Banning City Council
August 26, 2026

AGENDA

ADJOURNED CITY COUNCIL - SPECIAL MEETING (WORKSHOP)

CITY OF BANNING, CALIFORNIA
August 26, 2026 Council Chambers
4:00 p.m. 99 E. Ramsey Street
In Chambers Banning, CA 92220
The following information comprises the agenda for the special meeting of the Banning City Council, a joint meeting of the City Council and Banning Utility Authority, and the Banning City Council sitting in its capacity as the Banning Successor Agency Board.

This meeting is being held via Zoom so that members of the public may observe and participate in this meeting electronically. If you participate in this meeting via Zoom, you are agreeing to abide by the City's Zoom Community Standards for Public Meetings (provided in full on the last page of the agenda). Esta reunión se lleva a cabo en la Cámara y a través de Video/Teleconferencia en Zoom para que los miembros del público puedan observar y participar en esta reunión de manera electrónica. Si elige participar en esta reunión a través de Zoom, acepta cumplir con los Estándares comunitarios de Zoom para reuniones públicas de la ciudad (que se proporcionan en su totalidad en la última página de la agenda).

To observe and participate in the online video portion of the meeting through your personal computer or device, follow this link:
https://us02web.zoom.us/j/85614073658?pwd=fa1o06fQNWoNxe5as2b6JZ4mxkcaUR.1 Dial in: +1 669 900 9128
Meeting ID: 856 1407 3658
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Join Via Audio/Passcode: 8464147627 - *9 raise hand
Per the City of Banning Manual of Procedural Guidelines, matters taken up by the Council before 10 p.m. may be concluded, but no new matters shall be taken up except upon a majority vote of the council members present and voting. Such an extension shall only be valid for one hour and each hour thereafter shall require a renewed action for the meeting to continue.

1. CALL TO ORDER

2. WORKSHOP

2.1 Continuation of the Fiscal Year 2026-27 Proposed Operating Budget - Workshop Presentation and Discussion
Recommendation: Staff recommends that the City Council:

1. Receive and file the presentation of the Fiscal Year 2026-27 Proposed Operating Budget;

2. Review the proposed General Fund, Special Revenue, Enterprise, and Internal Service Adjourned City Council - Special Meeting (Workshop) Agenda August 26, 2026
1 1
budgets;

3. Provide direction to staff regarding budget priorities, service levels, and any requested adjustments; and

4. Direct staff to schedule the Proposed FY 2026-27 Budget for a public hearing and consideration of adoption at a regularly scheduled City Council meeting in September.

3. PUBLIC COMMENTS - Agenda Items Only

4. ADJOURNMENT
Zoom Community Standards for Public Meetings
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Public Comment from Zoom attendees will immediately follow in-person comment from members of the public in Council Chambers.

If you fail to adhere to these community guidelines, you may be removed for disrupting the meeting occurring in Council Chambers. You may rejoin the meeting but may be removed for each violation of these community standards.

The chat function will be disabled for all City Council meetings on Zoom.

Estándares comunitarios de Zoom para Reuniones Públicas Al participar en esta reunión en Zoom, usted acepta cumplir con los Estándares Comunitarios para Reuniones Públicas de la ciudad de Banning. Los que atienden por Zoom que no cumplan con estos estándares pueden ser retirados de la sala de reuniones.

Su micrófono debe permanecer en silencio, y solo puede reactivar su micrófono cuando / si es reconocido por el alcalde.

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La función de chat estará deshabilitada para todas las Reuniones del Ayuntamiento en Zoom.

AFFIDAVIT • DECLARACIÓN JURADA
IT IS HEREBY CERTIFIED under the laws of the State of California that the above agenda was posted on the City's website (www.banningca.gov) as well as the Bulletin Board at Banning City Hall, located at 99 E Ramsey Street, Banning, CA 92220, at least 24 hours in advance of the meeting.
_________________________
Vickie Sellers, Elected City Clerk
Adjourned City Council - Special Meeting (Workshop) Agenda August 26, 2026
2 2
Secretaria Municipal Electa
PUBLIC NOTICE • NOTICIA PÚBLICA
Meeting Agendas and Notices
Interested in receiving email and/or text notifications of upcoming City Council meetings? Sign up for meeting notifications through the City's website. Pursuant to amended Government Code §54957.5(b), staff reports and other public records related to open session agenda items are available on the City's website (www.banningca.gov/).

Public Comment
Agenda Items
Any member of the public may address this meeting of the City Council on any item appearing on the agenda. A five-minute limitation shall apply to each member of the public and no member of the public shall be permitted to share their time with any other person.

Non-Agenda Items
Any member of the public may address this meeting of the City Council on any item which does not appear on the regular meeting agenda but is of interest to the general public and is an item upon which the City Council may act. A three-minute limitation shall apply to each member of the public and no member shall be permitted to share their time with any other person. No action shall be taken, nor discussion held by the City Council, on any item which does not appear on the agenda, unless the action is otherwise authorized in accordance with the provisions of subdivision (b) of §54954.2 of the Government Code.

Special Assistance/Accessibility Requests
In compliance with the Americans with Disabilities Act, any member of the public may request that the agenda and agenda packet be mailed to them. If you need special assistance to participate in this meeting (such as translation services), please contact the City Clerk's Office. Advanced notification of at least 48 hours prior to the meeting will allow the city to make arrangements to ensure your accessibility.
¿Necesita servicios de traducción para participar? Contacto Oficina del Secretario de la Ciudad.

CONTACT • CONTACTO
City Clerk's Office | 951-922-3102 | [email protected] 99 East Ramsey Street, Banning, California 92220
Adjourned City Council - Special Meeting (Workshop) Agenda August 26, 2026
3 3

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Elizabeth Gibbs, City Manager
PREPARED BY: Jennifer Terry, Finance Director
Jennifer Terry, Finance Director
MEETING DATE: August 26, 2026
SUBJECT: Continuation of the Fiscal Year 2026-27 Proposed Operating Budget - Workshop Presentation and Discussion STAFF RECOMMENDATION:

Staff recommends that the City Council:

1. Receive and file the presentation of the Fiscal Year 2026-27 Proposed Operating Budget;

2. Review the proposed General Fund, Special Revenue, Enterprise, and Internal Service budgets;

3. Provide direction to staff regarding budget priorities, service levels, and any requested adjustments; and

4. Direct staff to schedule the Proposed FY 2026-27 Budget for a public hearing and consideration of adoption at a regularly scheduled City Council meeting in September.

BACKGROUND:

On August 18, 2026, and August 20, 2026, City Council held two scheduled workshops on the FY 2026- 27 proposed budget. Between the two public workshops, City Council heard public testimony, staff presented the City Manager's budget message, the proposed Budgetary and Fiscal Policies, and the General Fund departmental budgets. This third workshop is intended to review the remaining proposed budget items, ask any remaining questions, and provide final direction prior to the budget being brough forward for formal adoption.

On February 24, 2026, City Council adopted its Strategic Plan which established the priorities used to guide development of the Fiscal Year 2026-27 budget. On June 23, 2026, City Council adopted Resolution No. 2026-89 establishing continuing budgets and authorizing expenditures/appropriations until the earlier of September 30, 2026 or the adoption of operating budgets for Fiscal Year 2026-2027.

Also at that meeting, City Council adopted Resolution No. 2026-102 declaring a fiscal emergency due to extraordinary financial circumstances threatening the City's ability to maintain essential municipal services.

This workshop is the first of two public budget workshops scheduled prior to the public hearing and consideration of adoption of the Final Fiscal Year 2026-27 Budget.

The draft budget presented tonight is structurally balanced on a citywide basis and reflects a structurally balanced General Fund. Staff is seeking Council feedback on the assumptions, priorities, and service levels reflected in the Draft Budget before it is finalized for adoption.

JUSTIFICATION:
4 Conducting a budget workshop in advance of formal adoption allows the City Council to review the proposed Fiscal Year 2026-27 budget in detail, ask questions of staff, and provide policy direction before the budget is brought forward for formal approval. This step ensures the adopted budget reflects Council priorities for service levels and fiscal sustainability.

Discussing these factors in a workshop setting, rather than at the time of adoption, gives staff the opportunity to incorporate Council feedback into the final budget document and reduces the likelihood of significant revisions late in the process.

FISCAL IMPACT:

There is no direct fiscal impact associated with receiving and filing this report. The Draft Budget presented tonight is preliminary; the fiscal impact of the City's Fiscal Year 2026-27 spending plan will be established upon City Council adoption of the Final Budget, currently anticipated at a public hearing in September 2026.

ATTACHMENTS:

1. Resolution No. 2026-89.pdf

2. Resolution No. 2026-102.pdf

3. Banning CM Budget Message Fy 26-27.pdf

4. Banning Revised FMP.pdf

5. Banning SP Appendix A - Fnl Fnl.pdf

6. Banning SP FINAL VERSION - Fnl Fnl.pdf

7. Fund Listing and Description.pdf

8. FY27_Proposed_Operating_Budget_Fund_Estimated Fund Balances.pdf

9. General Fund Budget Summary and Worksheets.pdf

10. FY 2026-2027 Proposed City-Wide Org Chart.pdf

11. FY 2026-2027 Proposed PD Org Chart.pdf

12. Banning_FY2026-27_Personnel_Summary Final.pdf

13. FY27 Budget Summaries for ISF Funds.pdf

14. FY27_Proposed_Operating_Budget_Fund_Summaries.pdf
5 2026-89
RESOLUTION 2026- 89

RESOLUTION OF THE BANNING CITY COUNCIL AND BOARDS OF THE

BANNING UTILITY AUTHORITY AND BANNING SUCCESSOR AGENCY,

ESTABLISHING CONTINUING BUDGETS AND AUTHORIZING

EXPENDITURES/ APPROPRIATIONS UNTIL THE EARLIER OF SEPTEMBER 30, 2026 OR THE ADOPTION OF OPERATING BUDGETS FOR FISCAL YEAR 2026- 2027
WHEREAS, the City Council of the City of Banning (" City") the Banning Utility Authority (" Authority"), and the Banning Successor Agency (" Successor Agency") are responsible for adopting operating budgets for their respective entities; and
WHEREAS, the City Council, Banning Utility Authority, and Banning Successor Agency passed the Fiscal Year 2025- 2026 Operating Budget; and
WHEREAS, the City Manager has provided a workout plan update at each City Council Meeting regarding the financial situation ofthe General Fund; and
WHEREAS, the workout plan requires a General Fund balanced budget to be presented for approval using only reoccurring revenues. Staff is evaluating all revenues and expenditures to determine what expenses can remain in the Fiscal Year 2026- 2027 Operating Budget; and WHEREAS, the City, Authority, and Successor Agency require the continued provision of municipal services and the payment of lawful obligations pending final adoption of the 2026- 2027 Fiscal Year - Annual Operating Budget; and
WHEREAS, With the assistance of City staff, the City Council, Banning Utility Authority, and Banning Successor Agency will be working on developing and reviewing the Fiscal Year 2026- 2027 Operating Budget and Capital Improvement schedules and have directed that expenditures/ appropriations continue at the same Fiscal Year 2025- 2026 Adopted Budget levels until the earlier of September 30, 2026 or upon the Fiscal Year 2026- 2027 Operating Budget being adopted by the City Council, Banning Utility Authority, and Banning Successor Agency; and
WHEREAS, the City Council, Banning Utility Authority, and Banning Successor Agency find that authorization of a continuing budget and expenditures/ appropriations as set forth herein, is necessary to preserve public health, safety, and welfare and ensure continuity of governmental operations; and WHEREAS, expenditures during the period of this continuing resolution shall be controlled through a prorated funding rate, based on the Fiscal Year 2025- 2026 Adopted Budget; and WHEREAS, the City Manager intends to and will work diligently to present a Fiscal Year 2026- 2027 Operating Budget to the City Council, Banning Utility Authority, and Banning Successor Agency for consideration no later than September 30, 2026.

NOW THEREFORE, the City Council of the City of Banning, Banning Utility Authority, and Banning Successor Agency do hereby ordain as follows:

SECTION l. RECITALS. The foregoing recitals are true and correct and are incorporated herein by this reference.

Resolution ---

6 2026-89
SECTION 2. CONTINUING BUDGET AUTHORITY. The City Council, Banning Utility Authority, and Banning Successor Agency hereby authorize a continuing budget and spending/ appropriation authority commencing on July 1, 2026, continuing through the earlier ofSeptember 30, 2026 or upon the City Council adopting the Fiscal Year 2026- 2027 Operating Budget.

SECTION 3. Authorized Expenditures. During the period of the continuing budget and appropriations, the City Manager, or designee, is authorized to incur expenditures and obligations at one quarter ( 1/4) of the prior year' s level of spending that are necessary for the continued operation of the City, Authority, and Successor Agency, including the following:

A. Expenditures necessary to meet payroll, employee benefits, debt service obligations, insurance premiums, utilities, contractual obligations, grant- funded activities, emergency expenditures, and other legally required payments and other expenses needed for the essential functions of the City, Authority, and Successor Agency as determined by the City Manager.

B. Capital improvement projects and capital purchases may proceed to the extent previously authorized by the City Council, Banning Utility Authority, or Banning Successor Agency, required by contract, supported by restricted funds, necessary to protect public health, safety and welfare, or approved by the City Manager.

SECTION 4. REVENUE COLLECTION AND ADMINISTRATION. The City Manager and other authorized officers are directed to continue the collection, receipt, deposit, accounting, and administration of all City, Authority, and Successor Agency revenues in accordance with applicable law and policies.

SECTION 5. BUDGET ADOPTION. Nothing in this Resolution shall be construed as adopting the Fiscal Year 2026- 2027 Operating Budget. The City Council, Banning Utility Authority, and Banning Successor Agency intend to consider and adopt the annual budget as soon as practicable.

SECTION 6. SEVERABILITY. If any provision of this Resolution or its application to any person or circumstance is held invalid, the remainder ofthis Resolution, including the application of its provisions to other persons or circumstances, shall not be affected and shall continue in full force and effect.

SECTION 7. EFFECTIVE DATE OF RESOLUTION. Thatthis Resolution shall take effect immediately upon its adoption.

SECTION 8. CERTIFICATION. That the City Clerk shall certify the passage ofthis Resolution and shall cause the same to be published according to law.

Resolution __

SIGNATURE PAGE BELOW]
7 2026-89
PASSED, APPROVED, AND ADOPTED this 9th day of June, 2026.

ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning
APPROVED AS TO FORM:

Joh
Sl& v , , urphy & Pinkney,
LLP
Resolution __

Rich~ rd ey; Mayor
City of Banning and Chair ofBanning Utility
Authority and Banning Successor Agency
8 CERTIFICATION:.

I, Sandra Calderon, Deputy City Clerk ofthe City ofBanning, California, do hereby certify that Resolution 2026-89 was duly introduced at a regular meeting of the City Council of the City of Banning, was duly adopted at a regular meeting of said City Council on the 9th day of June 2026, by the following vote, to wit:

AYES: Barrington, Flynn, Miller, Royce, Wallace
NOES: None
ABSENT: None
ABSTAIN: None
Resolution 2026- 89

Sandra Calderon, Deputy City Clerk
City ofBanning, California
9 RESOLUTION 2026- 102

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

DECLARING A FISCAL EMERGENCY DUE TO EXTRAORDINARY FINANCIAL

CIRCUMSTANCES THREATENING THE CITY' S ABILITY TO MAINTAIN ESSENTIAL

MUNICIPAL SERVICES
WHEREAS, the City of Banning is committed to maintaining essential municipal services for the protection of the public health, safety, and welfare of its residents; and WHEREAS, the City Council recently conducted a May 14, 2026, Workshop-- Banning' s Workout Plan to Sustainability, where it received financial information demonstrating significant fiscal challenges affecting the City' s General Fund and overall financial condition; and WHEREAS, the City has been operating with annual General Fund budgets that were not structurally balanced for the last six years, which resulted in a reduction of a healthy FY 19-20

13.1 million Beginning Fund Balance ( savings account) to what we expect to be a n~gative

12.8 million by June 30, 2026, a dramatic $ 25.9 million reduction; and WHEREAS, in the past, the City relied on one- time resources, which made it inaccurately appear the annual budgets were structurally balanced ( ongoing revenues cover ongoing expenses), thus avoiding the very conversations that we are having today; and WHEREAS, the one- time resources have simply disappeared this fiscal year, and with unrealistic revenue projections in a budget that was adopted back in June 2024, resulting in an untenable General Fund-- Fund Balance estimate of negative $ 12.8 million at June 30, 2026, and if no dramatic action is taken now this deficit will likely more than double to negative $ 26 million through Fiscal Year 26-27; and
WHEREAS, the previous annual budgets lacked the appropriate level of transparency on the finances of the City; and
WHEREAS, the City Council discussed a comprehensive new Budgetary and Fiscal Policy at their May 14th Workshop that would reduce th_e likelihood of repeating the past; and WHEREAS, the City Manager has provided City Council with a Workout Plan to Sustainability with a Phase 1, which would include immediate but difficult budget reductions and other measures to " stop the fiscal bleeding" and eliminate the FY 26-27 General Fund budget operating deficit; and
WHEREAS, given the size of this inherited operating deficit, $ 14 million as a percentage of the current General Fund budget ($ 37 million), this will be a very difficult process leading to unprecedented budget reductions to stabilize the City' s General Fund; and WHEREAS, the City Manager is working with City staff and consultants to develop a FY 26- 27 Annual Operating Budget; and
Resolution 2026- 102

10 WHEREAS, the City Council finds that the preservation of essential governmental services and the protection of the public health, safety, and welfare constitute important public purposes requiring immediate but very difficult action; and
WHEREAS, it is very apparent that Banning' s current economy cannot sustain an appropriate level of City services, and it produces a higher unemployment rate and lower per household income for its residents when compared statewide or regionally; and WHEREAS, the City cannot solely tax its way out of this predicament; and WHEREAS, this Council further finds that extraordinary measures are necessary to stabilize the City' s finances, preserve essential public services, improve long- term fiscal sustainability for our children, and protect the interests of the residents of the City of Banning; and WHEREAS, the City Council desires to formally recognize the severity of the City' s financial condition and establish a framework for evaluating and implementing appropriate fiscal recovery measures; and
WHEREAS, the City Council is directing the City Manager to initiate decisions, proposals, and conversations that will be difficult and controversial; and NOW THEREFORE, the City Council of the City of Banning does hereby ordain as follows:

SECTION 1. RECITALS. The foregoing recitals are true and correct and are incorporated herein by this reference.

SECTION 2. DECLARATION OF FISCAL EMERGENCY. Based upon the foregoing recitals, the City Council hereby finds and declares that a fiscal emergency exists within the City of Banning due to extraordinary financial circumstances that threaten the City' s fiscal stability and its ability to provide essential municipal services and protect the public health, safety, and welfare.

SECTION 3. PERIODIC REVIEW. The City Council directs the City Manager to continue providing periodic reports regarding the City' s financial condition and the status of efforts undertaken to address the fiscal emergency.

SECTION 4. FISCAL RECOVERY MEASURES. The City Council directs the City Manager and City staff to evaluate, develop, and implement lawful measures necessary to address the fiscal emergency, including but not limited to:
a. Proposing a FY 26- 27 General Fund budget that is structurally balanced, i.e., ongoing expenditures are covered by ongoing revenues and conforms with the attached Draft Budgetary and Fiscal Policy.
b. Proposing additional multi- year strategies that will result in eliminating negative Fund Balances and pivoting to appropriate positive amounts.
c. Seek immediate economic development opportunities that contribute to Banning' s economy and resources to the City.
d. Expenditure reductions and cost- containment measures.

Resolution 2026- 102

11 e. Seek partnerships with our labor representatives and comply with State law, e.g., Meyers- Milias- Brown Act ( MMBA).
f. Operational efficiencies and organizational restructuring. g. Review of staffing levels, vacancies, and personnel expenditures. h. Deferral, modification, or reprioritization of capital projects and non- essential expenditures.

1. Identification of new revenue opportunities and cost- recovery measures.

J. Pursue grants, outside funding sources, and other financial assistance; and k. Any other lawful actions deemed necessary or beneficial to preserve essential municipal services and improve the City' s financial condition.

SECTION 5. CONTINUING EFFECT. This declaration shall remain in effect until terminated by resolution of the City Council upon a determination that the fiscal emergency no longer exists.

SECTION 6. SEVERABILITY. If any provision of this Resolution or its application to any person or circumstance is held invalid, the remainder of this Resolution, including the application of its provisions to other persons or circumstances, shall not be affected and shall continue in full force and effect.

SECTION 7. EFFECTIVE DATE OF RESOLUTION. That this Resolution shall take effect immediately upon its adoption.

SECTION 8. CERTIFICATION. That the City Clerk shall certify the passage of this Resolution and shall cause the same to be published according to law.

Resolution 2026- 102

SIGNATURES ON FOLLOWING PAGE]
12 PASSED, APPROVED, AND ADOPTED this 23 rd day of June, 2026.

ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning
APPROVED AS TO FORM:

John Pinkney, City Attorney
Slovak, Baron, Empey, Murp y &
Pinkney, LLP
Resolution 2026- 102

RidhardRoyce, Mayor
City of Banning
13 CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk of the City of Banning, California, do hereby certify that Resolution 2026- 102 was duly adopted at a regular meeting of said City Council on the 23 rd day of June 2026, by the following vote, to wit:

AYES: Barrington, Flynn, Miller Royce
NOES: None
ABSENT: Wallace
ABSTAIN: None
Resolution 2026- 102

Sandra Calderon, Deputy City Clerk
City of Banning, California
14 1
City of Banning
Office of the City Manager
TO: Banning City Council
FROM: Elizabeth Gibbs, City Manager
RE: Budget Message for the Fiscal Year (FY) 2026-27 Proposed Operating Budget
Almost every budget message sent to City Councils throughout the State of California starts with their City Manager or Mayor being delighted to present their annual budget to their respective City Councils. This budget message is an exception to that practice. I am elated and proud that our relatively new staff has finished the laborious practice of catching our books up to date and we finally know our financial condition. I am not happy with the necessary cuts that I am proposing to make to live within our means and conform with your Fiscal Emergency Declaration. However, this fiscal crisis is what we inherited, and it is up to us to fix it while under our watch.

TABLE 1 below shows a very high-level summary of my proposed budget for all Funds within the City of Banning, except for our Capital Improvement Program (CIP). The CIP budget will come forward to you at a later date. It is then compared to the previous three years. In other words, this Table includes the General Fund (the fund that you have the most discretion over) and the Utility Funds (Water, Wastewater and Electrical Utilities) where the fiscal activity must be kept separately from other funds to conform with State law. It also includes the Internal Service Funds (Self-Insurance, Fleet Maintenance, Information Technology, etc.) which track costs and services provided internally to the other departments in the City, and other Funds that track dedicated or restricted resources that need to be accounted for separately for various reasons. 15 2
TABLE 1

ALL FUNDS BUDGET COMPARISONS
Unaudited
Actuals
2024-25
Amended
Budget
2025-26
Unaudited
Actuals
2025-261(1)
Proposed
Budget
2026-27
Beg. Fund Balance $25,517,421 $57,783,989 $57,783,989 $64,335,188 Revenues $172,879,392 $161,121,302 $132,195,704 $154,325,719 Expenditures $140,612,824 $193,653,386 $125,644,505 $122,022,532 Surplus/Deficit $32,266,568 ($32,532,084) $6,551,199 $32,313,187 Ending Fund Balance $57,783,989 $25,251,905 $64,335,188 $96,638,376 The key observations from this table include:

1. Continued operating surpluses and higher Ending Fund Balance amounts associated with the three Banning utilities. Two of the utilities have planned investments in large capital projects. The Electrical Utility financial metrics are improving too. This later item is discussed later in this Budget Message.

2. Slow but improved financial results in the Internal Service Funds (ISF) that are also discussed later in this Budget Message.

3. Expected one-time monies are reflected in the Transit Fund for new bus purchases. The expected purchases are not in this budget. This will be brought forward separately in the CIP budget.

4. The worsening General Fund fiscal position is partially offsetting the positive trends mentioned above. This too is discussed later in this Budget Message.

BUDGETS IN DISTRESS
Because the All-Funds Table has so many separate Funds that are in relatively decent shape, it can mask the fact there are acute problems in specific Funds that put the City and its services at great risk. It is my duty to call out these three distressed Funds, explain our concerns and our proposed actions within this budget to address them. The distressed Funds include the General Fund, the Internal Services Funds (ISF) as a category and the Electrical Utility. I also discuss required actions beyond this fiscal year 1 This column only represents revenues and expenditures recorded as this table was compiled. It does not reflect additional revenues/expenditures that will be “accrued” (revenues/expenditures collected or paid in the new fiscal year but applicable to FY 2025-26 activity). Thus, do not rely on these figures for determining trends until the “books are closed”.
16 3
to make each Fund healthy and sustainable again. It is my professional opinion that this communication role (from your chief executive) that I’m addressing via this Budget Message was somehow missed and not fulfilled in the past. This is just one of many reasons why this budget’s details will come as a surprise to many and why I propose making unexpected severe changes in the FY 2026-27 City budget.

1. GENERAL FUND
These next twelve pages are dedicated to the General Fund, explaining:
1) the big changes in the budget proposed for this fiscal year, and why I am making these recommendations; and
2) what future steps need to occur after budget adoption to attain future fiscal viability of the City of Banning.

Absent a substantial change in direction of the City, we simply are not on a sustainable path in terms of finances and adequate service levels.

Please find below TABLE 2, the General Fund proposed budget summary for FY 2026- 27 with a comparison to the previous three fiscal years. Again, the General Fund is where the City has the most discretion and it funds very important services like police, fire, parks and recreation and overall City management of all services.

TABLE 2

GENERAL FUND BUDGET COMPARISON
Audited
Actuals
2023-24
Unaudited
Actuals
2024-25
Adopted
Budget
2025-26
Amended
Budget
2025-26
Unaudited
Actuals
2025-262
Proposed
Budget
2026-27
Beg. Fund Balance $2,791,269 $1,798,554 $5,386,083) ($5,386,083) ($5,386,083) ($9,741,962) Revenues $32,403,608 $35,809,614 $35,016,315 $36,864,985 $29,278,282 $31,963,492 Expenditures $33,396,323 $42,994,551 $35,615,181 $39,097,398 $33,634,161 $31,944,358 Surplus/Deficit ($992,715) ($7,184,637) ($598,866) ($2,232,413) ($4,355,879) $19,134 Ending Fund Balance $1,798,554 (5,386,083) ($5,984,949) ($7,618,496) ($9,741,962) ($9,722,828) 2 This column only represents revenues and expenditures recorded as this table was compiled. It does not reflect additional revenues/expenditures that will be “accrued” (revenues/expenditures collected or paid in the new fiscal year but applicable to FY 2025-26 activity). Thus, do not rely on these figures for determining trends until the “books are closed.”
17 4
Key Observations From Table 2

1. Due to poor budget management practices from the past, the General Fund-- Fund Balance figure was impaired entering the Fiscal Year 2023-24. A healthy Fund Balance figure would have been $6-$8 million or more. Fund Balance is an important cushion that acts similarly to your household finances. It generally reflects unrestricted resources minus liabilities or obligations. A healthy Fund Balance would have helped the City deal with the subsequent difficult years summarized above.

2. As mentioned in this Budget Message, new interim staff discovered the previous administration had planned to dramatically worsen the Internal Service Funds’ (ISFs) financial position by not charging customer Funds (the General Fund being the biggest customer) the true cost of internal services for Fiscal Years 2024-25 and 2025-26. ISFs are discussed later in this message. New Finance staff increased the ISF charges to the General Fund and others to stop the fiscal ISF “bleeding” in FY 2024-25. This had the effect of increasing the General Fund operating deficit for that year. Furthermore, refinements were made in this area by the new Finance Director which affected subsequent years.

