City of Wasco Supplemental Special Meeting Agenda Materials, May 13, 2025
SUPPLEMENTAL AGENDA MATERIALS
Special City Council Meeting
May 13, 2025
Agenda Item:
4) NEW BUSINESS:
a) The Council finds this action is not a “project” as defined under section 15378 of the CEQA Guidelines ; Fiscal Year 2025- 2026 Budget Workshop General fund , Enterprise funds, and Capital Improvement Program. (Perez-Hernandez) PowerPoint presentation Preliminary Budget Workshop fiscal year 25-26
Special Presentation | Tuesday , May 13, 2025 Preliminary
Budget
Workshop
fiscal year 25-26
1 Budget Process Overview
Council strategic planning workshop 2/13
Mid-year budget review 3/04
Budget workshop 5/13
Budget workshop – Optional 5/14
Budget Adoption 6/17
Preliminary Budget Review
Budget Workshop
May 13, 2025
Budget Overview
General Fund
Revenues
Operating Costs
Fund Balance
Department Budgets
CIP Review
Enterprise Funds
Wastewater
Water
Sanitation
Compressed Natural
Gas
Public Transit
May 14, 2025
Optional workshop
Follow-Up
Preliminary Budget Overview
2025-26 Budget responds to new economic
challenges.
Guidebook for achieving goals for the year set by
Council during an annual strategic planning workshop
(February 13, 2025).
Navigating the Budget process with a conservative
but optimistic outlook.
Preliminary Budget Principles
Given uncertainties, the Budget is based on
following key principles:
Fiscally responsible and balanced.
Preserves essential services, recognizing that
delivery methods may change.
Reflects Council goal-setting from February 13th
workshop, consistent with the fiscal constraints
facing us.
Reflected in ambitious CIP and Department objectives. Navigating the Budget process with a conservative
but optimistic outlook.
Council Goal Setting
Process
Assessment of
departmental
Initiatives for
upcoming fiscal
year.
2024-25
accomplishments
Overview of ongoing
and new projects
Department
priorities: 2025-26
Council “homework”
assignment
Resulting Goals: 5 Major Themes
Support Sports Complex Development
Water Management Expansion
Community Engagement
Public Safety Enhancements
Economic Development
6 Economic Outlook
Inflation has cooled but remains above target in core sectors (housing, energy, utilities) – Bureau of Economic Analysis Interest rates remain elevated, impacting borrowing costs and consumer demand – Federal Reserve
Federal priorities shifting toward deficit reduction and regulatory enforcement, potentially affecting infrastructure and public safety funding – Congressional Budget Office
California faces a multi-billion-dollar deficit in FY 2026; state budget proposal emphasizes education, climate resilience, and core safety net programs –
CA Dept. of Finance
7 Economic Outlook Cont.
Flat sales tax forecasted by HDL - our largest discretionary revenue source
Potential supply chain disruptions in Q2 FY26 could impact construction timelines and material costs
Water infrastructure constraints may delay economic
development without strategic investment
Uncertainty around state/federal grants for police, housing, and infrastructure
8 Economic Outlook Cont.
USC’s Professor School of Business outlook on Gas
Prices.
“California gas prices could surge by as much as 75% by the end of 2026, reaching between $7.35 and $8.43 per gallon. This rise is primarily attributed to potential refinery closures, particularly the Phillips 66 refinery in Los Angeles and the Valero refinery in the Bay Area.”
