For City Council Meeting June 24, 2025
TO: Honorable Mayor and City Council
APPROVAL: Tanya Williams, City Manager
FROM: Scott Williams, Director of Finance
Title
Request City Council to: (1) Conduct a Public Hearing on the City’s Fiscal Year 2025-26 Proposed Annual Budget, (2) Approve Resolution No. 8364, RHA Resolution No. 02-25, RUA Resolution No. 08-42 and Rialto Redevelopment Successor Agency Resolution No. 8365 for the City’s Fiscal Year 2025-26 Annual Budget; (3) Resolution No. 8366 Adopting the Fiscal Year 2025-26 Appropriations Limit (Gann Limit); and, (4) Approve Resolution No. 8367 Adopting the Fiscal Year 2025-26 Citywide Classification and Compensation Plan.
POWERPOINT
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1) Conduct a Public Hearing on the City’s Fiscal Year 2025-26 Proposed Annual Budget, and
2) Approve and adopt the following Resolutions:
a. Resolution No. 8364, RHA Resolution No. 02-25, RUA Resolution No. 08-42 and Rialto Redevelopment Successor Agency Resolution No. 8365 for the City’s Fiscal Year 2025-26 Annual Budget;
b. Resolution No. 8366 adopting the Fiscal Year 2025-26 Appropriations Limit (Gann Limit);
c. Resolution No. 8367 adopting the Fiscal Year 2025-26 Citywide Classification and Compensation Plan.
BACKGROUND
In accordance with Section 2.04.140 of the Rialto Municipal Code, the City Manager is required to present the annual fiscal budget to the City Council for approval. Under the leadership of the Finance Director, the Budget Division conducted the necessary analysis and developed the projections needed to complete the budget document, incorporating input from all City departments. This comprehensive process began in March and involved collaboration across the entire organization.
The City Manager and Director of Finance held budget briefings with members of the City Council to present the proposed budget for Fiscal Year 2025-26. During these meetings, City staff addressed questions related to departmental requests as well as inquiries from the Council. In line with direction received from the City Council, the proposed FY 2025-26 Budget is hereby presented for the City Council’s consideration and adoption.
ANALYSIS/DISCUSSION
Staff is presenting a balanced proposed FY 2025-26 budget, which includes a General Fund surplus of approximately $3 million and an estimated Unrestricted General Fund balance of $42.2 million.
General Fund
The General Fund FY 2024-25 estimated year-end fund balance is projected to be $103.2 million.
Within the fund balance is the reserve for economic uncertainty, which is projected to be $36.3 million. The table above shows the overall trend of fund balance reserves, with a 5-year lookback of audited financial results. The fund balance increased for two years, with a slight projected year-over-year decrease resulting from an interfund loan payment to Rialto Utility Authority.
General Fund Revenues
The total proposed General Fund revenue for FY 2025-26 is $164,997,716, reflecting an approximate 8% increase over the revised FY 2024-25 budget. The City’s three primary sources of General Fund revenue are Sales Tax, Property Tax, and Utility Users Tax.
Revenue estimates across all categories are based on the most recent draft audited financial results, FY 2024-25 year-end estimates, general economic conditions, as well as consumer and business activity within the City and the region. Areas with expected increases from the previous year are property tax, sales tax, revenue from other agencies, and income from the use of money and property-driven by improved investment portfolio performance due to sustained increases in short and mid-term interest rates.
Revenue by Major Category and Distribution
The table below provides FY 2025-26 budgeted estimates for all General Fund revenue, summarized by major categories, and a comparison with the current fiscal year revised budget, as well as audited results from the two prior fiscal years.
The same data is shown below and distributed by major category type:
Tax Revenue Appropriation Limit
The City’s Tax Revenue Appropriations from the proceeds of taxes for FY 2025-26 is $367,061,519. Proposition XIII B allows local governments to increase the appropriations limit each year based on one of two accepted growth factor methodologies. The first methodology measures the rate of inflation and the population growth percentage. The second option uses the City’s residential building growth factor. The City is using the latter of these methods, with the Appropriation Limit calculation shown below.
General Fund Expenditures
The FY 2025-26 Proposed General Fund Expenditure Budget is $161,830,400. This amount is 8% more than the Revised Budget for FY 2024-25. The total, including transfers out, is 12% less than the prior year due to an interfund loan payment to Rialto Utility Authority in the current fiscal year.
