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Aliso Viejo council adopts FY 2025–26 budget; approves 3.1% COLA and salary schedules
Summary
Council voted to adopt the city's proposed FY 2025–26 budget and approved city salary schedules effective July 1, 2025. Staff projected $26.9 million in general fund revenues, a 3.1% COLA proposal, and recommended use of reserves for capital projects while continuing to seek revenue and efficiency gains.
The Aliso Viejo City Council voted to adopt the proposed fiscal year 2025–26 annual budget and to approve updated city salary schedules effective July 1, 2025.
Finance Director Anne presented budget highlights to the council, saying the city's estimated general fund revenues for FY 2025–26 are about $26.9 million, with sales tax accounting for roughly 32% and property tax about 38% of the general fund. The proposed budget includes a 3.1% cost-of-living adjustment for full- and part-time employees, continued funding for pensions (CalPERS unfunded liability), and a general fund operating appropriation of about $26.8 million. Special revenue and capital projects were summarized, including Measure M and SB1 road rehabilitation funds and CDBG-funded pedestrian signals and ADA curb ramps.
Anne said staff recommended a small set of budget reductions and offsets, including reductions in professional services, freezing a motor officer position, and converting an emergency operations coordinator to part time under the Orange County Sheriff's Department contract. Staff also proposed using reserves to fund the capital improvement program; projected year-end reserves were described as approximately $38.2 million (about 140% of the general fund budget under current assumptions).
Council discussion focused on the budget trajectory and options to increase revenue and reduce long-term costs. Councilmember Duncan warned the council faces a "snowball" effect of increasing costs and urged accelerated action and regular updates. Councilmember Munsing and others thanked staff for expenditure scrutiny and asked about rolled-over capital projects; staff confirmed some CIP items were carryovers and provided figures for increased operating costs year-over-year (about $700,000). Councilmembers discussed innovation, economic development opportunities (including potential new hotels and business recruitment), and the limits of municipal revenue tools.
Councilmember Munsing moved to adopt the budget as presented. The mayor called a voice vote and announced the motion passed. Staff had recommended two resolutions: one adopting the annual budget for FY 2025–26 and one approving the city salary schedules effective 07/01/2025.
Next steps: Staff will continue to monitor revenues (including upcoming sales-tax data) and review contracts and operating choices to implement council direction and return with updates.
