Gonzales council adopts 2025–26 operating budget, trims council stipends to protect reserves

GONZALES, Calif. — The Gonzales City Council on Monday voted to adopt the city’s operating budget for fiscal year 2025–26 and the successor‑agency budget, approving a status‑quo spending plan that uses $104,044.40 of a $1,000,000 council reserve to balance the general fund. Councilors also voted to remove council stipends from the adopted budget and instructed staff to return at a later date with options on merit increases.

During a detailed staff presentation, City staff member Carmen and city finance staffer Mike Howard walked the council through the budget’s revenue mix, projected expenses and risks. Howard said the total operating budget presented was approximately $37.0 million, with a general‑fund operating budget presented as about $7.0 million (all figures as presented by staff). The proposed budget was described as “status quo,” balanced in part by a planned use of $104,044.40 from the city’s $1,000,000 council reserve.

Staff told the council that sales tax receipts are softening and that expenses — notably CalPERS liabilities, 9‑1‑1 dispatch fees, insurance, staffing and capital needs — are rising faster than revenues. The presentation emphasized two major projects affecting current spending: completion of the community center (construction fund separated in the budget) and work on an industrial wastewater treatment plant. Howard said Measure X proceeds will be used to fund community center construction and to support its future debt service.

The council also reviewed Measure K, the Gonzales quality‑of‑life temporary sales tax (a one‑half percent transaction use tax). Staff estimated Measure K revenue at about $806,500 and recommended allocating $800,000 in the adopted budget to items including pool debt service ($130,000), fire salaries ($250,000), a city match for a fire truck ($120,000) and several recreation, youth and senior programs. Staff noted they intentionally budgeted $800,000 rather than the full estimated revenue to avoid over‑committing if sales tax softens.

Council discussion focused on cost‑cutting options and program priorities. Several council members proposed reducing or reallocating Measure K allocations — including the $30,000 community action grants and portions of after‑school and day‑camp funding — to preserve core services and reserves. One councilmember said they were willing to forgo their stipend as a symbolic budget saving; the council later moved and approved removing the stipend allocation from the adopted budget. The council also directed staff to return with analysis on merit increases at a later date rather than make changes immediately.

Public comment included residents urging hiring freezes and closer scrutiny of past purchases; one commenter criticized prior purchases such as a police drone and urged the council to avoid new taxes without demonstrating fiscal restraint.

After motions, the council approved Resolution No. 2025‑47, adopting the city operating budget for July 1, 2025–June 30, 2026, and Resolution No. SA‑2025‑02, adopting the successor‑agency budget for the same period. The council voted to adopt the budgets as amended to remove the council stipend allocation; council members directed staff to return with detailed options on merit increases and other potential adjustments.

The adopted budget authorizes staff to realign current‑year budget appropriations with actuals, affirms the city’s reserve policy as presented and includes planned capital and debt‑service assumptions tied to ongoing projects. Staff noted several future revenue strategies under consideration, including polling on a parcel tax for fire services, pursuing grants, sale of city property and potential new revenue sources tied to development projects such as the Vista Lucia project.

The council closed the session and opened the 6 p.m. meeting.