City Council voted unanimously Tuesday to set a June 17 public hearing for proposed adjustments to the city's fiscal 2025-2026 biennial budget after officials reported a $7.65 million shortfall from lower-than-expected tax revenues and unforeseen expenditures.
City Manager Mike Futrell told council members the changes don't reflect a municipal crisis but rather an adaptation to economic uncertainties.
"It is in large measure driven by our current economic circumstances," Futrell said. "You will see that we are projecting lower sales tax, lower property tax revenues, and lower property tax transfer fees, as well as being driven by some unexpected expenditures that last year we could not have predicted."
During his presentation, Budget Director Sergio Aguilar identified federal tariffs, immigration policies and other federal actions as "unprecedented obstacles" that could disrupt the budget. He recommended the city prepare for unexpected financial challenges.
The council originally approved the two-year budget last year, with Riverside now entering the second year of the plan. The proposed adjustments would affect the general fund, Measure Z revenue and reduce park improvements.
While maintaining $210.68 million in general fund reserves, the amendment shows $2.5 million less in projected general fund sales tax and $2.9 million less in Measure Z revenue. It includes an additional $6.8 million for general fund personnel costs, with $2 million allocated for Fire Department overtime and $3 million for pension liability payments.
The proposal also includes reductions in park improvements, vehicle fleet purchases and maintenance projects. The amendment draws $7.65 million from reserve funds to help cover expenses.
Aguilar recommended council members receive and provide input on the proposed amendments and set a public hearing for adoption on June 17.
Councilmember Clarissa Cervantes expressed concern about the financial uncertainties facing Riverside.
"We're just in challenging times and I know there is a lot up in the air that we have to consider," Cervantes said. "I look forward to this public hearing to hear from the community."
Anthony was born and raised in Pomona. After a decade in education, he now writes for Southern California News Group, LA Times, and LA Taco. He recently moved to Riverside with his wife Evelyn.
City Council will review a $31.3M budget amendment amid revenue shortfalls. Discussion of Riverside Transmission and Reliability Project alternatives has been removed from the agenda.
A $6.6 million street maintenance contract, potential updates to the City's historic district signage program, and revising crossing guard cost-sharing arrangements with school districts are on this week's agendas.
