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San Gabriel council adopts midyear budget adjustments, keeps reserves above policy minimum
Summary
Council approved midyear adjustments to the FY 2024–25 budget, projecting slightly higher revenues and expenditures and maintaining a reserve above the city's 25% target.
The San Gabriel City Council voted unanimously to accept the city’s fiscal-year 2024–25 midyear budget update and adopt Resolution No. 25-13, which adjusts appropriations and leaves the city’s reserve well above the policy minimum.
Finance Director Will Kahulakula told the council that after actual receipts through Jan. 31, the general fund revenues are projected to be $434,000 higher than adopted and expenditures $1,120,000 higher, producing a projected net decrease in the fund balance of $116,000 and a reserve percentage of 38.2 percent. Kahulakula identified lower-than-expected property, sales and hotel (transient occupancy) tax receipts as drivers of revenue weakness and noted one-time increases in plan-checking fees tied to large developments.
On the expenditure side, vacancy savings (projected at roughly $1.5 million) and capital-outlay carryovers offset higher separation payouts, pay-step adjustments and department midyear requests. Kahulakula said the five-year forecast still projects the city’s reserves above the 25 percent policy target and above the 17 percent minimum.
Councilmembers asked for clarifications about the property-tax deferral tied to wildfire relief and whether FEMA or other reimbursements were likely to offset emergency costs from January’s fires. Kahulakula said the $125,000 property-tax deferral will be recognized in FY 2025–26, and that FEMA reimbursements for fire-related costs remain uncertain and often take more than one year to process.
After questions, Councilmember Chen moved to accept the midyear update and adopt Resolution No. 25-13; Vice Mayor Menchaca seconded. The motion passed 5–0.
The council directed staff to continue monitoring finances during the remainder of the fiscal year and to present an updated five-year forecast as part of the FY 2025–26 budget process, with a public budget study session scheduled in April.
