Despite revenue challenges, city leaders expected to approve $111 million balanced budget for next fiscal year

Faced with slowing revenues and rising costs, Indio city leaders on Wednesday voiced approval for a balanced $111 million city budget for the coming fiscal year — relying on reserves to close a funding gap while warning that tough decisions may lie ahead.

While everyone else celebrates the New Year on Jan. 1, financial planners and city councilmembers are focused on finalizing a budget for the new fiscal year that starts July 1. That’s when new budgets have to be in place for the fiscal year 2025-2026. 

On Wednesday, the Indio City Council held a study session to review the budget and hear details about projected tax revenue and major capital improvement projects.

The proposed budget shows $105.9 million in revenue offset by $111 million in expenditures, with the difference covered by approximately $6.7 million in one-time resources from the previous fiscal year’s fund balance, resulting in a net surplus of $1 million.

The balanced budget comes despite what Finance Director Ruby Walla described as a “flattening” in revenue streams. Recent updates to the expected revenue from sales taxes and Measure X lowered projections slightly.

“During mid-year, we did update that we were seeing a decline in actual versus budgeted for 24-25 by about $400,000 on [both sales tax and Measure X],” said Walla.

Walla said the finance department had its quarterly sales tax meeting Wednesday morning, and that some growth was predicted but the progression was slow.

Despite the lower than expected revenue, City Manager Bryan Montgomery remained optimistic about the coming fiscal year. 

“We have Tillys, we have Sketchers, we have Wing Stop, Cane’s, all those things and all the potential additional revenue growth that will bring,” he said.

“We can’t continue to take $1 million, $1.4 million hits. We’ve got to come up with some creative ways to be able to look at ways to either change our service or partner with people.” — Indio Mayor Glenn Miller

Public safety remains the city’s largest expenditure at nearly $70 million, with $46 million going towards the Indio Police Department and $23.2 million for the fire department. A $1 million increase in costs for the fire department is expected, with its budget projected to rise from $22.3 million to $23.3 million in the coming fiscal year.

“We can’t continue to take $1 million, $1.4 million hits,” said Mayor Glenn Miller “We’ve got to come up with some creative ways to be able to look at ways to either change our service or partner with people.”

Councilmember Benjamin Guitron reminded his fellow elected leaders that the city had in the past looked into alternative service models for ambulance services. He noted that neighboring cities such as Palm Desert, Rancho Mirage and Indian Wells have formed cooperative arrangements for their ambulance services.

“We need to look at a different model,” Guitron said. “The model is already there. Those three communities have been together. They’ve been able to sustain it.”

Other large expenditures were related to ongoing capital improvement projects, some of which needed extra appropriations like the Police Headquarters requiring another $5 million and the Monroe interchange project possibly requiring another $8 million from the city.

The Monroe project went from an earlier estimate of $117 million to $174 million. Montgomery said that the project will be bid out in about a year.

“Let’s pray, literally, that it comes in much cheaper than this $40 million excess,” he said. If that’s the case, the $8 million could be used for other city projects.

Other projects like the Miles Avenue skate park and John Nobles park are in limbo, having received approval for funding but they haven’t started construction because locations and plans have not been finalized.

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