ELK GROVE, CA (MPG) - The Elk Grove City Council unanimously adopted the city’s $411-million 2025-2026 budget at its June 11 meeting.

According to the document transmittal letter to council from Elk Grove City Manager Jason Behrmann, the total budget amount, which includes all city funds, is $37 million or 10% more than the Fiscal Year 2024-2025 budget of $374 million. The increase is mainly due to the “carry over of unspent budget on Capital Projects” into the current year.

General Fund revenue is projected to be just more than $106.58 million for the coming fiscal year, much of which budget manager Nathan Bagwill told the council will come from increases in property taxes. Bagwill said that staff members are anticipating sales tax revenue to flatten out in the coming year.

General Fund discretionary budget expenses are $97.414 million, up almost $4.9 million or 5.3% from last year’s $92.5 million. That increase includes a $3.9-million increase in general salary and benefits, two new positions, three full-year costs of positions added last year and increases to CalPERS unfunded accrued liability payments.

The increase also stems from $2.5 million in internal costs associated with 15 new vehicles, a new timecard system for payroll, technology upgrades and expansion of reserves in “anticipation of City Hall improvement costs.”

The $6.4 million in additional costs are offset somewhat by a $1.6-million reduction in revenue neutrality costs.

While technically part of the General Fund, Measure E, a 1-cent sales tax increase adopted by voters in 2022; revenues and expenses are not included as line items. Bagwill said the measure is forecast to produce $33 million in revenues in 2026 with the city, according to a 2023 tax-sharing agreement, receiving $16.5 million, Consumes Services District $9.9 million and the remaining $6.6 million put into a “Priority Projects Reserve.”

Spending on measure priorities in the fiscal year total $28.9 million, with those priorities ranging from public safety to road and park maintenance and improvements, economic development and addressing homelessness. After a February 2025 retreat, City Council directed staff to add four more priorities: arts, culture and entertainment; affordable housing; natural and open space preservation; and maintaining and expanding local bike and pedestrian trails.

Bagwill said the measure’s fund has a higher balance than anticipated at passage, and as a result, the fiscal year expenditures include spending on one-time items to draw down excess funds, including a council request to set aside $4 million for a permanent shelter facility.

The five-year budget projection indicates annual revenue growth of 3 to 5%, while expenses are estimated to increase 3% to 4% yearly.

“Really, the story here, the bottom line is one of a balanced budget annually with a positive net revenue for the next several years,” Bagwill said.

“We’re not here by accident,” Councilman Kevin Spease said. “This is intentional. This is 25 years of council, staff, residents, right, working together.”

Also at the June 11 meeting, council received information and conducted the first of two public hearings on a proposed 3% increase to its solid waste collection rates. The city contracts with Republic Services for solid waste collection and the 10-year contract with the company allows for annual rate adjustments based upon inflationary cost increases.

According to a presentation by Recycling and Waste Manager Kimberly Taylor, the annual adjustment is based on the Consumer Price Index (CPI) and capped at 3%. The Consumer Price Index over the past 12 months has shown an increase in costs of 4.46% for garbage and trash collection.

Rates for all three cart sizes in the city will increase. A 32-gallon cart jumps from $30.60 a month to $31.51; a 64-gallon cart, the most common used, goes from $35.48 a month to $36.54; and a 96-gallon cart increases from $45.30 to $46.66.

The rate increase does not apply to the 64-gallon recycling and organics carts that all residents automatically receive when signing up for the service.

“It’s just for garbage,” Taylor said.

The increase also applies to the city’s fee for administrating the service, which goes from $3.64 a month per account to $3.75.

Accounts utilizing the cost-saving Lifeline program will also see rates increase by about 84 cents. Taylor said these accounts are already 20% lower than standard rates.

In comparison, six of 11 other Sacramento-area cities have solid waste collection rates higher than the regional average of $44.21 per month for a 64-gallon cart. The lowest rates are in Citrus Heights, followed by Roseville and Elk Grove.

“The average local rate in the region is significantly higher than Elk Grove,” Taylor said.

In response to a resident’s comment during the public hearing portion and request from Councilman Darren Suen, Taylor clarified that the 10-year contract with Republic entitles them to an annual rate increase but is capped at 3%.

“The bottom is 2%,” Public Works Director Jeffrey Warren added. “It’s always between 2 to 3%.”

A second public hearing on the solid waste rates takes place at the City Council’s June 25 meeting at Elk Grove City Hall, 8400 Laguna Palms Way.