It appears this planned impairment of the ISFs was not clearly articulated to the Council at the time that two-year budget was adopted back in June 2024.

3. The FY 2025-26 Budget as originally adopted was close to being balanced, at least on paper, yet apparently there were various budget increases approved (see original Adopted Expenditure amount of $35.6 million vs. Amended amount of $39.1 million) through the year without commensurate revenue increases. The General Fund Amended Budget is technically way out of balance by $2.2 million.

This practice needs to change.

4. We don’t anticipate the Actual Revenue figure for FY 25-26 is going to come remotely close to the $36,864,985 Amended Budget figure. We found various exorbitant estimates that are not supported by the facts or the actual collection activities.

5. This is the most important final observation. What is driving this very difficult budget are the more realistic, estimated revenues for the new year FY 2026-27.

We estimate the revenues for the new year to be $31,963,492. And given the poor condition of the Beginning Fund Balance and the Council direction to live within our means, we had to shrink the General Fund expenditure budget to equal that new figure, essentially to stop digging our financial hole.

One can easily see last year’s Amended Expenditure Budget was $39,097,398, and with increases in the cost-of-doing-business (e.g., labor MOUs, contract increases, etc.) that figure in FY 2026-27 dollars is approaching $40-$41 million. 18 5
Thus, we began this budget process with a substantial gap to plug with expenditure reductions.

By far, the biggest cost category for Banning’s General Fund is for staff. To satisfy Council direction, I made across the board cuts and eliminated 74.25 FTE (full-time equivalent positions) in the General Fund. For perspective this represents a 49% reduction from 151.25 full-time equivalent positions. A summary of these cuts and their impacts can be found later in this Budget Message and more details can be found in each respect departmental budget later in this document. This transition will be painful.

How Did We Get To This Crisis in the General Fund?
There are four main reasons for this fiscal crisis and this very difficult budget proposal.

1. Large reduction in the General Fund--Fund Balance
To begin answering this question, we must go back to the 2-year General Fund Budget for FY 2020-21 and FY 2021-22 which called for the use of $8 million in Fund Balance to balance that budget. Again, Fund Balance acts as a cushion to unexpected events e.g., recessions, uninsured losses, errors in revenue estimates, etc. This action greatly reduced the “cushion” from a very healthy $13.1 million to a planned $5 million.

Unexpected things inevitably happen in a city.

2. Poor Budget Management Over Six Years
This Fund Balance reduction would not have been so alarming if there was adequate discussion on the risks they were taken or a plan to get the structural budget deficit under control (an ongoing, built-in gap between recurring revenues and recurring expenditures, as distinct from a one-time shortfall). Instead, our review of the past fiscal year’s budget decisions showed a General Fund appearing like a run-away freight train, gathering speed and with no conductor or brakes. General Fund budgets were increased along with additional new staff. Out of the last seven years, there were General Fund operating deficits in every fiscal year. And the City appeared to rely on one-time monies to pay for ongoing commitments, which has the effect of hiding the structural budget deficit. This violated the golden rule for governmental budgeting, that “One-Time Funds Are To Be Used Only For One-Time Costs.” This “rule” is not much different than how most Banning residents manage their household budgets.

However, the “freight train” appears to have gathered more speed requiring more “creative” budgeting in the recently completed 2-year General Fund Budget for FY 2024-25 and FY 2025-26. These budgets had the effect of masking the true problem i.e., the General Fund had a substantial structural deficit, but it was communicated to Council like the budget was structurally balanced. This transparency breakdown primarily occurred within this next topic i.e., Internal Service Funds. 19 6
A likely indicator for this out-of-control General Fund budget is the employee position count, characterized as Full-Time Equivalents (FTE). One FTE equals one full-time job throughout the fiscal year.

FY 2018-19 FY 2022-23 FY 2023-24 FY 2026-27
Budget FTE Budget FTE Budget FTE Budget FTE

79.7 109.75 125.99 78

3. Misuse of Internal Service Funds and Hiding the General Fund Operating Deficit There are certain City services that are budgeted and accounted for separately from the General Fund within Internal Service Funds (ISFs). These internal services include SelfInsurance, Fleet Management, Information Technology, Utility Billing, etc. The primary “customers” are other City departments and not City residents. The principle behind this prevalent practice throughout the country is for accountability purposes. It isolates and enhances the management control of these costs and holds internal “customers” accountable for the burden they place on the cost of these services. This model encourages City departments to be better consumers of these services since they are allocated a fair share of the costs to their budgets. These benefits are realized IF there was an engaged and stable City management.

This ISF practice also has the benefit of isolating certain program costs that could put the General Fund at risk if these programs were poorly managed and costs get out of control. For example, it is obvious that Police, Public Works, and Recreation services inherently have substantial risks in the insurance area. So, best operating practices within the departments are critical but we also need to adequately fund and insure the City against the unexpected. And if we don’t, it puts the General Fund at risk--the “backstop” for most City activities. Given the Self Insurance trends show a doubling of their costs in five years, our Strategic Plan recommends a “deep dive” assessment of that program and practices.

The recently completed FY 2024-25 and FY 2025-26 budgets, the final budget adopted under the previous administration shows a $12 million Fund Balance deficit upon entering these two fiscal years. Again, Fund Balance is generally assets minus obligations and has similarities to the household “savings account.” In other words, the poor fiscal management practices of these Funds had already begun in the six previous years. And the recent 2-year budget called for new ISF operating deficits of $4.8 million for FY 2024-25 and $4.5 million on FY 2025-26. If we operated according to this budget plan, the ISF Net Position would end up as a $22.2 million Fund Balance deficit on June 30, 2026! This means that the General Fund and other Funds were not charged $12 million over the six years prior to FY 2024-25. And they were budgeted to be undercharged for another $9.3 million over the next two fiscal years (i.e., FY 2024-25 and FY 2025-26). This practice effectively hid key parts of the General Fund structural deficit that we are disclosing in this budget.
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As new interim Finance management staff investigated the books, they immediately increased the ISF charges to all Funds before the books were closed for FY 2024-25, which slowed the ISF fiscal “bleeding,” but it contributed to the General Fund operating deficit and Fund Balance reduction. And for FY 2025-26, your new permanent Finance Director hired in April 2026 dug deeper and found numerous other issues with the FY 2025-26 ISF budget and accounting practices which had the effect of further increasing the ISF charges to the General Fund and other Funds. It also increased the General Fund--Fund Balance deficit and illuminated the true massive General Fund operating deficit.

4. The General Fund Operating Deficit Increased Dramatically for FY 2025-26 Using estimated/unaudited data at year end close for FY 2025-26, we experienced another large General Fund operating deficit, which had a corresponding reduction to the Fund Balance figure on June 30, 2026--see TABLE 2.

The key contributors to the worsening fiscal crisis in FY 2025-26 include:
1) an inappropriately crafted budget with aggressive revenues that were never collected (e.g., cannabis revenues and development related fees); and 2) ISF charges that were inadequately budgeted and would further impair the City’s internal services and put the City at risk of inadequate insurance coverages (as described above).

These over-estimated revenues and relatively difficult-to-identify ISF undercharges had the effect of making the General Fund look miraculously balanced when it was adopted by Council but really wasn’t. In Table 2, the Fiscal Year 2025-26 “unaudited actuals” column above shows actual revenue receipts and these poor ISF practices “turned off.” Note the large differences between the FY 2025-26 budget and unaudited year-end actuals.

The most generous observation of these budget practices reflects, at best, substandard and unprofessional budgeting. The least generous observation is that these practices may have been designed to mask General Fund operating deficits for many years.

Regardless of intent, this had the effect of delaying or avoiding the very difficult conversations that we are having now. And because of this delay, our options today are many times worse.

Your newer staff and outside advisors warned your Council about this negative trend, but it required substantial resources to get the City’s books caught up to fully understand where we stand. Your Council heeded advice and developed a top Strategic Initiative--Banning’s Workout Plan to Fiscal Sustainability as part of the Strategic Plan that you adopted on February 24, 2026.
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Strategic Initiative 4(a)--Banning’s Workout Plan to Fiscal Sustainability Your Council had a substantial Workshop on May 14, 2026, where we went over the latest fiscal information and what might we do about it. I discussed a first phase of the Workout Plan that was to essentially stop the fiscal bleeding. Your Council followed up with declaring a Fiscal Emergency and directed me to do just that i.e., propose a budget where we live within our means. This proposed budget reflects that direction; however, it does not address the inherited negative General Fund--Fund Balance figure of $9.9 million, the negative Fund Balance of $10 million for the ISF category of Funds and the need for a positive $6-$8 million positive Fund Balance in the General Fund as a cushion for the next recession or other surprises. Please note, the General Fund will be responsible for a substantial share of the $10 million negative ISF Fund Balance.

These negative Fund Balances need to be addressed in our Phase 2 of the Workout Plan.

Banning’s Workout Plan Phase 1--Live Within Our Means
It is important to know that Banning residents are not the only ones watching what we do with this crisis given to us. Wall Street and the bond rating agencies are watching us as well. We will likely need to issue debt in the future for substantial Water and Wastewater projects to conform with evolving state and federal standards. We may need to issue debt in the future for the Electrical Utility. Our bond rating will dramatically affect our interest rates or borrowing costs. Right now, our Electrical Utility bonds are rated as B which is commonly described as “junk bond” a very poor, high-risk status. We are midstream in executing your multi-year plan to repair the Electrical Utility’s key financial measures. We need to restore the rating agencies’ confidence in the City to minimize our future interest costs.

The bond rating agencies will be watching what we do with this current budget. In addition to the problematic financial position of the Electrical Utility, they simply lost confidence in prior City management and were concerned the General Fund problems would spill over and further harm the utility. We recently introduced our team to S&P Global, our bond rating agency, and discussed our plans for moving forward. It was a good meeting. Their focus will now turn to see if we have the capacity and resources to work our way out of this crisis. They have seen our plans but will be waiting for action across the board.

Unfortunately, this first phase of the Workout Plan requires me to propose severe and painful cuts in services and positions to live within our means. The impact on our workforce pains me greatly given they did not create this crisis but are becoming victims to it. I feel City management has let down our employees, and we need to re-earn that trust. And if we don’t, we will continue to lose more staff.

This Proposed Budget is essentially my draft plan to live within our current means, as we know it today. The cuts to staffing assumes no negotiated cost savings from 22 9
employee groups, such as changes to compensation or benefits. We have just begun this negotiation process, and I cannot predict its outcome. Any concessions or other negotiated cost-saving measures may reduce the cuts to staffing and/or layoffs. We have engaged our labor groups and fully commit to complying with our obligations under State law i.e., the Meyers Milias Brown Act (MMBA) which governs labor negotiations between public agencies and employee organizations.

We feel the Banning organization is already modestly funded with a modest level of services. Thus, these proposed cuts will reduce our services to an unacceptable level.

FY 2026-27 Proposed Budget Overview--General Fund
It is important to note that this Council as a governing body and I inherited this fiscal crisis. It gradually developed over eight years, and the pace of the crisis greatly expanded these past couple of years. We get no satisfaction discussing these necessary budgetary reductions.

In reviewing Table 3 below, the proposed FY 2026-27 General Fund budget reduces citywide staffing from 151.25 to 78.00 budgeted FTEs, a net decrease of 74.25 positions (49%), partially offset by one new position added in Engineering. Of the eliminated positions, 44.75 FTEs (60%) are currently vacant and 29.5 FTEs (40%) are currently filled, meaning approximately 30 employees would be affected by layoff. Reductions touch nearly every General Fund department, with the largest proportional cuts in Parks/Recreation/Aquatics (–94%), City Manager (–89%), and Planning/Building & Safety (–60%); City Council, Economic Development, and City Clerk staffing remain unchanged.

In developing these reductions, I sought to preserve core public safety and legally mandated services — including police operations, elections and records administration, financial/fiduciary functions, and solid waste collection — while concentrating deeper reductions in discretionary programs and administrative overhead. Even with this approach, some reduction to public safety staffing was necessary given the scale of the budget shortfall. Anticipated service impacts include reduced recreation and aquatics programming, longer permit and development review timelines, slower administrative and financial processing, and reduced proactive policing and specialized law enforcement capacity; departments are continuing to assess and refine these impacts as the budget is finalized.
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TABLE 2
PROPOSED GENERAL FUND FTEs
Banning’s Workout Plan Phase 2--Beginning an Honest Conversation With Residents Every City in California essentially has their organization sitting on a 3-leg stool for revenue support. The three legs are general taxation, user fees for specific services and the local economic activity that supports more revenue. If one leg is pulled out from the stool as a policy choice, it puts added pressure on the other two legs.

Predominantly residential communities (like Banning) typically have more modest service levels, or the residents decide to tax themselves more to fund adequate levels of services. The general taxation leg gets strengthened to take on a greater share of the cost burden. Residential development rarely pays for the full cost of services those residents wish to have. Communities that have more robust local economies with retail, commercial and industrial sectors tend to have higher revenue and service levels and lower taxation rates. The simple fact is, these other sectors support the services to residents.

Our neighbor, Beaumont was in a serious financial predicament over ten years ago. I know this firsthand. At the time, they made difficult budget reductions as their initial round, like us, but with less severe cuts. However, they also made the policy choice that they will be unable to tax their way out of their problem and provide adequate services.

So, they pursued enhanced economic development. Their financial position and their services have dramatically improved due to this policy choice. 24 11
We need to learn from Beaumont and similar cities and pursue a more robust Banning economy to bolster that third leg of the stool. The data is clear, i.e., our unemployment levels are too high and our per household income is too low. Furthermore, our City is underfunded.

We conducted a quick survey of 28 cities in the area. We compared General Fund operating revenues on a per capita basis to adjust for larger vs. smaller cities. Banning’s per capita sales tax is $942 while the average in the survey pool was $1,430. This reflects a 52% difference. If Banning merely produced the average of the survey pool, we would see an additional $15 million more in General Fund revenues. This explains why our General Fund services will be dramatically substandard.

We can discuss proposing a 1-cent sales tax increase to the voters, but that only produces roughly $4 million more a year because of our poor economy. Upon reviewing the numbers above:
1) a negative General Fund--Fund Balance of $9.9 million; 2) a seriously service-impaired city after making proposed cuts; 3) a General Fund obligation to eliminate part of the Internal Service deficits-- roughly $5-$6 million; and
4) the need to create a healthy positive Fund Balance for the General Fund of $6-8 million; you can see that we cannot tax or cut our way out of this problem.

The best way to describe Banning is that we are asset rich but cash poor. We have underutilized land and assets, that if developed to their most productive uses, we can gradually work our way to fiscal viability again as a city.

A recent report by Capital Rivers Connect estimates the amount of retail sales and related tax revenue that “leak” to other nearby public agencies is in the millions. This amount represents Banning residents’ and businesses’ purchases that are typically made outside our City--benefitting other agencies. This is because we are not providing the opportunity for our residents to make their purchases within Banning.

We are doing our residents a disservice by not educating them on how the economy and the development of it is key to our recovery and survival. For example, the fiscal impact of the Sunset Crossroads Development Agreement, if approved by a majority of the voters, includes, but is not limited to the following:
1) a $3 million-dollar upfront payment to the General Fund; 2) a “big box’ retail business that can produce $1million or more every year to the General Fund;
3) additional one-time funds to jumpstart our underfunded Animal Control Program and improving our Downtown core;
4) a new Fire Station with some equipment south of I-10 to improve Fire/Paramedic response; and
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5) upon full completion of the project, an additional $1 million per year in fees to support public safety response, which offsets the General Fund obligation.

Residents need to fully understand their City’s current fiscal standing and how economic development affects the City’s bottom-line. It is critical to provide factual information to the “owners” of their City regarding the economic choices that impact their City.

This information is provided not to advocate a particular outcome, but to fulfill the City’s duty to inform residents of its financial condition.

The key for Banning’s future health as a community is for their City to be healthy and provide high-quality services. The only path to a healthy future for our kids and grandkids is to improve the vitality of Banning’s economy.

2. INTERNAL SERVICE FUNDS
Please find TABLE 3 below that covers the Internal Service Funds (ISF) proposed budget schedule for FY 2026-27 and compares it to previous fiscal years. Unlike the General Fund, this section covers multiple funds within one ISF category of Funds.

Again, these Funds track the costs of certain internal services and their allocation of these costs to their customers i.e., other City departments.

TABLE 3

INTERNAL SERVICE FUND BUDGET COMPARISON
Audited
Actuals
2023-24
Unaudited
Actuals
2024-25
Adopted
Budget
2025-26
Amended
Budget
2025-26
Unaudited
Actuals
2025-263
Proposed
Budget
2026-27
Beg. Fund Balance ($8,140,617) ($12,034,633) ($13,786,358) ($13,786,358) ($13,786,358) ($10,300,870) Revenues $12,836,421 $13,416,103 $13,868,618 $13,852,333 $14,763,733 $15,677,560 Expenditures $16,730,433 $15,167,828 $18,372,218 $15,531,023 $11,278,245 $15,443,286 Surplus/Deficit ($3,894,106) ($1,751,725) ($4,503,600) ($1,678,690) ($3,485,488)) $234,274 Ending Fund Balance ($12.034,633) (13,786,358) ($18,289,958) ($15,465,048) ($10,300,870) ($10,066,596) The internal services in these funds are Self-Insurance for the organization, Fleet Maintenance (cities have numerous vehicles), Information Technology (supporting the purchase and use of technology), Utility Billing (on behalf of Water, Wastewater and Electrical utilities), Building Maintenance and Central Services. 3 This column only represents revenues and expenditures recorded as this table was compiled. It does not reflect additional revenues/expenditures that will be “accrued” (revenues/expenditures collected or paid in the new fiscal year but applicable to FY 2025-26 activity). Thus, do not rely on these figures for determining trends until the “books are closed”.
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Again, the programs are treated like a business that provides services to their customers--other City departments. The programs are expected to use best practices for service provision and to equitably bill their costs to customers’ budgets. The Finance Department is to ensure that these programs’ finances are monitored and managed so there are resources to pay for internal services when they are needed. And if there is a breakdown in this role, which is exactly what happened previously, it exposes the City’s General Fund, the Fund ultimately responsible for these costs.

The Funds as a category have a combined Fund Balance (similar to savings) of negative 10+ million as of June 30, 2026. This is unsustainable, unacceptable and creates unnecessary risk to the General Fund.

The largest ISF is the Self Insurance Fund and it’s arguably the most important ISF for protecting the City’s financial position. Cities operate in a high-risk environment given the nature of their services. Lawsuits are inevitable and despite the best safety program in the world, employee injuries occur.

The Self-Insurance Fund’s Net Position on June 30, 2025, is negative $10.8 million. It has no cash to speak of on that day. Yet, it has claim liabilities of $2.2 million. It has been substantially underfunded for years, while the budget has doubled in 5 years. Its financial condition has not conformed with the City Council’s Fiscal Policy for many years. If the City has a difficult fiscal year with additional unexpected claims, the General Fund may have to incur unexpected costs.

If the new Finance staff did not intervene when the budget was calling for a more dramatic worsening of the ISFs fiscal position, this situation could have been catastrophic. Furthermore, only a trained public sector accountant would be able to piece together this potential problem when reading the budget. It surely was not highlighted in any communication to the Council, from what we can tell.

Again, like the General Fund, as a first phase we stopped the bleeding and improved the fairness of the ISF charges. As a second phase, we need to allocate the combined deficits in the ISF Net Positions and charge this back to the customer departments and home Funds. We need to work our way back into compliance with your Budgetary and Fiscal Policies.

3. BANNING ELECTRICAL UTILITY (BEU)
As everyone is painfully aware, the BEU was relatively healthy back in 2018 with a Net Position of $22 million and Cash balance of $22 million. The BEU management at that time went on an aggressive capital improvement campaign (construction and equipment) and funded the costs with cash rather than borrowing the funds. This trend quickly devolved into a cash deficit position on June 30, 2023, to negative $9 million.

This came to pass due to the general lack of management controls back then and the 27 14
high degree of decentralized decision making. This Banning cultural weakness has been fixed with appointment of new staff.

TABLE 4

ELECTRICAL UTILITY BUDGET COMPARISON
Audited
Actuals
2023-24
Unaudited
Actuals
2024-25
Amended
Budget
2025-26
Unaudited
Actuals
2025-264
Proposed
Budget
2026-275
Beg. Fund Balance ($8,575,464) ($11,956,519) ($10,733,262) ($10,733,262) ($2,700,658) Revenues $37,538,083 $42,831,214 $38,722,549 $43,210,112 $53,855,393 Expenditures $40,919,138 $41,607,957 $38,723,609 $35,177,508 $44,822,471 Surplus/Deficit ($3,381,055) $1,223,257 ($1,060) $8,032,604 $9,032,922 Ending Fund Balance ($11,956,519) ($10,733,262) ($10,734,322) ($2,700,658) $6,332,264 Workout Plan Targets ($10,461,000) ($10,383,000) ($4,391,000) Besides the enhanced capital initiative, the BEU did not adopt any rate increases since 2013. Thus, there was not enough cash to fund the capital costs and eventually operations. In response, the Council adopted a rate increase for the BEU in October 2024 with a comprehensive Cost and Rate Study with a phased Workout Plan on October 24, 2025.

The Council approved rate increases of 13.9% in November 2024 and 20% in November 2025. The Workout Plan’s benchmarks call for a negative $10.4 million Fund Balance on June 30, 2026, a negative $4.4 million Fund Balance on June 30, 2027, and a positive $4.3 million Fund Balance on June 30, 2028. We think we are on course to meet the goals of the BEU Workout Plan which will be confirmed once we accrue all revenues and expenditures and “close the books.”
This proposed budget assumes the rate increases mentioned above will be in place and it is staying the course until the BEU is a financially stable and healthy utility again.

MOVING FORWARD WITH LESSONS FROM THE PAST

NEW BUDGETARY AND FISCAL POLICIES
4 This column only represents revenues and expenditures recorded as this table was compiled. It does not reflect additional revenues/expenditures that will be “accrued” (revenues/expenditures collected or paid in the new fiscal year but applicable to FY 2025-26 activity). Thus, do not rely on these figures for determining trends until the “books are closed”. For example, we do not believe the FY 25-26 will end the year with an $8 million operating surplus since we will be accruing additional expenditures before closing the books. 5 The Proposed Budget for FY 2026-27 has grant and other one-time revenues. After adjusting for these nonoperating type revenues, the estimated Ending Fund Balance would be closer to negative ($4.3 million). 28 15
Crisis are the best learning opportunities if we learn from them and willingly execute change. We must be transparent and honest about our weakened financial condition and the causes of it. A crisis should never go to waste. To that end, I have asked our staff and independent advisors to discuss exactly what the City did wrong, what the City did right and what it is that we should do differently going forward.

Our proposed new Budgetary and Fiscal Policies (Attachment 2) represent a complete rewrite of past policies that were apparently and selectively ignored by staff. For example, we can find past financial management policies that required a structurally balanced budget, but the City hasn’t had one in many years.

We have proposed radically new policies that are more detailed and rigorous than most cities, but it reflects the need to change practices from the past. It requires the Council and City management to both understand what are in these policies and it needs City management to affirm, in writing, every year that the proposed annual budgets adhere to the Finance policies. And if they don’t, it should be highlighted along with a plan to eventually be in conformance with all of it.

We are dedicating a large part of our first Budget Workshop to essentially onboard the Council on these Finance policies.

While it may be obvious, it is important that everyone understands what we inherited.

We inherited an organization that was NOT utilizing best fiscal management practices.

The cumulative impacts of this over many years will take time to unwind and eliminate.

Compliance with Council Budgetary and Fiscal Policies
As your City Manager, I affirm with this Budget Message for FY 2026-27 that with the exceptions highlighted below, this Proposed Budget conforms with your new Budgetary and Fiscal Policies that are scheduled to be reviewed at your August 18, 2026, Budget Workshop.

Due to the many well documented issues in this Budget Message, this budget does not yet conform with:
✓ Budget Development Policy 6--“The City will strive to provide adequate maintenance of facilities, plant and equipment and for the orderly replacement.” We have made various budget cuts in this area and have not assessed the actual needs in this area. This will be taken up during the next budget cycle. ✓ Budget Development Policy 7--“The City will project its equipment replacement and maintenance needs for the next several years and will update these projects annually.” Again, due to fiscal and staffing issues, this has not been done. It will be taken up during the next budget cycle.
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✓ Budget Development Policy 8--“During the budget process, the City will reassess services and service levels.” Again, this will be taken up during the next budget cycle and/or if the City pursues any tax increase measure. ✓ Fund Balance Policy For the General Fund--“The City’s Fund Balance available for emergencies and to meet cash needs should be a minimum 17% with a target range of 17% to 30% of annual operating budget.” The budget message clarifies this policy is not being met. We will use the continuing discussions related to the Strategic Initiative--Workout Plan to Fiscal Sustainability to address this Fund Balance issue.
✓ Available Fund Balance Policies
✓ 3.“The Electrical Operational Fund shall maintain a minimum Available Fund Balance reserve of 10% of the upcoming fiscal year’s total operating appropriations and debt service (loan and bond) payments.” This standard will not be met until FY 2027-28 as per the BEU Workout Plan. ✓ 4.“The Self-Insurance Fund shall maintain a $1 million minimum Available Fund Balance reserve after fully funding the Accrued Claims Liabilities (the funds required to cover anticipated insurance claims) as determined by an actuarial estimate set at an 80% confidence level.” As mentioned previously, this is far from being met. This will be discussed as part of Phase 2 of the Workout Plan.

SUMMARY
This Budget Message presents my Proposed Operating Budget for FY 2026-27, developed after new Finance staff finished the difficult work of bringing the City's books current and revealing the true scope of a fiscal crisis inherited from prior administrations.

To comply with the Council's Fiscal Emergency Declaration and live within our means, the proposed budget closes an estimated $31.96 million General Fund revenue picture against a prior amended expenditure base approaching $40-41 million by eliminating

74.25 FTEs citywide, a 49% reduction, while working to preserve police operations, elections and records administration, financial functions, and solid waste collection.

Three funds remain in acute distress: the General Fund, which carries a negative $9.9 million fund balance after years of structural deficits masked by one-time revenues and underfunded Internal Service Fund charges; the Internal Service Funds, which face a combined negative fund balance of more than $10 million; and the Banning Electrical Utility, which is midway through a Council-approved rate and Workout Plan intended to restore its finances and its bond rating.

