Visalia passes 2-year fiscally sound budget

Visalia City Council meeting on May 20, 2024.(Rigo Moran)

City of Visalia approves budget for next two fiscal years, anticipates surpluses for both years despite declining revenues and major projects

VISALIA – A budgeting process that started last October has finally reached the end of its long and winding road, laying the foundation for the city’s financial planning for the next two fiscal years.

The budget, adopted by Visalia City Council on June 17, covers the city’s financial planning for fiscal years 2024-2025 and 2025-2026. In an interview with The Sun-Gazette, Visalia Mayor Brian Poochigian said the city’s finance team does a remarkably good job of accurate forecasting, and noted they’ve had very few issues over the years when it comes to keeping Visalia fiscally sound.

The approved budget will provide a surplus each year that will gradually decline over time, particularly as the city takes on significant capital projects such as the city’s new Civic Center. It anticipates a surplus of $6 million in 2024-2025 and $3.5 million in 2025-2026, which is in large due to declining revenue from the city’s sales tax. The city saw a significant spike in revenue during the COVID-19 pandemic but it is now stabilizing itself back out. 

In all, revenues are expected to exceed $101 million in the first fiscal year and $102 million in the second year. Operating expenditures are targeted at $85.8 million and $89.1 million respectively. Capital expenditures and transfers to other funds will result in expenditures totaling $95 million and 98 million respectively.

Some capital projects were pushed to the forefront, including one that met with broad support by the council.

“One of the things we discussed last night (on June 17) was the possibility of putting up a fence around Riverway Sports Park,” Poochigian said. “Those fields get used a lot, they are overused. This will make the field more secure.”

The outlay for Riverway Park had initially been set as a priority for 2025-2026, but on the urging of the council, it will now move to the 2024-2025 cycle. The fence project is expected to run $1.5 million.

Areas of the budget that Poochigian said he wished there was more funding for include road and street maintenance, which takes up a significant amount of the budget already.

“There is never enough money to fix the roads, but we do what we can but we could always use more money to fix the roads,” Poochigian said.

In a separate item, the council also passed changes to fees and permits. The council increased some fees, particularly in Parks and Recreation rentals, while reducing others when it was possible to do so. Several redundant or outdated fees were also removed to streamline the fee structure.

A positive that came out of the discussion during the June 3 council meeting was brought forward by a resident who noticed an inconsistency in the fee structure. The issue stemmed from a confusing method of determining the cost of compressed natural gas at the city refueling station. Now, the fee has been structured to be simple. The cost will be the actual cost the city pays for CNG plus 5%.

“We were making a mistake on how we were charging and we were able to fix it,” Poochigian said. “That shows why it is important to be involved in what is going on in the city. That shows how the system works.”

Poochigian pointed out that the budget does an excellent job of ensuring funding for emergency responders in the city. In total, public safety accounts for 61% of General Fund expenditures with the bulk of that – 42% – going to law enforcement. 

City staff advised that among the calculations, decisions were made to use numbers that are fiscally conservative to better prepare the city should a recession happen. Economists have stated that a recession is possible for several years, but a combination of federal stimulus money during the COVID-19 pandemic and high inflation have so far prevented a recession from occurring. To better prepare, the city council recently increased the funds held in the reserve fund from 25% of the operating budget to 30% of the operating budget.

Throughout the year, the city’s finance department monitors revenues and expenditures and can bring specific items back to the council if adjustments are needed.

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