During an initial review of Riverside’s proposed budget for the next two years, Councilmember Philip Falcone pushed back against plans to reduce public works spending as a means to address a projected deficit within the general and Measure Z funds.
“I won’t be in support of any budget that makes any cuts to public works,” Falcone said during the May 19 meeting. “The priorities that have been given to us by the public are pretty obvious and cut and dry: Do not cut from public safety or public works.”
Sergio Aguilar, the city’s deputy finance director, presented the proposed biennial budget to the council ahead of next month’s public hearing. He said the city was expected to have a total budget of $1.57 billion next fiscal year and $1.59 billion the year after that, including both the city’s operating budget and planned capital projects.
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Last summer, the council adopted an amended budget of $1.53 billion for the current fiscal year, which ends June 30.
Aguilar said the city’s general and Measure Z funds, which make up about 34% of the city’s operating budget, were both projected to face multi-million dollar deficits over the next two years, though he noted the city’s financial position was expected to remain stable.
According to the staff report, the general fund is set to face a $27 million shortfall in the upcoming fiscal year and $34 million in the 2027-28 fiscal year. The Measure Z fund is expected to face a $9 million deficit this upcoming year and a $12.4 million deficit in the 2027-28 fiscal year.
Residents are set to vote on both increasing and extending the Measure Z sales tax next month, but Aguilar said the projected deficits were based on the tax at its current rate.
“If the measure passes, there would be some additional revenue generated in [fiscal year] 2026-27 associated with the measure,” he said in an email to The Riverside Record. “City council would need to take action during the fiscal year to authorize any additional expenditure associated with the new measure.”
Aguilar said the projected fund deficits were caused by a mix of slowing tax revenues, rising personnel costs and other inflationary pressures.
To address the projected deficits, staff recommended several cost-saving measures, like allowing about 38 positions to remain vacant while cutting down on general fund and Measure Z spending, including decreases in public works expenditures. Staff also recommended using surplus funds for one-time spending and increasing user fees for a range of city services.
“We are making reductions to live within our means, while at the same time making critical increases to some critical needs identified by police and fire,” Aguilar said.
The public works department, according to staff’s proposal, could see almost $8 million in cuts over the next two years.
Public Works Director Nathan Mustafa said some of the cuts, especially to repavement projects, would be supplemented by Riverside County Measure A tax dollars recently made available to the city. He added his department also tends to receive millions more in federal and state grants to repave the roads.
However, Falcone said he believed offsetting public works spending cuts would not be acceptable to his constituents, especially when he has heard ongoing complaints about the city’s infrastructure. He instead suggested it would be more beneficial to find reductions elsewhere, including from the city council’s budget, to ensure more funding was available for public works projects.
But Mayor Patricia Lock Dawson said cutting costs elsewhere would be a drop-in-a-bucket compared to the high cost of road repavement.
“A hundred thousand dollars could make a difference in medians, in sidewalks and curbs and gutters,” Falcone said in response.
City Manager Mike Futrell said staff presented a cautious budget due to the uncertain economic climate, but said he expected his team to return throughout the coming year to restore funding for projects as money became available.
The council voted 4-1 to move forward with plans to hold a public hearing June 23 to approve the biennial budget. Falcone voted against, and Councilmembers Chuck Conder and Steve Hemenway were absent.
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