This budget represents Phase 1 of Banning's Workout Plan to Fiscal Sustainability — stopping the fiscal bleeding — and does not by itself resolve the negative fund balances 30 17
described above; Phase 2 will require difficult decisions about service levels, taxation, and economic development to rebuild a sustainable path forward. New Budgetary and Fiscal Policies are proposed to ensure the transparency and financial discipline that were absent in years past.
31 Dept FY 2027 CLASSIFICATION FY 2024-
2026 FTEs
FY 2027
FTEs Variance
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
5 Council 5.00 5.00 0.00
1200 Homeless Services Coordinator 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Communications Manager 1.00 - (1.00)
1200 Grants Program Manager 1.00 - (1.00)
1200 Assistant City Manager (see Water Fund pg. 6) 1.00 - (1.00) 1200 1 City Manager 1.00 1.00 0.00
1 City Manager 9.00 1.00 (8.00)
1210 1 Economic Development Manager 1.00 1.00 0.00
1 Economic Development 1.00 1.00 0.00
1300 1 Senior Human Resources Generalist 1.00 1.00 0.00 1300 1 Human Resources Generalist 1.00 1.00 0.00
1300 Risk & Safety Analyst 1.00 - (1.00)
1300 Human Resources Manager 1.00 - (1.00)
1300 1 Human Resources Director 1.00 1.00 0.00
3 Personnel 5.00 3.00 (2.00)
1400 1 Deputy City Clerk 1.00 1.00 0.00
1400 1 City Clerk 1.00 1.00 0.00
2 City Clerk 2.00 2.00 0.00
1900 1 Budget and Financial Analyst 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 Accounting Specialist 1.00 - (1.00)
1900 1 Accountant 2.00 1.00 (1.00)
1900 1 Accounting Supervisor 1.00 1.00 0.00
1900 1 Senior Accountant 1.00 1.00 0.00
1900 Deputy Finance Director 1.00 - (1.00)
1900 1 Finance Director 1.00 1.00 0.00
1900 1 City Treasurer 1.00 1.00 0.00
10 Finance 13.00 10.00 (3.00)
City of Banning
Authorized Position List for FY 2026-2027

Attachment 1
32 1910 Contracts Specialist 1.00
- (1.00)
19101 Buyer 1.00 1.00 0.00
19101 Buyer 1.00 1.00 0.00
19101 Purchasing Manager 1.00 1.00 0.00 3 Purchasing 4.00 3.00 (1.00) 2060 Multimedia Specialist 1.00- (1.00)
0 TV Government 1.00- (1.00)
2200 Police Cadet 0.50- (0.50)
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
22001 Police Officer 1.00 1.00 0.00
2200 Police Officer 1.00- (1.00)
2200 Police Officer 1.00- (1.00)
2200 Police Officer 1.00- (1.00)
2200 Police Officer 1.00- (1.00)
22001 Police Corporal 1.00 1.00 0.00
22001 Police Corporal 1.00 1.00 0.00
22001 Police Corporal 1.00 1.00 0.00
2200 Police Corporal 1.00- (1.00)
22001 Police Sergeant 1.00 1.00 0.00
22001 Police Sergeant 1.00 1.00 0.00
22001 Police Sergeant 1.00 1.00 0.00
22001 Police Sergeant 1.00 1.00 0.00
22001 Police Sergeant 1.00 1.00 0.00
2200 Police Sergeant 1.00- (1.00)
22001 Police Lieutenant 1.00 1.00 0.00
2200 Police Lieutenant 1.00
- (1.00)
2200 Police Lieutenant 1.00- (1.00)
2200 Police Lieutenant 1.00- (1.00)

33 2200 Police Captain 1.00 - (1.00)
2200 1 Police Chief 1.00 1.00 0.00
2200 Records Technician 1.00 - (1.00)
2200 1 Records Technician 1.00 1.00 0.00
2200 1 Records Technician 1.00 1.00 0.00
2200 Records Technician II 1.00 - (1.00)
2200 1 Evidence Technician 1.00 1.00 0.00
2200 Community Services Officer 1.00 - (1.00)
2200 Supports Services Manager/Executive Assistant 1.00 - (1.00) 34 Police 48.50 34.00 (14.50)
2210 1 Dispatcher 1.00 1.00 0.00
2210 1 Dispatcher 1.00 1.00 0.00
2210 1 Dispatcher 1.00 1.00 0.00
2210 Dispatcher 1.00 - (1.00)
2210 Dispatcher 1.00 - (1.00)
2210 1 Dispatcher II 1.00 1.00 0.00
2210 1 Dispatcher II 1.00 1.00 0.00
2210 1 Dispatcher II 1.00 1.00 0.00
2210 Dispatcher Supervisor 1.00 - (1.00)
6 Dispatch 9.00 6.00 (3.00)
2300 Animal Control Officer 1.00 - (1.00)
2300 1 Animal Control Officer 1.00 1.00 0.00
1 Animal Control 2.00 1.00 (1.00)
2700 Office Specialist 1.00 - (1.00)
2700 1 Building Permit Specialist 1.00 1.00 0.00
2700 Building Permit Specialist 1.00 - (1.00)
2700 Building Inspector 1.00 - (1.00)
2700 Senior Building Inspector 1.00 - (1.00)
2700 1 Building Official 1.00 1.00 0.00
2 Building & Safety 6.00 2.00 (4.00)
2740 1 Lead Code Compliance Officer 1.00 1.00 0.00
2740 Code Compliance Officer 1.00 - (1.00)
1 Code Enforcement 2.00 1.00 (1.00)
2800 Assistant Planner 1.00 - (1.00)
2800 1 Senior Planner 1.00 1.00 0.00
2800 1 Planning Manager 1.00 1.00 0.00
2800 Community Development Director 1.00 - (1.00)
2 Planning 4.00 2.00 (2.00)
3000 1 Engineering Services Assistant 1.00 1.00 0.00
3000 1 Public Works Inspector 1.00 1.00 0.00
3000 Associate Engineer 0.75 - (0.75)
3000 1 Associate Civil Engineer 1.00 1.00 0.00
3000 Senior Civil Engineer 1.00 (1.00)
3000 Deputy Public Works Director/City Engineer 1.00 - (1.00)

34 3000
1 Development Services Director- 1.00 1.00
4 Engineering 5.75 4.00 (1.75)
31001 Customer Service Representative 1.00 1.00 0.00
31001 Customer Service Representative 1.00 1.00 0.00
31001 Customer Service Representative 1.00 1.00 0.00
31001 Customer Service Representative 1.00 1.00 0.00
31001 Customer Service Representative 1.00 1.00 0.00
31001 Senior Billing Representative 1.00 1.00 0.00
31001 Senior Billing Representative 1.00 1.00 0.00
31001 Senior Billing Representative 1.00 1.00 0.00
31001 Customer Service Supervisor 1.00 1.00 0.00
3100 Customer Service & Billing Manager 1.00- (1.00)
9 Utility Billing & Account 10.00 9.00 (1.00)
31101 Field Service Representative 1.00 1.00 0.00
31101 Field Service Representative 1.00 1.00 0.00
31101 Field Service Representative 1.00 1.00 0.00
31101 Lead Field Service Representative 1.00 1.00 0.00 4 Meter Readers 4.00 4.00 0.00 32001 Building Maintenance Specialist 1.00 1.00 0.00
32001 Senior Building Maintenance Specialist 1.00 1.00 0.00 2 Building Maintenance 2.00 2.00 0.00 37001 IT Analyst I 1.00 1.00 0.00
37001 IT Analyst I 1.00 1.00 0.00
37001 IT Analyst II 1.00 1.00 0.00
37001 IT Manager 1.00 1.00 0.00 4 Computer Services 4.00 4.00 0.00 38001 Executive Secretary 1.00 1.00 0.00
38001 Fleet Mechanic II 1.00 1.00 0.00
38001 Fleet Mechanic II 1.00 1.00 0.00
3800 Fleet Mechanic II 1.00- (1.00)
3800 Fleet Manager 1.00- (1.00)
3 Fleet 5.00 3.00 (2.00)
36001 Maintenance Worker I 1.00 1.00 0.00
36001 Maintenance Worker I 1.00 1.00 0.00
3600 Senior Maintenance Worker 1.00- (1.00)
3600 Parks Supervisor 1.00- (1.00)
2 Parks 4.00 2.00 (2.00)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)

35 4000 Recreation Leader 0.50
- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Recreation Leader 0.50- (0.50)
4000 Senior Recreation Leader 0.50- (0.50)
4000 Seasonal Recreation Leader 0.50- (0.50)
4000 Office Specialist 1.00- (1.00)
4000 Program Coordinator 1.00- (1.00)
4000 Program Coordinator 1.00- (1.00)
4000 Sports Coordinator 0.50- (0.50)
4000 Recreation Manager 1.00- (1.00)
4000 Maintenance Worker I 1.00- (1.00)
4000 Parks and Recreation Director 1.00- (1.00)
0 Recreation 15.00- (15.00)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Lifeguard 0.50- (0.50)
4010 Pool Manager 0.50- (0.50)
4010 Pool Manager 0.50- (0.50)
4010 Pool Manager 0.50- (0.50)
4010 Assistant Pool Manager 0.50- (0.50)
4010 Cashier - Pool 0.50- (0.50)
4010 Cashier - Pool 0.50- (0.50)
4010 Cashier - Pool 0.50- (0.50)
4010 Cashier - Pool 0.50- (0.50)
0 Aquatics 13.00- (13.00)
49001 Maintenance Worker II 1.00 1.00 0.00
49001 Maintenance Worker III 1.00 1.00 0.00

36 4900 1 Senior Maintenance Worker 1.00 1.00 0.00
4900 Work Release Crew Leader 1.00 - (1.00)
4900 1 Public Works Supervisor 1.00 1.00 0.00
4900 1 Public Works Manager 1.00 1.00 0.00
5 Streets 6.00 5.00 (1.00)
5100 0.75 Airport Attendant 0.75 0.75 0.00

0.75 Airport Fund 0.75 0.75 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 1 Bus Driver 1.00 1.00 0.00
5800 0.5 Bus Driver 0.50 0.50 0.00
5800 0.5 Bus Driver 0.50 0.50 0.00
5800 1 Field Supervisor 1.00 1.00 0.00
5800 1 Transit Analyst - 1.00 1.00
5800 1 Transit Manager 1.00 1.00 0.00
13 Transit Fund 12.00 13.00 1.00
6300 1 Water Service Worker I 1.00 1.00 0.00
6300 1 Water Service Worker I 1.00 1.00 0.00
6300 1 Water Service Worker I 1.00 1.00 0.00
6300 1 Water Service Worker I 1.00 1.00 0.00
6300 1 Water Service Worker III 1.00 1.00 0.00
6300 1 Water Service Worker III 1.00 1.00 0.00
6300 1 Water Service Worker III 1.00 1.00 0.00
6300 1 Backflow Locator Specialist 1.00 1.00 0.00
6300 1 Water Production Operator II 1.00 1.00 0.00
6300 1 Warehouse Services Specialist 1.00 1.00 0.00
6300 1 Valve Crew Leader 1.00 1.00 0.00
6300 1 Assistant Water Superintendent 1.00 1.00 0.00
6300 1 Water/Wastewater Superintendent 1.00 1.00 0.00
6300 1 Associate Civil Engineer 1.00 1.00 0.00
6300 1 Service Crew Leader 1.00 1.00 0.00
6300 1 Production Supervisor 1.00 1.00 0.00
6300 1 Construction Crew Leader 1.00 1.00 0.00
6300 1 Meter Crew Leader 1.00 1.00 0.00
6300 1 Office Specialist 1.00 1.00 0.00
6300 Management Analyst 1.00 - (1.00)
6300 1 Water CIP Manager 1.00 1.00 0.00
6300 1 Public Works Program Manager 1.00 1.00
6300 1 Deputy Water/Wastewater Director 1.00 1.00 0.00
6300 Public Works Director 1.00 - (1.00)
6300 1 Assistant City Manager 1.00 1.00

37 23 Water Fund 23.00 23.00 0.00
7000 Public Benefits Analyst 1.00 - (1.00)
7000 1 Utility Services Assistant 1.00 1.00 0.00
7000 1 Utility Services Assistant 1.00 1.00 0.00
7000 1 Meter Tech Apprentice 1.00 1.00 0.00
7000 1 Meter Tech Apprentice 1.00 1.00 0.00
7000 1 GIS Tech 1.00 1.00 0.00
7000 1 Warehouse 1.00 1.00 0.00
7000 1 Powerline Tech 1.00 1.00 0.00
7000 1 Powerline Tech 1.00 1.00 0.00
7000 1 Powerline Tech 1.00 1.00 0.00
7000 1 Powerline Tech 1.00 1.00 0.00
7000 1 Powerline Tech 1.00 1.00 0.00
7000 1 Assistant Planner 1.00 1.00 0.00
7000 1 Service Planner 1.00 1.00 0.00
7000 1 Service Planner 1.00 1.00 0.00
7000 1 Powerline Apprentice 1.00 1.00 0.00
7000 1 Powerline Apprentice 1.00 1.00 0.00
7000 1 Powerline Apprentice 1.00 1.00 0.00
7000 1 Powerline Apprentice 1.00 1.00 0.00
7000 1 Powerline Tech Supervisor 1.00 1.00 0.00
7000 1 Powerline Tech Supervisor 1.00 1.00 0.00
7000 1 Powerline Tech Supervisor 1.00 1.00 0.00
7000 1 Powerline Tech Supervisor 1.00 1.00 0.00
7000 1 Powerline Superintendent 1.00 1.00 0.00
7000 1 Service Planning Supervisor 1.00 1.00 0.00
7000 1 Electric Operations Manager 1.00 1.00 0.00
7000 1 CORE Manager 1.00 1.00 0.00
7000 1 Engineering Supervisor 1.00 1.00 0.00
7000 1 Business Support Manager 1.00 1.00 0.00
7000 1 Associate Engineer 1.00 1.00 0.00
7000 1 Deputy Utility Director 1.00 1.00 0.00
30 Electric Fund 31.00 30.00 (1.00)
7010 1 Power Resource and Revenue Manager 1.00 1.00 0.00 1 Generation & Transmission 1.00 1.00 0.00
8000 1 WW Collections Tech III 1.00 1.00 0.00
8000 1 WW Collections Tech III 1.00 1.00 0.00
8000 1 WW Collections Supervisor 1.00 1.00 0.00
3 Wastewater Fund 3.00 3.00 0.00
9600 Public Works Program Manager 1.00 - (1.00)
9600 1 Environmental Program Coordinator 1.00 1.00 0.00 1 Refuse 2.00 1.00 (1.00)
175.75 CITY WIDE TOTAL 253.00 175.75 (77.25)

38 19
Attachment 2
CITY of BANNING
Budgetary and Fiscal Policies
I. PURPOSE
To satisfy our fiduciary responsibilities of being Transparent and Accountable in our use of public resources and to ensure Fiscal Sustainability in supporting our continued delivery of reliable services to our residents and visitors to our City.

II. METHODS FOR COMPLIANCE
City Council Periodic Review
The City Council shall conduct an annual review of this policy document to evaluate its effectiveness, consider any necessary refinements and formally adopt it. As part of this review the City Manager and Finance Director will present an overview of the City’s compliance with this Policy and commit to continual compliance.

Budget Development & Operational Policies
Budget Message

1. The City Manager is ultimately responsible for ensuring that a Budget Document is presented to the City Council and the public in a manner that is clear, understandable, and comprehensive to all stakeholders, including City staff, City Council, and residents.

The City Manager’s Budget Message will highlight key assumptions of the proposed budget, any explicit or implicit policy decisions, and, if the budget is adopted by the City Council, the short and long-term implications to the City’s current fiscal position and long-term fiscal sustainability.

The City Manager’s Budget Message should include an affirmation that the Proposed Budget conforms with the entirety of these Budgetary and Fiscal Policies. If any exceptions to this policy are proposed, they should be clearly identified, evaluated alongside alternatives, and accompanied by proposed plan to reach full conformance.

Structurally Balanced Budget

2. The City Manager is to propose a “structurally balanced” budget (i.e., ongoing expenditures are funded by ongoing revenues) for the General Fund and all other Funds.

To the extent the City Manager requests a deviation from this requirement, it should be clearly highlighted and discussed in the Budget Message. Preferably, any such deviations from policy should be identified and addressed prior to the Budget being presented to the City Council for adoption. The discussion shall outline, the reasons for the exception(s), the short and long-term implications, and how/when the City will return to compliance with this policy.
39 20
Budget Controls

3. The City will maintain a budgetary control system to ensure compliance with the adopted budget. The City will prepare quarterly status reports comparing actual revenues and expenditures to budgeted amounts. Where practical, the City will develop performance measures to be included in the operating budget.

Mid-Year Budget Review

4. The City will provide a detailed mid-year review that compares the Adopted Budget to actual revenue/expenditure activity. The review will clearly communicate the City’s level of conformance with the original Adopted Budget and expected year end fiscal position.

This mid-year review will also include presentation of the Audited Annual Comprehensive Financial Report (ACFR) from the previous fiscal year with a layperson’s assessment of key findings within the ACFR. At a minimum, this assessment should include material fund balance deviations between budgeted vs. audited actual balances as well as any relevant audit findings identified in the Management Letter, the Single Audit Report, the ACFR auditor’s opinion letter or other applicable source.

Budget Planning Workshop

5. The City will conduct an annual City Council workshop with the purpose of reflecting on the City’s current and expected long-term fiscal position for the General Fund, Utilities, and other Funds; current service levels and perceived needs of the community; and the parameters for the City Manager’s upcoming Proposed Budget. A 5 or 10-year fiscal forecast should be completed and discussed at this workshop.

Other Budget Goals

6. The City will strive to provide adequate maintenance of facilities, plant, and equipment and for the orderly replacement. If this is not occurring, this fact should be communicated with the City Council.

7. The City will project its equipment replacement and maintenance needs for the next several years and will update these projections annually. For this projection, a maintenance and replacement schedule will be developed and followed.

8. During the budget process, the City will reassess services and service levels. Staff may seek citizen input by surveys, public forums, and similar methods to accomplish this evaluation.

Equity of Cost Burden for Services and Infrastructure
Services: Services that are generally available to all should be funded with general taxes while services that disproportionably benefit residents or incur a new cost burden should be funded by fees e.g., CFDs--Mello Roos, user fees, etc.

Infrastructure: Costs should be generally borne with dedicated funding by those receiving the benefit or causing the additional cost burden e.g., growth related additional capacity. 40 21
Capital Improvement Policies

1. The City will maintain a rolling 5-year capital improvement plan presented annually with the adoption of each annual budget.

2. New Development/Growth-Pays-For-Growth--The City should ensure that new development pays its proportionate share of public infrastructure, utility capacity expansion, and municipal service costs.

3. Capital improvements are to be funded primarily by user fees, service charges, development impact fees, assessments, special taxes, Community Facilities Districts (CFDs--Mello Roos), utility capacity or connection charges, or developer agreements as appropriate.

4. The City will require that project costs and related funding be submitted with requested capital projects. “Full life” costs including operating, maintenance and demolition, if any, should be identified.

5. Although the City will strive to finance projects on a pay-as-you-go basis, the City Manager may recommend, and the Council may conclude that issuance of debt is the preferred alternative. This will be based on a study of the economy and other matters discussed below. The City will use the following criteria to evaluate the use of long-term financing vs. pay-as-you-go funding for capital projects:

Factors favoring pay-as-you-go.
• current revenues and excess reserves are available now and into the foreseeable future, or project phasing can be accomplished.
• debt levels adversely affect credit rating or there is unacceptable risk to the budget. • market conditions are unstable, or marketing difficulties exist for the debt.

Factors favoring long-term financing.
• the most equitable way of financing a project that benefits the entire community would be debt financing (pay-as-you-use) to provide the services in a timely manner. • revenues available for debt service are determined to be sufficient and reliable to provide funding for long-term financing which can be marketed with investment grade credit ratings. The assumption for the future revenue projections should include a conservative fiscal forecast (e.g., impacts of recessionary cycles, etc.). • the facility and underlying fiscal security for the financing is of the type that will support an investment grade credit rating.
• market conditions present favorable interest rates and demand for City financing. • a project is mandated by state and/or federal requirements and current revenues or fund balances are insufficient to “pay-as-you-go”.
• the facility is immediately required to meet or relieve capacity needs. • the life of the asset financed is equal to or longer than the life of the debt service. 41 22
• the proposed long-term financing must conform with the Debt Management Policies below.

Revenue Policies

1. The City will strive to maintain a diversified revenue system to protect it from short-run fluctuations in any one revenue source.

2. State and Federal funds may be pursued and utilized, but only when the City can be assured that the total costs and requirements of accepting funds are known and judged not to adversely impact the City’s General Fund and other Funds.

3. The City, where allowed by law, will review all fees for licenses, permits, fines, and other miscellaneous charges on a 3–5-year rotating basis. They will be adjusted as necessary after considering inflation, cash flow needs, direct and indirect costs to provide the services, the need to meet Fund Balance policies, and any other factors pertinent to the specific item. A regular review and implementation of index escalators will be applied wherever authorized by resolution or ordinance.

4. Enterprise Fund Cost Recovery--The City shall establish and maintain utility rates at levels sufficient to recover the full cost of service in a fair, transparent, and financially sustainable manner, while maintaining compliance with all applicable financing obligations.

At a minimum, the utility rates shall be sufficient to:
• Recover the full cost of operations, maintenance, administration, and regulatory compliance.
• Fund capital repair, replacement, and system improvements. • Maintain adequate operating, emergency, and rate reserves. • Pay all required debt service, lease payments, and other financing obligation of the enterprise.
• Preserve all required debt service, lease payments, and other financing obligations of the enterprise.
• Preserve the financial integrity and creditworthiness of enterprise funds. • Allocate costs equitably among customer classes based upon cost-of-service principles.

5. Enterprise Fund Annual Rate Reviews--During the annual budget process, there should be an assessment of whether revenue generation is adequate to cover the costs mentioned in #4 above.

6. Enterprise Fund Comprehensive Review of Rates--Every 3-5 years, unless the outcome of #5 above suggests more immediate actions is needed, a comprehensive review of rates vs. cost of service should be completed and reported to the City Council. The City may consider inflation-based escalators or other multi-year phased adjustments if it is justified.
42 23

7. Enterprise Fund New Development Cost Recovery--see Capital Improvement Policies mentioned above.

8. An administrative fee will be charged where allowed by law for administrative services, provided the fee is based on the reasonable estimated costs incurred and is not duplicative of other cost recoveries e.g., City’s Cost Allocation Plan (CAP).

9. All proposed capital projects will have a detailed capital budget specifying total costs and total revenues and shall identify the source of proposed revenues.

Debt Management Policies

1. The City will not use long-term debt to finance current operations. Long-term borrowing will be confined to capital improvements or similar projects with an extended life which cannot be “pay-as-you-go” financed from current and conservatively expected revenues over the life of the asset.

2. Debt payments shall not extend beyond the estimated useful life of the project being financed. The City will try to keep the average maturity of bonded debt at or below 20 years.

3. The City will maintain good communications with bond rating agencies and the bond market concerning its financial condition consistent with best practices and SEC guidelines.

4. The City may utilize lease purchasing with specific approval of the City Manager. The useful life of the item must be equal to or greater than the length of the lease. A lease purchase will require City Council approval beyond a five-year lease term, or the principal amount is over the City Manager’s authorized contract signing level.

5. The City will not obligate the General Fund to secure financing unless the marketability of the issue will be significantly enhanced resulting in lower interest costs, and there is appropriate review of the risk to the General Fund. This assessment of risk should be independently affirmed by the Municipal Financial Advisor.

6. A feasibility analysis shall be prepared for each request for long-term financing which analyzes the impact on current and future fiscal year budgets for debt service and operations. The analysis shall also address the reliability of revenues supporting annual debt service along with the risk of inevitable economic cycles that could impact that reliability.

7. The City shall conduct financing on a competitive basis unless, for reasons of market volatility, the use of an unusual financing structure or a complex security structure indicates the negotiated financing is preferred. These options should be evaluated with our contracted Municipal Financial Advisors.

8. The City will monitor all forms of debt on an annual basis and report concerns or suggested restructuring, if any, to the City Council as part of the annual Budget Planning Workshop process.

9. Enterprise and Property owner-based financing will only be issued under the assumption that the issue is self-supporting from user fees and charges, assessments, and special taxes without impacting the General Fund.
43 24

10. Appropriate credit enhancements, such as insurance or letters of credit shall be considered for marketing purposes, availability, and cost effectiveness.

11. The City shall diligently monitor its compliance with bond covenants and ensure its compliance with federal arbitrage regulations. Any current or expected non-compliance needs to be communicated to Council along with a plan to address it.

12. The City may issue interfund loans, but they must comply with the City of Banning current Interfund Advances or Loan Policy.

Fund Balance Policy For the General Fund
The Fund Balance (like household savings) of the General Fund is a critical buffer for the inevitable emergencies (e.g., recessionary impact on revenues, etc.), for an unexpected crisis, (e.g., uninsured loss, legal and/or court decisions), and to address operating cash flow needs.

Because the General Fund is so foundational to the City’s ability to provide services, the Policy goals discussed here, and the following section are extremely important.

The City’s Fund Balance available for emergencies and to meet cash needs should be a minimum 17% with a target range of 17% to 30% of operating appropriations.

This Fund Balance Policy establishes the desired funding level to ensure fiscal sustainability, protection against the unexpected and to meet cash flow needs. The following section sets out the procedures for reporting fund balance in the General Fund financial statements. The policy also authorizes and directs the Finance Director to prepare financial reports which categorize fund balance as per Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.

During the Mid-Year Budget Review, the Budget Planning Workshop, and the Budget presentation to City Council, the Finance Director, in conjunction with the City Manager, will report on the condition of the Fund Balances and provide an assessment of their compliance with this Policy. To the extent there is non-compliance, a plan shall be presented to achieve compliance in a timely fashion. Failure to do so presents an unacceptable risk to the City.

III. ACCOUNTING PROCEDURES FOR POLICY COMPLIANCE
Fund Balance is essentially the difference between the assets and liabilities reported in a governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the City is bound to honor constraints on the specific purpose for which amounts can be spent.
• Nonspendable Fund Balance (inherently nonspendable, will not convert to cash in the following year; thus, cannot be used as an available resource in the budget) • Restricted Fund Balance (externally enforceable limitations on use) • Committed Fund Balance (City Council self-imposed limitations on use) • Assigned Fund Balance (limitations resulting from City Council intended use) • Unassigned Fund Balance (residual net resources available for use) The first two components listed above are not addressed in this policy due to the nature of their restrictions. An example of Nonspendable Fund Balance is inventory or other asset that will not 44 25
convert to spendable cash in the next year. Restricted fund balance is either imposed by law or constrained by grantors, contributors, contracts, or regulations of other governments. This policy is focused on financial reporting of Fund Balance that can be controlled by City Council decision, the last three components listed above (Committed, Assigned and Unassigned). These three components are further defined below.

Committed Fund Balance
The City Council, as the City’s highest level of decision-making authority, may commit Fund Balance for specific purposes pursuant to constraints already imposed by formal actions taken, such as an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit Fund Balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently.

The Finance Director is the subject matter expert and is expected to ensure compliance with the following Fund Balance policy. If noncompliance occurs or is expected to, this fact will be reported to the City Manager. These two are then expected to report out to the Council at the earliest possible time as to why there is noncompliance and propose a plan for eventual compliance.
• General Fund Emergency Contingency
The City’s General Fund balance committed for emergency or inevitable economic cycle contingencies is established at a minimum of 17% or up to 30% of operating appropriations. The Emergency Contingency is reserved for economic uncertainties, local disasters, recession, or other financial hardships; to subsidize unforeseen operating or capital needs; and for cash flow requirements. The City Council may, by the affirming vote of three members, change the amount of this commitment and/or the specific uses of these monies.

To the extent the General Fund does not have adequate funds to achieve the minimum 17%, the City Manager will immediately offer a plan with options, to reach that amount.

The City Manager will not propose a budget that causes non-compliance with this Policy without a substantive staff report that highlights proposed options to continue compliance vs. options to temporary fall outside this range along with a plan to get back into compliance. This discussion will occur well before the budget is submitted to Council for adoption, preferably during the Budget Planning Workshop.

The status of the General Fund-Fund Balance will be discussed as part of the City Manager’s Budget Message, in the Budget document.

Assigned Fund Balance
Amounts that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. This policy hereby delegates the authority to assign amounts to be used for specific purposes to the Finance Director, with concurrence from the City Manager, for the purpose of reporting these amounts in the annual financial statements. A few examples of assigned fund balance follow. 45 26
• Continuing Appropriations
This is sometimes called “carryover appropriations” which reflects unspent funds for unfinished capital projects that must be carried forward into the new fiscal year to complete the project.
• Debt Service
Established to provide for future debt service obligations.

Unassigned Fund Balance
These are residual positive net resources of the General Fund more than what can properly be classified in one of the other four categories.

Fund Balance Classification
The accounting policies of the City consider Restricted Fund Balance to have been spent first when an expenditure is incurred for purposes for which both Restricted and Unrestricted Fund Balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the Unrestricted classifications of fund balance could be used, the City considers Committed amounts to be reduced first, followed by Assigned amounts and then Unassigned amounts.

