Soledad council adopts balanced 2025–26 budget, defers $132,715 housing transfer for later consideration

The Soledad City Council on June 18 voted to adopt the city's 2025–26 fiscal year budget after a prolonged public and council debate about reserves and a proposed transfer of $132,715 to a housing trust fund.

City staff presented a $60 million all-funds budget that the city manager said is balanced for 2025–26 but relies on a $510,000 use of the general fund operating reserve this fiscal year. The presentation noted that the largest capital item this year is the recycled-water ("purple pipe") project and that Measure Y, a local sales tax that currently provides about 16% of the general fund, is set to expire in 2032 and represents a major long-term fiscal risk.

Councilmembers pressed staff on program details, line-item breakdowns and how the budget affects residents' combined utility bills. Several councilmembers asked staff to provide a utility-bill insert that would show residents which portions of their bill (collection, landfill, sewer, etc.) are affected by changes.

Council debated a staff recommendation to transfer $132,715 (proceeds from a parcel sale) from the general fund into a newly created housing trust fund. Several members said they were sympathetic to establishing a housing fund but were uncomfortable moving the money immediately because the adopted budget uses some reserves for balance; others said they preferred setting the housing fund balance now to be competitive for future housing grants.

After discussion the council modified the staff recommendation: the council adopted the fiscal year 2025–26 budget and directed staff to remove Item 3 (the transfer of $132,715 into the housing trust fund) from the resolution and bring that transfer back to the council for separate consideration at a later date. The adopted actions included the FY 2024–25 budget realignment to reflect estimated actuals, approval of position allocations and the city's classification and compensation salary schedule for 2025–26, and reaffirmation of the city's $2 million emergency contingency reserve policy.

Council members and staff emphasized pursuit of grants and other revenue sources (e.g., the possibility of a future parcel tax for partial funding of fire services) and a forthcoming water/sewer rate study. Staff said the city has built reserves over recent years that provide flexibility to respond to near-term risks but highlighted the longer-term structural pressures of rising public-safety and pension costs.

Formal action: council adopted the joint resolution approving the 2025–26 budget while removing the $132,715 housing transfer from immediate approval and directing staff to return the housing-transfer item later.