Moraga council adopts midyear budget changes, moves $1 million to asset-replacement and $500,000 to pension trust

The Moraga Town Council on March 12 approved midyear adjustments to the town’s operating budgets, adopted a clarified reserve policy and directed one-time transfers of $1,000,000 to the asset replacement fund and $500,000 to a Section 115 pension trust.

The midyear budget update, presented by Administrative Services Director Katie Bruner, realigned revenue and spending estimates for the current fiscal year and recommended several modest program adjustments. Bruner told the council that updated property-tax estimates added about $50,000 and parks-and-recreation receipts had increased by roughly $66,000, driven by stronger summer-camp registration and special-event income. Parks and recreation spending was increased by about $41,000 for temporary summer staff and $25,000 for event supplies and merchandise, producing a projected general-fund operating surplus of roughly $83,000 for the year.

Why it matters: Town staff warned the council that long-term pension costs tied to CalPERS are rising and that, without new revenue or balancing actions, the general fund is projected to run annual operating deficits beginning next fiscal year. Council and staff framed the reserve-policy change and the transfers as steps to smooth future shocks while preserving flexibility for one-time needs.

Key items and context - General-fund midyear adjustments: Bruner recommended aligning budget lines with current receipts and modestly increasing parks-and-recreation appropriations for temporary staff and event supplies. The council adopted those adjustments by motion. - ARPA administrative cleanup: staff proposed a $32,000 transfer from the ARPA fund into capital projects to match previously obligated ARPA expenditures; the council approved the cleanup to align appropriations with earlier commitments. - Hacienda de las Flores operating budget: staff corrected earlier accounting errors and recommended a $50,000 increase in both revenue and expenditure appropriations tied to utility costs associated with a tenant (Wedgwood). Councilmember Carrie Hillis recused from this vote because her residence is within 500 feet; the item passed 4–0 with Hillis abstaining. - Reserve policy update and one-time allocations: staff recommended designating the general-fund reserve as a committed fund balance per GASB 54, calculating the 50% reserve on the current fiscal year’s adopted operating budget, and allowing council to allocate excess one-time balances rather than automatically moving all surpluses to asset replacement. For excess fiscal year 2023–24 unassigned fund balance, the council approved transfers of $1,000,000 to the asset replacement fund and $500,000 to the town’s Section 115 pension trust. - 10-year general-fund forecast: staff presented a forecast showing operating expenditures outpacing revenues beginning in fiscal year 2026 under current policy and service levels. Assumptions included a 3% annual property-tax growth, a 3.3% general inflator for other revenues and wages, a 12% healthcare-cost assumption (per current MOUs), a 6.8% CalPERS discount rate for pension projections and a projected CalPERS unfunded-accrued-liability (UAL) peak in the early 2030s. The forecast was presented for council feedback; no formal budget-balancing decisions were made at the meeting.

Council direction and next steps Council asked staff to continue refining the long-term forecast, to study possible revenue options (fee updates, districts or other sources) and to develop a policy framework for how and when the pension trust would be accessed to smooth employer pension costs. Staff will incorporate council feedback into budget development for fiscal 2025–26 and return with more detailed scenario analysis during the regular budget process.

Ending The council adopted the staff resolutions and adjustments unanimously except where recusal was recorded for the Hacienda item. Staff said the midyear changes are administrative and intended to align appropriations with current receipts while giving council more flexibility to use one-time funds strategically.