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Placentia council adopts midyear budget adjustments, flags reserve shortfall and pension cost pressures
Summary
Council approved the FY2024‑25 midyear budget (Resolution R2025‑06). Staff projected an end‑of‑year general fund balance decline of about $4.6M to $10.5M (≈18.9% of operating reserve), cited revenue headwinds (sales tax softness, Walgreens closure) and upcoming CalPERS UAL increases; council directed continued review and adopted the resolution 5‑0.
The Placentia City Council on Feb. 18 adopted the midyear FY2024‑25 budget adjustments and authorized staff recommendations to manage projected revenue and expense changes.
Staff reported the adopted budget totaled about $99.2 million supported by $95.3 million in revenues, with the general fund expenditure budget at roughly $50.9 million. Midyear adjustments include modest revenue downgrades (staff estimated sales tax roughly $75,000 lower in the projection so far, and noted the announced Walgreens closure), expense adjustments (about $100,000 for additional legal services, $153,000 for contract inspectors in development services because of recruitment challenges, roughly $85,000 for police overtime tied to a homicide investigation, and $266,000 for fire and life‑safety needs — $216,000 of which staff said would be reimbursed by Cal OES). Staff projected a net decrease in fund balance of about $4.6 million, leaving an estimated reserve around $10.5 million or about 18.9% of operating reserve, under the council's 25% policy threshold; that threshold affects Measure U allocations per Policy 460.
Staff described planning work for FY25‑26 (nexus, sewer rate study, potential CFD) and flagged an expected CalPERS unfunded actuarial liability increase of about $471,000 in FY25‑26. After discussion the council voted to adopt Resolution R2025‑06 approving the midyear budget actions (vote recorded: 5‑yes).