9 Wasco Population Outlook
CA Dept. Finance Population Report - May 2025
City County
Percent Change
24-25
Population Minus
Exclusions 1-1-24
Population Minus
Exclusions 1-1-25
Total Population
1-1-25
Arvin City Kern 0.99 19,796 19,991 19,991 Bakersfield City Kern 1.16 414,451 419,238 419,238 California City Kern 0.97 13,189 13,317 13,317 Delano City Kern 1.15 46,036 46,566 52,831 Maricopa City Kern 0.59 1,018 1,024 1,024 McFarland City Kern 2.24 13,902 14,213 14,213 Ridgecrest City Kern 0.25 27,664 27,732 28,386 Shafter City Kern 4.72 22,356 23,412 23,455 Taft City Kern -0.03 7,089 7,087 7,087 Tehachapi City Kern 0.64 9,372 9,432 11,476 Wasco City Kern -2.55 23,447 22,850 26,235 Balance of County Kern 0.05 304,188 304,351 306,708 Incorporated Kern 1.09 598,320 604,862 617,253 County Total Kern 0.74 902,508 909,213 923,961 F ISCAL YEAR 2025-26
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2024 to January 1, 2025 and Total Population January 1, 2025
Uncertainty but key strengths
Start with a balanced budget
“Clean” audits
No General Fund debt obligations
Unassigned General Fund balance at the end of
2025-26 of 161% compared with policy target of
35%
Clear budget and fiscal policies are the
foundation for decision-making
Long-standing tradition of responsible financial
management
General Fund
Summary
Summary of General Fund
Revenues, Expenditures and
Changes in Fund Balance
REVENUES
TAXES AND FRANCHISE FEES
GENERAL PROPERTY TAX $875,000 $866,250 $875,000
VLF SWAP PROPERTY TAX 3,475,000 3,403,763 3,475,000 GENERAL SALES TAX 2,040,000 2,019,600 2,095,000 MEASURE X SALES TAX 3,125,000 2,757,490 3,090,000 FRANCHISE FEES 425,000 606,333 660,000 TRANSIENT OCCUPANCY TAX 170,000 168,300 150,000 BUSINESS LICENSE TAX 95,000 94,050 90,000 PROPERTY TRANSFER TAX 45,000 44,550 45,000 TOTAL TAXES 10,250,000 9,960,336 10,480,000 OTHER REVENUES 5,594,889 5,159,143 6,761,196 TOTAL REVENUES 15,844,889 15,119,479 17,241,196
EXPENDITURES
OPERATING COSTS 15,621,438 14,162,951 17,154,402 General Fund Revenues, Expenditures and Changes in Fund Balance 2024-25
BUDGET
2024-25
PROJECTED
2025-26
BUDGET
General Fund Revenues
Top 3
sources
account for
over 50% of
total
revenues
General Fund Operating Costs
Public safety
largest cost area
(43%)
Fire Services 0.72M
Police 6.63M
PAL 0.09M
7.43M
Public Safety
REVENUES
TOTAL REVENUES 17,961,205 15,119,479 17,241,196
EXPENDITURES
OPERATING COSTS 14,197,216 14,162,951 17,154,402 (B) CIP PROJECTS 1,454,936 676,080 382,426 TOTAL EXPENDITURES 15,652,151 14,839,031 17,536,827
CHANGE IN FUND BALANCE
FUND BALANCE, BEGINNING OF YEAR 26,404,736 31,953,825 30,315,321
FUND BALANCE, END OF YEAR
ASSIGNED: LABOR HOUSING COMPLEX PROJECT 9,300,000 - - UNASSIGNED FUND BALANCE 22,653,825 30,315,321 27,652,422 (A) TOTAL FUND BALANCE 31,953,825 30,315,321 27,652,422 161%
General Fund Revenues, Expenditures and Changes in Fund Balance 2023-24
ACTUAL
2024-25
PROJECTED
2025-26
PROPOSED
BUDGET
Note: Unassigned Fund Balance is 161% over Operating Costs. Policy target is 35%
Common Themes
Personnel Costs roughly +4.5%
CalPERS may miss discount assumptions
and pass shortage to cities.
CalPERS Unfunded Accrued Liability will
be paid off at end of July.
(PEPRA & Tier 2)
Workers Comp. and Liability Insurance
Increases, PD Operational
FY25 - $1.1M
FY26 - $1.7M
General Fund
Departments
General Fund Operating Costs
Support Services
Community Development
Public Safety
Public Works
General Fund
Support Services
City Council
City Manager
City Clerk
City Attorney
Finance & Accounting
Human Resources
Information Technology
Facilities
Shop (Fleet)
Non-Departmental
Community
Development
Planning
Code Compliance
Building Inspection
Economic Development
Permanent Local
Housing Authority
General Fund
Public Safety
Wasco Police
Department
Wasco Police
Activities Leage
Kern County Fire
Department
Public Works
Engineering
Project management
Right-of-way projects
LLMD’s
Streets
StormWater
Animal Control
Support Services
City Council
2025-26 Budget: $321,522 -11%
Significant Changes
Downtown Decorations: -$40,000
Water Discount Subsidy: $60,000
Continue or Stop?
