Montebello council hears first-quarter budget update, approves salary-schedule change

At a City of Montebello council meeting, officials received a first-quarter fiscal update showing revenue gains tied to local development and hotel operations and approved a salary-schedule adjustment to reflect recently ratified labor agreements.

The update showed elevated revenue in licenses and permits — nearly $1 million higher — driven largely by Metro Heights development and a more favorable plan-check agreement, and by plan-check fees from Montebello Hills. Transfers in to the general fund were also higher, with the transit fund providing a one-time transfer of about $1.07 million. The city is projecting $17 million from the city's 1% sales tax (an increase of about $1.3 million from last year) and continuing receipts from Measure H.

The report said the city's adopted general fund budget for the year was $83.55 million, with an amended budget of about $84.8 million and a first-quarter projection of roughly $87.8 million. Since adoption there have been $1.26 million in budget amendments; about $931,000 of that reflects carryover purchase orders and roughly $330,000 stems from recent council-approved amendments for items including a fire strategic-plan consultant ($75,000), three fire vehicles and a custodial contract adjustment for public works (about $150,000). The presenter emphasized that approved memoranda of understanding (seven MOUs) are driving increased salary and benefit costs captured in the first-quarter projection.

The council was told it should still expect a surplus for fiscal year 2025-26 despite those increases, but the report noted upward pressure from retirement contributions, overtime and rising minimum wages affecting part-time staff. Hotel operations were cited as bright spots: Hilton Garden Inn ended the prior year with an operating surplus of about $1.24 million; Home2 Suites was reported with a $638,000 surplus and an occupancy rate near 89 percent.

Council members asked questions about the Home2 Suites revenue and expense swing; the presenter pointed to higher labor and food-and-beverage costs, increased staffing as occupancy rises, and minimum-wage increases as the primary drivers.

Councilor Alonso moved to approve the salary-schedule action (the city manager had noted a rescission as part of the item). The motion was seconded, and a roll-call vote was taken: Alonzo, Romero, Mayor Pro Tem Tamayo, Peralta and Mayor Melendez voted aye and the motion carried.

Council discussion also addressed potential sales-tax impacts tied to regional events earlier in the year. The presenter said sales-tax reporting lags several months and current projections reflected January through March collections; a forthcoming midyear update including April through June data would be used to assess any effect from regional ICE-related incidents on sales tax receipts and other departmental resource impacts.

The presentation concluded with an assurance that staff will provide a fuller second-quarter budget update with updated sales-tax and fee-schedule impacts.