ELK GROVE, CA (MPG) - Reviewing the proposed budget for the upcoming fiscal year, Elk Grove City Council members and staff noted the city’s strong financial outlook.

City Manager Jason Behrmann presented the fiscal year 2024-25 budget proposal for feedback from councilmembers. City Council will decide whether to adopt the plan at its June 12 meeting.

“It’s a ‘great news’ budget,” Behrmann said. “So the budget is balanced, fully funding all of our reserves. … Our revenues exceed our expenditures, so not only is it balanced but there’s a surplus and there’s a surplus projected every year for the next five years.”

With $373 million in spending, the budget is about 7% larger than fiscal year 2023-24, due to growth in Measure E sales tax and to capital projects carrying over from 2023-24.

The General Fund, excluding Measure E, is expected to have close to $92.5 million spending, about 4% more than 2023-24.

The General Fund is projected to take in $104.1 million in revenue, with nearly three-quarters of the money coming from sales tax and property taxes. Much of the $92.5 million in General Fund spending, 68%, will go toward employee compensation.

While Behrmann noted risks such as inflation and the possibility of a recession, he said that the budget has enough “flexibility” to adapt to such changes.

Measure E is now expected to bring in $30 million in the coming fiscal year. Of the revenue, 20% would be put into a reserve fund for future priority projects, and 30% would go to the Cosumnes Community Services District. The city of Elk Grove would have the remaining 50% to spend on projects such as maintaining public areas and streets, reducing crime, and addressing homelessness.

Behrmann highlighted that the city continues to set aside money to pay its liability for the California Public Employees’ Retirement System (CalPERS), contributing $13.5 million above its obligations since 2015-16, which Behrmann said helps stabilize the city’s rates. The city’s pension obligations are currently 86% funded.

During public comment, Elk Grove resident Lynn Wheat commended the city for its CalPERS funding, and she asked that the city place more focus on addressing homelessness.

Mayor Bobbie Singh-Allen emphasized the “the strong fiscal health of the city,” noting budget deficits at the state level and in other cities.

Councilmember Darren Suen asked whether the city could require a minimum level of pension funding. Noting that the funding level depends heavily on CalPERS’ investment results, finance director Matthew Paulin said a trust set up by the city is what has allowed it to contribute more than required.

“In conjunction with those tools, we could talk about a strategy as to where we want to get to as far as our funding ratio,” Paulin said.

Vice-Mayor Rod Brewer praised the “healthy” budget outlook.

“It sets the city up to do a lot of valuable things, especially as we’re trying to continue the course of maintaining a safe and resilient community, and also looking at ways to relieve traffic congestion in the arteries where it’s most needed,” Brewer said.

Councilmember Kevin Spease attributed the positive budget report to residents’ involvement, adding, “I think everyone is working in the right direction.”

He asked that the city consider offering older adults free rides on Sacramento Regional Transit District Buses. Suen also suggested looking into a subsidyfor older adults taking rideshares. Behrmann said city staff could bring such a proposal to a future meeting.

In addition, Spease suggested providing swimming classes to low-income children. Cosumnes Community Services District General Manager Phil Lewis noted that the district offers a scholarship program but demand for aid outstrips availability. He said the district would be interested in working with the city to expand the program.

Addressing Elk Grove’s Workforce Readiness Certification Program, Councilmember Sergio Robles proposed payment for those who participate in the workforce development initiative to defray their living costs. Spease supported discussing the concept but said there is potential for abuse.

“We need to help out those who need a hand,” Robles said. “Will there be bad actors? Possibly. But we’re hoping for the best and we’re hoping to continue doing this so that we can help alleviate some of the burden.”

City Council approved assessment increases and other changes in the Elk Grove Tourism Marketing District.

The district previously assessed a 3% fee on room nights at hotels within city limits, with the money going to Visit Elk Grove, the nonprofit created by the city to administer the district. The assessment was 1% in Sacramento County. A majority of district hotels requested that the fees be increased to 4% in the city and 2% in the county. The district includes seven hotels.

The hotels also wanted to extend the term of the district to 2030 and allow non-hotel tourism businesses to have voting members on the district board. However, they wanted to stipulate that hotels would always hold the majority of seats. City Clerk Jason Lindgren said no district hotel had lodged a protest against the modifications, and City Council voted unanimously in favor.