Finance director presents FY25 preliminary budget: $268M plan, $2.9M reserves use proposed

Finance Director Clay presented the City of El Cajon's preliminary fiscal year 2025 budget at the June 11 council meeting, describing it as an informational item and a starting point for council review.

Clay said the proposed spending plan totals approximately $268,000,000, with the largest component the general fund at about $101,000,000. He outlined other fund totals: roughly $47,000,000 in special revenue funds, $45,700,000 in governmental capital projects, a $49,000,000 wastewater fund, a $9,100,000 sole debt service fund (pension obligation bonds), and $15,700,000 budgeted for internal service funds. The presentation listed a citywide staffing total of about 422 full-time equivalent positions and noted public safety accounts for the majority of general fund FTEs.

On revenues and the short-term outlook, Clay said estimated FY25 revenues are about $98,100,000 against estimated expenditures of $101,000,000. To address the gap, the preliminary budget includes a $2,900,000 use of general fund reserves, which Clay said is for specific purposes: $2,000,000 to continue the 10 police over-hire positions and to carry forward two capital projects that will not finish by June 30.

Clay emphasized that, excluding the reserve use for those specific items, operating revenues and expenditures are balanced and that the city has relied on short-term measures such as a hiring slowdown to maintain services without permanent staffing reductions. He also highlighted the central role of sales tax in the general fund and flagged the upcoming sunsetting of the Prop J sales tax measure: Clay said Prop J accounts for $13,200,000 and comprises about 13.5% of general fund revenues.

Council members asked questions about the consequences of replacing Prop J and the trade-offs required to protect public safety. Council member Goebel said that if the council keeps police and fire budgets intact while losing Prop J revenue, "we'd have to cut all those departments in half" and severely reduce street repairs, recreation programs and permit staffing. City Manager Grama Mitchell and staff responded that many internal services support public safety and that cuts in certain departments could ultimately affect police and fire operations.

After discussion, the mayor moved and the council carried a motion to receive the FY25 preliminary budget report; the clerk reported the motion as carrying by unanimous vote. Clay said the council will receive updates at the next meeting, including wastewater fund details, capital projects and a recommendation to adopt the FY25 budget at a later date. Clay also reminded the public about forthcoming town halls to discuss Prop J and the interactive online budget activity on elcajon.gov/budget.

The presentation and council questions highlighted the challenge of replacing a significant sales tax revenue stream without reducing core services or public safety staffing.