Most department operating expenditures are expected to remain flat for the upcoming fiscal year, with some increases in contract services and facilities maintenance, reflecting the inflationary trends of the last several years. CalPERS pension costs continue to increase at a rate higher than other City expenditures, driven by market fluctuations and long-term obligations.
Total General Fund budgeted expenditures are 68% Salaries and Benefits, and 32% Maintenance and Operations, which is consistent with previous fiscal years in the City’s service delivery to the community.
Personnel Requests
There are no new positions incorporated into the proposed FY 2025-26 General Fund Budget. As part of the preparation of the annual budget, City Staff proposed city staff proposed the addition of new staff positions which are outlined in the tables below. These personnel changes are aimed at enhancing the level of customer service provided to the residents and businesses of Rialto. These positions can be added or incorporated into the Fiscal Year Budget with City Council action and adoption of the budget.
The total General Fund cost of the proposed personnel requests is approximately $1.07 million, which is not included in the proposed General Fund expenditures. Any personnel requests approved by the City Council will be incorporated into the final revised budget. If the Council approves all personnel requests, the FY 2025-26 General Fund budget would remain balanced, with an anticipated surplus of approximately $1.9 million-down from the currently projected surplus of $3 million.
Personnel Requests Justifications
Community Development
Community Development is requesting a new position and a reclassification to a current position aimed at enhancing customer service and improving departmental efficiency.
Administrative Analyst
A higher level of analytical skills is needed to support activities related to budgeting, housing and grants, particularly the administration of the Community Development Block Grant Program. The impact of adding this position will be minimal, as it will be offset by the elimination of the Administrative Assistant and Planning Intern positions.
Planning Technician
The title change from Planning Aide does not involve any additional costs and better aligns with industry standards. The revised position will focus more on technical applications rather than administrative support.
Public Works
Public Works is committed to continuously enhancing community services while delivering exceptional customer service through clear communication and prompt responses. The proposed personnel requests will enable the department to not only maintain its high standards but also exceed them. The following positions are being requested in efforts to streamline with the Department and City goals of bringing core project management functions in-house.
Construction Inspector
Public Works is requesting two (2) Construction Inspector positions specific to project management functions being performed by City staff. These positions will support CIP projects and ensure quality control in construction management.
Associate Civil Engineer
Public Works is requesting one (1) Associate Civil Engineer positions to perform in-house plan checking services and reduce reliance on contractual labor.
Office Specialist
The Public Works Department currently has a need for a position that can be assigned higher responsibilities, duties, and perform more complex tasks. The fiscal impact is minimal as it will be offset by the elimination of a Clerical Aide and an Engineering Intern.
Facility Maintenance Technician
The construction of the new Police Department has created the need for a dedicated Facility Maintenance Technician to ensure proper upkeep and support of the facility. This position will be dedicated completely to the new building.
Human Resources/Risk Management
Human Resources and Risk Management is requesting personnel adjustments that reflect the needs of the department, as well as better serve both external and internal customers.
Administrative Assistant
The reclassification from Human Resources/Risk Management Assistant is to address the need for personnel with an increased level of responsibility and more complex administrative tasks. This position has minimal financial impact.
Human Resources/Risk Management Analyst
The reclassification of the vacant Senior Human Resources Analyst is to reflect current staffing needs. This change will provide approximate salary savings of $32,738.
Police Department
The construction of the new state-of-the-art Police Department has created the need for additional personnel to enhance operations and better serve the community.
Crime Analyst Assistant
The Police Department is requesting two (2) Crime Analyst Assistants to support the development and implementation of the Real Time Crime Center (RTCC). These positions will represent the fifth and sixth of the eight total roles required to fully staff the bureau.
Human Resources/Risk Management Analyst
The purpose of this position is to shift human resources responsibilities to the Police Department, enabling more direct and efficient support for its personnel needs.
Information Technology Network Administrator
On September 24, 2024, the City Council approved the process for establishing a position responsible for administering the CAD/RMS system within the Police Department’s Information Technology Bureau.
Police Captain
An additional Captain is needed to support the growth of the Department and enhance public safety services within the City. There is no fiscal impact, as the associated costs are offset by Community Facilities District (CFD) funding.
Police Lieutenant
An additional Lieutenant is needed to support the growth of the Department and enhance public safety services within the City. There is no fiscal impact, as the associated costs are offset by Community Facilities District (CFD) funding.