This policy is in place to provide a measure of protection for the City against unforeseen circumstances and to comply with GASB Statement No. 54. No other policy or procedure supersedes the authority and provisions of this policy.

Available Fund Balance Policies
Available Fund Balance is a term used in budgets and essentially is the sum of Committed, Assigned and Unassigned Fund Balance. It is this number that when added to Revenues describes the total Resources available to fund the budget.

1. Each Fund shall maintain, if necessary, an appropriate Available Fund Balance reserve to fund prior year’s incomplete capital projects, continuing appropriations, cash flow needs and any other financial need not included in the current fiscal year budget.

2. The BUA Water and Wastewater operational funds shall maintain a minimum Available Fund Balance reserve equal to 90 days of the operating and maintenance expenses and debt service payments.

3. The Electric operational fund shall maintain a minimum Available Fund Balance reserve of 10% of the upcoming fiscal year’s total operating appropriations and debt service payments. The Available Fund Balance for the Electric Rate Stability Fund shall be maintained at a minimum of 20% of the upcoming fiscal year’s total operating appropriations and debt service payments.

4. The Self-Insurance Fund shall maintain a $1 million minimum Available Fund Balance reserve after fully funding the Accrued Claims Liabilities as determined by the actuary at an 80% confidence factor.
46 27
Budget and Budgetary Accounting Policies
The City uses the following procedures in establishing the budget:

1. Before the beginning of the budget cycle, the City Manager facilitates a Budget Planning Workshop to discuss the City’s finances, both current and long-term, current service levels, perceived needs of the community and the parameters of the City Manager’s upcoming Proposed Budget commencing July 1. The Council will provide general direction.

2. A budget workshop(s) may be conducted every two years or as needed to obtain citizen comments.

3. The budget is subsequently agendized, thoroughly discussed and adopted through passage of a resolution.

4. For a given fiscal year, all appropriations are as originally adopted or as amended by the City Council. At year end, all unencumbered budgeted amounts lapse, subject to requests for continuing appropriations. Outstanding encumbrances may be carried forward into the new fiscal year upon the Finance Director’s review and City Manager approval.

5. Continuing Appropriations requests and Authorized Capital Projects are approved by the City Manager after the adoption of the original budget. The original budget is then adjusted accordingly.

6. The legal level of budgetary control is at the fund level. A Department Head may transfer budget appropriations within a major category in a department or Fund under his authority. The City Manager’s approval must be obtained when a budget appropriation transfer request moves from one major appropriation category to another within a department.

7. The City Council may, at any time, amend the budget or delete appropriations, transfer appropriations within a fund, or change appropriation transfers between funds. 47

CITY of BANNING
Budgetary and Fiscal Policies
I. PURPOSE
To satisfy our fiduciary responsibilities of being Transparent and Accountable in our use of public resources and to ensure Fiscal Sustainability in supporting our continued delivery of reliable services to our residents and visitors to our City.

II. METHODS FOR COMPLIANCE
City Council Periodic Review
The City Council shall conduct an annual review of this policy document to evaluate its effectiveness, consider any necessary refinements and formally adopt it. As part of this review the City Manager and Finance Director will present an overview of the City’s compliance with this Policy and commit to continual compliance.

Budget Development & Operational Policies
Budget Message

1. The City Manager is ultimately responsible for ensuring that a Budget Document is presented to the City Council and the public in a manner that is clear, understandable, and comprehensive to all stakeholders, including City staff, City Council, and residents.

The City Manager’s Budget Message will highlight key assumptions of the proposed budget, any explicit or implicit policy decisions, and, if the budget is adopted by the City Council, the short and long-term implications to the City’s current fiscal position and long-term fiscal sustainability.

The City Manager’s Budget Message should include an affirmation that the Proposed Budget conforms with the entirety of these Budgetary and Fiscal Policies. If any exceptions to this policy are proposed, they should be clearly identified, evaluated alongside alternatives, and accompanied by proposed plan to reach full conformance.

Structurally Balanced Budget

2. The City Manager is to propose a “structurally balanced” budget (i.e., ongoing expenditures are funded by ongoing revenues) for the General Fund and all other Funds.

To the extent the City Manager requests a deviation from this requirement, it should be clearly highlighted and discussed in the Budget Message. Preferably, any such deviations from policy should be identified and addressed prior to the Budget being presented to the City Council for adoption. The discussion shall outline, the reasons for the exception(s), the short and long-term implications, and how/when the City will return to compliance with this policy.
48

Budget Controls

3. The City will maintain a budgetary control system to ensure compliance with the adopted budget. The City will prepare quarterly status reports comparing actual revenues and expenditures to budgeted amounts. Where practical, the City will develop performance measures to be included in the operating budget.

Mid-Year Budget Review

4. The City will provide a detailed mid-year review that compares the Adopted Budget to actual revenue/expenditure activity. The review will clearly communicate the City’s level of conformance with the original Adopted Budget and expected year end fiscal position.

This mid-year review will also include presentation of the Audited Annual Comprehensive Financial Report (ACFR) from the previous fiscal year with a layperson’s assessment of key findings within the ACFR. At a minimum, this assessment should include material fund balance deviations between budgeted vs. audited actual balances as well as any relevant audit findings identified in the Management Letter, the Single Audit Report, the ACFR auditor’s opinion letter or other applicable source.

Budget Planning Workshop

5. The City will conduct an annual City Council workshop with the purpose of reflecting on the City’s current and expected long-term fiscal position for the General Fund, Utilities, and other Funds; current service levels and perceived needs of the community; and the parameters for the City Manager’s upcoming Proposed Budget. A 5 or 10-year fiscal forecast should be completed and discussed at this workshop.

Other Budget Goals

6. The City will strive to provide adequate maintenance of facilities, plant, and equipment and for the orderly replacement. If this is not occurring, this fact should be communicated with the City Council.

7. The City will project its equipment replacement and maintenance needs for the next several years and will update these projections annually. For this projection, a maintenance and replacement schedule will be developed and followed.

8. During the budget process, the City will reassess services and service levels. Staff may seek citizen input by surveys, public forums, and similar methods to accomplish this evaluation.

Equity of Cost Burden for Services and Infrastructure
• Services--services that are generally available to all should be funded with general taxes while services that disproportionably benefit residents or incur a new cost burden should be funded by fees (e.g., CFDs--Mello Roos, user fees, etc).
• Infrastructure--costs should be generally borne with dedicated funding by those receiving the benefit or causing the additional cost burden e.g., growth related additional capacity.
49

Capital Improvement Policies

1. The City will maintain a rolling 5-year capital improvement plan presented annually with the adoption of each annual budget.

2. New Development/Growth-Pays-For-Growth--The City should ensure that new development pays its proportionate share of public infrastructure, utility capacity expansion, and municipal service costs.

3. Capital improvements are to be funded primarily by user fees, service charges, development impact fees, assessments, special taxes, Community Facilities Districts (CFDs--Mello Roos) or developer agreements as appropriate.

4. The City will require that project costs and related funding be submitted with requested capital projects. “Full life” costs including operating, maintenance and demolition, if any, should be identified.

5. Although the City will strive to finance projects on a pay-as-you-go basis, the City Manager may recommend, and the Council may conclude that issuance of debt is the preferred alternative. This will be based on a study of the economy and other matters discussed below. The City will use the following criteria to evaluate the use of long-term financing vs. pay-as-you-go funding for capital projects:

Factors favoring pay-as-you-go.
• current revenues and excess reserves are available now and into the foreseeable future, or project phasing can be accomplished.
• debt levels adversely affect credit rating or there is unacceptable risk to the budget. • market conditions are unstable, or marketing difficulties exist for the debt.

Factors favoring long-term financing.
• the most equitable way of financing a project that benefits the entire community would be debt financing (pay-as-you-use) to provide the services in a timely manner. • revenues available for debt service are determined to be sufficient and reliable to provide funding for long-term financing which can be marketed with investment grade credit ratings. The assumption for the future revenue projections should include a conservative fiscal forecast (e.g., impacts of recessionary cycles, etc.). • the facility and underlying fiscal security for the financing is of the type that will support an investment grade credit rating.
• market conditions present favorable interest rates and demand for City financing. • a project is mandated by state and/or federal requirements and current revenues or fund balances are insufficient to “pay-as-you-go”.
• the facility is immediately required to meet or relieve capacity needs. • the life of the asset financed is equal to or longer than the life of the debt service. • the proposed long-term financing must conform with the Debt Management Policies below.
50

Revenue Policies

1. The City will strive to maintain a diversified revenue system to protect it from short-run fluctuations in any one revenue source.

2. State and Federal funds may be pursued and utilized, but only when the City can be assured that the total costs and requirements of accepting funds are known and judged not to adversely impact the City’s General Fund and other Funds.

3. The City, where allowed by law, will review all fees for licenses, permits, fines, and other miscellaneous charges on a 3–5-year rotating basis. They will be adjusted as necessary after considering inflation, cash flow needs, direct and indirect costs to provide the services, the need to meet Fund Balance policies, and any other factors pertinent to the specific item. A regular review and implementation of index escalators will be applied wherever authorized by resolution or ordinance.

4. Enterprise Fund Cost Recovery--The City shall establish and maintain utility rates at levels sufficient to recover the full cost of service in a fair, transparent and financially sustainable manner, while maintaining compliance with all applicable financing obligations.

At a minimum, the utility rates shall be sufficient to:
• Recover the full cost of operations, maintenance, administration, and regulatory compliance.
• Fund capital repair, replacement, and system improvements. • Maintain adequate operating, emergency, and rate reserves. • Pay all required debt service, lease payments, and other financing obligation of the enterprise.
• Preserve all required debt service, lease payments, and other financing obligations of the enterprise.
• Preserve the financial integrity and creditworthiness of enterprise funds. • Allocate costs equitably among customer classes based upon cost-ofservice principles.

5. Enterprise Fund Annual Rate Reviews--During the annual budget process, there should be an assessment of whether revenue generation is adequate to cover the costs mentioned in #4 above.

6. Enterprise Fund Comprehensive Review of Rates--Every 3-5 years, unless the outcome of #5 above suggests more immediate actions is needed, a comprehensive review of rates vs. cost of service should be completed and reported to the City Council. The City may consider inflation-based escalators or other multi-year phased adjustments if it is justified.

7. Enterprise Fund New Development Cost Recovery--see Capital Improvement Policies mentioned above.
51

8. An administrative fee will be charged where allowed by law for administrative services, provided the fee is based on the reasonable estimated costs incurred and is not duplicative of other cost recoveries e.g., City’s Cost Allocation Plan (CAP).

9. An annual review of the City’s CAP will be conducted by the Finance Director to ensure indirect administrative costs and Internal Service Fund costs are fairly and equitably allocated to operating departments. The results of this annual review will be reported to the City Manager.

10. All proposed capital projects will have a detailed capital budget specifying total costs and total revenues and shall identify the source of proposed revenues.

Debt Management Policies

1. The City will not use long-term debt to finance current operations. Long-term borrowing will be confined to capital improvements or similar projects with an extended life which cannot be “pay-as-you-go” financed from current and conservatively expected revenues over the life of the asset.

2. Debt payments shall not extend beyond the estimated useful life of the project being financed. The City will try to keep the average maturity of bonded debt at or below 20 years.

3. The City will maintain good communications with bond rating agencies and the bond market concerning its financial condition consistent with best practices and SEC guidelines.

4. The City may utilize lease purchasing with specific approval of the City Manager. The useful life of the item must be equal to or greater than the length of the lease. A lease purchase will require City Council approval beyond a five-year lease term, or the principal amount is over the City Manager’s authorized contract signing level.

5. The City will not obligate the General Fund to secure financing unless the marketability of the issue will be significantly enhanced resulting in lower interest costs, and there is appropriate review of the risk to the General Fund. This assessment of risk should be independently affirmed by the Municipal Financial Advisor.

6. A feasibility analysis shall be prepared for each request for long-term financing which analyzes the impact on current and future fiscal year budgets for debt service and operations. The analysis shall also address the reliability of revenues supporting annual debt service along with the risk of inevitable economic cycles that could impact that reliability.

7. The City shall conduct financing on a competitive basis unless, for reasons of market volatility, the use of an unusual financing structure or a complex security structure indicates the negotiated financing is preferred. These options should be evaluated with our contracted Municipal Financial Advisors.

8. The City will monitor all forms of debt on an annual basis and report concerns or suggested restructuring, if any, to the City Council as part of the annual Budget Planning Workshop process.
52

9. Enterprise and Property owner-based financing will only be issued under the assumption that the issue is self-supporting from user fees and charges, assessments, and special taxes without impacting the General Fund.

10. Appropriate credit enhancements, such as insurance or letters of credit shall be considered for marketing purposes, availability, and cost effectiveness.

11. The City shall diligently monitor its compliance with bond covenants and ensure its compliance with federal arbitrage regulations. Any current or expected non-compliance needs to be communicated to Council along with a plan to address it.

12. The City may issue interfund loans, but they must comply with the City of Banning current Interfund Advances or Loan Policy.

Fund Balance Policy For the General Fund
The Fund Balance (like household savings) of the General Fund is a critical buffer for the inevitable emergencies (e.g., recessionary impact on revenues, etc.), for an unexpected crisis, (e.g., uninsured loss, legal and/or court decisions), and to address operating cash flow needs.

Because the General Fund is so foundational to the City’s ability to provide services, the Policy goals discussed here, and the following section are extremely important.

The City’s Fund Balance available for emergencies and to meet cash needs should be a minimum 17% with a target range of 17% to 30% of operating appropriations.

This Fund Balance Policy establishes the desired funding level to ensure fiscal sustainability, protection against the unexpected and to meet cash flow needs. The following section sets out the procedures for reporting fund balance in the General Fund financial statements. The policy also authorizes and directs the Finance Director to prepare financial reports which categorize fund balance as per Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.

During the Mid-Year Budget Review, the Budget Planning Workshop, and the Budget presentation to City Council, the Finance Director, in conjunction with the City Manager, will report on the condition of the Fund Balances and provide an assessment of their compliance with this Policy. To the extent there is non-compliance, a plan shall be presented to achieve compliance in a timely fashion. Failure to do so presents an unacceptable risk to the City.

III. ACCOUNTING PROCEDURES FOR

POLICY COMPLIANCE
Fund Balance is essentially the difference between the assets and liabilities reported in a governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the City is bound to honor constraints on the specific purpose for which amounts can be spent.
• Nonspendable Fund Balance (inherently nonspendable, will not convert to cash in the following year; thus, cannot be used as an available resource in the budget) • Restricted Fund Balance (externally enforceable limitations on use) • Committed Fund Balance (City Council self-imposed limitations on use) 53

• Assigned Fund Balance (limitations resulting from City Council intended use) • Unassigned Fund Balance (residual net resources available for use) The first two components listed above are not addressed in this policy due to the nature of their restrictions. An example of Nonspendable Fund Balance is inventory or other asset that will not convert to spendable cash in the next year. Restricted Fund Balance is either imposed by law or constrained by grantors, contributors, contracts, or regulations of other governments. This policy is focused on financial reporting of Fund Balance that can be controlled by City Council decision, the last three components listed above (Committed, Assigned and Unassigned). These three components are further defined below.

Committed Fund Balance
The City Council, as the City’s highest level of decision-making authority, may commit Fund Balance for specific purposes pursuant to constraints already imposed by formal actions taken, such as an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit Fund Balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently.

The Finance Director is the subject matter expert and is expected to ensure compliance with the following Fund Balance policy. If noncompliance occurs or is expected to, this fact will be reported to the City Manager. These two are then expected to report out to the Council at the earliest possible time as to why there is noncompliance and propose a plan for eventual compliance.
• General Fund Emergency Contingency
The City’s General Fund balance committed for emergency or inevitable economic cycle contingencies is established at a minimum of 17% or up to 30% of operating appropriations. The Emergency Contingency is reserved for economic uncertainties, local disasters, recession, or other financial hardships; to subsidize unforeseen operating or capital needs; and for cash flow requirements. The City Council may, by the affirming vote of three members, change the amount of this commitment and/or the specific uses of these monies.

To the extent the General Fund does not have adequate funds to achieve the minimum 17%, the City Manager will immediately offer a plan with options, to reach that amount.

The City Manager will not propose a budget that causes non-compliance with this Policy without a substantive staff report that highlights proposed options to continue compliance vs. options to temporary fall outside this range along with a plan to get back into compliance. This discussion will occur well before the budget is submitted to Council for adoption, preferably during the Budget Planning Workshop.

The status of the General Fund-Fund Balance will be discussed as part of the City Manager’s Budget Message, in the Budget document.
54

Assigned Fund Balance
Amounts that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. This policy hereby delegates the authority to assign amounts to be used for specific purposes to the Finance Director, with concurrence from the City Manager, for the purpose of reporting these amounts in the annual financial statements. A few examples of assigned fund balance follow. • Continuing Appropriations
This is sometimes called “carryover appropriations” which reflects unspent funds for unfinished capital projects that must be carried forward into the new fiscal year to complete the project.
• Debt Service
Established to provide for future debt service obligations.

Unassigned Fund Balance
These are residual positive net resources of the General Fund more than what can properly be classified in one of the other four categories.

Fund Balance Classification
The accounting policies of the City consider Restricted Fund Balance to have been spent first when an expenditure is incurred for purposes for which both Restricted and Unrestricted Fund Balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the Unrestricted classifications of fund balance could be used, the City considers Committed amounts to be reduced first, followed by Assigned amounts and then Unassigned amounts.

This policy is in place to provide a measure of protection for the City against unforeseen circumstances and to comply with GASB Statement No. 54. No other policy or procedure supersedes the authority and provisions of this policy.

Available Fund Balance Policies
Available Fund Balance is a term used in budgets and essentially is the sum of Committed, Assigned and Unassigned Fund Balance. It is this number that when added to Revenues describes the total Resources available to fund the budget.

1. Each Fund shall maintain, if necessary, an appropriate Available Fund Balance reserve to fund prior year’s incomplete capital projects, continuing appropriations, cash flow needs and any other financial need not included in the current fiscal year budget.

2. The BUA Water and Wastewater operational funds shall maintain a minimum Available Fund Balance reserve equal to 90 days of the operating and maintenance expenses and debt service payments.

3. The Electric operational fund shall maintain a minimum Available Fund Balance reserve of 10% of the upcoming fiscal year’s total operating appropriations and debt service payments. The Available Fund Balance for the Electric Rate Stability Fund shall be 55

maintained at a minimum of 20% of the upcoming fiscal year’s total operating appropriations and debt service payments.

4. The Self-Insurance Fund shall maintain a $1 million minimum Available Fund Balance reserve after fully funding the Accrued Claims Liabilities as determined by the actuary at an 80% confidence factor.

Budget and Budgetary Accounting Policies
The City uses the following procedures in establishing the budget:

1. Before the beginning of the budget cycle, the City Manager facilitates a Budget Planning Workshop to discuss the City’s finances, both current and long-term, current service levels, perceived needs of the community and the parameters of the City Manager’s upcoming Proposed Budget commencing July 1. The Council will provide general direction.

2. A budget workshop(s) may be conducted every two years or as needed to obtain citizen comments.

3. The budget is subsequently agendized, thoroughly discussed and adopted through passage of a resolution.

4. For a given fiscal year, all appropriations are as originally adopted or as amended by the City Council. At year end, all unencumbered budgeted amounts lapse, subject to requests for continuing appropriations. Outstanding encumbrances may be carried forward into the new fiscal year upon the Finance Director’s review and City Manager approval.

5. Continuing Appropriations requests and Authorized Capital Projects are approved by the City Manager after the adoption of the original budget. The original budget is then adjusted accordingly.

6. The legal level of budgetary control is at the fund level. A Department Head may transfer budget appropriations within a major category in a department or Fund under his authority. The City Manager’s approval must be obtained when a budget appropriation transfer request moves from one major appropriation category to another within a department.

7. The City Council may, at any time, amend the budget or delete appropriations, transfer appropriations within a fund, or change appropriation transfers between funds. 56 1
Appendix A
SWOTs
Banning 2030
Designing the Future TODAY!
Strategic Plan
February 24, 2026
City Council Workshop
November 25, 2025
57 i
58 Strategic Plan - Appendix A ii

TABLE OF CONTENTS
Page
CITY OF BANNING’S STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOTs) ......... 1 STRATEGIC PLAN SWOTS AND INITIATIVES.................................................................................. 3 CITY MANAGER’S OFFICE (CMO)
SWOTs and Strategic Initiatives ....................................................................................... 4

CITY ATTORNEY (SBEMP PERSPECTIVE)
SWOTsand Strategic Initiatives........................................................................................ 9

HUMAN RESOURCES (HR) & RISK MANAGEMENT (RM)
SWOTs and Strategic Initiatives ......................................................................................12 FINANCE DEPARTMENT—ACCOUNTING
SWOTs and Strategic Initiatives ......................................................................................16 FINANCE—INFORMATION TECHNOLOGY (IT)
SWOTs and Strategic Initiatives ......................................................................................21 FINANCE—PURCHASING
SWOTs and Strategic Initiatives ......................................................................................27 FINANCE—UTILITY BILLING (UB)
SWOTs and Strategic Initiatives ......................................................................................30

POLICE DEPARTMENT
SWOTs and Strategic Initiatives ......................................................................................34 PUBLIC WORKS—ELECTRICAL UTILITY
SWOTs and Strategic Initiatives ......................................................................................37 PW—WATER UTILITY
SWOTs ..........................................................................................................................41 PW—WASTEWATER UTILITY
SWOTs and Strategic Initiatives (Water and Wastewater).................................................44 PW—BUILDING MAINTENANCE
SWOTs and Strategic Initiatives ......................................................................................47 59 Strategic Plan - Appendix A iii
PW—ENGINEERING
SWOTs and Strategic Initiatives ......................................................................................49 PW—STREET MAINTENANCE
SWOTs and Strategic Initiatives ......................................................................................52

PARKS & RECREATION DEPARTMENT
SWOTs and Strategic Initiatives ......................................................................................55

COMMUNITY & ECONOMIC DEVELOPMENT
SWOTs and Strategic Initiatives ......................................................................................59 60 Strategic Plan - Appendix A 1
CITY OF BANNING’S

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND
THREATS (SWOTs)
This section reflects departmental views on their own Strengths and Weaknesses. They were also asked: what do they see as (primarily external) emerging Opportunities and Threats?
Strengths and Weaknesses
Healthy organizations should be confident enough to practice some self-reflection. There is no sense in tackling strategic goals without recognizing the strengths and limitations in achieving them. To skip this looking inward step has the effect of converting goals and expected outcomes to just dreams, that may or may-not occur. We need to better position ourselves to adequately meet the future and do it now. Skipping this step also means to give up control and lessen expectations.

Opportunities and Threats
The delineation of (future) opportunities and threats is equivalent to turning on the “high beams” in your car as you head down a windy road at night. This allows time to better plan your moves before coming onto the threat. It helps avoid the need to drop everything and handle a crisis that is in your lap. However, since we just turned on the “high beams” for the first time, we find many Threats are here and need addressing now.

What sets Banning apart from many cities is the sheer
volume of substantial problems or crises that are in your lap at the same time.

The myriad crises that you’ll be reading about are attributable to a few key factors. One is the obvious, there is no clear and robust strategic planning going on currently. To do this requires some self-awareness and looking into the future. The City has completed so called strategic plans in the past but there was limited follow through (i.e., missing an Implementation Phase). Also, it appears there was limited self-reflection on the overall capacity of the City organization, and its capacity to tackle strategic goals. Finally, it was readily apparent that there was inadequate awareness and management controls emanating from the City Manager’s Office to guide the organization in a coordinated way. 61 Strategic Plan - Appendix A 2
The underlying themes of this Plan include addressing the observations mentioned above.

Unfortunately, the choices for everyone (Council and City Management) now, are more difficult and numerous than other cities.

Given the overall tenure of this City Council, it did not cause the challenges mentioned in this report, rather they inherited them. However, they should be proud in sponsoring this effort and articulating plans to make the organization better. With this effort, the overall Banning community will be improving as well.

This is not just about fixing today’s problems. It is also about putting things in place for generations.
62 Strategic Plan - Appendix A 3

STRATEGIC PLAN SWOTS AND INITIATIVES
At the end of each City office, department, or division, you will note Possible Strategic Initiatives in suggested priority order. And once you read the entire document you will note the sheer number of goals. This reflects the large number of issues that need to be addressed. And to not address them, your list of weaknesses and threats will only get longer or more acute.

These Initiatives can be broken into two categories, Initiatives that are matters of policy and Initiatives that are administrative in nature. In other words, the Policy Initiatives are within the typical purview of the City Council. The other Initiatives are within the City Management purview.

One could try to break these matters out into two reports, Council vs Management.

However, the interplay between these two categories is so apparent, we decided to provide one report or plan. This provides the most comprehensive picture of the City organization and the emerging issues in the Banning community that ultimately must be addressed by the same organization.

To assist the reader, we attempted to highlight which Strategic Plan Initiatives are “policy” related and the rest, administrative related.
63 Strategic Plan - Appendix A 4
CITY MANAGER’S OFFICE (CMO)
SWOTs
Given this Office manages and supports the entire City, some of these CMO SWOTs cover City-wide issues that are not listed in the departmental discussions even though they may be implementors. However, it’s the City Manager (CM) that is responsible for the “heavy lifting” and personally addressing them for the City Council. Some initiatives require the gravitas of the CM position to be successful. However, some of these SWOTs do indeed singularly reside in the City Manager’s Office.

Strengths
Familiarity with Banning—The recently appointed Interim City Manager comes after many years within the City organization managing the largest City department with a diverse array of programs. This appointment provides stability in the position while the City completes the recruitment for the permanent City Manager Apparent Support by the Council—The employment agreement for the incumbent was approved 5-0 suggesting a certain level of unanimity, a degree of stability and support during a large transition in staff and Council members. Council made a commitment to the Interim City Manager to regularly meet with him on a one-on-one basis to communicate ongoing issues and to be kept up to speed on priority projects. Council continues to meet this commitment.

The City Council is Functioning As a Team— As of late, the Council is working well together to recruit for and select a permanent CM. By designating the term “permanent” to the CM position, it will continue providing the stability initiated by the Interim CM, which is a necessary component for success of this Strategic Plan. The Council’s sustained level of teamwork provides the foundation for the City Manager to address the numerous challenges discussed in this plan.

Weaknesses
Staff Turnover and Vacancies—There has been substantial turnover in the executive and mid-management ranks in the City with almost no transition plans; thus, losing institutional memory. This creates substantial risk and problems in continuing services and programs. One example is in the Finance and accounting area.

Inherited Corporate Culture Could Improve—It is apparent upon reading the departmental SWOTs the City lacked a certain level of management controls and oversight to ensure the diverse departments are moving in the same, predictable, and mutually 64 Strategic Plan - Appendix A 5
supportive direction. There was a certain level of independence, that without a proper balance of controls from this office, created avoidable problems. And because of this implied independence, there is a limited sense of urgency within some parts of the organization.

A Plethora of Crises That Require Immediate Action—Very few public agencies are addressing at the same time, the number of crises that can seriously harm the City’s very foundation to provide sustainable services and legitimacy in the eyes of the residents.

Some examples include: the Utility Billing tardiness, the Electrical utility fund balance deficit, the General Fund, and Internal Service Funds (ISF) overall distressed fiscal positions, the lack of fiscal management data, the lack of interest in coming to City employment because of these challenges, the high reliance on temporary or outside help for mission critical roles, the loss of mid-management capability to step in to help during trying times, etc.

Expenditures Require Revenues—In parts of the City budget (e.g., the General Fund, Electrical Utility, ISFs, etc.) there simply are not enough revenues to cover ongoing expenses. And due to poor past fiscal management practices, this was not brought to the fore with the City Council and others in years past. This has and will require hard choices to correct (e.g., large electrical rate increases over time, possible budget reductions, requesting more resources from residents, etc.). This adds stress to an organization that is currently trying to adopt to new healthy practices.

