During a recent government meeting, city officials unanimously approved the fiscal year 2024-2025 operating capital budgets, which include significant financial strategies aimed at maintaining essential services while addressing long-term sustainability concerns.

Director Scott K. Yoo presented the proposed budget, highlighting a moderate revenue growth forecast, with expectations that most revenue categories will meet or exceed current projections. However, a notable shortfall in vehicle in lieu fees was acknowledged, which is anticipated to be addressed in the upcoming state budget revisions.

The proposed budget indicates a planned expenditure exceeding revenue by approximately $6.2 million, necessitating a draw from the city's unassigned fund balance. The capital improvement program earmarks funds for two key projects: a grid separation initiative and utility improvements along El Camino Real. Yoo emphasized the importance of balancing discretionary spending with capital needs to ensure the city can continue to provide high-quality services to residents.

The general fund revenue is projected at $87.3 million, with expenditures rising to $81 million, reflecting a 1.8% increase from the previous year. Public safety services, including fire and police, account for over 46% of the budget, while leisure and culture services represent 27%. The budget also anticipates $3.1 million in revenue from Measure A, which will support various capital projects, including sidewalk repairs and debt service for the Community Center Project.

Despite the projected deficit, city officials expressed confidence in the city's financial health, noting that the general fund is expected to cover its operating expenses and transfers. However, they cautioned that increased capital improvement needs could pressure the fund balance in the future. The discussion underscored the city's commitment to addressing critical infrastructure projects while maintaining fiscal responsibility.