Police Officer
Two (2) additional Police Officers are needed to support the growth of the City. There is no fiscal impact, as the associated costs are offset by Community Facilities District (CFD) funding.
Finance
The Finance Department is requesting personnel adjustments to improve operational efficiency, address workload demands and ensure accurate financial management and reporting as the City’s needs continue to grow.
Accounting Technician
The reclassification of one (1) Senior Accounting Assistant will support department succession, as well as reflect an increased level of responsibility. There is minimal fiscal impact.
In addition, the department is requesting a title change from Payroll Technician to Accounting Technician to better align with department needs and streamline operational efficiency. This change has no fiscal impact.
Senior Administrative Analyst
The department is requesting a title change from Senior Payroll Analyst to Senior Administrative Analyst to better align with current responsibilities and streamline operational efficiency. This change has no fiscal impact.
Additional Impacts to General Fund Expenses
• LMD & SLD General Fund Subsidy - The Street Lighting and Landscape Maintenance Fund and the Landscape and Lighting District No. 2 Fund levy assessments to cover all expenses in the Funds.
• CalPERS employer contribution rates for its Unfunded Accrued Liability (UAL) payment will be $13.04 million. These costs are incorporated into the budget.
Special Revenue Funds
The City’s various Special Revenue Funds include grant program funds and other funds that by law are required to be segregated from other funds. The FY 2025-26 Special Revenue Fund category includes appropriations for 25 different funds, with a summary of each fund provided in the attached draft budget.
Special Revenue funds account for the proceeds of specific revenue sources that are legally restricted or otherwise assigned for specific purposes and include Measure I, Gas Tax, Drainage Development, Major Capital Grants, Waste Management, and Traffic Development.
Debt Service Funds
Debt Service Funds account for the payment of principal and interest on general long-term debt of the City. Some of the funds include the Public Building Authority and the Community Facilities District Funds. The proposed appropriations for the Debt Service Funds are $636,745.
Capital Projects Funds
Capital Projects Funds are used to account for the acquisition or construction of major capital facilities. Capital project appropriations are for the life of the project.
FY 2024-25 Capital Expenditures
The City Council recently approved the FY 2026-2030 5-Year Capital Improvement Plan. While approved, the 5-Year CIP planning document is subject to revision as conditions and funding opportunities change. The plan represents a five-year assessment of the City’s infrastructure, facilities, and equipment needs that will be updated regularly.
Staff will evaluate proposed capital projects to determine the estimated cost, funding sources, and make recommendations based on the plan. For the 2025-26 fiscal year, $7,007,948 is appropriated for capital projects. Most of the activity is project carryover (continuing appropriations) from the current fiscal year.
Enterprise Funds
Enterprise Funds account for City operations that are financed and operated in a manner similar to private business enterprises, where the costs of providing goods or services to the general public are financed primarily through user charges. The Enterprise Funds include the Airport Fund, Cemetery Fund, the Cemetery Endowment Fund, and the Rialto Utility Authority Funds. The proposed appropriations for all Enterprise Funds are $35,355,142.
Internal Service Funds
Internal Service Funds account for goods and services provided by one City department to other City departments or agencies. The two internal service funds are the Workers’ Compensation Fund and the General Liability Fund. The proposed appropriations for the Internal Service Funds are $16,672,660.
Agency Funds - Successor Agency
Fiduciary Funds, comprised only of Agency Funds, are used to account for assets held by the City as an agent for other governmental units, private organizations, or individuals. The Successor Agency to the Redevelopment Agency Fund is included in this category. The proposed appropriations for the Successor Agency fund is $8,125,126.
ENVIRONMENTAL IMPACT
The action is exempt from California Environmental Quality Act (CEQA) pursuant to Section 15378(b)(5) of the CEQA Guidelines. Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
General Plan Guiding Principle 3 - Rialto’s Economic Environment is Healthy and Diverse - specifically our City Government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed the staff report.
FINANCIAL IMPACT
The FY 2025-26 Citywide budget includes proposed revenues of $326,515,655 and proposed expenditures of $304,553,275. Sufficient reserves are available in specific funds to account for the excess expenditures. If projections change at any point during the fiscal year, staff will come back to the City Council with updates and recommendations to adjust as needed. Staff will return to the City Council no later than the middle of the fiscal year with an update.