Resolution No. 2026-007RESOLUTION NO. 2026-007
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON
AUTHORIZING AND APPROVING MID-YEAR BUDGET
APPROPRIATIONS AND AMENDING THE ANNUAL OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2025-26
SECTION 1. Recitals.
A. On June 3, 2025, the City Council of the City of Vernon adopted Resolution No.
2025-013, approving the annual operating and capital budget for Fiscal Year 2025-26.
B. Changes in anticipated expenditures of the City require a revision of the
appropriations for Fiscal Year 2025-26 and amendment of the budget by the affirmative
vote of a majority of the members of the City Council, pursuant to Vernon Charter Chapter
8.5.
C. There are sufficient funds in anticipated revenues and City-wide fund balance to
cover the proposed budget adjustments.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF VERNON AS FOLLOWS:
SECTION 2. The City Council of the City of Vernon finds and determines that the
above recitals are true and correct.
SECTION 3. Pursuant to Chapter 8.5 of the Charter of the City of Vernon, a
majority of the members of the City Council hereby approves the mid-year budget
appropriations in the table below.
Fund Department/
Division
Revenue
Expense GL Account Description Adjustment
Amount
011
General
105-City
Administration
Expense 011-010-105-529215
Professional
Services - Other
Metro Link
project
advocacy
$75,000
011
General
105-City
Administration
Expense 011-010-105-529215
Professional
Services - Other
Business tax
contribution
study
$35,000
011
General
115-City
Attorney
Expense 011-010-115-529200
Professional
Services - Legal
Metro Link
pending
litigation
$250,000
011
General
120-Human
Resources
Expense 011-010-120-529220
Professional
Services -
Administration
Workplace
investigation
services
$21,900
011
General
125-City Clerk Expense 011-010-125-529215
Professional
Services - Other
Records
storage and
retrieval
$75,000
Resolution No. 2026-007
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Fund Department/
Division
Revenue
Expense GL Account Description Adjustment
Amount
011
General
130-Finance Expense 011-010-130-529010
Bank Service Fees
Payment
processing
fees
$80,833
011
General
130-Finance Expense 011-010-130-529215
Professional
Services - Other
Sales tax
audit and
reporting
services
$12,000
011
General
130-Finance Expense 011-010-130-529225
Professional
Services Technical
Ballot
measure
outreach
consulting
$55,300
011
General
150-Industrial
Development
Expense 011-010-150-525000
Advertisement/
Promotion
Big 4 I.CON
West and
Business
Summit
$24,500
011
General
150-Industrial
Development
Expense 011-010-150-529215
Professional
Services - Other
Big 4
consulting
services
$177,125
011
General
200-Health Expense 011-695-200-523025
Grant-Funded
Expense
Return
MEHKO
grants funds
to CDPH
$30,676
011
General
300-Police Expense 011-030-300-501020
Salaries - O.T.
Additional
overtime due
to IOD,
staffing, etc.
$290,000
011
General
300-Police Expense 011-030-300-660010
Capital Equipment -
Auto
Replace
totaled
motorcycle
$45,000
011
General
410-City
Housing
Expense 011-040-410-529215
Professional
Services - Other
Property
management
services
$16,000
General Fund Subtotal $1,188,334
055
Electric
575-Customer
Service
Revenue 055-450-575-450012
Discount on Sales
Higher
discount on
sales
$2,350,000
055
Electric
585-
Engineering
Expense 055-050-585-660000
Capital Outlay
Fiber room
upgrades
$325,000
055
Electric
590-Resource
Management
Expense 055-050-590-520150
Energy - Other
Lower energy
costs
($2,400,000)
055
Electric
590-Resource
Management
Expense 055-050-590-520154
Renewable Energy
Credit
Required
REC
purchases
$2,400,000
055
Electric
590-Resource
Management
Revenue 055-450-590-450015
RA Capacity Sales
Increased RA
capacity sales
($4,136,160)
Electric Fund Subtotal ($1,461,160)
056
Natural
Gas
600-Gas Expense 056-060-600-525022
Natural Gas
Transport Cost
Lower natural
gas transport
costs
($150,000)
Resolution No. 2026-007
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Fund Department/
Division Fund GL Account Description Adjustment
Amount
056
Natural
Gas
600-Gas Expense 056-060-600-529000
Repairs &
Maintenance
Increased
repairs costs
$150,000
Natural Gas Subtotal $0
Grand Total ($272,826)
SECTION 4. The Annual Operating and Capital Budget for Fiscal Year 2025-26,
adopted by Resolution No. 2025-013, is hereby amended to include the mid-year budget
appropriations.
