By Sara Beth Williams–
The Citrus Heights City Council adopted its biennial budget on Wednesday, which details the city’s planned spending and anticipated revenues for the next two years.
The budget aligns with multiple Strategic goals and prioritizes core services, capital improvements, and long-term stability, according to the city’s staff report, with a strong focus on infrastructure and improvements.
For the upcoming fiscal year, the city anticipates $99.7 million in total revenues and $98 million in expenditures. In the second year of the budget cycle revenues are projected to total $88 million, with expenditures slightly lower at $87 million.
$8 million from the General Fund is allocated to go towards improving roadways over the next two years, the city confirmed, adding that more than $3 million in additional funding from grants and other revenues is also projected for allocation toward roads and infrastructure through the Capital Improvement Program. Citrus Heights City Manager Ash Feeney said Citrus Heights is one of the few municipalities to allocate general funds specifically towards improving roads.
Also of note, the city is also requesting additional positions. Position requests include two beautification team members, a construction inspector, traffic light technician, and a custodian and limited term senior facility attendant for the Event Center. Additionally, one police officer will be transferring to a POP sergeant position, at an anticipated $37,000 expense.
A new addition to this year’s budget cycle includes a vacancy factor of $1.5 million each year, which the city said represents about five percent. A vacancy factor represents an estimated savings in overall costs that result from unfilled staff positions during the fiscal year.
The city has divided the distribution of funds into distinct categories, including general fund for daily operations, revenue funds for restricted uses only such as grant funding or gas tax funding, enterprise funds for utility-style services like sewer or refuse, capital improvement funds for infrastructure upgrades and major projects, and internal service funds for citywide services like fleet maintenance and technology upgrades.
In a breakdown of funding allocated to the police department shared on June 11, the city said the police department will receive about $28 million per year in funds from both general funds, and special funds which are specific and restricted. The funding covers operations, including patrol and communications, and special services, which includes IMPACT and POP detectives, traffic, code enforcement, and animal services.
Of the remaining budget, 23 percent of the funds are being allocated toward administrative services, eight percent to General Services, three percent to the City Manager’s office, and the rest of the funds will go toward economic development and community engagement, community development, and transfers to non-general fund reserves.
The City Council also voted separately and unanimously approved the Five-Year Capital Improvement Program. Required by state law, the report identifies long-term infrastructure investments and is reviewed alongside the two-year budget to ensure adequate funding for critical projects.
The General Fund, which supports core operations, including public safety, administration, and community services, is expected to receive $46 million in revenues with $44.6 million in anticipated expenditures this fiscal year. In the following year, those numbers are projected to grow to $46.9 million in revenues and $45.7 million in expenditures. It is also anticipated that General Fund reserves will increase by over $1 million, according to the report.
Sales and Use Tax represents the largest individual revenue source for the city, with property taxes coming in as the second largest revenue source, the city said. $14 million in revenue is expected this year, an increase of $398,000 from last year.
“This rise is attributed to steady consumer spending, a resilient local economy, and inflationary impacts on taxable goods,” the city wrote in its staff report, adding that estimates are supported by “continued economic recovery, stable retail activity, and modest population growth.”
The projected growth continues into the following year, with sales tax revenue expected to reach $14.38 million, up $353,000.
While sales, property, charges for services, and intergovernmental revenue such as motor-vehicle-in-lieu fees are expected to increase, other sources of revenue are expected to decrease, including investment revenue, miscellaneous revenues, and licenses and permits revenue.
Revenue from licenses and permits shows a projected decrease of $185,000 from the last year, primarily due to a reduction in Building Permits and Plan Check revenues, which are expected to decline following lower development activity, the city said.
Talwar explained that due to the unknowns regarding market and interest rates, the city took a “conservative” approach for License and Permits, and Use of Money revenue projections.
City Council members praised city staff for presenting and maintaining a “prudent” budget that reflects the priorities and values of both the City Council and the community. The biennial budget and Five-Year Capital Improvement Program can be read in full in the city’s latest agenda packet.
