Gridley City Council on June 2 reviewed a draft fiscal year 2025–26 budget that projects $23.6 million in total revenue and $25.2 million in total expenditures, leaving an apparent gap staff said is driven largely by fund consolidations and planned capital set‑asides.

The draft, presented by Finance Director Martin (presenter name given in meeting), lays out the general fund, special revenue funds and enterprise funds and details a number of one‑time and ongoing costs. “This is just a draft, and the plan for this to be approved at the council meeting,” Martin said, noting staff brought the document to solicit council questions before formal adoption.

Why it matters: The draft shows the city putting money into reserves for planned capital projects while the general fund faces year‑to‑year pressure from higher retirement obligations, insurance and service contracts. Council members pushed staff to clarify how the city will protect low‑income or medically vulnerable residents if federal or county assistance shrinks.

Key budget figures and drivers

- Total projected revenue (all funds): $23,600,000; total projected expenditures (all funds): $25,200,000. Staff noted the difference reflects transfers into reserve accounts and capital set‑asides rather than immediate cash outflows.

- General fund: staff described a roughly $303,100 decrease in general fund revenue compared with the most recent figures; revenues from licenses, permits and fees rose while property tax projections are effectively flat.

- Fund consolidation: planning and recreation funds formerly shown as Fund 495 and Fund 500 have been consolidated into Fund 010 (the general fund); that consolidation increases the general fund’s expense lines compared with prior presentation formats.

- Retirement and benefits: CalPERS unfunded actuarial liability contributions (UAL) and health insurance increases are significant drivers. Staff said CalPERS contribution costs rose materially and health insurance is projected to increase about 11 percent.

- One‑time and capital items: the draft includes a $400,000 city contribution toward Highway 99 rehabilitation work being led by Caltrans; staff said a REIT 2 program will reimburse about $283,000 of that amount, leaving an estimated net cost to the city. The city will also make a fire‑truck loan payment of about $153,000 in August 2025.

- Sports complex reimbursements: staff said the project includes anticipated reimbursements of approximately $2,870,000 tied to the Gridley Sports Complex grant; those reimbursements appear in the special‑revenue fund projections.

Utilities and enterprise funds

Council and staff discussed electric, water and sewer enterprise funds in detail. Electric utility revenue and power‑purchase costs were reviewed separately:

- Electric utility revenue: audited fiscal year 2024 revenue was about $7.8 million; fiscal year 2025 actual receipts (to May 30) were about $8.6 million. Staff noted previous rate adjustments and a pending rate study to determine future need.

- Power purchase expenses: staff said planned power purchases for the current fiscal year were budgeted at about $5.2 million but actuals to date are about $4.1 million. The utility purchase projection for the next fiscal year was listed at about $4.1 million in the draft.

Council asked about the city’s approach to energy affordability. Martin said the utility maintains a public‑benefit program funded via a line on utility bills; the draft shows a working balance (displayed in the budget) and staff suggested the council could direct staff to earmark a larger amount for targeted programs. “We would put that money aside through what’s called the public benefit program,” Martin said, describing past uses for energy‑efficiency measures and one‑time bill credits handled through partners such as Community Action Agency.

Program choices and intake: staff and councilors discussed several program options, including one‑time bill credits for households facing imminent disconnection, appliance replacement (for example refrigerators or HVAC upgrades) and medically necessary backup batteries for residents who rely on powered medical equipment. Staff emphasized past coordination with Community Action Agency and noted some energy‑efficiency programs are administered by outside providers; council members asked staff to return with program design choices and the current public‑benefit fund balance before any appropriation.

Capital projects and risk

- Electric infrastructure: the draft budgets large reserve deposits (about $1.6 million shown for electric capital) intended to support future projects including substation replacement, meter replacement and feeder loop improvements. Staff said some of those components (for example a transformer/substation replacement) are at or near end of life and will be costly.

- CIP presentation: staff highlighted the new budget layout with a capital improvement program (CIP) section that includes project photos and descriptions; councilors said the layout is clearer than the prior Excel‑based presentation.

- Fire/CAL FIRE contract: the draft incorporates projected costs for the Cal FIRE contract and a new fire‑truck loan payment; staff warned Cal FIRE contract costs could increase in future years and that the department’s budget has grown significantly compared with the current year.

Other service areas discussed

- Recreation and splash pad: staff described a malfunctioning touchpad on the rec splash pad and provided repair cost estimates; staff recommended a timed recirculation approach (for example a block of hours per day) while evaluating a permanent repair. Council and staff discussed hours of operation to match school events and community needs.

- Animal shelter and code enforcement: staff reported ongoing outreach for shelter adoptions and noted the shelter building needs repairs; intake and euthanasia statistics were not immediately available but staff offered to provide monthly intake figures in follow up.

- Transit and BCAG audits: councilors raised concerns about audit timeliness reported by regional agencies. Staff explained a backlog of city‑side audits caused by pandemic‑era interruptions and turnover, and said work is current to the present audit cycle; BCAG representatives, staff said, had acknowledged the situation and signaled continued support.

Council direction and next steps

Council did not take formal budget actions at the session; staff said the item was a draft presentation meant to gather questions before returning for approval. Staff noted they will bring back:

- Revised revenue projections tied to contracts (for example police services bids) that could change draft revenue assumptions.
- A cash‑balance report for the public‑benefit program and options with estimated costs for proposed assistance programs (short‑term bill credits, appliance replacement, medically necessary backup power, or weatherization complements).
- Cost estimates and potential supplemental appropriations for splash‑pad repairs and for specific capital projects where repair is urgent.

Ending

Staff urged councilors to forward any detailed questions to the finance office before the next meeting so that answers can be incorporated into the formal approval agenda. The council scheduled additional study‑session requests to review recreation program options, transit (Feather Flyer) operations, and potential energy‑efficiency/public‑benefit program designs.