SANGER – Just days before the deadline, the Sanger City Council approved an operating budget with a $4.6 million general fund deficit during a special Friday evening session.
After some debate and confusion over certain proposals in the budget, the Sanger City Council unanimously approved the budget and five other budget-related resolutions on June 27. Council members had mixed feelings, with some putting more emphasis on their concerns and others sharing their view that the city is still moving in the right direction.
“I know that nobody wants to hear the word deficit, but I do know that, as hard as it is to say, we as a council and as city staff, we’re trying to go in the right direction for the community,” Councilmember Dolores Melendez said. “So it’s never going to be a perfect budget, and it’s not good that we’re in a deficit, but I still feel that we’re going towards the right direction.”
Councilmember Michael Montelongo said he didn’t want to use the word “disappointed” because he didn’t want it to come across as though city staff did something wrong; however, he said he wished each department presented its own budget like Sanger has done in the past. That way, council members and the public would have a better understanding of the specifics of what the departments were asking for, instead of having to dig through the budget line-items to see what’s in store for the next year.
City Manager Nathan Olson said that moving forward, his plan is to have department directors present their budgets over a series of meetings. The budget process for Sanger was delayed, and the presentation on it less detailed, than in years past as the new city administration continues to adjust to their role.
Olson was hired in February 2024, taking over the city’s leadership and bringing in Assistant City Manager Michelle Speer after a period of frequent staff turnover. Due to this transition, Sanger ended up passing its fiscal year 2024-25 budget as a preliminary budget first to give the staff more time to prepare a complete budget.
Addressing the deficit
Within the adopted budget, the city will have an operating general fund deficit of more than $4.6 million. This is a larger figure than what was presented when the budget was introduced because council members requested that city staff add back in a police officer position that staff initially proposed they freeze. They also wanted the city to continue sending out its newsletter in utility bills, which staff initially suggested they stop doing.
With those two changes, the council ultimately adopted the budget as presented by city staff; however, council members first voted to not approve a resolution that reallocated American Rescue Plan Act funds to the city’s general fund.
In an attempt to put more money into the general fund reserves as part of the fiscal year 2025-26 budget proposal, city staff recommended that the council move approximately $2 million of ARPA funding designated for two projects into the general fund.
Olson said that the funds would not be touched or allocated to other funds, but would sit in the general fund to maintain its balance. In the meantime, city staff would search for other funding sources for the two ARPA projects — the Newmark Sewer Main North Avenue to Muscat Avenue project at the California Quality Sewer Trunk Main project.
Montelongo, wary of the ARPA funds being allocated to other projects, initially made a motion to not approve the resolution authorizing the transfer of the funds from their ARPA-specific account to the general fund. This motion passed, with Mayor Frank Gonzalez and Mayor pro tem Daniel Martinez voting against the motion.
Confusion broke out between the council and Olson, however, as Olson said that by not reallocating the money to the general fund, he would have to find additional budget cuts to keep a positive balance of unrestricted money in the general fund.
This was because, with the budget presented by staff, the remaining balance in the general fund was less than $1.9 million of unrestricted money and about $4.5 million of restricted money. Per the city’s financial policies, it must set aside a certain percentage of its operating budget for emergency use only. By keeping $2 million in the ARPA fund, the city would have no unrestricted fund balance remaining.
Montelongo clarified that he was not directing the city to spend the money on the ARPA projects, however; he primarily wanted assurance that the funds initially allocated to those projects would still be used for the projects.
Instead of keeping the ARPA funds in the ARPA account, Montelongo eventually rescinded his first motion and made a new motion to approve the reallocation of the money, with the stipulation that it not be used for anything else without prior council authorization.
