Salinas finance committee reviews preliminary FY 2025–26 budget with $3.2M fund balance, staffing and capital needs

The Salinas Finance Committee on May 6 received a preliminary update on the city’s FY 2025–26 budget that projects a preliminary estimated general fund balance of about $3,200,000 for the current year and anticipates revenues of about $185 million and expenditures of about $185.4 million in the coming fiscal year.

Finance Director Selena Andrews told the committee staff had prepared a condensed “budget in brief” alongside the full budget and highlighted priorities including maintenance of facilities and infrastructure, information-technology improvements and preparations for projected development growth. “As with as with most municipalities, repairs and maintenance, of facilities and infrastructure continue to be an ongoing need, today and into the future,” Andrews said.

The update showed a current-year preliminary estimated fund balance of $3,200,000 and an estimated general fund balance of $3,400,000 at the close of FY 2025–26 under the preliminary plan. Revenues are projected to rise to about $185,000,000 (a roughly $4.8 million increase), and projected expenditures were listed at about $185,400,000 (a 6.2% increase from the prior year). Andrews said some non-discretionary costs are rising, including general liability premiums, debt service, and joint-powers agreements for the animal shelter.

Andrews and staff described several line items and program changes that contribute to the increases. The presentation lists an $11.2 million increase in salaries and benefits (including overtime and new positions) and called out specific new or limited-term positions: a business navigator in Community Development, a management analyst in the Police Department, an urban-forestry crew supervisor in Public Works, and overtime funding for public safety (police and fire). Andrews said two limited-term police positions are funded 50% by a grant through December, then by the general fund beginning in January.

Staff also said the city has appropriated approximately $16,000,000 in carryover for street and sidewalk work (striping, pavement and preventive maintenance). A broader set of capital projects funded in the preliminary budget were described as equating to about $20,000,000 and include EV charging at city facilities, Monterey Street garage improvements, Cesar Chavez Park basin repair, city hall and public works repairs and fire station repairs. Examples and line-item amounts shown in the presentation include: striping and signage ($300,000), annual pavement and sidewalk maintenance ($1,700,000), sidewalk and drainage improvements ($750,000), street preventative maintenance ($5,500,000) and Safe Routes to School ($6,000,000).

The presentation included reserve levels in the preliminary plan: an economic contingency reserve of about $22,100,000, infrastructure maintenance about $4,500,000 and facilities maintenance about $1,400,000. Andrews also explained the city’s use of a Section 115 trust (federal tax code 115) to set aside funds to address unfunded pension and other post‑employment liabilities and noted those funds have restrictions on access.

On overtime, staff said the city is changing its approach to budget more transparently up front rather than adjusting midyear: “the determination we made this year is to be a lot more up front with the overtime cost in the beginning,” a finance staff member said, explaining a higher but more realistic estimate.

Committee members questioned whether public-safety staffing requests were fully funded. Salinas Police Chief (identified in the meeting as Chief Acosta) told the committee the department is “down many police officers, 13 to be exact,” and said four of those positions are frozen; he said recruiting and use of civilian professional staff are both being pursued. Community Development Director Lisa Brenton described current code-enforcement staffing as having two vacancies and said the department is budgeting for outside professional services to provide after-hours enforcement and carrying forward what she described as an approximate six‑figure contract allocation and $35,000 for overtime to support after-hours coverage.

Mayor Donahue and committee members asked about next steps: staff said a budget study session is scheduled for May 27 and the public hearing and adoption are planned for June 17. Andrews invited committee input prior to May 27 and said the “budget in brief” would be available as a condensed public-facing summary of the full budget.

Discussion items noted where staff requested further direction. No ordinances or budget adoptions occurred during the meeting; the committee received the report by motion and unanimous vote.

Ending: Staff will return with the formal budget documents and a May 27 study session; public hearings and adoption are scheduled for June 17.