City Manager’s Office Limited Capacity—Given all the issues and Strategic Plan initiatives that the Council will want to pursue, and the plethora of administrative goals; the City Manager will have difficulty staying focused on these priorities. And when you add the need for changing the culture of the City and to properly manage the day-to-day affairs of the City, it is clear the CM needs more help. The CM will need to evaluate various options to assist him, whether it be a Management Analyst or Assistant City Manager. This high workload will be there for at least the next five years. And with the recommended new reporting relationships for Human Resources and Information Technology (to the CMO); this suggests the need for a higher skill set to be added to the office.

Opportunities
An Experienced Team—The Council has formed an experienced team that has substantially restructured finances and repaired organizations in the past. The fiscal information needs to catch up so the Council, City management and its experienced team can develop a fiscal path forward.

Council Is Focused on the Future—The Council has demonstrated a willingness to take on the inherited challenges “head on” and develop this Strategic Plan as a guide to move in a coordinated way forward. This embodies the pivoting away from the transactional and the past, to the strategic long-term future of the City. 65 Strategic Plan - Appendix A 6
Economic Development is Knocking on the Door—There has been documented and serious interest by developers that can add jobs (to a City with a higher jobless rate) and revenues to help “right” the City fiscal ship.

Threats
Financial Vulnerabilities of the City—Given the poor past practices of management, the City’s financial position is distressed for the Electrical Utility, the General Fund, and the Internal Service Funds (ISFs). There is a clear plan to address the Electrical Utility impaired fiscal position that has been reviewed and approved by the Council. Once the Finance Department produces updated and current fiscal information, the path forward will provide for many difficult decisions. We have no choice but to balance future budgets. This may require difficult cuts or equally difficult resource measures that may require voter approval.

Management Instability—While the City is recruiting for new management capabilities, it is important to nurture a stable environment starting from staff, through this office up to the Council. If we fail, we will lose more key managers in the future.

Residential Does Not Pay for City Services—While Banning residents will disagree with this assertion given everyone is paying too many taxes; but the resources to fund the services that residents want simply does not come from those same residents. It requires a healthy business sector (industrial, commercial, and retail). There is a large segment of Banning that prefers more residential over some of the business alternatives; thus, there is a disconnect. This has to be reconciled or the City will be suffering to provide adequate services and balance their budgets.

The Economic Development Door May Close—If Banning repeatedly turns down the Economic Development opportunities that present themselves; the door may eventually close, and opportunities will become scarce for the foreseeable future. This will make your task of financing a robust and sustainability City for now and the next generation, very difficult, if not impossible. This will then cause more turnover in the management of your City. It could create a difficult distress loop (fiscal and operational) that will be very difficult to exit.

Homelessness— Homelessness presents a significant challenge to the City as it impacts public safety, community well-being, and economic vitality. The growing number of unhoused individuals places increased demand on public resources, including law enforcement and public works crews responsible for encampment cleanups and infrastructure maintenance. Visible homelessness can also deter private investment, affect property values, and generate community concern over health, sanitation, and the use of public spaces.
66 Strategic Plan - Appendix A 7
Grants Manager? Without the focused oversight of a dedicated Grants Manager there is a risk of grant noncompliance, missed reporting deadlines, and potential loss or repayment of awarded funds. Equally concerning is the lack of proactive pursuit of new grant opportunities—particularly given the City’s status as a Disadvantaged Community, which often strengthens eligibility and competitiveness for state and federal funding. You will note the many comments in various departmental SWOTs about needing to pursue grant opportunities.

No Animal Control and Shelter— The lack of dedicated animal control services in coordination with an operational shelter presents a significant threat to public health, safety, and community confidence. Without these resources, the City faces increased risks of uncontrolled stray animal populations, potential spread of disease, and heightened incidents of aggressive or dangerous animal behavior in public areas.

POSSIBLE PRIORITY 1 INTITIATIVE (policy)
Strategic Plan Implementation—Upon review and approval of Banning’s Strategic Plan, the City Manager will take the top priority goals and develop more detailed plans (e.g., including steps, timelines, resources, etc.), that effectuates the goals. The Council will review and adopt this Implementation Phase. The City Manager will report out semiannually.

The City Manager will also be responsible for high-priority administrative-related Goals, largely through the department heads.

Given the plethora of Goals within this Plan, the CM should assess and recommend to Council the necessary support needed to be successful (i.e., Administrative Analyst vs.

Assistant City Manager).

POSSIBLE PRIORITY 2 INITIATIVE (policy)
In Conjunction with Finance, Develop and Implement Banning’s Workout Plan to Fiscal Sustainability (see Finance Goal 2)—This includes identifying and executing all the components necessary to bring the City’s financing into more of a sustainable state. This will likely require approaching the voters for more resources.

POSSIBLE PRIORITY 3 INITIATIVE
Develop a New Banning Organizational Culture—In collaboration with staff, the City Manager will lead an effort to define the “new” Banning organizational culture along with values, desired behaviors, a sense of a coordinated team, effective management controls, etc. The CM will then work with Human Resources to reinforce these norms via 67 Strategic Plan - Appendix A 8
performance management discussions, promotions, employee recognitions, new hires, training, etc.

POSSIBLE PRIORITY 4 INITIATIVE (policy)
A New Economic Development (ED) Plan—After it becomes clear what is needed to fund a sustainable Banning, develop an Economic Development Plan that supports the General Fund Workout Plan—see Finance’s and CM Priority Goals 2. This will be a critical part in determining and financing Banning’s future. The two (ED and Banning’s fiscal future) are inextricably connected at the hip. This should also include an inventory of City-owned lands and consider how they might be better utilized to effectuate ED Plan goals.

POSSIBLE PRIORITY 5 INITIATIVE (policy)
Homelessness—After surveying how other cities have been successful on managing this challenge, develop Banning’s Homeless Program that includes important partners, such as Riverside County (social services and jail), churches and non-profits. The approach should include both local enforcement in coordination with committed regional resources.

POSSIBLE PRIORITY 6 INITIATIVE (policy)
Animal Control and Shelter— The City should take steps to reopen its existing animal shelter facility. At the same time, the City should collaborate with neighboring jurisdictions to explore a long-term regional partnership. A regional approach would maximize resources, reduce costs, and provide consistent, high-quality animal control services for the community.
68 Strategic Plan - Appendix A 9

CITY ATTORNEY (SBEMP PERSPECTIVE)
SWOTs
Strengths
Seasoned Public-Agency Counsel With a Deep Bench of Skill Sets—SBEMP brings to the city one of the region’s largest and most effective labor & employment teams, insurance coverage, environmental, real estate business, and land use expertise. There is also extensive experience advising and litigating under Propositions 218 and 26 for agencies with water, sewer, and electric utilities, mirroring Banning’s portfolio.

Proven Track Record of Stabilizing Agencies Under Pressure—The firm has helped jurisdictions experiencing some of the exact challenges facing Banning to “reset” toward sustainable paths. It has the expertise and experience the city needs now and in the future for navigating complex, high-stakes challenges.

Land Use & Development—A Public Agency Perspective—the team regularly handles public-sector land use and development matters. Senior lawyers bring significant, practical know-how that the City can tap as initiatives arise.

Strategic Fit—SBEMP’s bandwidth aligns closely with Banning’s needs, which is a strength for the City as it embarks on this Strategic Plan’s initiatives.

Weaknesses
New Working Relationships are Still Forming—Recent personnel changes at the City, and SBEMP’s relative newness to Banning mean that team integration and institutional knowledge are still maturing.

Fragmented Litigation Defense—This is driven by the JPAs that handle City claims (workers’ compensation, general liability, and employment practices). Claims tendered to the two JPAs (PERMA and ERMA) are often assigned to defense firms not selected or vetted by the City Attorney’s office, producing a rotating cast of defenders and avoidable inefficiencies (lost time learning players/process). Furthermore, the philosophies and styles of these firms may not always be in the best interests of the City.

Opportunities
Lessons Learned—Convene a retrospective meeting with appropriate staff after the claim has run its course and report to the City Manager.
69 Strategic Plan - Appendix A 10
Reform (Insurance) Defense Counsel Selection—Counsel should be picked for quality, efficiency, and firms that are more in line with Banning’s needs, both short and long term.

The City should work with the JPAs to pursue options in routing claims to firms that reflect City priorities.

Strengthen Public Understanding—As legal matters become public, we should communicate the City’s legal posture to stakeholders. This includes educating the Council, staff and community on risk management, use of revenue tools, and litigation philosophy.

Apply Specialized Experience as Initiatives Surface—As Banning advances capital, utilities, and land-use priorities, the firm’s expertise can streamline entitlement, revenue compliance, and defensibility.

Threats
History of Heavy Litigation and Costly Settlements Around Employment Claims— Banning’s past volume of cases and expensive outcomes increases exposure and sends the wrong message to other staff. Without a reset, this trend can persist as potential plaintiffs pursue more of the same.

Banning’s Employment Claim History Negatively Impacts Our Insurance—Our partnerships via JPAs greatly reduce our insurance costs; however, it requires fiscal partnerships with other public agencies (JPA members). If JPA members perceive they are continually subsidizing our inordinately high claims trends, they may opt to remove us from the JPA or reduce our insurance coverage. This would greatly increase financial exposure to us at the time that we least can handle it.

Fiscal pressure—Broader financial challenges heighten the stakes of every claim and settlement decision.

Adverse Signaling—Without a robust litigation strategy, plaintiffs and firms may calibrate expectations accordingly.

The Large Number of Employees Out on Leave—Besides a relatively high vacancy factor for City positions, there is a large list of employees out on leaves (i.e. Workers’ Compensation, Administrative and other disability leaves). This impairs our ability to provide services. It also increases our costs by backfilling their jobs with other employees (overtime). This should be closely managed with Human Resources, the City Attorney’s office and the City Manager consistent with Federal and State law. Some of this will require more engagement with the insurance JPAs.
70 Strategic Plan - Appendix A 11
Evolving State Mandates—Rapidly changing California housing, land use, and environmental mandates may strain cities and require continual legal adaptation, increasing workload unpredictability.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Collaborate with Human Resources Department on Outreach to our Insurance JPAs— We should engage our two insurance JPAs (PERMA and ERMA) and communicate to our partners what Banning will do differently to change the negative claims trends. This should also include addressing the selection of defense counsel.

POSSIBLE PRIORITY 2 INITIATIVE
Create a New Human Resources Program Around Performance Management—In conjunction with the City Attorney, Human Resources and Department Heads, develop a clearly understood program when Human Resources’ input is requested for “upstream” departmental management decisions related to performance management. Also, the program should clarify when the City Attorney’s Office input is required before making more “downstream” disciplinary decisions.

POSSIBLE PRIORITY 3 INITIATIVE
Implement a Coordinated Leave Management Program—In conjunction with Human Resources, City management and this office, create a formal reporting mechanism to track progress on leaves. Employees should be assisted in acquiring the medical assistance due them while on leave, but we need to ensure employees return to work when medically cleared. We should refine our Return-to-Work Policy to encourage employees to return to the workforce, when appropriate.

POSSIBLE PRIORITY 4 INTITIATIVE (policy)
Develop a Written Claims and Litigation Management Strategy—This Goal overlaps with the Priority 1 Goal mentioned above. This requires collaboration with Human Resources/Risk Management, the City Manager’s Office, affected departments and the insurance JPAs. It communicates expectations, early case coordination, settlement discussions, trial preparation, review of Risk Management case reserves and lessons learned. An after-action report should be part of this to ensure our strategies are effective or we learn how we can improve for better outcomes.
71 Strategic Plan - Appendix A 12

HUMAN RESOURCES (HR) & RISK MANAGEMENT (RM)
SWOTs
Strengths
Flexibility & Helpfulness—We try to quickly and effectively adapt to changes that occur daily. We make sure we are available to employees when they have requests.

Strong Internal Relationships—We make sure to connect with staff whenever possible so they feel comfortable to ask questions and know we will assist when we can.

Ownership & Pride—We are a very driven team and take pride in our work. We take accountability for work and will make sure can provide a solution.

Weaknesses
Limited Capacity—There is a very high workload in the HR & RM programs. Employees can have very high expectations for addressing their immediate needs and disappointed when we simply cannot be as responsive. We currently struggle to meet certain deadlines and complete tasks.

Limited Strategic Influence—HR/RM is viewed by some as an administrative “pushing paper” function rather than a support or advisory resource. It is much easier to properly and jointly plan for performance, discipline, or staffing issues, rather than clean up the mistakes afterwards.

Technology Constraints—HR has a very dated Human Resource Information System (HRIS) system, so we must complete everything by paper. And RM keeps track of claims by an excel worksheet.

Who is Managing a Growing Risk Management Program—The City has historically outsourced major pieces of a robust Risk Management program to two JPAs (PERMA and ERMA); thus, the expertise in the City is limited in this area. The Risk Management program now is a $6-$7-million-dollar annual program that warrants an investment in better managing this program and these City resources. This will help in engaging the two JPAs and assessing their performance.

Opportunities
HR Technology—HR needs an employee platform, the ability to complete the onboarding process online and an online performance management system. RM needs a platform to 72 Strategic Plan - Appendix A 13
prevent and manage claims, employee leaves, manage safety programs and any other legal matters.

Culture Building—HR, in conjunction with employees and the City Manager first need to articulate what kind of culture they wish to have in their organization. Second, they need to develop a plan to achieve and reinforce it. Tools for culture building include, among others:
an agreed list of employee values or behaviors that guide how they work together, hiring and promotion decisions, performance evaluations, training opportunities, etc. It can include restarting employee recognition receptions and the city newsletter. We need to also look at other employee engagement opportunities, focus on wellness and areas we can reward staff. RM needs to restart all city safety trainings and assist departments with specializes training sessions.

Policy Development—We need to finalize and finish our outdated Employee handbook and Administrative policies; then continue to revise policies as changes are needed.

Threats
Compliance Risks—We are behind on current legal requirements which requires updating certain policies.

Dependence on Key Individuals—When we are down a person in our small team, the work does not stop, and other team members are left to take over that workload.

Talent Retention Challenges—Since the department has a high-workload we are unable to focus on other positive areas, (i.e., employee retention, career development, and employee satisfaction).

Risk Management Costs Have Doubled—In five years, our Risk Management operating expenses have increased from $3.6 million to $7.2 million. The source for some of this trend relates to employee actions or inactions. It also reflects the “hardening” of the insurance market. We need to develop a higher level of Human Resources and Risk Management skills and involvement in “upstream” personnel decisions and actions in departments to better prevent claims; improve the City culture and hold the Risk Management JPA accountable once a claim is tendered.

The Self-Insurance Fund fiscal position is greatly impaired—The Self-Insurance Fund is in the red by at least $8 million (Unaudited FY 24 ACFR) and is budgeted to go further in the red by another 50% in FY 25 and FY 26 each respectively. Right now, there is no cash to fund this program. The overall fiscal management of the RM Fund has been retained in Finance while the budget management is in this department. Absent a structural change in how this program is managed and financed, the deficit will increase even more. 73 Strategic Plan - Appendix A 14
Substantial Employment Related Claims and Payouts—The City has made substantial payouts that sends the wrong message and is a difficult trend to break, notwithstanding the huge cost impacts.

Corporate Memory Goes Out the Door—There has been high turnover in the City and there is little transitional planning when this happens. This is more acute given Banning’s relatively small size with limited redundancy. As a result, corporate memory around key processes, system or projects leave with them. At best, this creates inefficiencies and at worst, the City is at risk of dropping the ball and making substantial errors.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Fiscal Plan to Eliminate Massive RM Fund Deficits—In conjunction with Finance’s work on cleaning up the books (Goal 2), develop a fiscal plan to turn the Risk Management program into a self-sustaining one and develop the capacity in this department to manage both the budget and the fiscal position of the Self-Insurance Fund.

POSSIBLE PRIORITY 2 INITIATIVE
Assessment of the Risk Management Program—Solicit proposals for a comprehensive assessment of the Risk Management program and implement its recommendations to better manage this $7 million dollar/yr. program.

POSSIBLE PRIORITY 3 INITIATIVE
Create a New Human Resources Program Around Performance Management—In conjunction with the City Attorney, Human Resources and Department Heads, develop a clearly understood program for guiding departmental performance management decisions. Also, the program should clarify when Human Resources assistance is requested and when City Attorney’s Office input is required before making more “downstream” disciplinary decisions.

POSSIBLE PRIORITY 4 INITIATIVE
Develop New City Organizational Culture—In conjunction with the new permanent City Manager, develop a comprehensive new organizational culture that furthers Council and City Manager priorities around good service, transparency, sustainability with the City, etc.

This new city-wide culture needs to involve Human Resources (and possibly City Attorney) in difficult personnel decisions within departments.
74 Strategic Plan - Appendix A 15
POSSIBLE PRIORITY 5 INITIATIVE
Develop Employee Transition Plan—Develop a checklist or plan of duties to complete when an employee announces they are leaving. The check list should identify all key processes, projects or systems the employee was responsible for and provide for transference of adequate information and training to minimize the risk of mistakes and knowledge loss.

POSSIBLE PRIORITY 6 INITIATIVE
Purchase and Install New HRMS—In conjunction with IT plans for Finance, purchase a new HRMS system to reduce the need for manual processes and furthering other priorities e.g., timely and well-done performance reviews, etc.
75 Strategic Plan - Appendix A 16
FINANCE DEPARTMENT—ACCOUNTING
SWOTs
This section covers the general accounting, payroll, accounts payable and the overall fiscal management of the City.

Strengths
Experienced Temporary Help—The department currently has two highly experienced former Finance managers that are familiar with Banning and its Finance systems.

The Department Has Recently Engaged A Strike Team—Befitting of this emergency, the LSL LLP CPA firm has been engaged to provide an experienced team to bring the books current and assist in fixing the impaired Internal Service Funds (ISFs).

Weaknesses
It should be noted that this section of the department is in extreme distress with numerous vacancies, a general staff exodus, and a huge backlog in accounting for City operations.

Lack of Fiscal Information—It appears many basic accounting functions had been suspended for approximately a year. Thus, there is limited reliable data on the current financial position of the City. The current temporary staff are conducting basic monitoring of finances such as cash flow management and working diligently to catch up with this fiscal information void.

Poor Fiscal Management Practices—It appears the City has apparently had a difficult time in balancing the General Fund (GF) and Internal Service Fund (ISF) budgets in previous years. Thus, previous Councils approved budgets reflected operating deficits in the GF and ISFs. We do not see the typical staff warning and (Council) discussions about these deficits along with their long-term implications. And it appears this practice violated Council Budget Policy. This had the effect of eroding GF fund balances over time. These practices have also caused massive deficits in the ISFs that was not commonly understood in the City. Finally, it appears the City regularly had to make substantial budget adjustments during the 2-year budget cycle. This suggests more work is needed in developing the original budget.

Extreme Staffing Instability—Since the exodus of core staff, the department is being managed by very dedicated Retiree Annuitants that are subject to CalPERS limitations. The general accounting staff are temporary. The City is currently recruiting for permanent staff.

However, the labor market in this area is very restricted for qualified applicants. 76 Strategic Plan - Appendix A 17
Gradual Bifurcation of Accounting Systems—The overall accounting system picture reflects a gradual bifurcation of systems around various program activities that are not integrated. Thus, monthly updates on City’s overall fiscal activities are labor intensive and takes too much time to produce meaningful information. It also makes the City vulnerable to one person thoroughly understanding the labyrinth of various subsidiary systems and how they affect the City’s books. And if that person leaves, the accounting support for the City comes to a screeching halt. This is exactly what happened at the City.

Cost Accounting Knowledge is Weak—Most cities have a commonly understood Indirect Cost Allocation Plan that is used to assist departments in understanding their direct and indirect (overhead) costs for providing services. This mathematical model is used to price City services and facilitate policy discussions on what customers are charged (e.g. user fees, etc.). Very few staff understand the Indirect Cost Allocation Plan and it appears various errors occurred in its latest versions.

Internal Service Funds (ISF) Are Not Being Professionally Managed—The ISFs have built up large Fund Balance deficits over time. This trend began in 2019 and has steadily worsened over time. The ISF program managers were not assigned the responsibilities of managing their overall ISF fiscal position. They were responsible for only controlling their annual expenditure budgets, but they were not asked nor given the tools to manage the revenues of their fund. This was kept in Finance and poorly managed. This will require a painful Workout Plan to get back into a positive position over time. This will greatly impact the General Fund.

Decentralized Management Practices—It appears the City has lacked basic management controls including Finance management without the requisite central controls via a strong and enabled Finance Director and an engaged City Manager. This is the primary reason (among others) for the Electrical Utility’s distressed fiscal position.

No Budget Document—The City does not have a readily accessible budget document that explains the City’s spending plans and assumptions to staff, Council, residents and outside interested parties. The City is also behind in completing an audited Annual Comprehensive Financial Report (ACFR). This last fact sends warning signs to grantors, lenders and the bond markets.

Not Using All Financing Tools—The City is not actively using all the financing tools for services that other area cities are using in the area. One of the most substantial ones is the use of Community Facilities Districts (CFDs), which can be used to fund services and capital needs. There are a few CFDs required with some new development, but it is not widely used to fund, say public safety services.
77 Strategic Plan - Appendix A 18
Opportunities
Purchase a Finance ERP System—Once the City’s staffing and fiscal processes have stabilized with permanent Finance management staff; the City should consider purchasing a new Finance ERP system that is integrated and has the appropriate modules to support other important responsibilities (e.g., Utility Billing, etc.). However, it is highly important that the City acquire skill sets to guide the purchasing decision and implementation phase—see discussion in the Information Technology section of this department.

City Has Convened a Team That Has Addressed Similar Challenges—There is a very high functioning team that has been convened by the City Council that, upon getting data on the City’s financial position, it can work with the Council to execute a plan to bring the City back into a sound and sustainable fiscal position.

Economic Development Interest—There have been developers showing a clear interest in investing in Banning’s future. This will be a very important piece of the “puzzle” to improve the City’s capacity to fund quality services that residents want and deserve.

Threats
Reliance on Temporary Staff—The City cannot continue to rely on retiree annuitants who are limited to 960 hours per fiscal year to conduct core financial management responsibilities. If the City does not catch up soon on its accounting duties; the City will have to carefully manage the transition of key management positions to yet other temporary staff. This affects the timely “true up” of the City’s books, the understanding of its fiscal position and it creates risk to the City’s overall management.

Cash Flow Needs Careful Management—Until the Electrical Utility moves into a positive financial position (rate increases are implemented), the Utility Billing is current, and the Financial Workout Plan for the General Fund and Internal Service Funds is developed and being implemented; the City’s overall cash position will be suboptimum. This becomes very acute when considering cash flow needs for Banning’s Capital Improvement Program.

This will require careful management with regular reports to the City Manager and City Council.

Upcoming Budget Will Be Very Difficult—If the City doesn’t get a handle on its finances by this fall, the City management and Council will be entering a very difficult new budget cycle where they will not have the necessary fiscal information to compile, review and adopt a defensible budget (a new spending plan).

Difficult Labor Market—The one common observation between various executive recruitment firms is the lack of qualified public agency fiscal staff. The City will have to repeat its recruitments until it gets a list of qualified candidates to choose from. This takes time.
78 Strategic Plan - Appendix A 19
The City Has a Robust Group of Municipal Utilities—With the rarest one being the Electrical Utility. Most cities do not have this utility. This is a potential strength and weakness, depending upon management capacity. The City will inevitably have to go to the bond market to seek financing of capital improvements for each respective utility. This process requires an enhanced level of transparency and review by outside agencies and firms. The City needs to demonstrate solid financial positions and good overall management practices over time before it enters this environment; otherwise it will be locked out and limited to other more expensive financing options.

POSSIBLE PRIORITY 1 INITIATIVE(possibly policy)
Aggressively Recruit and Staff the Finance Department With Permanent Staff--This may require revisiting compensation to better compete in this impaired labor market. It may also require evaluating current recruitment methods to ensure we are reaching the best candidate pool.

POSSIBLE PRIORITY 2 INITIATIVE
Develop System For Monitoring and Managing Cash Flow—This should include estimating cash flow needs for operations and the Capital Improvement Plan (CIP) in twelve-month increments. And due to the size of some capital projects, the long lead times, and reimbursement nature of outside funding; cash flow plans should be agreed upon for substantial projects (between Finance, Public Works and the City Manager).

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Finish Cleaning Up the Books By Fall--Once the fiscal condition of the City is known, develop a 10-year fiscal forecast model (includes GF and ISFs) to fully understand the fiscal trends and where they are heading for Banning. The Council should then go through a structured discussion on difficult options to improve the long-term viability of Banning as a robust City providing the excellent services deserved by its residents. The prioritized Strategic Plan Goals (and related costs) should also be included in this forecast modeling.

POSSIBLE PRIORITY 4 INITIATIVE (policy)
Review and Update the Fiscal Management Policies--The City needs clear guidelines on when and how the FY 26-27 and FY 27-28 budget will be developed and communicated to the Council and community. There needs to be clarity to the Council and the public exactly what is the City’s financial position; how it has changed and why; and how it might change with the future budget. There should always be a reconciliation between what the budget assumed vs. what actually happened via the presentation of the Annual Comprehensive Financial Report (ACFR). The budget process should begin around January/February to provide adequate time for everyone to provide input and fully understand what is in it. 79 Strategic Plan - Appendix A 20
Additionally, the City Manager in conjunction with the Finance Director should clarify administrative policy that affirms responsibilities for fiscal management for the overall City via-a-vis the departments and funds. This should specifically cover the City Manager, Finance Director, and department heads.

POSSIBLE PRIORITY 5 INITIATIVE (policy)
Engage a Special Tax Consultant To Create CFD Program For Services--To develop a complete CFD program that would be used to create more resources to fund new service demands that come with new development.

POSSIBLE PRIORITY 6 INITIATIVE (policy)
Produce a Transparent Spending Plan—This results in a commonly understood and accessible City Adopted Budget. This should be easily available to anyone that wishes to read it. The City Manager and Finance Director should jointly and explicitly affirm (annually) that the plan conforms with the policies completed as part of Goal 3. 80 Strategic Plan - Appendix A 21
FINANCE—INFORMATION TECHNOLOGY (IT)
SWOTs
Strengths
Stable and Committed Staff—This small work unit has not suffered the turnover of others; thus, they retain institutional knowledge of the City’s IT systems, workflows, and operational nuances. They can translate how the technology serves the mission.

An Established IT Infrastructure—The City has built and maintained reliable (mainly) hardware systems that underpin critical services ensuring continuity, stability, and responsiveness to daily operations.

Commitment to Cybersecurity—With firewalls, endpoint protection, and regular audits by implementing layered defense, such as firewalls, endpoint protection, regular audits, and 24/7 monitoring.

Use of Cloud-Based Platforms—For email, document management, and remote access to operate more efficiently, securely, and flexibly. This forms a backbone that follows a modern, resilient computing environment.

Responsiveness to Service Requests—Quickly and effectively the IT team reacts to user reported problems. IT usually handles and/or responds to user issues within minutes.

Weaknesses
Aging Legacy (Finance) Enterprise Resource Planning (ERP) and (Utility Billing) Customer Information System (CIS) Software Applications In Use Across Multiple Departments—Older Legacy Systems are outdated software platforms or infrastructure that continue to support essential city operations, often because replacing them is costly, complex, or risky. In areas like Permitting, Finance, and Utility Billing, these systems may have been in place for over a decade and are deeply embedded in daily workflows.

