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San Gabriel projects $1.65 million General Fund increase; reserves now 41.3% of expenditures
Summary
Finance Director Will Kahulakula reported preliminary fiscal-year 2024–25 results showing a $1.65 million net increase in the General Fund and an unrestricted reserve of $22.8 million, equal to 41.3% of general fund expenditures — above the city's 25% rainy-day target.
Finance Director Will Kahulakula presented preliminary General Fund results for the fiscal year ending June 30, 2025, to the San Gabriel City Council on Oct. 21, saying the city projects a net increase in fund balance of $1,650,000 and an unrestricted fund balance of $22,800,000.
"The General Fund is projecting a net increase in fund balance of 1,650,000.00," Kahulakula said. "This is the seventh year in a row with a positive net change in fund balance." He told council that the unrestricted reserve equals approximately 41.3% of general fund expenditures, above the city's 25% rainy-day reserve target and the 17% minimum.
Kahulakula attributed the $1.75 million revenue increase primarily to higher taxes: property tax, property tax in lieu of vehicle license fee (VLF), the utility user tax and transient-occupancy tax. Sales tax and Measure SG receipts were described as relatively flat for the year. On the expenditure side, total spending rose by $5.5 million, driven by higher CalPERS pension costs, separation payouts, contractual services and the creation of a new capital replacement fund.
The finance director described a $1.5 million transfer from the general fund to the newly established capital replacement fund, which will allow multi-year capital projects — for example, roof work on municipal facilities — to be budgeted and paid from a dedicated fund over several years. Kahulakula said the city has committed $9 million of the unrestricted reserves for other post-employment benefits (OPEB) and future capital replacement.
Kahulakula also explained the accounting for the vehicle-license-fee exchange: "It's a property tax in lieu of VLF, vehicle license fees... we're getting property tax in lieu of the VLF," he said when asked.
Council members commended staff. Council member Wu called the results "very healthy," and Vice Mayor Chan and others thanked the finance and administrative team for producing seven consecutive years of positive net changes in fund balance.
No formal council action was required; staff said the next step is the annual audit, after which the city will publish the comprehensive annual financial report and present it to council with the auditor in January 2026.
