Stockton releases $996 million citywide budget proposal; staff outlines $15 million general-fund gap and five-step plan to close it

Brandon Sepulveda, interim budget officer, presented the Stockton City manager's proposed fiscal year 2025—6 budget on June 4, describing a citywide spending plan of $996,000,000 and a general fund package that currently leaves a projected $15,000,000 structural gap.

Sepulveda said the proposed total represents a 4.2% increase over the prior year and that the most significant cost drivers are salary and benefit inflation, rising insurance and the city's CalPERS pension obligations. "Doing the same things we did last fiscal year now costs more money," he said, noting departments face higher fleet, facility and materials costs.

The budget presentation broke down revenues and one-time funding: proposed citywide revenues of $936,000,000 leave a nominal $60,000,000 gap that narrows to roughly $20,000,000 after accounting for interfund transfers and drawdowns of fund balance used to pay capital projects. On the general-fund side Sepulveda said the operating budget is $341,600,000 while revenues are $326,600,000; public safety constitutes the lion's share of the general fund, with police at about $184,000,000 (54%) and fire at about $70,000,000 (21%).

To close the $15 million shortfall without cutting public safety or using general-reserve balances, the interim city manager and budget staff proposed five actions: (1) deny $4.5 million in new non-public-safety budget requests that departments submitted beyond baseline service levels; (2) reduce the general-fund contingency by $600,000 (contingency had been $2,000,000); (3) align the general-fund contribution to the capital improvement program with the long-range financial plan (reducing this year's proposed transfer); (4) redirect $1.7 million from the ERP project fund balance that IT identified as available; and (5) increase the assumed vacancy savings percentage to raise the ongoing vacancy offset by about $6.09 million. Together, staff said, those five steps sum to roughly $15 million.

Interim City Manager Calandro (as referenced in the meeting) framed the approach as a directive to protect public safety and city reserves: "I set two firm boundaries for this work. First, no cuts to public safety departments. Second, no use of general fund reserves to balance the budget." Staff said details of the line-item reductions and the full list of non-safety requests recommended for denial will be provided to council and posted in follow-up materials.

Next steps: staff scheduled a second work session for follow-up presentations (notably an Office of Violence Prevention briefing) and will supply the detailed list of new requests, CIP contributions, and reserve calculations before the council considers a final budget adoption at the June 24 meeting. The council also set a public hearing on June 24 to receive additional community comment before final action.