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Salinas finance staff reports midyear budget surplus and warns of $47.8M shortfall if Measure G lapses
Summary
Finance staff presented a FY 2025-26 midyear review showing a reported $20.4 million unassigned surplus and recommended reallocations and supplemental appropriations; staff warned the city could face a $47.8 million deficit if Measure G is not renewed.
Finance staff (identified in the meeting as Selena) presented the FY 2025-26 midyear budget review to the Salinas Finance Committee on March 17, outlining revenue trends, selected capital fund status and recommended supplemental appropriations and reallocations.
Selena said the city closed FY2025 with an unassigned surplus of $20,400,000 and used part of that balance to address funds that were in deficit. She told the committee staff proposes reallocation of $2,300,000 in carryover appropriations, deappropriation of $5,253,000 for completed or stalled projects, and a set of midyear adjustments totaling roughly $4,000,000. Staff also recommended increasing Utility User Tax revenue estimates by $1,700,000 based on stronger-than-expected collections.
The presentation included a capital projects summary (carryover appropriations and current-year appropriations noted at about $23,700,000) and a list of 14 positions under consideration across departments (examples cited: deputy police chief, an evidence technician, community outreach assistant, park maintenance positions, three firefighters, three captains, public records coordinator and communications coordinator). Selena said the midyear process will inform the biennial budget development and that staff will return for workshops and study sessions with the Finance Committee and City Council before adoption.
On the fiscal risks, Selena warned: "In the event that Measure G isn't renewed, the city could be faced with a $47,800,000 deficit." Committee members and staff discussed funds with structural deficits (stormwater, downtown parking, fleet maintenance) and options such as cost allocations to departments to reduce pressure on specialty funds.
Public works director David described a reorganization to address hiring challenges: converting senior engineers into project/division manager roles, hiring project managers without a PE and backfilling technical positions to expand capacity. Committee members asked for line-item detail on supplemental appropriations and were directed to staff-report pages 12 and 15 for itemized tables.
The committee received the midyear report; staff said they plan internal budget study sessions starting the week after the meeting, a Finance Committee study session in May and an anticipated council adoption process in June.
