Placentia council reviews $92.7 million budget, weighs repairs vs. street cuts

City staff on May 20 presented a proposed fiscal year 2025–26 operating budget and capital improvement program that would fund $92.7 million in all funds while relying on $89.7 million in projected revenues, leaving planners to cover a remaining gap with limited options.

Jennifer Lampman and Senior Financial Analyst Gavin Hoon told the City Council the budget reflects economic pressures including tariffs and slower sales-tax growth and a sharp increase in pension costs: "In the current fiscal year, we're paying $447,000; next year, it's going up to $917,000," staff said, describing the city's unfunded actuarial liability tied to CalPERS returns. To address an earlier estimated $3 million preliminary deficit, staff proposed measures including switching an ALS provider, holding most departmental budgets flat or trimming them, eliminating four vacant positions and using $1,000,000 from the city's Section 115 trust and about $500,000 in one-time revenue.

On the revenue side, staff presented a general fund of about $53.5 million with the bulk of revenue coming from property tax and sales tax; they said Measure U policy seeks to preserve a 10% Measure U reserve and to push the general fund reserve toward a 25% goal by June 30, 2026.

Public Works Director Chris Tano outlined a $11.4 million CIP package that includes roughly $8.4 million for streets and a federally funded Golden Avenue Bridge project requiring a $935,000 local match. Staff described four options for $880,000 freed when the council directed removal of an underground fuel tank: reinstall the tank; repair the City Hall roof (a $1 million project requiring an additional $220,000 from public-safety development impact fees); backfill the street-project deficit to maintain previously planned residential streets; or leave the dollars unallocated for future use. "So of that $880,000 that's freed up, there's 4 options," staff said.

Council members broadly agreed on the need for conservatism and further review. Council Member Yamaguchi urged a shift toward infrastructure priorities, saying residents have repeatedly identified streets as the top concern. Council Member Ivanka pressed staff to clarify whether the $600,000 developer donation from a Toll Brothers project is legally restricted to parks, and asked staff to return with the agreement language. Several council members asked staff to dig deeper for recurring savings and to explore financing options that avoid large upfront costs, such as energy-savings financing for the roof.

Staff recommended setting a public hearing on the budget for June 3 and returning with more detailed project descriptions and options for the City Hall roof versus street backfilling; the council agreed to schedule follow-up study sessions and a timeline for a final vote.

The study-session presentation did not adopt the budget. The council directed staff to return with more information about the developer fee restrictions for parks, possible additional savings, and the implications of using Section 115 funds for pension cost increases. The council also requested a clearer list showing what changed between this draft and the final budget when it returns for adoption.