SAN JOAQUIN COUNCIL OF GOVERNMENTS
555 E. Weber Avenue • Stockton, California 95202 • P 209.235.0600 • F 209.235.0438 • www.sjcog.org Christina Fugazi
CHAIR
Gary Singh
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, 2026
Kevin Werner
City of Ripon
259 N Wilma Ave
Ripon, CA 95366
Dear Mr. Werner,
On March 26, 2026 the San Joaquin Council of Government (SJCOG) Board adopted the Annual Financial Plan for FY 2026-27. 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 2026-27 on a forthcoming consent agenda prior to June 30, 2026, for ratification.
The Annual Financial Plan implements the FY 2026-27 Overall Work Program (OWP) that was also adopted by the SJCOG Board on March 26, 2026.
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 2026-27 budgets with the current year (FY 2025-26) adopted budget, as most recently amended, along with FY 2024-25 actual expenditures.
Revenues and expenditures total $47,315,919. 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
7.50 % 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.
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, 2026. 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
Deputy Director of Finance & Administration
Attachments:
R-26-22
FY 2026-27 Annual Financial Plan Staff Report
FY 2026-27 Annual Financial Plan Board Summary
Councilmember Jeremy Engle City of Escalon
Councilmember Lisa Craig City of Lodi
Mayor Paul Akinjo City of Lathrop
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
Derek Graves, Jr, Chair San Joaquin Regional Transit District Margaret Shea Stephens, Commissioner Port of Stockton
Mayor Christina Fugazi, City of Stockton
San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2026/27
CHAIR
Proposed Final March 26, 2026
Grace Orosco
Deputy Director of Finance and Administration
VICE-CHAIR
Mayor Gary Singh, City of Manteca
BOARD OF DIRECTORS
EX OFFICIO DIRECTORS
SUBMITTED BY:
Diane Nguyen
Executive Director
P. 24
FY 2025-26 FY 2026-27 +/- +/-
REVENUES Amendment #3 Proposed Draft Change % Change
Federal Grants 30,541,057 28,901,219 (1,639,838) -5.37% State Grants 16,847,401 8,593,012 (8,254,389) -49.00%
Local 9,625,460 9,721,688 96,228 1.00%
Interest 40,000 40,000 - 0.00%
Other 60,000 60,000 - 0.00%
SJCOG OPERATING REVENUE 57,113,918 47,315,919 (9,797,999) -17.16%
EXPENDITURES
Salaries & Benefits 7,137,261 7,137,261 - 0.00%
Services & Supplies
Office, Computer License 367,000 377,000 10,000 2.72%
Communications 60,000 60,000 - 0.00%
Memberships 45,000 45,000 - 0.00%
Maintenance - Equipment 10,000 10,000 - 0.00%
Rents & Leases - Equipment 131,000 131,000 - 0.00%
Publications & Legal Notices 7,500 7,500 - 0.00%
Insurance 278,000 303,000 25,000 8.99%
Building Operations & Maintenance 335,000 335,000 - 0.00% SJCOG Building Debt Service Principal and Interest 200,000 200,000 - 0.00% Transportation/Travel
Transportation,Travel & Training (In & Out of State) 233,000 233,000 - 0.00% Professional Services 47,859,656 38,026,657 (9,832,999) -20.55% Capital Outlay 450,500 450,500 - 0.00%
SJCOG OPERATING EXPENDITURES 57,113,918 47,315,919 (9,797,999) -17.16% San Joaquin Council of Governments
ANNUAL FINANCIAL PLAN
Fiscal Year 2026/2027
Proposed Final March 26, 2026
P. 25
March 2026
SJCOG Board
STAFF REPORT
SUBJECT: Approval of the Fiscal Year 2026-27
Proposed Final Annual Financial Plan
RECOMMENDED ACTION: Adopt Resolution 2026-22, approving the Fiscal Year 2026-27 Proposed Final
Annual Financial Plan
The attached proposed Annual Financial Plan (AFP) provides a detailed summary of revenues and expenditures by cost category and line item. The proposal compares the Fiscal Year 2026-27 proposed budget with the most recently adopted Fiscal Year 2025- 26 AFP. In addition, it compares the proposal to the Fiscal Year 2024-25 actual expenditures. The total revenues and expenditures amount to $47,315,919. The proposed AFP represents the general fund budget for the San Joaquin Council of Governments (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:
x SJCOG revenue sources are quite different from our member agencies. x SJCOG employs staff on an at-will basis, as compared to civil service for most member jurisdictions, and has its own employee handbook and policies. x SJCOG has its own Financial and Accounting Policy guiding our financial matters including procurement procedures.
x SJCOG employees are exempted from Social Security except for Medicare. x As noted below, SJCOG offers a defined contribution retirement plan to its employees. SJCOG has no CalPERS or other post-employment benefit obligations except limited sick leave conversion as noted for qualifying employees.
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’s population, approve the AFP.
P. 20
The following assumptions are incorporated in the budget:
1. The budget includes a longevity incentive program to attract and maintain an experienced and knowledgeable workforce. 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.
This longevity pay does not apply to the contract position of the Executive Director.
