The Gustine City Council held a second workshop hearing in regards to the 2026-27 fiscal budget last Tuesday. A budget was not adopted.

Following the first hearing on June 2, city staff were directed to reevaluate the general fund and its expenses to align better with the budget. In the June hearing, three recommendations were made by Finance Director Jenny Morrison of what to do with the proposed budget.

The first was to allocate a combined $61,844 from the city’s User Utility Tax (UUT) towards the funding for recreational services, the Al Gomon Community Center and the Gustine Swimming Pool.

The second option was to show the deficits in the recreational services, general fund, the community center and the city’s swimming pool. All four accounts are projected to have a combined deficit of $702,824.

Lastly, the third and final choice would either be a recommendation from the city council or a combination of the first two options.

Tuesday’s workshop focused on a revised budget that includes cost reductions without eliminating positions and using a salary split reallocation from the general and recreational funds to water, sewer and refuse funds, Morrison said.

34% of total salary allocation were moved out of the subsidies from the Gustine’s general fund, recreational and the community center. Fifteen percent was reallocated to the water fund, 11% to the sewer fund and 8% towards the refuse fund.

In addition to the changes, there were cuts to budgets for operational expenses, training, contract services and motor vehicle maintenance. The changes are projected to reduce the city's general fund exposure to $225,346.

Gustine is expected to have a total revenue with all funds at $13.3 million, but the city is expected to spend $13.5 million in expenditures. Both amounts include resources from Capital Improvement Projects (CIP). The general fund revenue is $3.32 million with an expenditure of $3.38 million, resulting in a $57,400 deficit.

The community center is expected to receive $12,000 in funding, but it will be more than four times the cost to operate at $51,834, resulting in a $39,843 deficit. Gustine is projected to bring in a deficit of $133,565 through its swimming pool fund with operating expenses at $170,565 and a revenue of $37,000. Operating costs continue to increase deficits as recreation and fire services will have a combined $149,821 deficit.

The refuse fund could bring in a revenue of $833,000, but is projected to have a deficit of $177,362 from a combined $950,362 from CIP and operating costs. Despite $2.4 million in revenue, the sewer fund could bring a $55,832 deficit. The water and storm drain funds are projected to bring a combined deficit of $27,497.

Mayor Pro Tem Rich Ford said city staff should look at dividing costs from other funds given the deficits. “Part of that street sweeping cost, I think should be allocated to storm drains because that’s definitely a big portion of our storm drain system, as cleaning those gutters,” Ford said.