Riverside staff propose FY 2025–26 budget amendments; council sets June 17 public hearing

Mike Petrell, the city manager, told the City Council the administration is proposing amendments to the second year of the city's 2024–26 biannual budget to reflect updated revenue forecasts and higher costs. "A very strong city budget is balanced. Total of $1,500,000,000 all in," Petrell said, adding staff are taking a conservative approach because of economic uncertainty.

Sergio Aguilar, deputy finance director, presented the amendment details. Citywide, staff proposed supplemental appropriations of about $31.3 million across all funds and net revenue adjustments driven by revised sales‑tax forecasts, lower property‑transfer revenue and higher pension liabilities. The package keeps the general fund balanced at roughly $381.6 million while increasing the planned drawdown of Measure Z fund balance to about $23.7 million in the second year.

Aguilar said the city still holds "record level reserves"—roughly $210 million across general fund reserves—and recommended avoiding using those reserves now. The amendments include personnel cost increases tied to negotiated MOUs, a roughly $3 million increase in CalPERS unfunded actuarial liability payments, and proposed one‑time transfers from Measure Z to support public‑safety costs. Staff also recommended deferring some noncritical capital and program spending (for example, reductions to fleet and deferred‑maintenance lines) to preserve options if revenues soften.

Sergio Aguilar described revenue adjustments in detail: a 2.6% sales‑tax reduction in the general fund (about $2.5 million) and a 3.3% reduction in Measure Z sales tax projection; a $750,000 downward revision to property‑tax projections tied to anticipated lower property‑transfer fees; and recognition that updated consultant projections could require additional downward adjustments once actual data are available. On expenditures, staff recommended $10.9 million in additional general‑fund personnel costs (including $2 million to cover anticipated fire overtime) partially offset by $15.9 million in projected vacancy savings.

Council discussion was brief. Council Member Alejandra Cervantes thanked staff and moved to set a public hearing; Council Member Frank Condrick seconded the motion. The motion to set a public hearing for adoption of the amended FY 2025–26 budget on June 17 carried unanimously.

Why this matters: the amendments affect near‑term spending priorities for public safety, infrastructure and capital programs and propose a mix of targeted spending deferrals, use of unprogrammed Section 115 set‑aside funds, and a one‑time Measure Z transfer to cover higher personnel and pension costs. The June 17 public hearing will allow public comment before final adoption.