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San Fernando council wrestles with budget trade‑offs, OPEB liability and staffing requests in second study session
Summary
Council held a wide‑ranging budget study session focused on personnel costs, retiree health (OPEB) liabilities, reserves, capital projects and proposed staffing enhancements across community development, parks & recreation and public works; staff and council agreed to refine proposals and return with final budget language for the June 16 meeting.
City staff and councilmembers spent the evening on the second fiscal year 2025–26 budget study session, debating long‑term retiree health liabilities, reserve policy, proposed staffing enhancements and capital project priorities.
Councilmember Joe Fajardo pressed for continued funding of retiree health contributions, saying, “we will not have a system and plan to pay that unless we begin now,” and flagged a projected future peak in retiree health costs. Administrative Services Director Erica Milton and City Manager Kimball explained the city’s reserve policy: the general fund reserve target is 20 percent of operating expenses, the current balance is approximately 40 percent, and staff recommended drawing $500,000 from reserves this year while keeping the reserve at about 37 percent. Milton noted revenues exceeded expenditures by about $416,000 before enhancements; redirecting $500,000 to OPEB in a zero‑enhancement scenario would have produced a slight deficit.
Councilmembers debated staffing upgrades across departments. Recreation and Community Services Director Julio Salcedo asked to reclassify two program specialist positions to full RCS coordinator roles and to convert a part‑time summer camp position to full time; several councilmembers supported reclassifying current full‑time program specialists (to correct out‑of‑class work) but asked to delay adding a new full‑time position until after further study. Public Works sought a working field supervisor by promoting an existing senior maintenance worker and an upgrade of a management analyst to senior management analyst; council discussion favored internal recruitment for supervisory promotion and recognized the value of a senior analyst for contract oversight.
Councilmembers also pressed staff on parks and restroom needs downtown, the Las Palmas Park elevator and HVAC upgrades (staff reported the elevator and HVAC projects are in progress and roof replacement at Las Palmas is expected to allow unit replacement by mid‑summer), a backhoe procurement arriving imminently, and Cindy Montañez Park design funding and outreach. On capital spending, staff emphasized that many CIP projects are funded from special revenue or grant funds (Measure M, Measure R, Measure W, transportation grants) and do not come from the general fund.
Councilmembers asked staff to prepare a consolidated list of candidate council enhancements for the remaining discretionary funds and advised staff to return a resolution or appropriation if council chooses to draw on reserves. The study session closed with direction for staff to refine budget language and for councilmembers to submit enhancement priorities ahead of the June 16 hearing.
