Budget Update: Citrus Heights on track for $4M surplus

By Phillip Pesola–
Following a mid-year budget presentation last month showing Citrus Heights is projected to have a nearly $4 million surplus, the City Council approved adjustments to the city’s current budget.

The initial General Fund budget for the current fiscal year was adopted last year and anticipated revenues of $43 million and expenditures of $40 million. At the end of January, marking the halfway point of the fiscal year, actual revenues were only about 25% of the budget while expenses were approximately 54%.

Susan Talwar, the city’s administrative services director, said the mid-year revenue shortfall is typical at this time of year, due to property taxes, sales tax, and motor vehicle licensing fees typically coming in later in the year. She said the city relies on cash reserves during such times, until more revenue is collected.

The council approved a recommendation for an upward adjustment in the budget of about $700,000 in revenue for the remainder of the year. The increase was attributed primarily to a $1.1 million projected increase in investment income due to rising interest rates, as well as higher-than-expected property taxes and motor vehicle “in-lieu” fees. The increase was offset, however, by a $500,000 drop in expected sales tax revenue. That decrease was said to be caused by various economic factors, including lower gas prices and business closures.

The city’s projected expenditures for the year increased by about $129,000, with adjustments mostly related to the Police Department to cover increased costs for police training, booking and towing fees, software costs, and unexpected canine medical expenses.

Overall, the adjustments amount to a projected year-end surplus of just under $4 million, which is nearly $700,000 higher than the initial budget projection of $3.3 million, according to the presentation. The city has also received $15.7 million in American Rescue Plan Act funding, with $1.6 million of those funds yet to be allocated.

The updated revenue and expenditure projections show a reserve balance of approximately $25.1 million at the end of June this year, after considering necessary street repairs and other commitments.

More detailed information regarding the budget adjustments, including an updated 10 year financial forecast, can be found starting on page 238 in the meeting’s agenda packet.

Vice Mayor Jayna Karpinski-Costa praised City Manager Ash Feeney and city staff for the positive budget update, noting the city faced dire shortfalls in projections under former City Manager Chris Boyd.

Councilmember Tim Schaefer also expressed appreciation for city staff, noting efforts to fund repair of city roads, while acknowledging that more funds will be needed in the coming years in order to repair and maintain them.

“This is more than the city has ever contributed from the General Fund to road repairs. This is a huge, huge deal,” he said, noting the city is contributing $2 million to road repairs this year and will contribute $4 million per year in subsequent years. “[B]ut as much as I love to see it, we’re going to fall short. So we have to look at options.”

The City Council approved the budget adjustments unanimously during the Feb. 22, 2024, council meeting.

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