City Manager
2025-26 Budget: $757,399 8%
Significant Changes
Salaries: $15,048
Retirement: $34,243
Travel and Training: $5,000
Professional Services: -$12,100
City Clerk
2025-26 Budget: $196,279 5%
Significant Changes
Computer Software: $2,000
Salary: $2,552
City Attorney
2025-26 Budget: $150,000
Significant Changes
No Changes
Finance & Accounting
2025-26 Budget: $610,087 20%
Significant Changes
Salaries: $71,840
FICA: $5,496
CalPERS Retirement: $7,941
Tuition Reimbursement: $10,000
Human Resources
2025-26 Budget: $170,438 14%
Significant Changes
Salaries: $7,032
Retirement: $2,052
Computer Hardware: $3,000
Information Technology
2025-26 Budget: $603,319 4%
Significant Changes
Salaries: $5,506
Dues/Subscriptions: $10,000
Facilities
2025-26 Budget: $582,646 12%
Significant Changes
Group Insurance: -$6,000
Annex Repairs: $10,000
Court House Repairs:$10,000
PAL Repairs: $4,500
Shop (Fleet)
2025-26 Budget: $869,945 4%
Significant Changes
Equipment: $25,000
Auto Repair: -$10,000
Non-Departmental
2025-26 Budget: $296,100 2%
Significant Changes
Utilities: $1,725
Community
Development
Planning
2025-26 Budget: $498,067 1%
Significant Changes
Computer Software: $8,874
Professional Service Reimb. $5,000
Building
2025-26 Budget: $582,584 4%
Significant Changes
Travel and Training: $3,400
Professional Services Reimb. (Solar App):
-$13,547
Code Compliance
2025-26 Budget: $543,282 11%
Significant Changes
Weed Abatement: $5,000
Equipment: -$12,000
Professional Service: $8,500
Economic Development
2025-26 Budget: $52,500 -5%
Significant Changes
Materials/Supplies: $10,000
Computer Software: $27,000
Public Safety
Police Services
2025-26 Budget: $6,109,071 15%
Significant Changes
Computer Software: $110,640
Special Events: -$21,500
Safety Inventory: $24,000
Kern County Fire Contract
2025-26 Budget: $720,000 -3%
Significant Changes
Contract Adjustment: -$20,662
Animal Services
2025-26 Budget: $615,490 58% (~26%)
Significant Changes
Vet Services (Reimb): $125,000
Retirement: $15,672
Fuel: -$2,000
Staffing Requests
Finance Unfreeze Accounting Manager
Public Works
Engineering
2025-26 Budget: $346,390 -17%
Significant Changes
Salary: -$79,887 – Reclass one Position
Computer Software: $3,500
Streets
2025-26 Budget: $1,373,531 8%
Significant Changes
Salaries: $20,437
Street Repair: $10,000
Materials/Supplies: $10,500
Questions?
Capital Projects
• Total Projects 55
• Completed = 8
• Over 50% = 15
• Under 50% = 9
• Not Started = 23
• New Projects: 13
Summary of City Projects
Count
23 CIP > 50%
Count
9 CIP Between 1% - 49%
Count
23CIP List < 1%
Description Amount
PD SHOOTING RANGE RESTORATION $50,000
ST 11TH STREET PEDESTRIAN IMPROVEMENTS $25,408
CH FLEET $150,000
WT WATER MAIN RELOCATION ROUNDABOUT $1,400,000
WT FIRE HYDRANT REPLACEMENT $75,000
WW SEWER LIFT GENERATOR $100,000
SMOOTH DRUM ROLLER $50,000
WT WATER WELL TESTING NEW SITE $350,000
GF STUMP GRINDER $30,000
WT UTILITY TRAILER $15,000
SHOP BENCH LATHE $10,000
SHOP LIFT RACK $45,000
ASPHALT PAVING MACHINE $270,000
TOTAL $2,570,407
Count
13 New Proposed CIP’s
Questions?
Budget Review
Enterprise Funds
May 13, 2025
Wastewater Fund
Wastewater Fund
Note: Unassigned Fund Balance is 172% over Operating Costs. Policy target is 35%
2024-25
Projected
Budget
2025-26
Proposed
Budget Variance
Beginning Bal. 7.1M 8.1M 1.02M
Revenues 2.8M 2.9M .09M
Operating Exp. -1.7M -2.9M 1.23M
Non-Operating Exp. .0M .0M .00M
Capital Exp. -.1M -.5M .41M
Ending Bal. 8.1M 7.6M
Unnasigned 5.5M 5.0M -.53M
Assigned (Impact Fees) 2.6M 2.6M .00M
Ending Bal. 8.1M 7.6M -.53M 172%
-
Sources Over(Under) Uses 1,018,093$ (525,655)$ (1,543,747)$ Significant Operating Changes
Wastewater
Department Budget: $2,933,090 -5%
Significant Changes.
