Lodi city officials this week unveiled a proposed $89.7 million budget for the upcoming fiscal year that preserves current staffing and services, even as projections show a $4.8 million structural deficit emerging over the next five years.
Councilmembers and city staff presented a revised spending plan that avoids cuts to full-time positions but emphasizes service maintenance over expansion. Budget Manager Jennelle Baker said the plan uses targeted reductions and adjustments to close the gap for the upcoming year, including approximately $1 million in departmental cuts.
The review began Tuesday with a focus on the city’s General Fund and Measure L budgets, which together account for most discretionary spending. These support police, fire, parks, and other administrative services.
Measure L, a half-cent sales tax approved by voters in 2020, contributes about $10 million annually to the General Fund. According to the draft budget, Measure L’s purpose is to “maintain and enhance” city services with funds allocated each year. However, the current plan “prioritizes service maintenance above enhancement as overall resources are limited.”
Among the key cost-saving measures was the removal of a proposed $2 million Facility Internal Service Fund, which had been intended to support future building maintenance. The revised budget also eliminates $154,000 in part-time police staffing.
Despite these reductions, city officials emphasized that core services will remain intact.
“We never have enough, but we do have to respect the priorities of our citizens,” Councilmember Lisa Craig-Hensley said during the meeting. “Public safety is still the top priority.”
According to city staff, the police department accounts for 37% of the General Fund budget, while the fire department comprises nearly 22%. Parks and other recreational services make up about 10%.
Wednesday’s session shifted to the city’s enterprise and special revenue funds, which are legally restricted for specific uses and operate primarily through dedicated fees or taxes.
The Electric Utility Fund is projected to bring in $97.2 million and spend $97.8 million, showing a modest deficit. The Wastewater Fund anticipates $19.5 million in revenue and $21.4 million in expenditures, while the Water Fund is expected to post a surplus of $1.5 million, with $15.6 million in revenue and $14.1 million in spending.
Other funds showed more significant shortfalls. The Streets Fund is projected to spend $9.97 million, about $2.5 million more than its $7.5 million in expected revenue. The Community Development Fund anticipates a $2.4 million gap. The Library Fund is projected to spend $1.9 million while generating $1.7 million in revenue.
“These shortfalls reflect the growing challenge of maintaining infrastructure without significant new revenue sources,” Baker told the council.
Some accounts remained stable. The Parks, Recreation and Cultural Services Fund is projected to break even at $9.47 million. The Capital Outlay Fund projects a positive margin, with $3 million in revenue and $754,000 in spending. In contrast, the Vehicle and Equipment Replacement Fund expects to spend $2.8 million against $2.3 million in revenue.
The proposed budget also includes an update on the city’s Pension Stabilization Fund, which is designed to manage future retirement liabilities. Staff said no major changes are expected in FY 2025–26 but noted the fund’s role in long-term fiscal planning.
Though the current proposal avoids layoffs or service rollbacks, officials acknowledged that it does not address underlying structural issues.
“That’s how we address issues of structural deficits, by bringing in additional revenue sources and creating new opportunities for businesses to locate here,” Craig-Hensley said.
She added that future efforts will focus on economic development and increasing household income as ways to expand the city’s revenue base.
On Wednesday, the council reviewed the city’s enterprise, special revenue, capital outlay, and vehicle and equipment replacement funds. These accounts are restricted for specific purposes and are primarily funded through user fees or designated taxes. Baker presented revenue and expenditure projections for each fund.
Following the public session, the council entered a closed session to conduct a labor negotiations conference.
Employee groups discussed in the session included the International Brotherhood of Electrical Workers, Lodi City Mid-Management Association, AFSCME General Services and Maintenance & Operators, Police Mid-Managers, Lodi Police Officers Association, Lodi Police Dispatchers Association, Lodi Professional Firefighters, Fire Mid-Management, Confidential General Services, Confidential Mid-Managers, Executive Managers, and Appointed Employees.
No reportable action was announced after the session. According to city documents, compensation and benefits negotiated with employee groups are a component of overall General Fund expenditures and could influence future budget planning.
The full draft budget is available for public review on the City of Lodi’s website. The City Council is scheduled to vote on the proposal during its regular meeting on June 4.
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