Montclair council approves midyear budget review showing $298,735 shortfall

The Montclair City Council on Feb. 15 approved a midyear review of the city’s FY 2024–25 general fund budget that increases spending authority by $359,018 and projects $60,283 in additional revenue, leaving a $298,735 deficit that staff said would be covered from reserves if necessary.

Finance staff presented department requests and recommended transfers during the special meeting. “The total requests were just over 1,600,000.0, and we reduced that to $359,018,” the finance presenter identified in the transcript as Kolbeck said, summarizing recommended changes across Police, Fire, Public Works and building maintenance. Kolbeck told the Council that some capital repairs — including flooring at the senior center and nonwarranty roof repairs — will be paid from lease revenue bonds and will not affect the general fund.

City Manager Star placed the shortfall in broader economic context, citing declining sales-tax receipts, shifts to online shopping and rising costs for insurance and pension obligations. “If revenues don't increase, then we will have to make transfers from reserves to cover that cost,” Kolbeck said. Star added that unrestricted reserves remain “healthy,” estimating about $8,000,000 available but warning reserves are one-time funds that should not be committed to ongoing expenses.

Key cost pressures identified in the presentation and discussion included higher-than-anticipated citywide insurance premiums, pandemic-era and continuing shifts in retail behavior that have reduced sales-tax receipts, and projected increases in the city’s CalPERS-related costs. Star told the Council the city budgeted about $980,000 for insurance this year but that current insurance numbers are closer to $1,600,000 and that figure could climb further.

The Council asked detailed questions about several line items. On police requests, staff said records overtime and investigations overtime were partially funded through transfers from other police accounts, with a modest net general-fund impact. On public safety staffing, Council Member Lopez raised concerns about motorcycle patrol and dispatcher vacancies; a police representative said the department currently has vacancies and is actively recruiting, and that motorcycle positions had been suspended this fiscal year because of training-related injuries and personnel constraints.

Public Works items were pared back after staff analysis of historical expenditures and vendor estimates. Staff recommended reducing one contracted street-maintenance request from $130,063 to $114,600 and said separate palm-tree trimming costs would be met from existing allocations.

The presentation also flagged risks to anticipated federal and state grant revenues and a possible tariff-driven rise in construction bids for regional projects such as the Gold Line rail extension; city staff said bids due on April 10 will determine local exposure. The manager said the Council would need to weigh any future decision to use lease revenue bond monies or other one-time funds to bridge a funding gap on regional projects.

Council Member Roux moved to adopt the midyear review as presented; Mayor Pro Tem Martinez seconded. The Council recorded a 5–0 vote in favor. Following the vote the Mayor adjourned the meeting.

Next steps: staff will file the documentation for the midyear adjustment and follow up with Council on any state responses to the audit and on the April bid outcomes related to the Gold Line funding risk.