2. The budget includes a COLA adjustment of 2.67 percent in the minimum and maximum salary ranges of all classifications for noncontract positions. The COLA percent is applied to noncontract employees’ salary.
3. 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, with contributions defined within the Board adopted Policy Handbook
b. SJCOG employee vacation accruals are capped at two times the individual’s annual leave, per the Board adopted Policy Handbook. 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 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 $57,113,918 to $47,315,919, which is a reduction of $9,797,999. This change primarily reflects the planned drawdown of several large multiyear grant programs that were in peak implementation during Fiscal Year 2025-26. As for SJCOG capital projects, including SR 99/120 and I-205 Managed Lanes, significant expenditures are occurring in Fiscal Year 2025/26, with phase 1A of the SR 99/120 project completing construction in the summer. As those projects advance toward completion, associated grant or project delivery expenditures naturally decline in Fiscal Year 2026-27.
P. 21
Federal funding for
general fund activities is
$28,901,219 which is
5.37% lower than Fiscal
Year 2025-2026. This is
primarily due to the
planned drawdown of
I-205 Managed Lanes
funds, and consumption
of FTA 5304 pass
through funds.
State funding sources are
budgeted at $8,593,012
or 49% lower primarily due to:
x $5,292,852 drawdown on REAP 2.0
x $507,429 drawdown on Regional Climate Collaborative grant. x $1,050,773 drawdown on Clean Mobility EV Bike program. x $825,508 drawdown on Clean Mobility EV Car Share program. x $344,730 drawdown on State Transportation Improvement Program (STIP) Planning Programming and Monitoring.
x Net drawdown of $86,790 Freeway Service Patrol funding. x $411,884 drawdown has occurred on three years of Senate Bill 1 (SB1) Sustainable Transportation Planning Grants offset by a Fiscal Year 2026-27 allocation of $363,600.
Local revenues are slightly higher by $96,228.
EXPENDITURES
Salaries and Benefits remain stable at $7,137,261.
The budget includes $34,820 for longevity pay and $315,488 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 $35,000.
Liability insurance is increasing by $25,000 due to increased premiums. Office expenses are increasing by $10,000 due to increased costs for computer software and licensing.
Professional Services and Staff Augmentation will decrease by $9,832,999 from FY 2025-2026 of $47,859,656 to $38,026,657.
There is planned consumption of several multi-year grants, which directly correlate to professional services.
x The prior year’s SB-1 Sustainable Communities grants used $474,880 and we are budgeting the new SB-1 allocation of $350,000.
P. 22
x The I-205 Managed Lanes Widening project drew down $1,798,459 x We drew down on $1,050,773 for EV Bike Share program, and $825,508 for EV Car Share program.
x The San Joaquin Regional Climate Collaborative used $507,429 while the Regional Early Action Plan (REAP 2.0) expended $5,292,852.
Position Classification and Salary Schedule
Per board policy, the salary ranges at both the minimum and maximum levels are adjusted by the CPI change of 2.67%.
FISCAL IMPACT
The AFP assumes the continuation of currently programmed grant funding and revenue sources. The AFP is required to be adopted by the Board of Directors prior to April 1 each year and disseminated to the member agencies for ratification. The AFP is the traditional line-item budget identifying estimated revenues and expenditures for the fiscal year. The AFP is complementary to the Overall Work Program.
COMMITTEE ACTIONS:
Executive Committee — Unanimously approved the staff recommendation
RECOMMENDATION
That the Board adopt Resolution 2026-22 approving the Fiscal Year 2026-27 Annual Financial Plan.
Prepared by: Grace Orosco, Deputy Director of Finance & Administration, and Lynnetta Castle, Manager of Finance P. 23
RESOLUTION
SAN JOAQUIN COUNCIL OF GOVERNMENTS
R-2026-22
RESOLUTION APPROVING THE ADOPTION OF THE 2026-2027
ANNUAL FINANCIAL PLAN
FOR THE SAN JOAQUIN COUNCIL OF GOVERNMENTS
WHEREAS, the San Joaquin Council of Governments is required by the Joint Powers Agreement to adopt a budget (Annual Financial Plan) annually, and WHEREAS, the adopted budget is to be sent to the member agencies for ratification.
NOW THEREFORE BE IT RESOLVED, that the San Joaquin Council of Governments adopts the FY 2026-2027 Annual Financial Plan and directs the Executive Director to transmit it to the member agencies for ratification.
PASSED AND ADOPTED this 26th day of March 2026 by the following vote of the San Joaquin Council of Governments, to wit:
AYES: Councilmember Craig-Hensley, Lodi; Supervisor Dhaliwal, SJ County; Mayor Fugazi, Stockton; Councilmember Harrison, Mountain House; Councilmember Ponce, Stockton; Supervisor Rickman, SJ County; Councilmember Zuber, Ripon NOES:
ABSENT: Mayor Akinjo, Lathrop; Mayor Arriola, Tracy; Supervisor Ding, SJ County; Councilmember Engle, Escalon; Councilmember Enriquez, Stockton; Mayor Singh, Manteca