Modesto Council adopts $639 million FY25-26 budget, approves $53 million Measure H spending plan

The Modesto City Council voted unanimously on June 3 to adopt the city's fiscal year 2025-26 operating and capital improvement budgets and related position changes, approving four resolutions that together implement the proposed $639,000,000 citywide spending plan.

Council approved the package on a 7-0 roll call. The motion to adopt the resolutions was made by Council member Escudia Brayton and seconded by Vice Mayor Bavaro. The roll call recorded ayes from Council members Rickey, Bavaro, Williams, Wright, Escudia Brayton, Alvarez and Mayor Sue Zwolens.

The adopted budget package includes: a general fund operating budget (total revenues shown in staff materials at approximately $199,900,000), the Measure H spending plan, amendments to the city's position classification plan, and position allocations for the new year. City staff described the full citywide operating and capital budget total as approximately $639,000,000.

Council and staff highlighted several Measure H priorities included in the adopted plan. Measure H spending for FY25-26 was shown in staff materials at $53,000,000 in total programmatic funding, including about $13,600,000 in transfers from Measure H to the general fund (a combination of ongoing and prior commitments) and approximately $10,900,000 in one-time Measure H expenditures. Major Measure H investments called out during the presentation include continued funding for urban forestry work and contractors, remaining funding for Cesar Chavez Park projects and a multi-million-dollar renovation for Martin Luther King Park cited in staff slides at $7,800,000. Staff also listed public safety equipment items (wildland gear, replacement armored vehicle), a rentable community stage for parks, and funding to move five police officer positions into Measure H-funded programs.

Budget staff and the city manager emphasized that sales-tax projections had been revised downward since earlier drafts. Staff showed a multi-year sales-tax projection in which previously projected general-fund sales tax that had been forecast to reach about $42,600,000 by FY26-27 is now projected at roughly $36,200,000, a multi-year reduction staff quantified on the slide as about $17,000,000 over that forecast horizon. Measure H sales-tax projections also showed a decline in the materials presented, with staff estimating roughly a $9,000,000 reduction over the same multi-year window compared with earlier projections. Council and staff said the city will continue to monitor revenues and return for midcycle adjustments as needed.

City staff noted several non-general-fund and capital items in the plan: the water and wastewater funds, solid waste, storm drain and capital support accounts are included in the multi-fund presentation; staff stated the proposed Water Fund budget at about $78,500,000 and Wastewater at about $55,000,000 for FY25-26. The capital improvement program (CIP) as presented includes 186 projects with approximately $279,000,000 of available budget across multiyear projects; seven new CIP projects increase the adopted CIP by about $11,870,000, staff said.

Council members thanked budget staff for the multi-month process of workshops and committee briefings. The formal adoption consisted of four resolutions read on the record and approved together: the operating and CIP adoption; adoption of budget principles and the final proposed budget; amendments to classification specifications; and amendments to position allocations. All four passed on the same 7-0 vote.

Looking ahead, staff said the council will revisit second-year projections under the city's two-year budgeting framework during the midcycle update next year and in upcoming finance committee meetings.