A deficit was initially predicted, Zawadzki said, but special sales tax revenues were higher than expected and there were some savings in salaries and expenses, due to vacant positions. The biggest change was in on-call consultant fees, which were budgeted higher than the city’s actual use. 

Of the surplus, $500,000 is being carried over into the current budget to complete projects not finished last fiscal year. Zawadzki said that leaves $0.6 million available for reprogramming. 

Looking at the first quarter budget projections, Zawadzki said, the expected ending fund balance for Fiscal Year 2025-2026 is $16.1 million, with ending reserves at 48.1%. There is a deficit prediction of $1.2 million but with the surplus carryover of $500,000, the deficit is adjusted to $0.7 million.

Zawadzki clarified that $866,209 of that projected deficit is one-time expenditures, “so you still have a structurally balanced budget at this time. It’s just the carryovers that are making it look skewed.”

Staff requested budget amendments to align with current projections and council direction on how to re-allocate the available surplus funds. 

During public comment, a resident said that he worried that the projected deficits are due to overspending. 

“Our community is in a growth phase and it can be difficult to project the revenues,” Zawadzki said.

It is typical to operate with a potential projected deficit because the city uses conservative revenue estimates, according to the finance director.

“The worst thing that I could do is present to you that you have funds available to spend that you don’t have,” Zawadzki said. “So while our expense projections are generally fairly accurate throughout the year, the revenues can be difficult.”

Property taxes and sales taxes are both currently growing, Zawadzki said, but if development suddenly slows, then the city will make strategic changes to the budget as needed to ensure the reserves are not drawn down too far. 

The budget amendments were approved 4-0, with Mayor Steven Bird absent. Staff will monitor revenues and expenses and a mid-year budget update will be presented next March.

City Council next considered a purchase agreement for a new fire engine from Golden State Fire Apparatus. The build time for a new engine is 49 to 53 months, so the expected delivery would be in 2030.

Under the Dixon Fire Department’s engine replacement plan, engines spend their first 10 years as front-line vehicles and the next 10 years as reserves. Engines are also eligible for reserve status when they reach 100,000 miles. Engine 84, a 2008 model with 125,622 miles, has undergone major engine repairs over the last 15 years and is eligible for replacement under the plan guidelines. 

A new engine will cost $1.06 million if pre-paid or $1.27 million if paid on delivery. The Dixon Fire Protection District has committed to covering 30% of the cost, because approximately 30% of calls for fire service are outside the Dixon city limits.

During public comments, a resident expressed concern that the city could lose money if the engine was paid up front and the company was to go bankrupt and be unable to fulfill the order. 

Vice Mayor Thom Bogue asked if there is insurance on the purchase agreement and staff said that there is a performance bond to protect the city’s investment. 

The council voted 4-0 to approve the purchase with the pre-paid option and to use the surplus funds from fiscal year 2024-2025 to cover the cost. 

The council considered a resolution to ratify City Manager Jim Lindley’s appointment of Melissa Eads to the position of assistant city manager, along with an accompanying budget adjustment for a $250,000 base salary plus additional benefits. 

Lindley said that Eads has “a track record of success” with many years of experience as a city administrator in Sonora and Angels Camp. She also served as executive director of the Calaveras Council of Governments.  

“We would like to bring her on to learn my job,” said Lindley, so there is a replacement for when he eventually retires.

Lindley added that there is plenty of development going on in the city and it would be beneficial to have another person share the workload. 

Eads said that she is grateful for the opportunity.

“I’m looking forward to it and it’s wonderful to meet the City of Dixon.”

Council members welcomed Eads to the city and said this position will fill an important need. They voted 4-0 to approve the appointment. 

City Attorney Douglas White also announced that City Manager Lindley recently received the distinction of being the longest serving city manager in California in a single city.

The next Dixon City Council meeting is scheduled for Nov. 4.