 23.62% SJCOG Building Debt Service Principal and Interest 133,377 200,000 200,000 - 0.00% Professional Services 8,465,101 50,997,831 45,412,816 (5,585,015) -10.95% Professional Services(Staff Augmentation) 86,870 900,000 600,000 (300,000) -33.33% Capital Outlay 465,846 380,500 450,500 70,000 18.40%
Unallocated/Reserve
SJCOG OPERATING EXPENDITURES 60,794,894 16,117,592.19 55,267,077 (5,527,817) -9.09% San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2025/2026
Proposed Final March 27, 2025
P. 57
March 2025
SJCOG Board
STAFF REPORT
SUBJECT: FY 2025-2026 Proposed Annual
Financial Plan (AFP)
RECOMMENDED ACTION: Adopt Resolution 2025-24 Approving
the FY 2025-2026 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 2025-2026 budget with the most recently adopted FY 2024-2025 AFP. In addition, it compares the proposal to the FY 2023-2024 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-à-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 CalPERS 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. 52
their maximum salary and only receive cost of living adjustments annually. The incentive is structured to recognize and reward the length of staff’s 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 2025-2026 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’s annual leave.
c. Upon separation, an employee can convert accrued sick leave hours to be deposited into a Retirement Health Savings Account to pay for healthrelated expenses, with the qualification of being 50 years of age or 20 years of SJCOG employment. The conversion is based upon the employee’s salary 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 $5,527,817 Federal funding for general fund
activities is $30,187,954 which is 3.58%
lower than FY 2024-2025 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% lower 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. • $1,119,158 drawdown on prior year’s Freeway Service Patrol funding.
P. 53
• $1,067,489 is available for FY 2025-2026 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 2025-2026 allocation of $353,501.
Local revenues are primarily higher by $1,128,688 or 13.83% due to the annual allocation of Measure K for dibs program.
EXPENDITURES
Salaries and Benefits are anticipated to increase by $193,198 or 2.78%.
The budget will increase from $6,944,063 to $7,137,261 compared to the FY 2024-2025 amended budget. It includes $34,815 for 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 $223,000 to $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 2024-2025 $51,897,831 to $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 $350,000. 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 $1,990,986.
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. 54
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 2025-24 approving the FY 2025-2026 Annual Financial Plan.
Prepared by: Grace Orosco, Interim Deputy Director of Finance & Administration, and Lynnetta Castle, Interim Manager of Finance P. 55
Mayor Akinjo, Lathrop
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