Grover Beach council hears FY 2025–27 budget, directs accelerated three‑year repayment of wastewater interfund loan

The Grover Beach City Council on June 9 reviewed the proposed fiscal year 2025–27 budget and the city’s 2026–2030 capital improvement program and instructed staff to accelerate repayment of interfund loans owed to the wastewater fund so the principal is amortized over three years rather than the six‑year schedule that staff had recommended.

Administrative Services Director Zomet opened the council hearing with a multi‑year budget overview, saying that taxes and charges for services were the largest revenue categories and that the city anticipates a modest surplus in the current year but shrinking surpluses over the two‑year outlook. “We have just over $200,000 surplus in the current fiscal year,” Zomet said, and noted the general fund reserve policy target of 25 percent would remain met under the proposed plan.

City staff had recommended a six‑year repayment schedule for interfund advances to the wastewater fund, with annual payments at just over $187,000 and a 3 percent interest credit to the wastewater fund for the interfund loan. Director Zomet told council the repayment schedule as presented “has no material effect on rates because the repayment is already assumed within the rate study,” but would reduce the general‑fund reserves. City staff also presented a capital program that includes multi‑million‑dollar sewer upgrades, lift‑station work and other system replacements in FY 2025–26 and subsequent years.

Councilmembers questioned the budget presentation, asked for clearer line‑item visibility (for example, separating the 5 Cities Fire Authority contract from other “non‑departmental” costs) and asked staff to parse mandatory versus discretionary training and council travel expenses. The council directed staff to:

- accelerate repayment of the wastewater interfund loan so that the loan is repaid within three years (direction to staff; staff will incorporate the schedule into the final budget for adoption on June 23); and - separate out major non‑departmental costs in budget documents (for example, show the 5 Cities Fire Authority contract as its own non‑departmental line item) and provide a clearer breakdown of training and travel expenses that distinguishes mandatory, job‑required training from discretionary recognition and travel costs.

Clarifying details from the presentation: city staff identified planned wastewater CIP spending of about $4.65 million in FY 2025–26 (including a roughly $3.9 million sewer upgrade), follow‑on projects in FY 2027–28 of roughly $2.7 million, and other multi‑year investments. Staff estimated general‑fund surpluses of about $211,000 in the current fiscal year and lower surpluses in the next two years; staff also reported projected reserves would remain at or above the 25 percent policy goal across the proposed two‑year budget outlook.

Councilmembers also asked for periodic updates from the Ramona Park donation program (being run by the Community Foundation) and asked staff to return a clear mid‑year report showing whether fiber‑optic landing revenues materialize as anticipated. The council did not adopt the final budget at the June 9 hearing; staff will incorporate the two staff directions and return the budget for adoption at the June 23 meeting.

Ending: Staff will include the three‑year wastewater loan repayment schedule and the requested line‑item clarifications in the packet for the June 23 budget adoption vote.