Westminster staff presents balanced proposed FY2025–26 budget; council questions reserve use and staffing requests

City of Westminster staff on May 14 presented a proposed fiscal year 2025–26 budget totaling $154,300,000 and asked the City Council for direction on supplemental staffing requests and fund-balance priorities ahead of a scheduled adoption hearing on June 25, 2025.

The presentation said the proposed budget would leave the city with a projected reserve balance of roughly $45–46 million at the end of FY25–26 and that the general fund projection “adds $624,000 to reserves” in the proposed budget without supplementals; with the supplementals the contribution falls to $244,000. Staff characterized the proposed general fund as the first balanced budget in six years.

Why it matters: council members pressed staff on multi-year projections showing reserve balances declining in later years, large projected increases in CalPERS (pension) costs in the late 2020s, and whether one-time or recurring revenues should be used for ongoing costs. Several council members and staff discussed tradeoffs between adding staffing to improve service and maintaining or increasing reserve levels to buffer future pension spikes.

Key facts and figures presented - Total proposed city budget: $154,300,000. The general fund was shown as $90,500,000 (58%); water funds $24,200,000 (16%); internal service funds $13,700,000. - Special revenue funds: revenues shown as $13,900,000 and expenditures $7,700,000, with $9,300,000 in transfers to capital projects. - Staff said three water-fund supplementals total about $158,000; five general-fund supplementals total about $380,000 (eight total supplemental position requests across departments). - Examples of requested positions and net costs to the general fund: community services full-time administrative assistant (net $40,302), full-time building inspector (net $75,946), police dispatch manager ($148,153), two full-time parking enforcement officers (net $115,315). Water fund requests included a full-time accountant I ($89,835), a water tech I ($85,360; net $14,539 after offsets), and a full-time administrative assistant ($94,697; net $53,252). - Pension and other long-term liabilities: staff presented a total outstanding pension liability of $146,000,000 as of June 30, 2024, and noted the FY25–26 CalPERS payment shown was $14,280,000. Staff discussed using Section 115 trust funds to smooth years when pension payments spike. - Vehicle rebate program: staff said the vehicle rebate program is funded at $3,000,000 over five years and the city has spent about $454,000 over just over two years.

Discussion highlights - Public comment: Terry Raines urged clearer budget variance reporting and requested workload statistics for many supplemental requests, arguing each request should be evaluated on its own merit. Raines also flagged concern about using $9,000,000 of reserves over five years. - Reserve trajectory and pension exposure: multiple council members, including the mayor and vice mayor, pressed staff about projections that show reserves declining in later years and the significant impact of projected CalPERS increases in the late 2020s. Staff said the city has been placing funds in two Section 115 trust accounts to help cover pension and retiree medical obligations and that prepaying CalPERS annually (in July) produces interest savings to those trusts. - Staffing and service tradeoffs: council members asked why several part-time positions are proposed to convert to full-time. Community services staff (identified by first name in the record) and public works staff explained high turnover among part-time workers, frequent retraining costs, and new state/federal water-related mandates (lead and copper rule, cross-connection requirements, water conservation reporting) as drivers for full-time requests. - Water meter delays: council members raised resident complaints that new water meter installations (for example, related to ADUs) can take roughly nine months if done by city crews; staff said hiring additional water technicians would reduce backlog but staff must analyze whether additional hires could be cost-recovered by increased work volume. - Revenue options and timing: council members asked about faster revenue sources. Staff said many large projects (mall redevelopment, billboards, cannabis permitting) could generate revenue but are not yet at a stage to include reliably in five-year projections; cannabis and other potential new revenues were discussed as possibilities to pursue but not assumed in the current baseline projections.

Staff directions and next steps - Staff requested council direction on the supplemental request list and on priorities for the fund-balance policy. Staff told the council the final proposed budget will be presented for adoption on June 25, 2025. - Council members asked staff to provide follow-up information, including (1) the annual funding/timeline for the vehicle rebate program, (2) a cost/recovery analysis for adding water installation crew capacity (how many positions would be required and whether additional projects would cover the cost), and (3) potential supplemental cost estimates (for items such as additional public-safety cameras) for consideration as part of supplemental budgeting.

Quotes from the record - “The proposed fiscal year 26 budget cannot be analyzed easily without them,” said Terry Raines, urging clearer variance reporting and workload statistics for supplemental requests. - “This is our proposed 25–26 budget,” said finance staff presenting the document, walking the council through fund statements and schedule columns. - Staff presentation: “The general fund proposed budget is the first balanced budget in 6 years.”

Context and background - Staff noted all unspent American Rescue Plan Act (ARPA) funds will be carried forward to previously allocated projects and mentioned a deadline for spending those allocations referenced during the presentation (date in the record was unclear). The presentation also reviewed that Measure Y and Measure E (local transaction-use taxes) helped avoid a budget shortfall in FY24–25 and remain a major general-fund revenue source.

Ending - No formal actions or votes were taken at the study session. Councilmembers and staff agreed staff will return with requested follow-up information and that the budget adoption is scheduled for the City Council meeting on June 25, 2025.