Loma Linda council adopts 2025–26 budget, warns reserves may be depleted by 2034

The City of Loma Linda City Council voted 4–1 to adopt the city’s final fiscal year 2025–26 budget, approving a plan that covers a projected $458,500 general fund shortfall by drawing on reserves.

Finance Director Sonia Fevella told the council the proposed budget projects $28.6 million in general fund revenue and an operating deficit of about $458,500, which staff recommended covering with the city’s reserves. “The general fund shows a deficit of 458,500 that will be covered by the reserves,” Fevella said, and cautioned that relying on one‑time revenues and modest annual growth would deplete reserves by roughly 2034 if action is not taken to secure recurring revenue.

The budget presentation described the city’s top revenue sources (sales tax, motor vehicle license fees and property tax), one‑time development impact fees that temporarily boost overall funds, and prioritized expenditures including public safety, street and park projects and the creation of new pickleball courts at Leonard Bailey Park and Citrus Trail improvements. Fevella also noted unfinalized memoranda of understanding (MOUs) for several bargaining units and said market adjustments and cost‑of‑living increases were not yet included in the presented figures.

During discussion, budget committee member Gary Nelson and others pressed whether the shortfall projections accounted for pending wage adjustments. “The projections of the deficit this year don’t include any of the wage adjustments,” Nelson said, warning that approved wage increases would shorten the time frame for reserve depletion. A council member later noted that last year’s half‑million deficit had become about $1 million in practice and urged caution about repeating that trend.

Council members debated adopting related budget items individually or together; the council ultimately approved the budget resolution (Council Bill R‑2025‑14) by voice vote, 4–1, with one member recorded in opposition. The agenda consolidated city council, housing authority and successor‑agency items; the Loma Linda Housing Authority’s final budget was adopted separately and unanimously.

What happens next: staff will proceed with budget implementation and monitor revenue performance; the council and staff also identified long‑term options discussed in the meeting — reviewing minimum qualifications, compensation competitiveness, policy changes to attract businesses and pursuing revenue strategies — as potential actions to address recurring structural gaps.

The council scheduled a follow‑up meeting and a closed session on July 1 for labor negotiations and a Brown Act onboarding presentation.