Nogales reviews preliminary FY2025–26 budget; water fund remains the sole unbalanced department

The Nogales City Council on Wednesday reviewed the proposed fiscal year 2025–26 budget at a study session, hearing that most departments’ proposed spending is balanced but the city’s water enterprise fund is projected to run a deficit. Staff also described several proposed staffing and capital changes and said grant activity will be centralized in the finance office.

Why it matters: The workshop showed the budget largely intact across general government departments while highlighting one clear funding risk — water utility revenues that staff said are too low to support current operations. Council also voted on four routine items at the end of the session, including a budget transfer for fire-suppression work and adoption of cemetery rules.

Finance director Mr. Kramer told the council that the city’s non-departmental reserves grew and that most departments are balanced: “Our reserve can grow every year, and it has grown a large amount this year.” He listed non-departmental expenditures for FY2026 at $17,684,760 and a projected reserve of $12,774,362 — an increase the director described as “very, very good.”

But Mr. Kramer warned that the water enterprise fund is the one account staff could not balance in the preliminary figures. According to staff figures presented at the session, the water fund is roughly $369,280 “in the negative” under current revenue assumptions. To reduce near-term pressure, staff asked council to consider postponing a previously…