However, their age and limitations pose significant challenges. • Legacy systems often lack modern features like mobile access, cloud integration, or real-time analytics
• They struggle to scale with growing population demands or evolving regulatory requirements.
• Customization is difficult, and adding new capabilities may require expensive workarounds.
81 Strategic Plan - Appendix A 22
Limited Budget for Modernization and Emerging Technologies—A constrained budget restricts an organization’s ability to upgrade aging infrastructure, adopt innovative tools, and satisfy user and resident expectations . In city governments, where funding must be balanced across essential services, IT often receives a small budget allocation, making strategic growth and transformation difficult. Some of this is due to the lack of understanding of the IT role in supporting mission critical functions. Some of this is due to the IT “voice” not being clear and strategic in the organizational discussions. • Outdated hardware and software remain in use (e.g., Finance, Utility Billing, etc.), far beyond their intended lifecycle.
• Citizens experience slower response times, outdated interfaces, and limited online services (e.g., permitting and utility billing).
• Manual processes persist where automation could improve efficiency and transparency (e.g., Finance).
• Public trust may erode if technology fails to meet expectations.

Lack of City-wide IT Coordinated Effort—the City IT division operates with lean teams focused on technical operations—network maintenance, help desk support, and system administration. However, without a dedicated multi-year plan covering all IT-related needs, purchases and system implementations, even well-intentioned implementation efforts suffer due to poor coordination, missed deadlines, unclear accountability and unintended consequences. We have the “poster child” for this concern with the Utility Billing crisis. The unintended consequence was the harm it caused to the City’s overall cash flow position given it’s the source of funding for slightly more than half of the City’s budget. As to lack of accountability, very few understood who was ultimately responsible for this new system roll out.

This lack of coordinated efforts produces the following Weaknesses:
• Manual processes are used in some departments, reducing efficiency. Despite advances in digital tools and automation, many city departments continue to rely on manual workflows—such as paper forms, handwritten approvals, spreadsheet tracking, and physical filing systems. These outdated practices slow down operations, increase the risk of errors, and limit the ability to deliver timely, transparent services to residents. The recent Finance Director challenge of attempting simple bank reconciliations is partly due to this phenomenon.

Inconsistent Digital Literacy—Due largely to IT being a decentralized program, there is inconsistent digital literacy across departments. This slows adoption of new tools and modernization efforts. New system rollouts become fragmented and reduces the return on investments from technology.
82 Strategic Plan - Appendix A 23
• The purchasing of software becomes decentralized where independent decisions about which software to buy, often without centralized oversight from the IT division. While this can, on the surface, offer flexibility and responsiveness to department needs, it introduces several vulnerabilities and inefficiencies. New system implementation can be complex and create unintended problems without specialized skill sets (e.g. Utility Billing). Different teams may purchase similar software tools that perform overlapping functions. This leads to a fragmented IT environment with multiple platforms doing the same job (e.g., five different GIS management software across departments). There is increased complexity in integration, support, and training. Software may be acquired without proper vetting for security compliance, data protection standards, or vulnerability assessments.

Shadow IT (unauthorized software use) becomes prevalent, exposing the organization to data breaches and compliance violations.

Opportunities
Federal and State Government Grant Programs—These are actively investing in digital transformation through grant programs that support smart city technologies (e.g., traffic sensors, public Wi-Fi, smart lighting); broadband expansion in underserved communities; and infrastructure upgrades for digital equity and resilience.

Improving and Implementing Public-Facing Services—These are the digital touchpoints where residents interact with the City (e.g. online bill pay, permitting applications and service requests). When these services are outdated, manual, or fragmented, they frustrate users and burden staff. Modernizing them with intuitive, secure, and integrated platforms transforms the citizen’s experience and streamlines internal operations. • Implementing Service Request Platforms—More and more cities have implemented tools for residents to report issues (e.g., potholes, graffiti, broken streetlights) via web or mobile apps. This would be an enhanced version of what we have on the City’s webpage. They often use geolocation and photo uploads to improve accuracy. This can be integrated with work order systems for faster resolution and updates. However, any initiative like this needs to be properly resourced with response capability in Public Works, Police, and other affected departments.

Enhance GIS and Data Dashboards—To support planning, utilities, and emergency response by enabling the city to map, analyze, and visualize spatial data for everything from zoning and infrastructure to population density and environmental hazards. When paired with interactive dashboards, this data becomes a powerful decision-making tool across all departments.
83 Strategic Plan - Appendix A 24
Partnering With Local Schools or Colleges—For internships and workforce development that helps build a local and sustainable workforce. These partnerships create a mutually beneficial ecosystem where students gain hands-on experience, and cities benefit from fresh perspectives, expanded capacity, and long-term recruitment advantages.

Threats
Cybersecurity Risks Including Phishing, Ransomware, and Data Breaches—These threats are no longer hypothetical; they’re persistent, sophisticated, and increasingly targeted. Municipal governments, utilities, and public institutions are prime targets due to the sensitive data they hold and often have limited security budgets. The three most prevalent and damaging threats are:

Phishing Attacks—which involve deceptive emails, texts, or websites designed to trick users into revealing sensitive information.

Ransomware—is a type of malware that encrypts files or systems, rendering them unusable until a ransom is paid—often in cryptocurrency.

Data Breaches—are when unauthorized individuals gain access to confidential information either through hacking, insider threats, or system vulnerabilities.

Regulatory Compliance Pressures (e.g., California Consumer Privacy Act, public records laws)—These laws have myriad requirements including:
• Strict handling of personal data, including transparency about data collection and the right for individuals to opt out.
• Ensure that any personal data we collect, such as utility billing, permit applications, or emergency contact info—is securely stored and properly disclosed. • Possibly new rules that may require annual cybersecurity audits and risk assessments for entities processing sensitive personal data. • Mandates that digital communications and records be preserved and made accessible upon request.
• Websites and digital services must comply with ADA (Americans with Disabilities Act) standards, ensuring that all residents—including those with disabilities—can access city services online.

Natural disasters (e.g., wildfires, earthquakes)—Which can disrupt IT infrastructure, especially in our City which sits in a high-risk zone for both wildfires and earthquakes. 84 Strategic Plan - Appendix A 25
Public Expectations for Fast, Mobile-friendly Digital Services—This may simply outpace our capacity to address given the various weaknesses previously mentioned. Some of the reasons for this threat are: 1) our previously mentioned reliance on old Legacy Systems; 2) our limited IT staffing to develop, test and maintain mobile-friendly applications; 3) reliance on contracting for these skills may be cost prohibitive; 4) cyber security risks may enhance commensurate with expanding digital services; and 5) the digital divide may become more acute without proper support.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Develop and Implement a Banning IT Strategic Plan—With full participation by City departments, this plan should independently assess and address the following:
• The development of an IT Governance Structure that involves all City departments (e.g., Executive Steering and Working Committees).
• Topics to evaluate in the Plan include the previous mentioned SWOTS (e.g., centralized vs decentralized project management and purchases, etc.). • A clear recommendation for a 5-year path to move forward. • A 5-year prioritized and recommended spending plan like a Citywide CIP. • A recommended IT staffing model that supports the Strategic Plan’s recommendations.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Make Cybersecurity a Core Priority of the Organization—Cybersecurity isn’t just an IT concern anymore; it’s a public safety, financial, and reputational imperative for the organization. With rising threats targeting small municipalities, continuing to prioritize cybersecurity is essential.
• Regularly update systems and patch vulnerabilities.
• Conduct annual penetration tests and tabletop exercises simulating ransomware or data breach scenarios.
• Train Every Employee
• Offer mandatory cybersecurity training for all staff, including phishing simulations and password hygiene.
• Make cybersecurity part of onboarding and annual performance reviews. 85 Strategic Plan - Appendix A 26
POSSIBLE PRIORITY 3 INITIATIVE
Data Cleansing & Migration Strategy—Our systems contain outdated or duplicate records that should be cleaned or purged. We need to “clean data” before migrating to avoid compounding issues in the new system.

POSSIBLE PRIORITY 4 INITIATIVE
In Coordination with Goal 1, Consider Changes to the IT Manager Reporting Relationship— Upon reviewing the various IT needs of every City department in this Plan and the missioncritical nature of it; the current IT reporting relationship should be evaluated and possibly changed for the future. The most likely landing spot would be the City Manager’s Office. This could have the added benefit of freeing up the Finance Director to focus on the core mission of the department, the overall financial management of the City. 86 Strategic Plan - Appendix A 27
FINANCE—PURCHASING
SWOTs
Strengths
Cost Control Expertise—Skilled in negotiating pricing and securing bulk or long-term discounts.

Supplier Relationships—Strong, long-term relationships with reliable suppliers.

Process Efficiency—Established procurement processes and technology (e.g., eprocurement tools).

Market Intelligence—Good understanding of market trends, pricing, and availability.

Compliance Awareness—Familiar with regulatory requirements, contracts, and procurement policies.

Transparent Vendor Access—Vendors register and receive bidding notifications centrally via OpenGov. This encourages broader competition and accessibility in the bidding process.

Weaknesses
Limited Flexibility—Rigid procurement processes can delay urgent purchases. Parts of the purchasing/contracting process is roughly the same no matter the urgency, size, and risk of the transaction. Emergency purchases are skeptically viewed and delays can create major risks to the City.

Training & Capacity Building—Limited departmental understanding of procurement practices affecting the overall purchasing performance and timing with substantial risk.

Ironically, there is limited procurement depth within the Purchasing staff itself. When the Purchasing Manager is gone, key points of the process come to a halt until her return. This may be a function of the excess process complexity or lack of staff training.

Overdependence on Key Suppliers—Some risk if one or two suppliers dominate the supply chain.

Data Silos—Lack of real-time data or poor analytics leading to suboptimal purchasing decisions. This unknowingly increases organizational weaknesses (decentralized IT system acquisitions) discussed in the Finance—Information Technology section of this department.
87 Strategic Plan - Appendix A 28
Vendor Onboarding is Cumbersome and Delaying Starting of Services—Once the decision has been made to utilize a particular vendor, it takes too long for contract execution and approval for paying vendors.

Opportunities
Digital Transformation—Potential increased automation, continued use of AI tools, and data analytics can improve decision-making and efficiency.

Sustainable Sourcing—Growing focus on ethical and environmentally friendly procurement practices.

Supplier Development—Partnering with suppliers to innovate or improve supply chain resilience.

Strategic Procurement—Moving from tactical buying to value-driven, strategic procurement (e.g., e-bonding of vendors, vendor outreach to Chamber of Commerce, hosting workshops with underrepresented businesses, etc.) Regional Sourcing —Cooperative agency outreach (e.g., buying coops).

Threats
Supply Chain Disruptions—Geopolitical issues, pandemics, tariffs or natural disasters affecting supply.

Price Volatility—Fluctuations in raw material or commodity prices.

Regulatory Changes—New laws or tariffs/trade policies increasing compliance costs.

Cybersecurity Risks—Potential for data breaches in procurement software or supplier networks.

Fraud and Mismanagement—Without appropriate points of control, it increases the risk of corruption, favoritism, or misallocation of funds.

Political Interference—Localized purchasing may be more vulnerable to political pressure or bias in vendor selection.

Public Scrutiny—Perception of inefficiency, waste, or favoritism must be managed and can damage public trust.

Regulatory Non-Compliance—Purchasing practices need to ensure compliance with procurement laws or federal/state guidelines.
88 Strategic Plan - Appendix A 29
Rigidity of the Procurement Process—The City may be losing viable vendors that don’t or can’t participate in an extensive, confusing, and rigid process.

POSSIBLE PRIORITY 1 INITIATIVE
Work with the City Attorney and Restructure Vendor Onboarding—Once the purchasing decision has been made, continue improving the timeliness of the process that produces an executed contract and appropriate other approvals (e.g., insurance) that support timely onboarding and payment of vendor invoices.

POSSIBLE PRIORITY 2 INITIATIVE
Convene an Interdepartmental Team and Develop a More Responsive Purchasing Process for Emergencies—Expand the section of the Purchasing Rules regarding Emergency Purchases—more clearly articulating a process that is more responsive to the risks inherent in not addressing said emergency (e.g., employee safety, risk for more damage to City assets, enhanced liability to the City, etc.).

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Convene an Interdepartmental Team and Develop a Purchasing and Contracting Process That is More Accessible to Smaller Local Vendors or Just Smaller Projects— The rather long and extensive City (mandated) contract along with the Purchasing processes should be revisited for smaller and low risk projects and vendors (including some local vendors). This may produce a short-form contract under certain circumstances.

POSSIBLE PRIORITY 4 INITIATIVE
Independent Review of Purchasing Processes—This review would seek ways to strike a better balance between centralized control over every aspect of purchasing vs. the speed and flexibility of purchasing goods and services. This is one of the most repeated comments by departments. The review should consider City Manager expenditure authority, bidding thresholds, etc.
89 Strategic Plan - Appendix A 30
FINANCE—UTILITY BILLING (UB)
SWOTs
It should be noted that the Utility Billing program is one of the most impactful programs in and to the City of Banning. However, it has not received the attention commensurate with this fact. This has become abundantly clear during the failed purchase and execution of a new UB system. It is this program that is solely responsible for collecting over half of the City’s revenues. Due to this crisis, the City’s overall cash flow has been dramatically affected as well.

Strengths
Customer Focused—Customer service representatives are very focused on customer satisfaction and providing accurate and timely billing.

Dedicated Employees—During the ongoing billing crisis, staff has worked weekends and holidays to get caught up on billing. This dedication has been admirable and has kept the billing function afloat.

Ownership & Pride—Staff is very proud of the work they do in billing and take mistakes personally. They also keep the customers best interest at heart and strive to provide the highest bill accuracy as possible.

Ability to Work in Stressful Conditions—Able to continue working at a high level while still having to deal with angry customers and the stress of getting caught up on delayed billing.

Weakness
Limited Managerial Capacity—With losses of Finance managerial staff, FD, Deputy FD, and Billing Supervisor – the City is working with limited managerial capacity on the utility billing side. While recent line-staff hiring and (re-assigned) long-term existing staff are working to get bills out, there is limited managerial leadership in addressing the bigger and underlying systems issues. In this vacuum, the focus is entirely on day-to-day operations rather than also developing a systems strategy to accelerate and refine the billing process.

There is Limited Onsite Managerial Authority—To work with utility managers, on equal stature, to pursue unique approaches to an equally unique crisis. While the Utility Billing Manager has done a commendable job in this area, there needs to be the Deputy FD presence to seek ways to balance the sometimes-competing needs of overall City fiscal 90 Strategic Plan - Appendix A 31
management with the operating needs of the utilities. The Billing Specialists should have a relevant voice in this program.

Lack of Interface Between Meter Reading Software and Billing Software—The shift from NaviLine billing software to another software program and back to NaviLine has resulted in problematic interfaces between the meter reading and billing software. While this was a known systems issue at the beginning of the 2025 calendar year, these issues are only now being addressed. This lack of interface has caused significant additional work for the billing department and has exacerbated the current billing issues.

No Billing Software Experts on City Staff—Utility billing staff members are well versed in the day-to-day uses on the NaviLine software; however, there is no current staff who deeply understands the software capabilities.

Lack of IT expertise on Billing Software—Typically with a major software system there is an IT staff member who develops software expertise to address the administrative and technical issues that arise with any major software program. Additionally, there is typically an IT staffer (a best practice) that guides purchasing and implementation of new important software applications. There is no dedicated IT support to fulfill this role, which is a major reason for the utility billing debacle when rolling out a new software application. The current version of the utility billing software is several generations behind and will soon no longer be supported by the manufacturer, which will further create issues in managing the software.

Opportunities
Move to Cloud-Based Software Platform—NaviLine offers a cloud-based billing system that allows the City to keep current on software updates and does not require upgrades to City hardware as updates occur.

Onboard Full Finance Staff—The City is actively attempting to fill current Finance staff vacancies. Once fully staffed, the Finance department should be able to better support the utility billing function and proactively address potential billing issues before they become critical. However, the CFO needs to elevate this expectation when onboarding new management staff.

Fix Meter Reading Software Issues—An outside vendor is needed to develop an application programming interface (API) between the metering reading software and the billing software. This alone will address many of the issues that have been plaguing the billing department.

Policy Development—Billing, collection, and shutoff policies are not clearly articulated in a billing policy for the City. Clear policies and procedures for utility billing should be documented and updated on a regular basis. Such policies will allow for better 91 Strategic Plan - Appendix A 32
succession planning as well as clear articulation of the billing processes, late notices, cutoff rules for non-payment, and resources for low-income customers. This should lead to consistent actions and messages to the community and help repair the current lack of faith by customers.

Threats
Loss of Credibility with Customers—The billing issues have created significant and ongoing issues with customers on the City’s inability to produce and bill an accurate utility bill. Based on calls and emails to the City, phone complaints, and social media posts the City has suffered a significant loss of confidence from City utility bill payers. This could have lasting effects on the City’s relationship with its residents. This is important as the City needs to pursue options for improving the City’s long term fiscal picture.

Continued View of Utility Billing as Ancillary Activity—The City has not put the staffing or resources in place to ensure high service levels in utility billing. The billing department is responsible for bringing in approximately $58 million of revenue (FY22-23 budget) out of a total City-wide revenue budget of $104 million. The lack of investment in the utility billing process and staffing has created a significant financial challenge for the City. The cost of the billing department is funded by the utility customers and, therefore, should not be a low priority for the City.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Address The Software Issues (and IT Staff Support) That Led to the Current Billing Crisis—The recent billing crisis is a function of attempts at software changes without a best practice such as having an IT led comprehensive and integrated approach. Currently the utility billing function is using an old version of the NaviLine Customer Information System (CIS) and is not fully connected to the Electric meter reading software.

Additionally, there are no staff members that are expert on the CIS software or integration issues with the meter-reading software. The City should upgrade to the latest CIS version and create APIs between the meter-reading and CIS programs, when the City is ready with the proper resources.

POSSIBLE PRIORITY 2 INITIATIVE
Do In-Depth Evaluation of the City’s Utility Billing Function and Tools—The utility billing function is responsible for billing and collecting over half of the City’s budget each year.

When not working properly the lack of utility collections threatens the entire City’s financial health. The current utility billing system, tools, and policies and procedures should be independently evaluated and updated to ensure continuous billing and revenue collection on behalf of the utilities.
92 Strategic Plan - Appendix A 33
POSSIBLE PRIORITY 3 INITIATIVE
Elevate the Utility Billing Function Within Finance—The utility billing function needs to be elevated within the Finance department. This elevation should include a managementlevel staff member overseeing the billing function to elevate billing issues up to the Finance Director and beyond when issues occur. Furthermore, the billing function should include all aspects of the billing process, including meter-reading and software integration. 93 Strategic Plan - Appendix A 34

POLICE DEPARTMENT
SWOTs
Strengths
A Dedicated Team—The Police Department has a core of dedicated and hardworking staff that display teamwork/collaboration, the ability to adapt under resource constraints, commitment to community relationships, and positive interpersonal relationships in many areas of the department.

Timely Response to Calls For Service—The Department classifies calls for service into (5) primary categories: Priority 1 is for imminent and severe threat to life; Priority 2 is for urgent calls, the severe threat to life has passed but suspects may be still around; Priorities 3-5 is for lower priority calls but impact resident’s sense of community service.

Given our staffing challenges, these response times are relatively good but could improve with more filled positions.
• The data say that our response to these calls are as follows: Priority 1 calls— 07:14, Priority 2 calls are 12:04 minutes and Priority 3-5 calls are 17:50 minutes.

Response times can be affected by our level of vacant positions, speed of employee recruitments, and our ability to retain staff. By focusing on department weaknesses listed below, we can greatly improve response times and overall service provided to the community.

Weaknesses
Need For An Improved Departmental Culture—While the core of the department is positive, due to the turnover of management and other visible past personnel decisions, some perceive we can improve in the following areas: accountability, fairness, communication, equity in treatment, consistent and strong leadership, and clear departmental direction. This backdrop makes it more difficult for recruitment, retention, and promotional processes.

Turnover, Vacancies and Morale Issues—Vacancies, recruitment challenges and morale create a difficult “stew” to overcome in providing proactive Community Policing to address crime in general and reinforce Banning residents sense of safety.

Crime Rates—According to the FBI's 2019 Uniform Crime Reporting (UCR) data, the national average violent crime rate was 366.7 per 100,000 inhabitants, and the property crime rate was 2,109.9 per 100,000 inhabitants. In comparison, California's average violent 94 Strategic Plan - Appendix A 35
crime rate was 499.5 per 100,000 inhabitants, and the property crime rate was 2,138.9 per 100,000 inhabitants. For the City of Banning, the violent crime rate is 5.0 per 1,000 residents and the property crime rate is 17.0 per 1,000 residents. To properly compare these data, we have created the following conversion table:

National California Banning
Violent Crime 3.7/1,000 5.0/1,000 5.0/1,000
Property Crime 21.1/1,000 21.4/1,000 17.0/1,000
Comparing Banning's reported incidents to these rates, Banning appears in line with the California average, but higher (as is the state) than the National average by 35%. It is difficult to compare Property Crime rates given Banning’s reporting requirements are dissimilar to California and the nation. One can argue whether Banning’s crime rates are a Strength or Weakness.

Opportunities
Community Outreach—Some of the department staff is motivated to engage the community in an expanded and more meaningful way through a stronger social media presence. This would involve enhancing information sharing and two-way staff/public engagement. Other efforts like open houses, “Coffee with the Chief” events, can be implemented to further community engagement. This is all part of lessening the real or perceived barrier between the residents and their Police staff.

Threats
Homelessness and Gangs—Both of these issues impact quality of life and eventually crime levels in Banning. Our largest category of Calls-for-Service is related to the homelessness issue. This activity, which is more acute than other cities, takes our staff away from other Community Policing activities in Banning. With respect to gangs, while it hasn’t been a substantial problem, if not managed, it can metastasize into a crime problem.

Extremely Large Insurance Payouts for Employment Claims—The department has been the source for very large payouts related to employment claims. This sends the wrong message to the City workforce and especially Police staff. This is a trend that is hard to stop, and it threatens the overall finances of the City.

Employee Turnover—The department has been wrestling with a high vacancy factor due to turnover—newer employees leaving for other Police departments shortly after arriving in Banning. And the other cause may be attributable to the negative departmental culture mentioned above. At this writing, the department had 7 vacancies plus 5 staff out on leave (e.g. medical leave). This equates to a roughly 30% vacancy factor, an extreme situation. It 95 Strategic Plan - Appendix A 36
should be noted the department is close to filling many of these vacancies. This has the secondary impact of causing stress on the current employees coming to work (overtime) and having to backfill for the vacancies. It also pushes the department into taking risks by taking on transfers from other Police departments to fill positions.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
In Conjunction With the City Manager and Human Resources, Develop and Implement a Proactive Outreach and Hiring Program--To eliminate vacancies and stay at full strength. Consider hiring bonuses and other strategies to compete in a very competitive labor market and retain the new hires. While the department is in process of more hiring, it’ll be just a matter of time where past trends play out and newer hires will leave for other departments. The City needs to address this systemic threat with new “out of the box” ideas.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Provide One-Time Resources For A Departmental Assessment--To independently evaluate the Police Department’s culture, and develop and implement strategies (for the Chief) to provide consistent expectations on performance and norms from the Chief and down throughout the department. In conjunction with Human Resources and the City Attorney’s Office, this assessment should also review past and current claims to see if there are lessons learned for the department and City management.

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Provide One-Time Resources to Develop a Community Outreach Program--Using best practices in social media, open houses, “Coffee with the Chief” etc. 96 Strategic Plan - Appendix A 37
PUBLIC WORKS—ELECTRICAL UTILITY
SWOTs
Strengths
Stable Workforce and Responsiveness to Customers—The Banning Electric Utility (BEU) workforce has many long-term City employees with the necessary experience in understanding the complexities of a city-owned electric system. Many of the staff are City residents and take pride in their service to the community with quick response to outages (e.g., 5-10 min.) response during normal business hours and maximum of 45 min. after hours.

Rare Local Control for Electricity—Local control and governance of the utility by the Banning City Council allows for the electric utility to have enhanced regulatory oversight locally instead of with the California Public Utilities Commission (CPUC).

Near-term Capacity for Growth—Banning’s electric capacity can accommodate the City’s future development and growth in the short-term (up to the next 4-5 years), given known development patterns to date. This speeds any planned development projects in the City avoiding potential stalling or delays from a more arms-length utility.

Growing Climate Friendly Power—BEU continues to exceed the State’s renewable energy requirements with 62% of its resource portfolio recognized as renewable energy and another 2% recognized as greenhouse gas free energy. BEU will continue to conduct its electric operations while trying not to add harm to the environment.

High Reliability During Fires—BEU does not implement any Public Safety Power Shutoff to our residents and businesses during high wind scenarios, thus maintaining a better System Reliability index (SAIFI and SAIDI) rating than others.

Competitive Rates—Even with a pending electric rate increases, BEU rates will still be below Southern California Edison (SCE).

Weaknesses
Utility Billing Impacts—The City’s Utility Billing crisis affects everyone at electric operations because to the residents and businesses, they are not able to distinguish which department is responsible for City utility billing functions. This has hurt BEU’s reputation.

Internal Business Processes Need Balance—Sometimes the City’s internal business processes compete with efficiency needs of the utility. BEU understands the need to find the balance between the higher accountability standards of government with the efficiency 97 Strategic Plan - Appendix A 38
needs of service delivery. However, in emergency cases the balance needs to swing towards efficiency and risk management. For example, a recent emergency purchase that was needed immediately for safety/risk management purposes was delayed by Purchasing for 2 weeks.

Negative Impacts from Poor BEU Fiscal Management—Due to poor fiscal management in BEU, the near-term financial stability of utility and fiscal sustainability has required the Council to increase its rates in a more aggressive manner than has been conducted in the past. This too impacts BEU’s reputation.

BEU’s Poor Credit Rating—BEU’s credit bond rating of B+ has led to consecutive downgrades by bond rating agencies leading to “junk” bond status. This may cause additional risks for the utility and its power supply counterparties willing to conduct business with BEU or higher interest rates for future purchases.

Outdated Tools—BEU equipment, vehicles, technology and software systems are becoming dated and less efficient.

BEU Staff’s Poor Fiscal Management—The lack of knowledge and clarity on the financial aspects of the utility, including the sharing of responsibility of and partnership with our Finance Department is improving but more work is needed.

Need to Improve the BEU Culture—Communication and teamwork both internally and externally beyond the department has room for improvement. The BEU management and staff have acknowledged this, recognizing more work needs to be done to improve the departmental culture.

Opportunities
Investment in Software and People Who Use it—Software technology advancement (both Enterprise and Utility Customer Information Systems) could lead to significant modern improvements in day-to-day operations, improve internal process and customer service to both internal staff and external residents and businesses.

Cannabis—Embracing cannabis cultivation in the City’s industrial areas could provide significant revenue opportunities for BEU/City. An example of a legally operating cultivation business could provide upwards of $250,000 of electric revenue annually.

Interstate 10 As an Asset—Given the City’s proximity to Interstate 10 and the potential for electrical semi-truck development; Banning is well positioned for a truck-stop electrification site. This could be a substantial revenue source for the BEU. 98 Strategic Plan - Appendix A 39
Threats
Not Losing Site of Capital Needs—As a result of BEU’s near term financial instability, deferred capital expenditures of operations and maintenance of existing infrastructure could lead to reliability and wildfire mitigation improvement delays. This must be properly monitored.

The Inefficient Utility Billing System—The City’s Utility Billing function has greatly reduced customer confidence in their work product (i.e., monthly bills in the eyes of our customers due to the unsuccessful roll out of a new system). To mitigate the damage and resolve the problem, the City fell back to the old system, which is manually intensive, extremely inefficient and late. This is affecting our image with customers.

Limited Consensus of Direction—Due to management staff turnover at all levels citywide and BEU, there needs to be more consensus for next steps and direction for the City and the utility.

