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Mission Viejo staff outlines 2025–27 budget priorities; council okays contract extension approach
Summary
Staff presented a pre‑budget overview highlighting $39.7M in general fund reserves, public safety and infrastructure as top priorities, and pension funding metrics; council authorized two‑year extensions on infrastructure contracts to manage cost risk.
City staff delivered a pre‑budget presentation on Jan. 28 outlining the fiscal outlook for the 2025–27 budget cycle and recommended actions to manage near‑term cost risks.
Former Assistant City Manager Erwin Bornstein reported Mission Viejo closed FY 2023–24 with approximately $39.7 million in general fund reserves, which he said equates to roughly 51% of ongoing general fund revenue. Staff emphasized two top priorities — public safety and infrastructure maintenance — which together account for about 60% of the operating budget. Bornstein reported the public safety allocation as approximately $30.5 million and infrastructure maintenance as roughly $24.2 million for fiscal 2024–25.
On pension and retiree benefits, staff said the city’s OPEB (other post‑employment benefits) program is about 99% funded and that the CalPERS pension plan is 83.4% funded. Staff attributed recent pension funding volatility primarily to investment returns rather than local policy choices.
To limit budget uncertainty, staff recommended extending a set of infrastructure and maintenance contracts for two years using negotiated percentage increases rather than rebidding in the current market. Assistant City Manager/Director of Public Services Jerry Hill explained that recent competitive bids in neighboring jurisdictions have shown large increases and that renewing proven contractors reduces transition costs and performance risk.
Council moved to accept the staff recommendation and unanimously authorized staff to process the proposed contract extensions. Staff estimated a total first‑year increase of roughly $620,000 across the recommended contracts; staff will return with individual contract documents for council review.
Other points covered: staff noted economic development work including a village center vision, progress on short‑term rental registration (Deckard Technologies work generated ~$60,000 in revenue), and Olympic partnerships following the Netherlands selecting Mission Viejo as an official 2028 training site. Staff also briefed the council on capital project priorities (including Courtyard core‑area work and Lower Curtis Park soil issues) and a pending personnel compensation study with recommendations expected in March.
Next steps: staff will process contract extensions, present individual contracts for formal approval and provide further details in the March–June budget schedule.
