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Placentia council adopts FY 2025–26 midyear budget report as reserves shrink
Summary
The City of Placentia adopted its FY 2025–26 midyear budget report and accompanying resolution, projecting revenue upticks (about $61,000 property tax and $200,000 sales tax) but a fall in the general fund reserve to roughly 17.87% driven mainly by $1.3M in labor cost adjustments and overtime; the motion passed 5–0.
Gerry Griggs, the city’s Director of Finance, presented the fiscal year 2025–26 midyear budget report and recommended the council approve the proposed adjustments and adopt the accompanying resolution. Griggs opened: "We are going to be walking through the fiscal year 25, 26 midyear budget tonight, highlighting the budget process as well as where we started back in June when we adopted, as well as where we're projecting for the end of fiscal '26."
Key takeaways Griggs presented included: general fund is the largest fund (about 67% of the budget); operating expenditures are roughly $46,000,000; property and sales taxes make up about 59% of general fund revenues; the city is projecting about $61,000 more in property tax and an approximately $200,000 increase in sales and use tax compared with the June 2025 budget; and a $1 million transfer back into the general fund from the asset‑forfeiture fund related to the public safety building reimbursement.
On the expenditure side, Griggs identified roughly $1,300,000 in increased wages for bargaining groups tied to recent memoranda of understanding, a projected $200,000 police overtime cost this year (including investigation‑related overtime), and a $300,000 overtime pressure in fire due to extended leaves. Griggs summarized: the city now projects the general fund reserve will be about 17.87% (down from the target of ~25.03%). He said staff will return with further steps during the FY 2026–27 budget process to restore reserves.
Council Member Kerwin pressed on the recurring nature of labor costs and the multi‑year budget pressure; Griggs acknowledged CalPERS unfunded liability increases and other contractual pressures. After discussion, the council moved, seconded and adopted the midyear budget report and resolution by a 5–0 vote; staff confirmed the resolution adoption was part of the motion.
The adoption directs staff to proceed with the next budget steps and to return with recommended measures to improve long‑term fiscal sustainability during upcoming budget workshops.
