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Escalon council adopts 2025–26 proposed budget; staff outlines strategy to reduce CalPERS liability
Summary
Council adopted the FY 2025–26 proposed budget and heard staff proposals to accelerate payoff of the city's CalPERS unfunded pension liability using additional one‑time payments and investment earnings to reduce long‑term interest costs.
The Escalon City Council on June 16 adopted the city's proposed budget for fiscal year 2025–26 and received a staff presentation on fiscal strategy that included a proposal to accelerate payoff of the city's CalPERS unfunded accrued actuarial liability (UAAL).
Finance staff presented a balanced general fund budget of about $6.3 million for the incoming fiscal year; staff said the budget assumes modestly higher revenues from local taxes and investment income and reiterated commitments to maintain service levels while investing in strategic priorities such as economic development and infrastructure. The proposed budget will be posted with the packet and allow for the standard fiscal adoption process; council voted to adopt the proposed budget at the meeting.
Finance Director Celinda (last name not read) explained steps the city can take to improve long‑term fiscal stability. Staff recommended making accelerated payments to CalPERS that would reduce the city's UAAL faster than the actuarial schedule. Staff said an additional payment this year — on top of the required contribution — of roughly $322,000 (staff estimate presented during the meeting) would lower long‑term interest costs and reduce the required annual contribution in future years. Staff noted a prior lump‑sum payment produced a 3.5 percent discount on the required payment last cycle and that continuing focused prepayment can materially reduce total long‑term costs.
Council members praised the finance team for improving reporting and said paying down pension liability is an effective long‑term step to stabilize expenses. Staff also reviewed cash‑flow timing, investment vehicles the city uses (LAIF, a certificate investment program and bank sweep accounts) and the city's plan to report Measure P revenue and expenditures regularly to the council.
Council adopted the proposed budget by motion after a short public comment period and asked staff to return with further financial detail, options for applying extra funds to interfund loans and a schedule for any accelerated CalPERS payments.
