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City staff says Riverside’s reserves remain strong but flags slowing revenue and staffing costs
Summary
Deputy Finance Director Sergio Aguilar reported first-quarter fiscal results showing roughly $230 million in combined general fund reserves, softening sales and development revenues, higher police overtime and growing personnel costs; staff recommended restraint and several supplemental appropriations, and a motion to approve was delayed when the council paused for closed session.
City finance staff told the Riverside City Council on Feb. 24 that the city remains in a generally strong fiscal position but faces emerging fiscal uncertainties that warrant restraint on unallocated spending.
Deputy Finance Director Sergio Aguilar said the general fund held about $76 million in policy reserves and about $154 million in other reserves — roughly $230 million in total — and that these reserves comply with the city's 20% policy. He reported mixed revenue signals: sales tax rose about 1.1% year-over-year in the first quarter but at a slower pace than the prior year, building-permit revenue was down about 12%, and development-fee receipts trailed the prior year’s pace.
Aguilar highlighted that roughly 70% of the general fund budget is personnel and that personnel costs have been growing. The general fund vacancy rate was about 9.8% at the close of the first quarter, and staff warned that overtime costs — particularly in the Police Department — are trending above budget and may require an upward adjustment during the second-quarter report.
On Measure Z, staff projected a year-end fund balance of about $20 million for the fiscal year after drawing down previously approved encumbrances and supplemental appropriations. Enterprise funds (electric, water, refuse, sewer, parking) showed mixed results tied to consumption patterns, transmission revenue changes and capital project timing.
Staff recommended that council receive and file the report and authorize several supplemental appropriations and interfund transfers (including developer deposit-driven supplemental appropriations for two North Side projects and transfers to cover repairs and reimbursements tied to developer agreements). Sergio Aguilar explained the “as-needed” language for developer-related supplemental appropriations as a mechanism to allow staff to apply developer deposits to cover fluctuating review costs without returning to council for incremental increases.
After public callers pressed for an inspector general and more transparency about past spending decisions, a council member moved and a second was recorded to approve the staff recommendations. The council attempted to vote, but the electronic voting machine failed; the meeting recessed to closed session before a final roll-call vote on the agenda item could be completed.
Separately the council later approved the consent calendar (items 19–40) with a recorded recusal on item 31 and a Ward 1 'no vote' noted on the same item.
The council is expected to revisit budget adjustments as second-quarter data arrives; staff indicated they will return with recommendations if revenue or overtime trends require supplemental appropriations.
