Port Hueneme council adopts tight two‑year budget, uses CIP reserve to balance first year

The Port Hueneme City Council unanimously adopted operating and capital budgets for fiscal years 2025–26 and 2026–27 after staff presented a plan that relies on department operating cuts, position freezes and limited reserve use to address projected revenue uncertainty.

City staff said the general fund faces continuing pressure from salary and benefit growth and CalPERS payments, and proposed 5% department operating reductions and rightsizing through attrition. “Salaries and benefits make up roughly 70% of our expenditures,” a staff presenter said, noting the city proposed freezing several general‑funded positions for fiscal 2026–27 to reduce cost growth.

The adopted plan uses about $600,000 of the city’s CIP reserve to fund capital expenditures in FY2025–26 and adjusts reserve targets, leaving an estimated unassigned fund balance of about $7.4 million at the end of FY2025–26 under the current assumptions. Staff warned the FY2026–27 projections show a lower ending fund balance (about $6.8 million) and said additional reductions or adjustments may be needed if revenues do not improve.

Council members asked for continued reporting and said staff will return to the council with updated information, including a utility rate study for enterprise funds (water, wastewater and solid waste) to ensure those user‑funded operations recover their full costs. Staff said wastewater and solid‑waste rate studies were last completed in 2009 and the water study in 2019.

The motion to adopt the budgets passed with all members present voting yes; members Brown and Blackwell were absent. The council also adopted related resolutions establishing the city’s appropriation limit for the period covered by the budgets.

Council members and staff said they plan to monitor revenues and return with budget adjustments as needed during the fiscal year.