Visalia operates on a financial calendar called a fiscal year, which runs from July 1 to June 30. Unlike the federal government, which can spend more than it has, the city is legally required to keep a balanced budget. This mandate means Visalia cannot plan to spend more than the money it takes in from taxes, fees, and other sources.
The city’s financial plan is split into two main sections. The Operating Budget covers daily costs like staff pay and community services. Local taxes, fees, and fines provide the money for these programs. The second section is the Capital Improvement Program. This multi-year plan focuses on building or fixing long-term projects like roads and city buildings that are meant to last at least five years.
Creating this financial plan happens in three stages. While the city tracks its spending every year, it uses a two-year planning cycle to help look further into the future. Phase One is the planning and assessment stage. This can begin as early as July 1, a full year before the new budget starts.
Phase Two officially runs from December through March, but preparations start in October. This stage begins with a formal kickoff meeting between the City Manager, Finance Director, and department heads. The City Manager sets goals and guidelines, and departments then have until March to submit their spending requests.
Phase Three, the final stage, begins in late winter and runs through June. Throughout these months, the Finance Director holds workshops to present a draft budget to the City Council. Residents can participate in this stage by taking city surveys, attending public hearings, or contacting officials directly. The City Council then votes to officially adopt the budget in late June.
Beyond local planning, state laws also play a role. For example, California’s Proposition 4, or the Gann Limit, sets a yearly limit on how much tax money the city can spend. Once the budget is set, the City Manager can move money between specific categories within the same fund. However, moving money between major city funds—which act like separate bank accounts for different purposes—requires City Council approval.
This level of oversight is designed to prevent financial crises. For example, Detroit, Michigan, went bankrupt in 2013 after years of rising costs and a shrinking number of taxpayers. By following a structured cycle, Visalia aims to manage its finances properly and remain on solid financial ground.
