ORANGE COVE – The city of Orange Cove is gradually working to improve its financial position by keeping its spending tight and finding ways to increase revenues.
Although the fiscal year 2026-27 budget — unanimously adopted by the Orange Cove City Council on June 24 — is smaller than last year’s, fewer individual funds have a deficit and the general fund has a larger surplus. In a letter attached to the budget, City Manager Sam Escobar wrote that the city has made “measurable progress” in the last year to rebuild its financial foundation.
“This budget reflects both the progress the city has made over the past year and the financial realities that continue to shape the decisions before us,” Escobar’s letter said. “It is a responsible budget built around maintaining essential services, continuing the city’s recovery from prior-year financial challenges and investing where limited dollars can provide meaningful benefit to residents.”
During the public hearing, multiple residents were engaged and asked questions about the budget that Escobar then addressed. Having had two previous budget workshops, council members had few comments on it but thanked Finance Director Danny Jimenez for bringing them a balanced budget.
Overall outlook
In total, the 2026-27 budget includes approximately $22.77 million in revenues and $22.33 million in expenses.
For revenues, this includes approximately $3.6 million in the general fund, a combined $14.4 million in special revenue funds and $4.7 million in enterprise funds, including funds attributed to the redevelopment agency and debt service
For expenses, the overall budget shows more than $3.5 million in the general fund, $13.9 million in special revenue funds and more than $4.8 million in enterprise funds.
Almost half of the overall budget — about $10.9 million — is attached to capital improvement projects the city has received grant funding for, kept track of through special revenue funds. Though they are included in the budget, the projects may not be completed in 2026-27.
For example, Escobar said the city has received $2 million from the state for the construction of a new police station. That amount is not enough to fully construct a new building, however, so the city is still looking for other ways to fund the project before it can move forward.
City operations
Though it still does not leave a lot of wiggle room, a surplus of nearly $67,000 is projected in the general fund for fiscal year 2026-27 — a significant improvement over the surplus of around $2,000 that was first approved for fiscal year 2025-26.
Contained within the general fund are the budgets for all city departments. While enterprise funds and special revenue funds help support city operations — including water and sewer services — the bulk of the day-to-day work done by city administrators is reflected in the general fund.
In 2026-27, the police department will take up a majority of the general fund at 60.3%. Police department operations, including the animal control division, are budgeted to have more than $2.1 million in expenses.
This includes one full-time animal control officer, two records clerks, four management positions, including the police chief, two sergeants and a corporal, and seven patrol officers.
Total police officer positions accounted for in the budget decreased by four this year, including two patrol officers and two School Resource Officer positions. Jimenez said the two patrol officer positions had already been frozen, meaning the department was not hiring anyone to fill them, and the adjustment to the budget document reflected that.
Escobar’s letter noted that the budget “reflects the reality that available general fund dollars remain limited.”
“The city has made significant reductions and adjustments to account for current revenues, known obligations and service needs,” the letter said.
No other individual city department receives more than half a million dollars. Combined, the budgets for the city council, city attorney, administration department and finance department, in addition to a $5,000 allocation for the fire protection district, make up 14.7% of the budget, or about $524,000 in expenses.
The planning, inspection and engineering department budget accounts for 10.5% of the overall general fund at nearly $375,000. Public works and building and parks maintenance have a combined budget of about $257,000, which is about 7.2% of the overall general fund.
The community center and senior center budgets have a combined expense of just over $151,000, or 4.2% of the general fund, and the recreation department has a budget of nearly $110,000, or 3.1% of the general fund.
Utility needs
One aspect of the budget already poised for improvement is the city’s enterprise funds, which primarily handle the water, wastewater and solid waste disposal services that are provided to residents.
In 2025-26, the city identified large operating deficits in the both water and wastewater enterprise funds, meaning Orange Cove was consistently spending more to operate the services than it was receiving in revenue.
As a result, the city worked with a consultant to conduct water and sewer rate studies over the last year to ensure that it is charging enough to cover all costs. The council voted to approve new, increased water rates in May that will cover the operating deficit and help pay for needed repairs at the water and wastewater treatment plants.
For 2026-27, just the water fund is expected to continue to have a deficit. Water fund revenues are budgeted at $2.1 million and expenses are budgeted at more than $2.3 million.
Although new rates will take effect July 1, coinciding with the start of the fiscal year, the water fund will not see a surplus immediately. This is because the city council chose to spread the necessary rate increases out over two years to ease the burden on residents.
For solid waste disposal, revenues are estimated to be $620,000 and expenses about $609,000. The wastewater fund is expected to have revenues of $1.3 million and expenses of $1.2 million.
Moving forward, city staff are continuing to work with consultants to complete financial audits that Orange Cove is behind on. The most recent audit was completed in May for fiscal year 2022-23. Orange Cove still needs to complete fiscal years 2023-24, 2024-25 and now 2025-26 to be caught up.
The city’s goal is to have all three finished within the next year. When that is done, Orange Cove will have a much more clear understanding of its overall financial position and will be eligible to receive additional state and federal grant funding to support infrastructure improvements.