SECTION 5. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications, and to this end, the provisions of this Resolution are declared
to be severable.
SECTION 6. The City Clerk, or Deputy City Clerk, shall certify the passage and
adoption of this resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED March 3, 2026.
________________________
LETICIA LOPEZ, Mayor
ATTEST:
GENOVEVA ROCHA, City Clerk
APPROVED AS TO FORM:
ZAYNAH MOUSSA-MILWARD,
City Attorney
Resolution No. 2026-007
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CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF VERNON )
I do hereby certify that the attached is a true copy of Resolution No. 2026-007 that was
passed and adopted at the Regular Meeting held on March 3, 2026, by the following vote:
AYES: Merlo, Rivera, Ybarra, Lopez
NOES:
ABSENT: Larios
ABSTAIN:
__________________________
GENOVEVA ROCHA, City Clerk
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City Council Agenda Report
Meeting Date:March 3, 2026
From:Alice Hui, Director of Finance/City Treasurer
Department:Finance
Submitted by:Alice Hui, Director of Finance/City Treasurer
Subject
Fiscal Year 2025-26 Mid-Year Financial Update
Recommendation
Adopt Resolution No. 2026-007 authorizing and approving mid-year budget appropriations and
amending the Annual Operating and Capital Budget for Fiscal Year 2025-26.
Background
The Mid-Year Financial Update provides an overview of the City’s financial position at the
midpoint of the fiscal year and is intended to support City Council in informed decision-making
and the continued achievement of the City’s goals. As of December 31, 2025, revenues and
expenditures would typically be expected to align near the 50% mark. However, the timing and
recognition of certain revenues and expenditures can vary throughout the year.
At mid-year, total Citywide expenses, including non-operating costs, for the General Fund and
Vernon Public Utilities (VPU) combined were at 45% of the adopted budget, while revenues were
at 53%. Within the General Fund, approximately 46% of budgeted revenues had been received,
compared to approximately 42% of budgeted expenditures, indicating that spending is tracking
below revenues at this point in the fiscal year.
When excluding grant revenues, General Fund revenues were at 52% of the adopted
budget. Grant revenues were minimal at 5%, as most capital projects have not yet begun. On
the expenditures side, General Fund salaries and benefits and maintenance and operations
(M&O) were each at 47% of budget, while capital project expenditures were at 19%, reflecting
the early stages of project implementation.
VPU revenues were at 55% of budget, while expenses were at 47% at the mid-year mark. Staff
evaluated the trajectory of actual versus budgeted results and are providing recommendations
to appropriate additional funds for unforeseen circumstances that have arisen since the normal
course of budget setting during the prior fiscal year. Pursuant to City Charter Chapter 8.5,
Council may amend or supplement the budget by the affirmative vote of a majority of the
members of the Council.
General Fund
With the completion of the City’s audit for Fiscal Year 2024-25, the General Fund closed the year
with a total fund balance of $54,244,152, of which $26,619,588 is available as unassigned fund
balance:
FY 2024-25 Audited Final
General Fund Revenues $ 80,494,678
General Fund Expenditures (75,535,864)
Surplus $ 4,958,814
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At the adoption of the FY 2024-25 budget on June 4, 2024, the General fund was projected to
have a deficit of $7,199,568. Actual results reflected a surplus, primarily attributable to revenues
exceeding projections and lower than budgeted M&O and capital outlay expenditures.
Warehouse parcel tax, utility users tax, and building permit fees each generated approximately
$1 million more than anticipated. In addition, M&O actual expenditures were approximately $2.8
million below the original budgeted amount. Capital outlay expenditures totaled approximately
$4 million, or $7.1 million below the original budgeted amount of $11.1 million, primarily due to
the grant funded Atlantic Bridge Project, which remains in its early stages.
FY 2025-26 General Fund Projections
At the time the FY 2025-26 budget was adopted on June 3, 2025, the General Fund was
projected to end the year with a surplus of $1.9 million. Total budgeted revenues were $92 million,
including $12.2 million in grant revenues, while expenditures, net of estimated savings, were
budgeted at $90 million. These estimated savings were based on historical trends, which
typically reflect vacancy savings of approximately 5% and M&O savings of approximately10%.