Salaries: $29,337
Biosolid Disposal: $5,000
Chemicals and Testing: $15,000
Water Fund
Water Fund
Note: Unassigned Fund Balance is 219% over Operating Costs. Policy target is 35%
2024-25
Projected
Budget
2025-26
Proposed
Budget Variance
Beginning Bal. 14.0M 14.3M .34M
Revenues 3.5M 3.2M -.36M
Operating Exp. -2.7M -3.76M 1.06M
Non-Operating Exp. .0M .0M .00M
Capital Exp. -.5M -4.5M 4.04M
Ending Bal. 14.3M 9.2M
Unnasigned 13.4M 8.24M -5.12M
Assigned (Impact Fees) .9M .9M .00M
Ending Bal. 14.3M 9.2M -5.12M 219%
-
Sources Over(Under) Uses 335,587$ (5,117,283)$ (5,452,870)$ Significant Operating Changes
Water
Department Budget: $29,998,820 7%
Significant Changes
Salaries: $37,312
Repair Maint. Equipment: -$65,000
Water Meter Service: $10,000
Chemicals and Testing: $4,000
Tank No. 1 Construction
Sanitation Fund
Sanitation Fund
Note: Unassigned Fund Balance is 147% over Operating Costs. Policy target is 35%
2024-25
Projected
Budget
2025-26
Proposed
Budget Variance
Beginning Bal. 5.4M 7.4M 2.07M
Revenues 4.8M 5.2M .46M
Operating Exp. -2.7M -4.6M 1.89M
Non-Operating Exp. .0M .0M .00M
Capital Exp. .0M -1.3M 1.33M
Ending Bal. 7.4M 6.7M
Unnasigned 7.4M 6.7M -.70M
Assigned (Impact Fees) .00M
Ending Bal. 7.4M 6.7M -.70M 147%
-
Sources Over(Under) Uses 2,067,090$ (697,063)$ (2,764,153)$ Significant Operating Changes
Sanitation
Department total: $4,827,834 4%
Significant Changes
Salaries: $40,504
Computer Software: $20,000
Liability Insurance: $59,606
Postage: -$6,000
Compressed Natural
Gas Fund
CNG Fund
A B A-B
2024-25
Projected
Budget
2025-26
Proposed
Budget Variance
Beginning Bal. .3M .1M -.22M
Revenues .3M .1M -.21M
Operating Exp. .0M -.2M .14M
Non-Operating Exp. .0M .0M .00M
Capital Exp. -.5M .0M -.51M
Ending Bal. .1M .0M -.80M
Unnasigned .1M .0M -.06M
Assigned (Impact Fees) .00M
Ending Bal. .1M .0M -.06M -1%
-
Sources Over(Under) Uses (222,932)$ (61,773)$ 161,158$ Significant Operating Changes
CNG
Department Budget: $149,308 -77%
Capital Outlay: -$525,000 deferred
Public Transit Fund
Public Transit Fund
A B A-B
2024-25
Projected
Budget
2025-26
Proposed
Budget Variance
Beginning Bal. .7M 1.7M 1.02M
Revenues 2.6M 2.6M -.01M
Operating Exp. -.4M -.9M .43M
Non-Operating Exp. .0M .0M .00M
Capital Exp. -1.1M -3.4M 2.23M
Ending Bal. 1.7M .0M 3.67M
Unnasigned 1.7M .0M -1.65M
Assigned (Impact Fees) .00M
Ending Bal. 1.7M .0M -1.65M 4%
-
Sources Over(Under) Uses 1,020,640$ (1,652,363)$ (2,673,003)$ Significant Operating Changes
Transit
Department Budget: $5,064,622 51%
Fleet Update
Increase is driven by CIP.
Salaries: $10,819
Retirement: $11,291
Training and Travel: -$9,000
CIP: $1,691,534
Professional Services: - $32,000
Fiscal Year 2026 -Action Plan
Defer non-critical spending in first half of FY26; revisit in midyear review
Focus budget requests on essential services and
Council priorities
Protect General Fund reserves to preserve stability
and creditworthiness
Avoid following cities that budgeted optimistically and now face layoffs, service cuts, or deficit borrowing
71 Adopt lean budgeting; adjust
Quarterly & midyear
Strategically target grants for infrastructure &
public safety
Stay engaged with HDL & League of CA Cities
Prepare departments for midyear recalibration
Monitor revenues monthly; update forecasts
Quarterly Financial projections reports
Quarterly CIP KPI reports
Proactive or Reactive ???
Fiscal Year 2026 -Action Plan Cont.
Reactive v. Proactive
Questions?