Long-Term Planning for Electricity—While Banning’s electric capacity can accommodate the City’s expected 4–5-year growth, future expansion capacity beyond that will be reliant on BEU’s Edison Transmission Interconnection and its Wholesale Distribution Access Tariff. This important agreement will provide for the additional capacity needed for development projects beyond the 5-year increment.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Achieve BEU Fiscal Solvency And Sustainability—The Council has seen the plan to achieve this goal which requires adherence to rate increases over the next five years.

However, this also requires collaboration with the City Manager, BEU management and Finance to monitor expenditures, revenues, the Utility Billing function, and fiscal strategies to fund capital needs. There should be an annual review comparing actual results to the original financial model, and adjustment should be made accordingly. After a few years, BEU may consider seeking a bond rating upgrade and entering the bond market to fund capital needs and related bond rating upgrade.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Complete Edison’s Wholesale Distribution Access Tariff agreement—This should take (1-2years) which increases BEU’s capacity for long-term growth and its related load.

POSSIBLE PRIORITY 3 INITIATIVE (policy)
In Conjunction with IT, Purchase and Roll Out a New Utility Billing system—This requires the identification and purchase of a new Finance Enterprise Resource Planning 99 Strategic Plan - Appendix A 40
(ERP) system for the entire City including a Utility Billing module (see the Finance—IT discussion on this).

POSSIBLE PRIORITY 4 INITIATIVE (policy)
As The Utility Becomes Solvent, Ramp Up Capital Needs—Upon reaching utility solvency, ramp up deferred Electric capital needs, striking the balance between use of cash and borrowing.
100
Strategic Plan - Appendix A 41
PW—WATER UTILITY
SWOTs
The Water and Wastewater utilities are managed by one division within Public Works. Thus, proposed goals are addressed after the discussion of the two utilities’ SWOTS.

Strengths
Locally Controlled High-Quality Groundwater Supply—This reduces reliance on imported water and provides stability for long-term planning. We have a large amount of stored water available for contingencies (the Beaumont Basin).

Skilled Operators—We have a strong team operating and maintaining approximately 165 miles of water pipelines, 21 wells, 8 reservoirs, and strong regulatory compliance history.

Ability to Move Water—It’s an important role moving water from one pressure zone to another via gravity in fire flow and operational emergencies and electrical outages.

Our Own Strategic Plan—We are following our 2018 Integrated Master Plan (IMP) covering Water, Wastewater and Recycled Water systems which provides a strategic road map for City’s utilities infrastructure planning and upgrades through year 2040.

Good Working Regional Relationships—With regional partners (e.g., San Gorgonio Pass Water Agency (SGPWA), a State Water Contractor), leading to imported water storage; and the neighboring Beaumont Cherry Valley Water District (BCVWD) leading to robust delivery system via interagency water “interconnects”.

Robust Fire Hydrant Flushing Program—This involves exercising and flushing over 2,000 fire hydrants annually for water quality and fire protection purposes.

Weaknesses
Aging Infrastructure—Resulting in approximately 5-6 leaks per month requiring water service lateral and/or water-main repairs, service disruption, higher maintenances costs, and the need for small diameter pipeline replacements to increase fire flow for public safety. Approximately 21 miles (roughly 13 percent of the system) of small diameter pipelines exists ranging between 2 and 4-inches.

Increasing Reliance on Imported Water—As City nears buildout, there will be an increasing exposure to supply uncertainties, drought restrictions, and cost volatility. 101
Strategic Plan - Appendix A 42
City’s Limited Ability to Raise Rates—Given our disadvantaged community with a limited capacity to handle high water rates and the myriad infrastructure and operational needs, there is a funding ceiling challenge for the utility.

Outdated Supervisory Controls and Data Acquisition (SCADA)—This is a computerized industrial control system that monitors and controls processes across the entire water system with a lack of asset management technology in system monitoring.

Limited Technical and Administrative Staff—This includes engineers, analysts, conservation specialist and distribution/production staff members. It reduces the division’s ability to manage projects, implement conservation programs, and plan and implement future regulatory or operational demands. This is due to budget constraints and inability to attract and keep qualified staff.

Upcoming Regulatory Requirements—Such as Hexavalent Chromium treatment will require advanced operator training and licensing (which currently cannot be obtained by current staff unless the City implements a “pilot-plant” project), exposing a gap in staff readiness that needs to be addressed.

Opportunities
Grants Are Available—To pursue for offsetting capital project costs to the City and accelerate necessary infrastructure upgrades without overburdening rate payers. The City’s Disadvantage Community status often provides an advantage for receiving grant funds.

Implement Leak Detection Technology—Avoiding leaks improves water conservation, minimizes unscheduled service disruptions, and reduces non-revenue water losses.

Promote Water Conservation—Through public education to potentially reduce long-term water demand trends and build stronger community support for the division’s programs.

Threats
Newer and Stricter Regulatory Mandates—Such as lowering maximum contaminant levels (e.g., Chromium-6) will require costly treatment upgrades, placing financial and operational burden on the utility.

Future Reliance on Imported Water—Due to the City growing, it may expose the City to potential water shortages, state-wide drought restrictions, and higher costs.

Drought Conditions and Mandated Conservation—May limit water availability, which in turn could reduce consumption and impact revenue stability. 102
Strategic Plan - Appendix A 43
Deferred CIP Implementation—This tends to increase long-term costs and service disruptions, as infrastructure deficiencies worsen, and repairs become more frequent. 103
Strategic Plan - Appendix A 44
PW—WASTEWATER UTILITY
SWOTs
Strengths
Effective Compliance With the Current Wastewater Discharge Permit Requirements— This is occurring through our planning and implementing wastewater treatment plant (WWTP) upgrades to address future regulatory requirements. This includes impending regional water quality control board’s (RWQCB) discharge limits of Nitrogen. We also need to generate Title 22 compliant tertiary treated recycled water for landscape and irrigation purposes to offset demand from the potable water system and diversify City’s water resources portfolio. These are to be addressed with the planned completion of a new WWTP.

Strong In-House Ability—To inspect, clean and maintain sewer lift stations and sewermains; reduce the risk of sanitary sewer overflows; rapid response to issues; and we can do it cheaper than outsourcing.

Good Working Relationships with Regional Partners—Enhances the City’s ability to address wastewater challenges, leverage resources.

Weaknesses
Approaching Wastewater Treatment Capacity Limits—This is due to the increased rate of development and the existing treatment plant’s inability to remove higher amounts of nitrogen; hence the need for WWTP upgrades.

Lack of Peak Wet-Weather Wastewater Storage—Due to inflow and infiltration from stormwater into sewer collection system; hence the need for an equalization basin (storage basin).

Aging Infrastructure—And the need for replacements and/or rehabilitation of manholes, pipelines and pumps which if left unaddressed, will lead to increased maintenance costs and risk of infrastructure failure.

Bottlenecks and Hydraulic Capacity Deficiencies—Within sewer-mains resulting in sanitary sewer overflows etc.

Opportunities
Grant Funding—Reflects opportunities to carry out recycled water and wastewater system improvements that enhance its reliability.
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Prioritize and Implement Targeted Improvements—Within the wastewater system as identified in the Sewer System Management Plan (SSMP).

Explore the Possibility of Producing/Reusing Biogas—Which is often produced by the wastewater treatment processes to reduce operational costs and improve sustainability.

Use Recycled Water—Convert Sun Lakes Country Club’s golf course and additional parks to utilize recycled water soon (upon completion of the WWTP upgrades). This improves our conservation rates for potable water.

WWTP Has Capacity to Add Solar Power—There is land available to add solar power to assist in meeting the needs of the facility operations.

Threats
Ever Increasing Environmental Regulations—Affecting wastewater treatment and discharge requirements which could require costly plant upgrades (like the current planned WWTP upgrades in progress for Nitrogen removal) and place additional financial strain on the ratepayers.

Risk of Sewer Overflows—And associated liabilities due to aging system and bottlenecks, which can be reduced by implementing capital improvements and best practices.

High Cost of Treatment Facility Upgrades—Requiring careful planning and potential rate adjustments.

WATER & WASTEWATER
POSSIBLE PRIORITY 1 INITIATIVE (policy)
Complete Wastewater Treatment Plant Recycled Water Upgrades—Complete design and construction of the new WWTP to meet nitrogen discharge limits and produce tertiary recycled water for irrigation, reducing potable demand and diversifying water supplies.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Hexavalent Chromium Compliance Plan Implementation—Implement a Hexavalent Chromium (Cr6) Compliance Plan to meet the new 10 ppb MCL, using treatment and nontreatment measures, with full compliance anticipated by 2032. 105
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POSSIBLE PRIORITY 3 INITIATIVE (policy)
Develop and Implement Water Conservation Program— Develop and implement a State-mandated Water Conservation Program to ensure reliable supplies, comply with mandates, and promote efficiency through outreach, incentives, and usage monitoring.

POSSIBLE PRIORITY 4 INITIATIVE (policy)
Update Integrated Master Plan (IMP) and Evaluate Water/Wastewater Financial Rate Structure—Update the 2018 Infrastructure Master Plan (IMP) for Water, Wastewater, and Recycled Water systems to guide future utility upgrades, and review the current rate structure to ensure it supports the IMP’s capital needs. Any discussion of rates should clearly include capital and operating needs over multiple years, the possible use of debt financing vs. use of cash, expected annual fund liquidity, etc. There should be an annual review that compares yearly actuals vs. the underlying finance model assumptions.

POSSIBLE PRIORITY 5 INITIATIVE
Replacement of Small Diameter Pipelines and New Potable Wells—Replace aging, small-diameter, leak-prone watermains to reduce water loss, minimize costly repairs, and improve fire flow capacity, and develop new potable wells to enhance system reliability and accommodate future development.
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PW—BUILDING MAINTENANCE
SWOTs
Strengths
Familiarity With Assets—The team has strong familiarity with city-owned assets and experience in providing services them. They are aware of the problem areas within facilities and the services or vendors necessary to complete repairs.

Responsiveness—The team is responsive to City facility needs and requests from city staff when issues are brought up and can effectively triage requests.

Cooperating Ethos—There is strong interdepartmental and internal staff cooperation if additional resources are needed to complete specific tasks.

Weaknesses
Small Team—With only 2 staff members, the team is limited in completing: medium to large scale projects (i.e., roofing maintenance, facia board replacement; facility painting and flooring upgrades, etc.); clearing backlogs of internal requests; and necessary recurring maintenance items.

Deferred Upgrades and Maintenance—Staffing and funding constraints have led to deferred upgrades to HVAC, roofing, and ADA compliance.

Robust Preventative Maintenance Plans Don’t Exist—Facility Condition Assessments and preventative maintenance plans have not been established for all recurring tasks completed by the department. This would assist in advance scheduling of resources and conducting necessary work to extend the lifespan of City assets.

Rigid Insurance Requirements—Local hiring of vendors is challenging due to our large insurance requirements. When vendors are necessary, they are often further from the City and at higher costs.

Opportunities
Energy Retrofits Can Save Costs—Energy efficiency retrofits throughout the City with LED replacements, HVAC maintenance, or window tinting, replacement, or upgrades can reduce our energy costs.

Using Technology Can Help—Being able to fully integrate a Facility Condition Assessment into an asset management software to centralize requests, track useful life, 107
Strategic Plan - Appendix A 48
plan for capital projects, and evaluate if repair or replacement would be more cost effective.

Scaling Up with Contractors—The team can leverage contractor support for medium to large capital projects where inhouse staff is unable to complete due to lack of staff, required skill sets, or where specialized equipment is required.

Threats
Rising Costs for Materials and Services—The rising cost of construction materials and vendor labor costs are limiting factors to our ability to complete routine maintenance projects.

Age of Some Facilities—Due to the age of some facilities (i.e., Fleet Building, PW Building) and equipment, unexpected facility failures can disrupt essential city operations as there is limited space to accommodate displaced staff in other locations.

Increased Regulations—Increasing regulatory and safety compliance requirements take staff time away from maintenance tasks to comply with mandatory trainings, certifications, and reporting.

POSSIBLE PRIORITY 1 INITIATIVE
Complete a Facility Condition Assessment—Integrate the data into the asset management software and develop Preventative Maintenance Plans to guide future budgeting decisions and prolong useful lives of our facilities.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Address Deferred Maintenance Issues—Focus projects to clear deferred maintenance of key facility systems (e.g. HVAC, roofing, electrical).

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Evaluate Adding More Capacity For Routine Maintenance—Evaluate hiring a 3rd Maintenance Worker vs. adding contracting capacity to address more routine maintenance inhouse and maintain a low backlog of work. 108
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PW—ENGINEERING
SWOTs
The Engineering program provides land development, stormwater and NPDES programs, traffic management, capital project development and implementation, regulatory compliance, and inspection services on City and private projects.

Strengths
Strong Multi-Disciplinary Team—The engineering staff has a broad base of knowledge and are flexible, multi-disciplined, and accountable staff that provides the required services for capital projects, stormwater programs, land development processing and review, inspections, and contract management. The department has received positive remarks from the public, developers, and other city staff for providing a high level of customer service and responsiveness.

The Capital Project Team Delivers—Projects for the community, including the Highway Safety Improvement Program roadway improvement project, water line upgrades, annual pavement maintenance programs, and the Sun Lakes Boulevard extension project.

Software Application Support—Engineering staff leads the effort in software implementation and training (internal and external) for: the SmartGov permitting system that benefits the Community Development Department; also, Cartegraph (roadway) Asset Management, and assistance with ERSI ArcGIS (geographic information system) implementation. This can be expanded to Parks and other programs.

Success in Acquiring Outside Funding—The public works team has been very successful in receiving grant awards and delivering projects. These efforts include the Downtown Revitalization Plan grant, Active Transportation Plan grant, over $30 million in grants for Sun Lakes Boulevard, $7 million in grants for the Hargrave Grade Separation Design project, HSIP safety improvement projects, and nearly $1 million in quick build grants to implement portions of the active transportation plan.

Weaknesses
Challenges in Obtaining Full Staffing Levels—Besides filling vacancies, we also need more authorized engineers and project management staff. These challenges lead to a lack of redundancy and our ability to perpetuate standard operating procedures in an absence or vacancy that arises in the department.
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The Regulatory Environment is Always Changing—Staying current on the changing regulations is a challenging goal. The regulatory environments across all services (stormwater, air quality, pavement standards, etc.) with limited staff takes away time to perform other essential community services.

Purchasing and Vendor Management—With limited in-house staff, the division relies on vendors for minor projects like traffic calming, traffic signal timing, curb/ramp improvements, ADA compliance matter, and required reporting. Purchasing challenges and management of vendors reduces the benefit of contracting to complement limited staffing capacity.

Opportunities
Leveraging Other Resources—Continuing efforts to find grant and regional partnership opportunities to implement ‘Smart City” features like centrally connected and managed traffic signals.

Coordinating With Partners—Greater coordination with adjacent jurisdictions (e.g., Morongo Tribe, Beaumont, etc.) and regional partners (e.g., WRCOG, County and State), to bring regional projects and initiatives that will benefit Banning.

More Outreach—Expanding our communication to the public on various projects and our day-to-day services will improve support and understanding of our efforts.

Enhanced GIS Usage—The integration of spatial data with asset management systems provides more data driven capital programming and decisions. This helps in infrastructure planning, project reviews and developing financing options for growth.

Threats
Changing Regulations—The changing regulatory environment makes it challenging to articulate our priorities for State and Federal funding. Current state priorities for funding are not for roadway expansions. Previous federal guidance was aligned with this, which has recently changed with the new administration. When planning multi-year projects, the uncertainty presents challenges to ultimate constructability and viability of individual projects.

Long-term Population Growth Requires Proper Planning—If all potential residential development projects come to fruition, the City’s population will double, thus, new demands will be put on the department to deliver traffic safety, capital enhancements, and roadway improvements projects.
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Mandated Stormwater Requirements—The state’s requirements will require greater staff and financial resources over time that are currently unfunded by the Federal, State or County governments.

POSSIBLE PRIORITY 1 INITIATIVE (policy)
Update Engineering Standards and Specifications For Development—Create an engineering manual to provide guidance to developers, plan checkers, and City staff. This will provide expectations and surety for planning purposes. It will also mitigate the potential for issues due to possible staff turnover.

POSSIBLE PRIORITY 2 INITIATIVE
Seek Greater GIS integration with Asset Management Software (AMS)—Seek vendor assistance with integrating our GIS data with our AMS tools. This enhances our decision making.

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Help in Implementing Newer Stormwater Requirements—The pending update for the regional stormwater program will require additional staff, vendors, and funding to ensure compliance. Minimal funding will be provided through the County Assessment District, requiring local money to backfill the remaining need.
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PW—STREET MAINTENANCE
SWOTs
Strengths
Small but Mighty—While very small (3 laborers, 1 supervisor and 1 work release crew supervisor), the maintenance team is experienced, cohesive, and knowledgeable about City assets and infrastructure.

Experienced With Multiple Tasks—The team can perform cold-patch pothole repairs, replace and install signage, implement roadway striping, curb painting, and minor concrete curb and sidewalk repair.

Will to Pitch In—The team is willing to take on other tasks as assigned, such as homeless camp cleanup, assist landscape maintenance vendors, graffiti removal, assist with the Building Maintenance team, trash cleanup, bulky item day assistance, and more.

Weaknesses
Aging Equipment—The department utilizes aging equipment and vehicles that will require replacement to remain effective. They also lack specialized equipment to expand on services, such as hot-mix asphalt repair, larger concrete replacement jobs, and larger roadway striping tasks.

Limited Resources—The program is funded exclusively from Gas Tax receipts without General Fund support, leading to a deferred maintenance backlog due to limited funding and lack of staffing. This leads to staff reacting to issues, rather than addressing preventative needs.

Lack of Preventative Maintenance (PM) Plans—PM plans have not been established for all recurring tasks completed by the department. This would assist in advance scheduling of resources and/or acquiring contracted help on occasion. This lack of guidance results in staff being pulled from scheduled tasks to the hot item of the moment. This is inefficient and creates more of a backlog for preventative maintenance.

Opportunities
Seek Regional, State and Federal monies—Outside funding should be acquired for roadway improvements to lengthen the life of pavements and enhance striping through the implementation of a pavement management system.
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Work with Regional Transportation Partners (WRCOG, RCTC, etc.)—To integrate smart city technology (e.g., traffic sensors, signal coordination) to improve performance of our road system.

Acquire New Equipment and Training—To expand service ability to apply striping and implement traffic calming and active transportation signage and striping.

Move Landscape Services—To contractors thus allowing more time to maintain the right of way assets.

Threats
Rising Cost of Asphalt and Construction Materials—Is a limiting factor on the ability to complete routine maintenance projects.

Extreme Heat and Other Events like Hurricane Hillary—Leads to felled trees, damaged storm channels, and rapid occurrences of potholes and pavement damage.

Increased Traffic—From new and increasing development adds more stress to right of way assets and makes maintenance more difficult and inconvenient to the public.

POSSIBLE PRIORITY 1 INITIATIVE
Develop Formal Preventative Maintenance Plans—Complete preventative maintenance plans for all City owned street related assets and provide options to policy makers for funding. Adhere to the plans via regular scheduling of staff.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Develop a Pavement Management Plan and Policies—Complete a comprehensive inventory of roads along with their relative condition and expected life cycle e.g., Pavement Condition Indices. This would be communicated to Council along with options to fund differing performance levels or indices.

POSSIBLE PRIORITY 3 INITIATIVE (policy)
Seek Additional Funding—After completing the previous two goals, seek additional funding for improved performance and condition of City infrastructure, with improved costeffectiveness of maintenance efforts. This may include more staffing, contracts, and reduced backlog for repairs.
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POSSIBLE PRIORITY 4 INITIATIVE (policy)
Move all Landscape Services to Contractors—This would improve the focus and effectiveness of our street maintenance crews.
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PARKS & RECREATION DEPARTMENT
SWOTs
Strengths
Well Respected—The Banning Parks and Recreation Department is a well-respected part of the City that receives positive overall community support. From events, family recreation, youth sports, and our Senior Center, our programming offerings are well-run and well-received by the community.

Affordable Services—Banning is a disadvantaged community, and the department currently offers much of their programming at a very low price point, when compared to others.

Has a Far Reach to Many—The department offers both small and large events throughout the year at no cost. In FY 2025, over 14,000 total people were attendees at fourteen community events. Additionally, the City significantly supports the Annual Stagecoach Days event each year which has over 7,500 attendees.

Has Two Popular and Unique Amenities—The department has two unique facilities that enable amazing experiences for Banning, our Repplier Aquatic Center and Playhouse Bowl Amphitheater.
• The Aquatic Center has both a small and large water slides, not found in most public pools, as well as zero entry kids play area. The Aquatic Center had nearly 23,000 people through the door in FY 2025, including private rentals, swim lessons, classes, and open recreational swim.
• The Playhouse Bowl Amphitheater offers an outdoor amphitheater with nearly 2,000 available seats. The facility hosts the annual Playhouse Bowl Association concert series with between 6,000 and 8,000 annual attendees. The facility is also the site for movies in the park and numerous public and private events throughout each year.

Builds and Maintains Partnerships—The Department has developed and continues to have strong partnerships throughout the community. Some of these partnerships are with other agencies, non-profits, and community associations that enable the department to provide much-needed resources to our seniors. Some of our other partnerships include the Banning Unified School District, churches, and various city departments.

Senior Center—One of the great strengths of the Parks and Recreation Department is a Senior Center that operates Monday through Friday to provide connection for our seniors, 115
Strategic Plan - Appendix A 56
to one another and to the many available and needed resources both in the local and regional community. The Senior Center provided over 9,000 daily meals in FY 2025. The Senior Center offers daily and weekly classes and monthly and seasonal events throughout the year and has well over 10,000 seniors through the door each year.

Leveraging a Small Staff—The Parks and Recreation Department’s greatest strength may be a small group of dedicated, knowledgeable, passionate, and skilled staff who are flexible and able to adapt as necessary to execute in all settings.

Weaknesses
A High Reliance on Part-Time Staff—Creates very limited opportunity for growth with our large part-time staff and such a small contingent of full-time staff. This creates insufficient opportunities for staff advancement and growth. This results in instability and turnover with the part-time staff.

Some Under-served Youth—Although the department offers a significant number of programs and events for youth, families, and seniors, it has struggled to reach the teen and under-five demographic areas with minimal success in programming and event offerings.

Departmental Facilities Are Aging—The department has some of the standard parks and recreation amenities in its parks and facilities, but many of those facilities are aging and not designed ideally for best operational practices.

Inventory of Departmental Facilities is Inadequate—The city has a substantial shortage of available parks, facilities, and programming space for its current population when compared to the National Recreation and Park’s annual Parks metrics benchmark survey.

The city currently has five baseball fields and only four lit fields. The current Little League program is at capacity without additional fields. The city does not have a soccer field and uses available turf space in several parks for its youth soccer league and youth association practices. We can use the School District facilities when available, but their space is limited, and their programs take priority on these fields.

Safety Concerns in Our Parks—With drug use, alcohol, and homelessness issues affecting normal user experiences; there are ongoing concerns with graffiti and vandalism and a perception of a lack of safety throughout our park system.

Opportunities
Update our 2010 Parks and Recreation Master Plan—The current Master Plan is outdated and does not provide a usable plan for development for either the current or future needs of the City. The number of ballfields, community centers, and gymnasiums are significantly below the benchmark numbers for similarly sized communities. The city is without some amenities altogether, such as pickleball courts, soccer or multi-use fields, 116
Strategic Plan - Appendix A 57
and technology norms such as WIFI in public spaces and audio-visual accompaniments in our rentable facilities. There is a facility shortage today and it will increase as the City grows in population.

As Development Occurs Seek Facilities and Funding—Overall funding for the department’s operations and development is a significant concern for the future. With significant development coming to Banning in the future, the updating of our Park Development Impact Fee (DIF) associated with developments provides a potential enhanced revenue source.

Fundraising Non-Profit—A fundraising non-profit for parks, (e.g., “Friends of Banning Parks”) could be created to assist in raising money for Parks and Recreation amenities or programs.

Use of Reclaimed Water—Besides lessening the need for potable water, Parks can use reclaimed water for possible cost savings to the department.

Partnering With the School District and Police Department—we can always enhance our partnerships with the school district to provide intramural sports programming and classes directly on the school sites. We can partner with the Police Department to develop a joint program offering sports and outreach to youth and teens in the community. These programs will provide positive after school activities at a time when youth and teens are the most vulnerable to negative activities.

Mobile Recreation Program—there are opportunities to provide significant increase in our offerings by developing a mobile recreation program that we could bring to parks, neighborhoods, outside partners, and senior communities like several 55+ mobile home parks that lack recreation services and programming.

Threats
Keeping Up With Expected Population Growth—Given the current deficiencies in facilities and the expected demands due to population growth that can double over the next, say 10-15 years, the resident’s experience of our department will be greatly harmed in the future.

Increasing Cost Pressures—One example of these increasing costs is in department’s utility costs. These costs were $68,000 in FY 2023 and $320,000 in FY 2025. As the General Fund gets distressed, there is a concern that these popular departmental experiences will lose out due to competing priorities in the City.
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POSSIBLE PRIORITY 1 INITIATIVE (policy)
Complete An updated Parks and Recreation Master Plan—Develop a Master Plan of facilities and services to anticipates growth and fold its results into the City’s Capital Improvement Plan
POSSIBLE PRIORITY 2 INITIATIVE (policy)
Funding the Master Plan—Including the Plan into the City CIP, development of additional funding sources for Parks and Recreation (e.g., Friends of Banning Parks, Sponsorship and partnerships, private and public grants, updating the Parks DIF, etc.).

POSSIBLE PRIORITY 3 INITIATIVE
Development of Career Paths—Create opportunities in the department for entry level staff to advance, grow and be productive in the community; thus, providing stability in the staffing of the department.

POSSIBLE PRIORITY 4 INITIATIVE
Enhancing School Partnerships—Seek additional leveraging of school sites for the delivery of recreational services.
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COMMUNITY & ECONOMIC DEVELOPMENT
SWOTs
Strengths
Committed Staff and “One-stop Shop”—The City of Banning’s Economic and Community Development Departments are supported by a knowledgeable, collaborative staff committed to facilitating sustainable growth and long-term community revitalization.

Strong Interdepartmental Coordination—Coupled with in-house electric and water/wastewater utility resources, enables streamlined entitlement and permitting processes, making the city more responsive to developers, business owners, and housing partners as a one-stop shop for projects.

Strong Relationships—City staff also maintain strong working relationships with regional agencies and educational institutions, further enhancing Banning’s ability to align with broader economic and workforce development strategies.

Modern Goals/Policies—The City is currently updating its General Plan and zoning ordinances to ensure goals, policies and City growth aligns with community values and provides a foundation for downtown revitalization, commercial corridor improvements, and new housing projects.

Strong Outputs—The department reviews and processes a large volume of work as exemplified below:

Permits Issued
Quarter 3, 2024 276 Quarter 2, 2025 428
Quarter 4, 2024 301 Quarter 3, 2025 389
Quarter 1, 2025 312 QTD@10/17/25 97
Weaknesses
Staffing and Turnover Challenges—The Economic Development program is a team of one. The Community Development Department has a staff of 16 that is made up of City and contract staff. Only three of the 16 CDD staff have been employed with the City for longer than two years, while most of the others have been with the City for about a year or less. The turnover and limited staffing has led to gaps in institutional knowledge on processes that are required to provide an efficient operation. This staffing challenge has caused some delays in application processing and responsive customer service; and 119
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reduced capacity for proactive community outreach/awareness and staffing of the newly appointed Historic Preservation Commission.

Impaired Systems—The City faces internal limitations that often slow down momentum, such as an impaired or failed implementation of permitting and licensing systems. In both economic and community development, there is a need for modernized tools to track metrics, assess development readiness, and identify gaps in housing, infrastructure, and commercial activity. There is limited capability for GIS mapping services. Inconsistent or outdated zoning and development standards in certain areas also complicate project feasibility. Additionally, the City must balance growth with preservation of community character, which requires more robust community engagement tools and clearer policies to guide infill and redevelopment without displacing existing residents or small businesses.

