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Council reviews FY 2025–26 preliminary budget; staff recommends up to $2 million from reserves
Summary
Finance staff presented a $285.1 million draft operating budget and a $4.2 million projected general-fund gap; council gave directional feedback to use up to $2 million of reserves and adopt a mix of cuts and reserve use rather than deeper service reductions.
City finance staff presented El Cajon’s preliminary FY 2025–26 budget June 10 and outlined a projected $4.2 million shortfall in the general fund. Council gave direction to staff to limit reserve use to no more than $2 million and to pursue identified reductions that would avoid deeper service cuts where possible.
Finance director Clay Shane and fiscal analyst Autumn Reburger said the draft operating budget totals about $285.1 million for all funds, with a general-fund expenditure budget of $105.4 million and projected general-fund revenues of about $101.2 million. The draft includes 415 funded full-time-equivalent positions, of which 357.5 are in the general fund; staff noted the draft includes staffing for one crew of the new fire engine company but does not include a planned police overhire.
Staff said sales tax, Proposition J and property tax make up roughly three-quarters of general fund revenue. The draft shows a projected $4.2 million deficit for next year; staff identified approximately $2.1 million in initial, less-disruptive cuts (hiring freeze, deferring some sinking-fund contributions, training reductions) and an additional $1.2 million in deeper cuts (service reductions, delaying a general-plan update, contracting some community-development functions and other items) that would be required if the council preferred to preserve reserves.
City management recommended limited and targeted use of reserves to smooth a cyclical downturn in sales tax. Staff recommended using up to $2 million of the city’s general-fund reserves, rather than the full $4.2 million, to avoid long-term structural deficit spending. Council members discussed the tradeoffs and several supported the $2 million figure and asked staff to return with potential revenue-generation options and a workshop on revenue best practices.
Council provided direction but did not adopt final appropriations; staff will return June 24 with a final packaged budget for adoption.
