BUDGET

A budget tells you where you are today. A forecast tells you where you're headed.

When people hear that the City of Lodi adopted a balanced budget, it's easy to assume everything is fine.

It isn't that simple.

A budget can be balanced today while the long-term financial outlook continues to deteriorate. That's exactly why cities prepare multi-year financial forecasts.

Lodi's latest budget summary projects a $4.8 million structural deficit over the next five years. It also notes that while revenues are projected to increase, they are not expected to keep pace with the City's operating needs.

Balancing this year's budget required difficult choices. Departments reduced their budgets by $2.8 million. A proposed $2.7 million building maintenance fund was eliminated. And approximately half of the City's 139 capital improvement projects show no funding in FY26 and are identified as planned needs awaiting future-year funding.

But the part of the forecast that concerns me most is what happens to our reserves.

If nothing changes, the City's own five-year forecast projects the Economic Reserve declining from approximately $6.4 million to zero and the Catastrophic Reserve declining from approximately $6.4 million to zero. The Pension Stabilization Fund is projected to decline from $32.8 million to $20.7 million.

Those reserves are one-time resources. They can help balance a budget for a period of time, but they do not solve an ongoing mismatch between revenues and expenses.

And even those numbers don't tell the entire story.

The City's budget summary identifies more than $97 million in multi-year maintenance and upgrade needs across City departments—from streets and public facilities to vehicles, equipment and other critical infrastructure. Deferring those needs doesn't make them disappear. In many cases, waiting simply makes them more expensive.

Over the last 20 years, I've learned that good financial management requires looking beyond what's in front of you today. You have to understand where today's decisions are taking you tomorrow.

That's why I believe we need to pay as much attention to Lodi's five-year forecast as we do to this year's balanced budget.

Before we can solve a problem, we have to acknowledge it. And once we acknowledge it, we have to make addressing it a priority.

The City's forecast looks five years into the future. City Council terms are four years. That means the decisions made during the next Council term will cover almost the entire period shown in this forecast.

We cannot afford to get these four years wrong.

But we also have an opportunity.

This election could give Lodi a majority on the City Council with business and financial management experience. That experience matters—not because every decision is about dollars and cents, but because sound financial management allows us to focus our resources on the things that matter most: public safety, roads and infrastructure, our parks, and creating a more business-friendly environment that can strengthen our local economy.

If we spend the next four years focused primarily on balancing one annual budget at a time without addressing the underlying structural problem, we will arrive near the end of this forecast with far fewer options than we have today. By then, according to the City's own projections, two major reserves will have been depleted and millions more will have been drawn from the Pension Stabilization Fund.

The time to change course is while we still have choices.

I don't enjoy talking about numbers like these. I'd much rather be talking about how Lodi can become more business-friendly, how we improve our quality of life, and what we can do to make our city stronger for the future.

But those conversations depend on a financially healthy city.

The good news is that Lodi's financial challenges are not insurmountable. We have time to make different choices, strengthen our local economy, establish clearer priorities and put the City on a more sustainable financial path.

But first, we have to be willing to acknowledge what the forecast is telling us.

A balanced budget tells us where we are today. The forecast tells us where we're headed. We need to pay attention to both.