By Louis Zylka
The 830 Times
City council discussed options for adopting the city’s fiscal year 2025-26 budget during Tuesday’s regular meeting.
Council members considered an ordinance to adopt a budget for the fiscal year beginning Oct. 1, 2025, and ending Sept. 30, 2026. The proposal would appropriate funds for the city’s governmental, debt service, capital projects, enterprise, special revenue and internal service funds.
City Manager Shawna Burkhart presented the ordinance and outlined options to subsidize the budget and lower the property tax rate.
“We have approximately a $6.6 million shortfall to be 100 percent budgeted. We began our draft one with that shortfall. The second bullet I would like to highlight is the city is using the same transfers as last year from the enterprise funds. Enterprise funds are subsidizing the budget and ultimately the property tax rate, and keeping that lower,” Burkhart said.
“With the final budget option presented, the city will be short of revenues by $1.7 million, while bringing down the city’s reserves from five months to three months, which is a one-time fix. Next year, the city will face the same shortfall with only three months’ reserves. The fund balance would be about $5.17 million,” she added.
Burkhart noted the city does not have enough recurring revenues to cover recurring expenditures. Such revenues can only be raised by increasing property tax, sales tax, fines, fees, permits and licenses.
She said that if the final budget option is approved without layoffs, the city will face a $2.4 million revenue shortfall, while reducing reserves from five months to three months. She estimated the fund balance would then fall to about $4.43 million.
Burkhart also informed council members that significant changes to the budget would require reposting the ordinance and holding another public hearing. If no budget is passed, state law requires the city to adopt the previous year’s tax rate and budget, which would not allow the city to capture new values on the tax roll.
Mayor Pro Tem Jim DeReus said he and council have been looking for ways to identify additional funding. He voiced concerns about laying off employees and suggested using $250,000 from the fund balance to extend employment for an additional three to four months.
“The only thing that I have come up with, that is potentially viable because of those big picture concepts we talked about, is the transfer from the bridge fund for the American Airlines revenue guarantee,” DeReus said. “That will be paid off in a couple of months, hopefully, and then there will be a couple of months putting money toward the matching for one of the airport grants that we have, which should leave us somewhere between two and four months, depending on how the numbers work out, which should be enough to extend (people’s employment) a month or two.”
DeReus emphasized the need to treat employees fairly and to provide them with certainty about their jobs. He said transferring money from the bridge fund could give departments time to reassign duties and make any transition “as smooth as possible” for employees who may be laid off.
Councilwoman Carmen Gutierrez asked whether the city’s junk car ordinance was generating any revenue and suggested increasing fines. Scot Carcasi, the city’s operations and compliance manager, said the ordinance is “not a significant revenue generator.”
Councilman Randy Quinones said he believes the city “is not ready for a reduction in force.” He agreed with DeReus on exploring other fund transfers before considering layoffs.
Mayor Al Arreola asked about the implications of delaying budget adoption. Burkhart said the city must act between Sept. 22 and Sept. 25, with Sept. 30 as the legal deadline.
Councilman J.P. Sanchez also opposed reducing the workforce. He suggested department heads should be required to cut their budgets by 10 to 20 percent.
“The school district has done this in prior years to get into budget . . . We need to talk to our municipal court judge. The revenues coming from her are not what she proposed. We need to see what we can do about raising fines, generating more money from her and in her department; she has no cuts whatsoever. We need to go back, and we need to see what we can do,” Sanchez said.
“A few years back, we gave the employees a double-digit raise,” he added. “And we’re suffering for it now, and now we’re going to fire people? That’s a slap in the face. I don’t think that’s right.”
Arreola said more performance reviews are needed for all employees, noting they are essential for making informed decisions about budget cuts. He criticized the lack of reviews in some departments and called for better accountability.
“It’s already been done by the directors, but some directors are not doing the performance review. Is it on us, or is it on some directors to do their job for the next year?” Arreola said. “And this is where I hold everybody accountable from the administration now, that if you’re not doing your job out there, how in the hell do you expect us to come in and say yes to something if we don’t know that you’re doing performance reviews?”
No action was taken on the ordinance. After further discussion, Arreola concluded, “This council doesn’t want to implement a reduction,” and asked Burkhart to present a solution the council could approve at its next regular meeting.
