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Placentia adopts FY 2025–26 midyear budget; reserves projected to fall to 17.9%
Summary
The council unanimously approved midyear adjustments projecting $2.1 million in net changes (chiefly $1.3 million for labor MOUs), a $1 million asset-forfeiture transfer, and a drop in general fund reserves from 25.03% to 17.87%; staff will return with further budget steps and a potential Q3 review in April.
The Placentia City Council on Feb. 17 adopted the FY 2025–26 midyear budget adjustments after a staff presentation that highlighted revenue upticks and significant labor-related cost pressures.
Director of Finance Gerry Griggs summarized the midyear outlook: overall midyear adjustments total about $2.1 million, of which roughly $1.3 million is for wage and MOU changes with bargaining groups. Griggs said the city is projecting about $61,000 more in property tax revenue and roughly $200,000 above budget for sales tax, and that a $1 million transfer from the asset forfeiture fund will return previously fronted funds to the general fund to pay for the Public Safety Building.
Griggs outlined department-level pressures: police overtime and salary impacts (about $200,000), fire overtime (about $300,000, in part because of extended leaves), and non-general-fund Fire Development Impact Fund items (about $46,000 for county-mandated software and about $20,000 for iPads). Public works requests included roughly $200,000 for citywide parkway sidewalks (funded from a Toll Brothers contribution) and about $150,000 estimated for traffic signal synchronization funded from the traffic impact fund. Griggs said the current projection would lower the general fund reserve from the 25.03% target to about 17.87% by the end of FY 2025–26 absent offsetting actions.
"So, overall, we're looking at about $2,100,000," Griggs told the council. Council members asked clarifying questions about whether some overtime costs would be one-time versus ongoing; Griggs said some overtime spikes (for example, related to a homicide investigation) may be temporary but labor increases are ongoing until renegotiated.
Council voted 5-0 to approve the midyear budget report and adopt the associated resolution. Griggs said staff anticipates a Q3 review in April if additional adjustments are required and will return with the FY 2026–27 budget for adoption by June 2.
The vote recorded was unanimous; staff noted next steps to restore reserves as part of the next-year budget process.