During the current fiscal year, the City implemented a new classification and compensation plan
effective July 2025. This plan was adopted after the FY 2025-26 budget was approved and was
therefore not incorporated into the original budget assumptions. Based on financial data as of
December 31, 2025, the anticipated vacancy savings included in the budget may be fully
absorbed by the implementation of the new plan.
In addition, M&O expenditures are occurring at a slightly higher rate than in the prior year, with
47% of the budgeted expended as of December 31, 2025, compared to 46% at the same point
in FY 2024-25. For context, the General Fund ended FY 2024-25 with budgetary savings of
8.6% of the original adopted budget. This information provides important context for City Council
as staff continue to monitor expenditure trends and evaluate the potential need for budget
adjustments.
Below is a summary of major General Fund revenue activity through the end of December. It
should be noted that many revenue sources are not received evenly throughout the year,
therefore, amounts received through December may not be reflective of anticipated annual totals.
FY 2025-26 Major Revenues through December
Major Sources Budgeted
Actual
through
December
Prior Year
through
December
Prior Year
Final $
Warehouse Parcel Tax $ 14,855,250 $ 6,347,452 $ 6,144,323 $ 15,020,209
Safety Parcel Tax 2,362,100 976,469 991,106 2,315,092
Utility User Tax 13,871,819 6,806,519 7,209,141 13,346,507
Sales Tax 9,126,966 5,294,626 4,516,802 9,424,389
Measure V Sales Tax 4,660,000 3,010,133 2,441,830 4,994,171
Property Tax 6,066,432 1,610,209 1,672,172 6,376,104
Business Licenses 6,232,000 3,914,694 3,988,823 5,957,917
Building Permit Fees 3,489,453 2,173,316 1,212,056 2,109,181
Plan Check Fees 750,000 1,595,833 550,612 914,073
Solid Waste Franchise Fees 1,973,848 1,085,428 1,015,997 2,003,714
In-Lieu Taxes 5,600,000 2,639,140 2,670,344 4,867,592
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As shown in the above table, revenues are in line with or exceeding prior year’s actual revenues
through the same time period. Accordingly, no General Fund revenue-related budget
adjustments are recommended at this time.
Proposed Budget Adjustments
Department staff have reviewed their respective line-item budgets and identified amendments
needed to address additional expenditures through the remainder of FY 2025-26. Due to the
rising costs of materials, supply chain constraints, labor related costs, and expenditures that were
not known or anticipated at the time the budget was adopted, proposed adjustments are being
presented to City Council to appropriate and reallocate funds within the General Fund and VPU.
Among the General Fund expenditures not anticipated at FY 2025-26 budget adoption and now
included in the midyear adjustments are consulting and legal services related to the Metro Link
Us Project, consulting services for a study on business tax contributions, and costs associated
with efforts by the “Big 4” coalition of industrial/commercial cities. Since approval of the
Memorandum of Understanding between the cities of Vernon, Commerce, Industry and Santa
Fe Springs in September of 2025, the Big 4 cities have engaged consultants to assist in
advancing their collective goals. Of particular importance, the Big 4 are pursuing legislative
changes at the State level to increase SB1 (Road Repair and Accountability Act) allocations for
each of the respective cities.
The proposed adjustments are included in Resolution No. 2026-007.
Vernon Public Utilities Forecast
Vernon Public Utilities (VPU) is committed to dependable, high-quality electric, water, natural
gas, and fiber services at competitive rates and the highest standards for reliability, while also
achieving California's clean energy goals. As a publicly owned utility, VPU is focused on its
customers, responsible operations, and a sustainable future. VPU regularly updates its forecast
to plan for customer demands, revenues, operating expenses, and capital expenditures. To that
end, in Fiscal Year 2025-26, VPU continues to manage its operating expenses and its capital
investment to ensure a reliable system infrastructure. Moreover, VPU continues to focus on
revenue growth in its transition to clean commerce, including data centers, green hydrogen, and
electrification to ensure that VPU is able to maintain utility services and infrastructure into the
future as well as being self-sufficient. VPU completed the Water Cost of Service and Rate Design
study and implemented an amended five-year water rate schedule that went into effect on
January 1, 2026. An Electric Cost of Service and Rate Design Study will begin during this fiscal
year with an expectation that it will be presented to City Council during the Fiscal Year 2026-27
budget process.
Fiscal Impact
Approval of this action would require an appropriation of $1,188,334 in the General Fund and
($1,461,160) reduction in the Electric Fund, from their respective Fund Balances as detailed in
Resolution 2026-007.
Attachments
1. Resolution No. 2026-007