STAFF REPORT
ADMINISTRATIVE SERVICES DEPARTMENT
DATE: February 17, 2026
TO: Honorable Mayor and City Council
FROM: Henry Chen, Administrative Services Director
SUBJECT: FISCAL YEAR 2025-26 MID-YEAR BUDGET REVIEW AND SUPPLEMENTAL APPROPRIATION TO AMEND THE FISCAL YEAR 2025-26 GENERAL FUND
OPERATING AND CAPITAL IMPROVEMENT FUND BUDGETS
PRESENTATION OF THE GENERAL FUND FISCAL YEAR 2024-25 YEAR- ENDING RESULT AND THE FISCAL YEAR 2025-26 MID-YEAR BUDGET REVIEW
CEQA: Not a Project
Recommendation: Receive and File
RESOLUTION NO. 7674 AUTHORIZING A SUPPLEMENTAL BUDGET
APPROPRIATION IN THE AMOUNT OF $1,030,000, AMENDING THE FISCAL YEAR 2025-26 GENERAL FUND OPERATING AND CAPITAL
IMPROVEMENT FUND BUDGETS
CEQA: Not a Project
Recommendation: Adopt
SUMMARY
A PowerPoint presentation of the General Fund Fiscal Year 2024–25 year-end results and the Fiscal Year 2025–26 mid-year budget status will be reviewed.
Based on current estimates for Fiscal Year 2025-26, the General Fund is projected to end the year with a positive operating result of $1.8 million. Due to this projected positive result, two budget appropriations totaling $1,030,000 are being requested for a contribution to the Pension Stabilization Fund, as well as a change in funding source for a previously approved capital project.
Fiscal Year 2025-26 Mid-Year Budget Review
February 17, 2026
It is recommended that the City Council receive and file the report on the General Fund Fiscal Year 2024–25 year-end results and the Fiscal Year 2025–26 mid-year budget review; and adopt Resolution No. 7674, authorizing a supplemental budget appropriation in the amount of $1,030,000, amending the Fiscal Year 2025-26 General Fund Operating and Capital Improvement Fund Budgets.
DISCUSSION
A mid-year budget review is conducted to assess the City’s financial performance at the midpoint of the fiscal year and to evaluate overall fiscal conditions. This review provides an opportunity to ensure that the assumptions made during budget adoption are still valid and that financial trends are aligning with expectations.
At the midpoint of Fiscal Year 2025-26, the General Fund is projected to achieve a positive operating result. General Fund revenues are anticipated to exceed the budgeted amount by approximately $500,000, while expenditures are expected to increase by approximately $700,000. Expenditure increases are a result of increased equipment purchases carried over from prior fiscal years; however, the increases are directly offset by transfers in from sinking funds, resulting in no net change to the Budget. Transfers into the General Fund are projected to exceed the budgeted amount by $2.1 million due to reimbursements from the Equipment Replacement Fund for eligible equipment purchases. Collectively, these forecasts are expected to result in a positive operating outcome of $1.8 million. After the proposed appropriation of $1.0 million is made, the operating results are estimated to result in a positive balance of approximately $811,000.
FY 25-26 FY 25-26 FY 25-26 FY 25-26
Original Budget Amended Budget Estimates Variance
Beginning Fund Balance 31,719,300$ 31,719,300$ 31,719,300$ -$ Estimated Revenues 92,490,400$ 92,490,400$ 92,993,700$ 503,300$ Transfers In 3,676,800 3,676,800 5,772,300 2,095,500
Estimated Expenditures (90,366,800) (90,506,902) (91,243,000) (736,098) Proposed Appropriation - - (1,000,000) (1,000,000) Revenue and Transfers In Over Expenditures 5,800,400$ 5,660,298$ 6,523,000$ 862,702$ Transfers Out to Equipment Replacement Fund (1,900,000) (1,900,000) (1,900,000)- Transfers Out to Capital Improvement Fund (2,900,000) (2,900,000) (2,900,000)- Transfers Out to Other Funds (912,000) (912,000) (912,000)- Total Transfers Out (5,712,000) (5,712,000) (5,712,000)- Operating Results 88,400 (51,702) 811,000 862,702
Ending Fund Balance 32,719,700$ 31,667,598$ 32,530,300$ 862,702$
Fiscal Year 2025-26 Mid-Year Budget Review
February 17, 2026
No significant budgetary issues have been identified through this review. Additional updates may be presented to the City Council as needed throughout the remainder of the fiscal year progresses.
Additional Appropriations:
Two budget appropriation requests are being proposed as part of the mid-year budget review.
1. A contribution of $1.0 million to the Pension Stabilization Fund from the General Fund. This item was included in the prior Fiscal Year budget; however, the contribution was deferred due to budgetary and investment uncertainty at that time. With the close of FY 2024–25 reflecting positive financial results— namely a $4.6 million surplus—the contribution is now being recommended.
This action is intended to support the City’s long-term fiscal health and sustainability by reducing future pension costs and providing flexibility during economic downturns.
2. Change in funding source for the resurfacing of the basketball court at Eisenhower Park. This item was originally budgeted using the Civic Center Field Reserve; however, it was later determined that this project did not represent an eligible use of that reserve. Therefore, a budget amendment in the amount of $30,000 from the Capital Improvement Fund is being requested for the project to be completed within the current Fiscal Year.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it is deemed to have no impact on the environment.
FISCAL IMPACT
The projected positive operating results of $1.8 million in the General Fund are sufficient to support the appropriation of $1.0 million to the Pension Stabilization Fund. The current reserve fund balance from the Capital Improvement Fund is able to support the additional appropriation needed to complete the resurfacing of the Eisenhower Park basketball court.
Fiscal Year 2025-26 Mid-Year Budget Review
February 17, 2026
RECOMMENDATION
It is recommended that the City Council determine that these actions do not constitute a project under the California Environmental Quality Act (“CEQA”); and:
1. Receive and file the report on the General Fund Fiscal Year 2024-25 Year- Ending Result and the Fiscal Year 2025-26 Mid-Year Budget.
2. Adopt Resolution No. 7674 authorizing a supplemental budget appropriation in the amount of $1,030,000, amending the Fiscal Year 2025-26 General Fund Operating and Capital Improvement Fund Budgets.
Attachment: Resolution No. 7674
1 RESOLUTION NO. 7674
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, AUTHORIZING A SUPPLEMENTAL BUDGET
APPROPRIATION IN THE AMOUNT OF $1,030,000, AMENDING THE FISCAL YEAR 2025-26 GENERAL FUND OPERATING AND CAPITAL
IMPROVEMENT FUND BUDGETS
WHEREAS, a mid-year review of the Fiscal Year 2025–26 budget has been conducted to assess financial performance and budgetary trends; and WHEREAS, the review indicates that the overall fiscal condition is favorable and that sufficient funds are available to support additional appropriations; and WHEREAS, it has been determined that additional appropriations are necessary for (1) a contribution to the Pension Stabilization Fund in the amount of $1,000,000 and (2) a change in funding source for the resurfacing of the basketball court at Eisenhower Park in the amount of $30,000; and
WHEREAS, the Administrative Services Director has projected that there are adequate reserves in the General Fund and Capital Improvement Fund Reserves to fund the additional appropriation needed for these services.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. That the sum of $1,030,000 is hereby appropriated from available General Fund reserves and the Capital Improvement Fund to fund the additional items as described above.
2 SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this 17th day of February, 2026.
______________________________
Mayor of the City of Arcadia
ATTEST:
__________________________
City Clerk
APPROVED AS TO FORM:
__________________________
Michael J. Maurer
City Attorney