Reedley balances the books for 2024-25 budget

Reedley City Council adopts fiscal year 2024-25 budget, approves staff salary and benefit adjustments

Members of the Reedley City Council listen to the results of the water rate study conducted by HDR Engineering at a public hearing in the Reedley City Council Chambers June 11, 2024. The council unanimously voted to increase water rates over the next two years to keep pace with rising utility costs. (Serena Bettis)
Serena Bettis
Published June 14, 2024  • 
9:00 am

REEDLEY – The 2024-25 fiscal year budget received approval from the Reedley City Council, capping off six months of work by city staff. 

At its meeting on June 11, the council unanimously passed the operating budget for the fiscal year beginning on July 1. Assistant City Manager Paul Melikian presented the budget to the council once again after leading budget workshop presentations throughout May. Melikian said the proposed budget was the culmination of a process that began in January and has worked in perspectives from the council, the public and staff since then. 

“The council has been approached — and the public — on several different occasions as early as late February, early March with our strategic capital planning that sets the tone for the planning for the next couple of years … as well as highlighting was is going well in the city because not all is bad,” Melikian said. 

Introduced to the city council on May 14, the proposed budget includes just under $50.8 million in total expenses, broken down to approximately $23.4 million in maintenance and operation costs, $21.1 million in personnel and benefit costs and $6.3 million in capital improvement project costs. 

Reedley’s general fund, the primary operating fund that supports the bulk of the city’s departments and services, will see just under $20.2 million in expenses and almost $17.9 million in revenues. The city still has a balanced budget thanks to approximately $2.3 million in carry-over funds from the end of the 2023-24 fiscal year, and estimates that at the end of the 2024-25 fiscal year, the general fund will have a balance of $41,000.

As a part of approving the operating budget, the council also approved multiple resolutions relating to city employees. Melikian explained how the city has provided its employees with slight salary increases to account for cost of living adjustments and, as was discussed at the May 28 budget workshop, has increased the per-call compensation for volunteer firefighters.

The council adopted updated master salary tables for city employees, established a salary and benefit schedule for unrepresented employees, established a revised compensation schedule for the volunteer fire department, amended the city’s deferred compensation matching plans and approved a two-year memorandum of understanding (MOU) with the Reedley Police Officers’ Association.

Council members were excited to hear about the city’s proposed change to its deferred compensation matching plan that was established multiple years ago. With more city employees being covered by a lower-tier pension plan under the California Public Employees’ Pension Reform Act (PEPRA), the city is saving money and was able to establish the compensation matching plan to benefit employees whose retirement will look “vastly different” than employees covered under the California Public Employees’ Retirement System (CalPERS). 

Melikian said that this plan looks more like retirement plans in the private sector that “allow employees to contribute tax-free to essentially a stock market fund that would allow those funds, hopefully, to grow over time.” When Reedley initiated the plan, it established a 2% match of an employee’s base salary, which Melikian said was below the surrounding area. 

“We purposely established and recommended it below the average because we didn’t know what the full financial impact would be to the city,” Melikian said. “Now that our enrollment has stabilized at just over 50 full time employees, … we are comfortable at this time with recommending an increase from 2 to 3%.”

This means that if an employee contributes $10 to their retirement plan, the city will match that $10, all the way up to 2% — now 3% — of their base salary. Melikian said the employees who are taking advantage of this are greatly appreciative of it. Additionally, the city has a five-year vesting period, meaning employees have to work for the city for five years before they receive the full benefits of the plan, which has been a good employee retention tool, Melikian said.

Serena Bettis
General Assignment Reporter