Lodi council approves FY2025–26 midyear budget adjustments, pension‑policy change
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Summary
Council adopted midyear budget updates including MOU-driven salary and benefit increases, reallocation of ARPA carryover to the access center, a recommended pension-stabilization policy change to 70% and several capital and personnel adjustments.
The Lodi City Council on Feb. 4 approved midyear changes to the city’s fiscal-year 2025–26 budget, including staff recommendations to adjust appropriations and personnel classifications to reflect negotiated and anticipated MOU salary and benefit changes.
Budget staff presented the midyear report, noting the fiscal year runs July 1, 2025–June 30, 2026. Key items included a $5.1 million ARPA carryover (largely tied to the Access Center project), an estimated $2.9 million increase in general fund expenditures (about $2.4 million of which staff attributed to MOU salary/benefit changes and projections for unsigned MOUs), and updated revenue projections that partially offset expense increases (including $1.3 million of higher-than‑expected interest income). Staff presented proposed updates to the city’s budget and fiscal policy, recommending a pension-stabilization funding base of 70% of combined liability (down from the existing 80% target) to free funds for operational needs.
The presentation included a breakdown of department-level impacts: police overtime and a new community liaison officer; fire academy costs and paramedic training grant changes (AFG); public-works repairs; and changes to enterprise funds (electric, water, wastewater) driven by usage, low-carbon fuel standard receipts and development impact fees. Staff also sought council approval to reclassify several positions (for example, reclassifying an assistant city clerk and creating a senior plans examiner) and to add positions funded in the midyear adjustments (one police officer, one senior billing specialist, net personnel additions across funds).
Council questioned the status of ARPA and other reimbursements and asked the county representative about grant timing and reporting. County Health Director Genevieve Valentine explained the requirements for ARPA and bridge-housing dollars and cautioned that certain federal and state infrastructure dollars carry operating-duration obligations; she emphasized that some funds (county ARPA reimbursement buckets and bridge-housing grants) require operations to be maintained for a specified period to avoid clawback.
Council members also discussed reserve levels, pension trust balances and investment management. Staff reported a combined PERS/PARS funding ratio (as of 12/31/2025) of about 71.3%, slightly above the proposed 70% policy target, and projected modest drawdowns beginning in FY2027–28 under the recommended approach. Council asked for a more detailed quarterly investment report, which staff said would be provided.
After discussion and follow-up clarifications, a motion to adopt the budget and fiscal policy updates, to adjust appropriations across funds and to approve the personnel recommendations passed by council vote. Staff will implement the approved midyear appropriations and return any required follow-up items for council consideration as they finalize contracts and staffing actions.
The action authorizes midyear appropriations and policy updates but does not substitute for separate council approval of future contracts or large capital expenditures outside the scope of the approved midyear adjustments.