Opportunities
Undeveloped/Underutilized Land—The City’s abundance of underutilized land, proximity to regional job centers, and growing interest from industrial and retail developers create an ideal environment for attracting new businesses, expanding the housing supply, and activating commercial corridors.

Established Downtown—Banning, with its established theater, retail buildings, and proximity to City Hall, presents a unique opportunity to build and expand a walkable, mixed-use hub. It can include the arts, dining, and local services for both residents and tourism, especially through the implementation of the Downtown Revitalization and Complete Streets plans. City-owned land downtown also provides a significant opportunity to drive economic and community revitalization through targeted investment and public-private partnerships.

Regional Access—Banning’s strategic location along the I-10 corridor between major Southern California markets makes it highly attractive for logistics, commercial, mixeduse, and residential development.

Higher Education—A significant internal asset is the presence of Mt. San Jacinto Community College’s Banning campus, which offers career training and educational programs that align with regional workforce needs and creates strong potential for talent development partnerships. The College offers an opportunity to serve as a partner on workforce development, career pipelines, and entrepreneurship support.

Threats
Regional Competition—For jobs, investment, and housing is a challenge without local stability and staff continuity. Additionally, nearby cities may offer more aggressive incentive programs or more fully developed commercial environments to attract growth. 120
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Infrastructure—Potential limitations such as traffic congestion, long-term water supply, and utility capacity may require substantial investment to accommodate future long-term growth.

Outside Agency ROW/Land—Coordination with Caltrans and UPRR on necessary improvements for growth has proven to delay development and public projects.

Housing Affordability and Homelessness—Housing affordability, while currently a strength, may become a concern as demand increases, raising risks of additional strain on resources and impacts the City’s ability to attract growth and retain businesses.

POSSIBLE PRIORITY 1 INITIATIVE
Streamline Permitting, Business Licensing, and Customer Service Systems— Modernize and integrate permitting, licensing, and tracking systems to reduce processing times, improve responsiveness, and enhance transparency. This requires a thorough assessment of current systems and identify gaps or outdated features. It will facilitate establishing performance benchmarks, customer service standards and better data to make decisions.

POSSIBLE PRIORITY 2 INITIATIVE (policy)
Enhance Staffing Capacity, Stability, and Institutional Knowledge Retention—We need to break the turnover trend by developing retention strategies with the help of HR. And when inevitable turnover occurs, we need a transition plan to manage the potential loss of corporate memory.

POSSIBLE PRIORITY 3 INITIATIVE
Explore and Implement Surge Capacity—We need to assess the potential for temporary and part-time staff or contracts with firms to support peak periods and reduce potential for burnout and turnover.

POSSIBLE PRIORITY 4 INITIATIVE (policy)
Inventory and Then Sell or Activate Underutilized Land in Downtown—In conjunction with a new Economic Development Plan (see City Manager’s Office Goal 4), inventory and seek ways to encourage development in the downtown core. This may include targeted incentives and collaboration with regional partners and developers. This will also require an active outreach program to City residents.
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ii
The City of Banning is at an inflection point. With
the addition of three new council members last
winter, the City Council is essentially a “new”
governing body. With that newness comes a new
set of opinions and experiences and a certain zeal
to make things better.

This is the perfect time to set the direction and
priorities for the entire City. This Council just
finished its one-year anniversary as a team. Thus,
the newer members have a year’s worth of
interacting with the City organization and their
community. They have more informed opinions
about the City organization and how everyone
might move forward in unison to meet the
challenges of today and tomorrow.

Self-Reflection
A Strategic Plan is a powerful tool to do just that! It is structured to be first, self-reflective, where
departments discuss their current Strengths and
Weaknesses. And next, they look externally and list
the future Opportunities and Threats. Taken
together, the strengths and opportunities are
variables that can make things better for serving
their mission. The other two variables are barriers
to mission success, and they may threaten the
entire organization or impact the greater
community. We are calling these four important
variables, the SWOTs. These SWOTs can be found
as a separate Appendix A in this plan.

Setting Future Direction and Priorities For The
Futures
The next step addresses: what is it that we do with
this information? The Council thoroughly listened,
discussed, and decided which SWOT (policy) issues
they wish to tackle and in what (priority) order.

These are articulated in terms of Strategic Initiatives.

The goal is for these Initiatives to be completed, or
at least started in the next five years. And because
these are classified as policy issues, there would be
the appropriate Council involvement in their various
phases of implementation.

And when SWOTs of an administrative nature are
not addressed in a timely manner, sometimes they
become (policy) issues for the Council. As a result,
the Council provided recommendations on these
SWOTs as well; however, the City Manager’s
judgement is deferred to in tackling and adjusting
these priorities. These variables will be addressed as
performance goals between the City Manager (CM)
and department heads and ultimately between the
CM and Council.

Converting Ideas to Action!
As the Council approves this Strategic Plan and
“Policy” Initiatives of the City, the CM has provided
an Implementation Phase. This Phase takes the top
priority (Tier 1) Strategic (Policy) Initiatives and
provides more details on how and when the CM
might complete these initiatives. We call this
document the Strategic Initiative Charter. It is the
first step in converting an idea to actionable steps.

After review by the City Council, the Charter gives
staff the direction and authority to act. As the CM
works into the next priority level (Tier 2), it is
expected a new Charter will be developed and
shared for each Initiative.

Taken together, the Strategic Goals and
Implementation Phase will be Banning’s Strategic
Plan—Banning 2030, Designing our Future TODAY!

FOREWORD

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iii

TABLE OF CONTENTS
Page
FOREWORD............................................................................................................................................................ ii BANNING VISION STATEMENT......................................................................................................................1 BANNING MISSION STATEMENT .................................................................................................................2 STRATEGIC PLAN OVERVIEW.......................................................................................................................3 TRANSLATING GOALS TO ACTION............................................................................................................4 STRATEGIC INITIATIVES—POLICY ..............................................................................................................5 STRATEGIC INITIATIVES—ADMINISTRATION........................................................................................9 IMPLEMENTATION PHASE............................................................................................................................. 12 Strategic Initiatives Charters ..................................................................................................15 1a. Emergency Operations Plan (EOP)................................................................15 1b. PD Strategic Excellence Initiative....................................................................18 2a. Animal Shelter and Control Services .......................................................... 21 2b. Address Homelessness .......................................................................................24 2c. Wastewater Treatment & Recycled Water Upgrades....................28 2d. Streets Maintenance Pavement Management Plan (PMP) .......32 3a. New Economic Development Plan (EDP) ................................................36 3b. Inventory and Activate Underutilized Land in the Downtown ..39 4a. Workout Plan to Fiscal Sustainability.........................................................43 4b. Evaluation of Utility Billing Program............................................................46 4c. PD’s Growth Strategy.............................................................................................50 4d. Strategic Plan Implementation .....................................................................52 Strategic Initiatives Dashboard ...........................................................................................54 APPENDIX A - SWOTs...................................................................................................................................55 125
1 BANNING
VISION

STATEMENT
The City of Banning promotes and supports
a high quality of life that ensures a safe
and friendly environment, fosters new
opportunities and provides responsive, fair
treatment to all and is the pride of its
citizens.
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2 BANNING

MISSION

STATEMENT
Our mission is to provide our
residents with a safe,
pleasant, and prosperous
environment in which to live,
work, and play, in a fiscally
responsible, citizen-friendly,
and transparent manner.
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3 STRATEGIC
PLAN

OVERVIEW
Vision Statement
Mission Statement
Strategic Goals
Ensuring Public Safety
Protecting and Improving Quality of Life
Strengthen The Local Economy
Maintain Effective and Efficient Services
Strategic Initiatives
Policy
Administration
Priorities
Tier 1—Now!
Tier 2
Tier3
Implementation Phase
Strategic Initiative Charters
128
4 This Plan of action cannot be a “blue sky” exercise. Rather, it must translate Banning’s broad Vision and Mission
Statements to more specific Strategic Goals and
ultimately to action (i.e., Strategic Initiatives). These planned actions should produce tangible improvements
to the City organization and community.

The background and rationale for these Strategic
Initiatives can be found in Appendix A. This is where the Banning departmental SWOTs are described (the
foundation for Strategic Initiatives).

Given the sheer number, these Policy Initiatives are
categorized by Strategic Goals and also prioritized into Tiers.

TRANSLATING GOALS TO ACTION

TRANSLATING

GOALS TO
ACTION
129
5 • 1a. Create Banning’s Emergency Operation Plan—City
Manager
• 1b. Provide One-Time Resources and Independently
Evaluate the Police Department—Human Resources and
Police
1st Tier Policy
Related Initiatives
STRATEGIC GOAL 1—ENSURING PUBLIC SAFETY

STRATEGIC
INITIATIVES—
POLICY
130
6 • 2a. Address The Lack of Animal Control and Shelter—City Manager
• 2b. Address Homelessness—City Manager
• 2c. Complete Wastewater Treatment Plan & Recycled Water Upgrades—Public Works
• 2d. Develop Formal Preventative Maintenance Plan (For Streets)—Public Works1
1st Tier Policy
Related Initiatives
• 2g. Update Engineering Standards. & Specifications for Development—Public Works
• 2h. Seek Additional Funding for Streets Pavement Mgmt.

Plan—Public Works
• 2i. Fund the Updated Parks and Recreation Master Plan— Parks & Recreation
• 2j. Enhance School Partnerships for Parks & Recreation 3rd Tier Policy
Related Initiatives
• 2e. Update Integrated Master Plan (IMP) & Evaluate
Water/Wastewater User Rate Structure—Public Works
• 2f. Develop a Pavement Management. Plan and Policies
(Streets)—Public Works
2nd Tier Policy
Related Initiatives
STRATEGIC GOAL 2—PROTECTING AND IMPROVING

QUALITY OF LIFE
131
7 • 3a. Develop New Economic Development (ED) Plan—City Manager
• 3b. Inventory & Activate Underutilized Land in Downtown— City Manager & Community Development
1st Tier Policy
Related Initiatives
STRATEGIC GOAL 3—STRENGTHEN LOCAL

ECONOMY
132
8 STRATEGIC GOAL 4—MAINTAIN EFFECTIVE
& EFFICIENT SERVICES
• 4a. Develop and Implement Banning’s Financial Workout Plan to Sustainability—Finance and City Manager
• 4b. Do In-Depth Evaluation of the City’s Utility Billing Program and Tools—Finance
• 4c. Develop & Implement a Proactive Outreach & Hiring Program For Police—Human Resources and Police
• 4d. Strategic Plan Implementation—City Manager
1st Tier Policy
Related Initiatives
• 4m. Make Cyber Security a Core Priority of the Organization- -Finance 3rd Tier Policy
Related Initiatives
• 4e. Develop New Banning Organizational Culture—City
Manager and Human Resources
• 4f. Assessment of the Risk Management Program—Human
Resources
• 4g. Independent Review of Purchasing Process—Finance
• 4h. Develop More Accessible Purchasing Process for
Small/Local Vendors--Finance
• 4i. Develop/Implement Banning’s IT Strategic Plan—Finance • 4j. Achieve BEU Fiscal Solvency and Sustainability—Public Works and City Manager
• 4k. Streamline Permitting, Bus. Licensing and Customer Svc.

Systems—Community Development
• 4l. Develop Plan to Enhance Staffing Capacity, Stability, and Institutional Knowledge Retention—Human Resources &
Community Development
2nd Tier Policy
Related Initiatives
133
9 Since the dividing line between Policy related initiatives (within the Council purview) and the Administration
related initiatives (within the City Manager purview) is very grey at times, especially when Administrative issues are not properly managed, some initiatives morph into
acute challenges for the Council.

Thus, these administrative-related solutions or initiatives became “fair play” for Council and this Strategic Plan.

The City Council discussed and recommended priorities
for these Strategic Initiatives as well. While their voice on these matters is noted, it is the City Manager that needs discretion and room to tackle these given the myriad
variables (e.g., staff capacity, the number of competing priorities, complexity, etc.).

STRATEGIC
INITIATIVES—

ADMINISTRATION
134
10 1st Tier Administrative Initiatives
• 1a. Develop a Community Outreach Process—Police
GOAL 1—ENSURING PUBLIC SAFETY
GOAL 2—PROTECTING AND IMPROVING

QUALITY OF LIFE
1ST Tier Administrative Initiatives
• 2a. Complete Updated Parks and Recreation Master Plan— Parks & Recreation
• 2b. Evaluate Adding More Capacity for Road
Maintenance—Public Works
1st Tier Administrative Initiatives
• 3a. Complete Edison’s Wholesale Distribution Access
Tariff Agreement—Public Works
• 3b. As BEU Becomes Solvent, Ramp Up Capital Needs—
Public Works
• 3c. Develop and Implement Water Conservation
Program—Public Works
GOAL 3—STRENGTHEN LOCAL ECONOMY
135
11 GOAL 4—MAINTAIN

EFFECTIVE &
EFFICIENT SERVICES 1st Tier Administrative Initiatives
• 4a. Develop a Written Claims and
Litigation Strategy—City Attorney
• 4b. Create a Coordinated Program for
Performance Management—Human
Resources & City Attorney
• 4c. Develop City Employee Transition
Plan For Impending Turnover—Human
Resources
• 4d. Elevate the Utility Billing Function in
Finance—Finance
• 4e. Address the Software Issues and IT
Support That is Behind the Current Utility
Billing Crisis—Finance
• 4f. Aggressively Recruit and Staff
Finance—Accounting with Perm. Staff—
Finance & Human Resources
• 4g. Develop and Implement System for
Monitoring and Managing Cash Flow—
Finance
• 4h. After Completing UB Review (see
above) Buy and Implement New UB
System—Finance and Public Works
2nd Tier Administrative Initiatives
• 4i. Conduct Outreach to Our Insurance
JPAs—Human Resources & City Attorney
• 4j. Develop and Implement Leave
Management Program—Human
Resources & City Attorney
• 4k. Restructure Vendor Onboarding to
Speed the Process—Finance & City
Attorney
• 4l. Hexavalent Chromium Compliance
Plan Implementation—Public Works
3rd Tier Administrative Initiatives
• 4m. Data Cleansing and Migration
Strategy—Finance/IT
• 4n. Consider Changes to the IT Manager
Reporting Relationship—City Manager &
Finance
• 4o. Convene Interdepartmental Team &
Develop a More Responsive Purchasing
Process for Emergencies—Finance
• 4p. Replacement of Small Diameter
Pipelines and New Potable Wells—Public
Works
• 4q. Complete a Facility Condition
Assessment—Public Works
• 4r. Address Facility Deferred Maintenance
Issues—Public Works
• 4s. Seek Greater GIS Integration with
Asset Management Software (AMS)—
Public Works
• 4t. More Help in Implementing Newer
Stormwater Requirements—Public Works
• 4u. Move Landscape Services to
Contractors—Public Works
• 4v. Development of Career Paths—
Parks/Recreation & Human Resources
• 4w. Explore and Implement Surge
Capacity—Community Development
136
12 This Implementation Phase of the Plan is to ensure Banning converts this Strategic Plan to ACTION and that the City Council and staff generally agree on HOW and WHEN to roll out the Strategic Initiatives.

Some of the top priority (1st Tier) Strategic (Policy) Initiatives have already begun, and a Charter was developed for each one (see below). The Charter outlines the How and When along with other important variables. Once this Plan is approved by Council (along with these Charters), staff has the authority to move forward on them.

The City Manager will report out progress on these Initiatives every three months for the first year and every six months thereafter. And as the City Manager wishes to initiate a 2nd or 3rd Tier Strategic (Policy) Initiatives, a Charter will be completed and forwarded to Council as well.

IMPLEMENTATION
PHASE
137
13 1st Tier Policy Initiatives
• 1a. Create Banning’s Emergency Operation Plan—City Manager • 1b. Provide One-Time Resources and Independently Evaluate the Police Department— Human Resources and Police
STRATEGIC GOAL 1—ENSURING PUBLIC SAFETY
1st Tier Policy Initiatives
• 2a. Address The Lack of Animal Control and Shelter—City Manager • 2b. Address Homelessness—City Manager
• 2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades—Public Works • 2d. Develop Formal Preventative Maintenance Plan (For Streets)—Public Works STRATEGIC GOAL 2—PROTECTING AND IMPROVING QUALITY OF LIFE 138
14 1st Tier Policy Initiatives
• 3a. Develop New Economic Development (ED) Plan—City Manager • 3b. Inventory & Activate Underutilized Land in Downtown—City Manager & Community Development
STRATEGIC GOAL 3—STRENGTHEN LOCAL ECONOMY
1st Tier Policy Initiatives
• 4a. Develop and Implement Banning’s Financial Workout Plan to Sustainability— Finance and City Manager
• 4b. Do In-Depth Evaluation of the City’s Utility Billing Program and Tools-- Finance • 4c. Develop & Implement a Proactive Outreach & Hiring Program For Police—Human Resources and Police
• 4d. Strategic Plan Implementation—City Manager
STRATEGIC GOAL 4—MAINTAIN EFFECTIVE & EFFICIENT SERVICES 139
Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
15 Which Council Strategic (Policy) Initiative does this Charter address? 1a. Create Banning’s Emergency Operations Plan (EOP)—City Manager What is the short title for this Strategic Goal?
Create Banning’s Emergency Operations Plan (EOP)
What is your proposed strategy to accomplish this Goal? Emergencies and disasters (e.g., fires, earthquakes, floods, prolonged power outage during the summer) take different forms that require different responses from impacted public agencies. Some disasters can be addressed within the confines of Banning’s capabilities while others may require County, State or Federal resource capabilities.

There is a uniform structure and process for how each level of government requests help and interacts with each other. And with this uniformity comes structures for incident response. Much of this is prescribed in the National Incident Management System (NIMS) and Incident Command System (ICS). This uniformity provides scalability and interoperability for Banning vis-à-vis other public agencies.

The City shall develop a Banning EOP that follows NIMS and is well coordinated with the Riverside County Emergency Management Department; thus, coordinated with other public partners. It will provide the framework to guide the City in responding to various emergencies and when to open the Emergency Operations Center (EOC). It will also provide guidance for Banning residents during emergencies.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
This Strategic Initiative was the only one that did not emanate from the detailed discussions in the SWOTs section. Rather, the City Council added this as part of their day-long Strategic Plan Workshop in November 2025.

The Weakness and Threat is apparent. The City does not have an Emergency Operations Plan that guides the entire City’s response through a substantial disaster.

Granted, Police and Fire do have their own incident command systems, but there is Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
140
Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
16 currently nothing that guides the entire City and when to seek help from other public agencies.

Who is the project sponsor?
City Manager
Who is the project lead?
Police or Fire Chief. However, there will likely be a contracted project manager for EOP development and training. One of the two Chiefs will be the City lead given their experience in the incident command system.

Other team members and roles?
The City management team (Directors) will be important team members given they guide their department’s response to an emergency, and they will likely fulfill a role in the EOP/EOC incident command structure.

Finally, once the EOP is understood and approved by the Council, everyone (all City staff and Council) will have an important role in its implementation.

Who are the stakeholders that can determine success or failure? Why? Riverside County, the City Council, all City staff and Banning residents will all have an important stake in this Plan.

Can this be accomplished within the current budget?
No
If not, how much will be needed?
Estimated at $50,000 for development of EOP plus ongoing cost for training.

Funding Source: Cost allocation to all departments.

What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Acquire EOP expertise through the County or from
other sources—will likely require Council action
May 1, 2026
141
Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
17 Milestones Estimated Dates

2. Project Commences June 1, 2026

3. Draft EOP is shared with Council September 1, 2026

4. Council adopts Banning’s EOP October 1, 2026

5. At the completion of item 4, City staff is trained,
and the first “tabletop” exercise commences.

February 1, 2027
What are the risks associated with this project? How do we manage these risks?
Because this EOP is designed for incidents that rarely occur, there is risk that this Initiative will constantly take a back seat to the plethora of issues being addressed by Banning right now.

To manage this, someone must be picked as the Champion of this project and it must be brought to the forefront whenever possible.
142
Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
18 Which Council Strategic (Policy) Initiative does this Charter address? 1b. Provide One-Time Resources and Independently Evaluate the Police Department— Human Resources & Police
What is the short title for this Strategic Goal?
The Banning PD Organizational Assessment and Improvement Initiative What is your proposed strategy to accomplish this Goal? To address the systemic issues identified in the Banning Police Department (BPD) SWOT discussion, the City Council has prioritized the allocation of one-time resources for an independent Departmental Assessment. This initiative is designed to provide an objective evaluation of the department’s current culture (e.g. norms for behavior and performance at all levels of the department vs. a uniform department-wide best practice one). It will also provide the Chief with actionable strategies to transition the current department culture to a more positive one. Besides establishing desired behaviors and values, it will establish consistent performance expectations across all ranks. Furthermore, the assessment will involve a collaborative review with the Chief, Human Resources (HR), and the City Attorney’s Office to establish the department as a desired employer but also mitigate future claims and improve the department’s professional environment.

The City has chosen Jacob Green and Associates (JGA), a California-based consulting firm specializing in organizational assessment, executive recruitment, leadership development, facilitated team development, and executive coaching for public sector agencies. JGA was recommended by PERMA the City’s Risk Management Authority for General Liability and Workers’ Compensation. JGA’s work is grounded in a deep understanding of local government and public safety environments, and their approach is guided by a simple principle: Listen First, Design Second. JGA will work collaboratively with BPD and HR to provide objective insight, strengthen organizational alignment, and support informed decision-making.

How does this project address or make a positive impact on the stated SWOTs? How will you know e.g., can you break the Goal down to objectives? Conducting a formal Organizational Assessment is a powerful strategic move for the Banning Police Department because it directly addresses the "stew" of issues outlined in the Police SWOT discussion. They include negative culture and morale in some parts Strategic (Policy) Initiatives Charter
1b. The Banning PD Organizational Assessment and Improvement Initiative 143
Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
19 of the department, high staff turnover, difficulty in recruitment and substantial claims filed by employees.

Instead of treating symptoms (like high turnover and large claims), an assessment identifies the root causes.

Who is the Project Sponsor?
City Manager
Who is the project lead?
Collaborative effort between Human Resources Director (lead), the Police Chief and the City Attorney (as appropriate).

Other team members?
Police management and possibly other opinion leaders in the department.

Who are the stakeholders that can determine success or failure? Why? Banning Police Officers Association, Banning Police Management Association, the Council and community.

Can this be accomplished within the current budget?
Yes
If not, how much will be needed?
N/A
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. City Council approves scope of work and contract
with Jacob Green and Associates
January 13, 2026

2. Conduct Assessment 60 days after project
commenced
144
Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
20 Milestones Estimated Dates

3. Review Assessment Report recommendations and
develop proposed Implementation Plan for Police
Chief and City Manager
90 days after project
commenced
What are the risks associated with this project? How do we manage these risks?
Addressing identified root causes may require accountability, changes in behavior and practices, and broad organizational buy-in to a new direction. Achieving this level of alignment will require commitment from all employees. In some cases, this transition may present challenges and necessitate difficult but necessary organizational changes.
145
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 21 Which Council Strategic (Policy) Initiative does this Charter address? 2a. Address the Lack of Animal Shelter and Animal Control Services—City Manager What is the short title for this Strategic Goal?
Animal Shelter Services - Local Restoration and Regional Solutions What is your proposed strategy to accomplish this Goal? The City will pursue a phased strategy that addresses Animal Shelter & Control restoration needs in the near-term while evaluating long-term regional Shelter & Animal Control service delivery options.

Animal Shelter
Recognizing that the existing animal shelter facility has been closed for an extended period, the City will first complete a Facility Condition Assessment and Operational Feasibility Analysis. These studies will identify required improvements, regulatory compliance needs, capacity constraints, staffing requirements, and associated capital and ongoing operations and maintenance (O&M) costs necessary to safely reopen the facility. Based on the results of these assessments, the City will develop reopening scenarios that align service levels with available resources and budget capacity.

At the same time, the City will continue discussions with neighboring jurisdictions and regional partners to evaluate the feasibility of forming a Joint Powers Authority (JPA) or similar governance structure. A regional JPA could provide a framework for financing, constructing, and operating a regional animal shelter facility, maximizing economies of scale, improving service consistency, and reducing long-term costs and operational risk for participating agencies. However, the regional approach will take much longer, say 3-5 years.

This dual-track approach allows the City to maintain flexibility, ensure informed decision-making, and present City Council with clear options for both near-term shelter operations and long-term regional solutions. Any decision to reopen the existing facility, participate in a JPA, or pursue a regional facility would be subject to City Council policy direction and approval.

Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 146
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 22 How does this project address or make a positive impact on the stated SWOTs? How will you know?
The SWOT discussion spoke to the lack of Animal Control and Shelter services. This project will provide an Animal Shelter that improves/increases animal control services provided to the community. These services will be able to mitigate a threat to public health and safety.

Who is the project sponsor?
City Council
Who is the project lead?
City Manager
Other team members and roles?
Director of Public Works (building assessment, capital improvements), Animal Control Officers (operations) and possible JPA participating agencies.

Who are the stakeholders that can determine success or failure? Why? The City Council, Non-Profits, Animal Control officers, the Morongo Band of Mission Indians and Banning residents are all stakeholders.

Council provides authority to invest in the required improvements to the City existing facility and ultimately approve participation in a regional solution. Non-profits will provide cost effective support in finding homes for animals and could aid in supporting Animal Shelter operations. Animal Control Officers will provide input on facility needs and operations. Morongo Band of Mission Indians (MBMI) have expressed interest in utilizing the existing facility. If a regional facility is pursued, other JPA agencies would be stakeholders.

Can this be accomplished within the current budget?
No
If not, how much will be needed?
The Facility Assessment and Feasibility Study was recently awarded and has a contract value of $145,000; $50,000 was committed by the Morongo Band of Mission Indians.

The construction and operating costs will be refined after the completion of the facilities assessment. The City may be able to find one-time funding for the capital 147
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 23 portion, but ongoing operations will be more difficult. A rough estimate for operations is $600,000 to $800,000. The Morongo Band of Mission Indians may participate in it too. The cost for a regional JPA option is not known at this time.

Funding Source: General Fund and possible contributions from partnering agencies (e.g. MBMI, etc.)
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. The Facility Condition & Operational Assessment
was started in January 2026
May 2026

2. Determine City fiscal capacity to re-establish the
Animal Shelter, including operations
June 2026

3. Outreach with potential JPA partners in a regional
solution
Ongoing

4. Assess likelihood and timing of the regional
approach and consider implementing the local
option.

If local option is pursued,
anticipate 18-24 months
of design & construction
activity

5. Consider the regional solution 3-5 years
What are the risks associated with this project? How do we manage these risks?
Funding: Given the City’s General Fund fiscal position, the biggest risk is finding the funds for capital and operations under both scenarios (i.e., local and regional) .

However, there is an unquantifiable risk to the City’s quality of life with a continued void for these services.

Regional Participation: The success of a JPA would be highly dependent on the sustained commitment and alignment of participating regional partners. 148
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
24 Which Council Strategic (Policy) Initiative does this Charter address? 2b. Address Homelessness
What is the short title for this Strategic Goal?
Responding to Homelessness in the City
What is your proposed strategy to accomplish this Goal? The City will develop and implement a comprehensive Homelessness Response Plan (HRP) informed by best practices from peer agencies that have demonstrated success in managing homelessness through coordinated outreach, services, and enforcement.

The program will be built on strong partnerships with Riverside County (e.g., social services, behavioral health, jail/Sheriff), and local and regional non-profits that provide social services, behavioral health support, housing navigation, and re-entry assistance.

As part of this strategy, the City will review and update its anti-camping ordinance to ensure it is clear, enforceable, and aligned with current legal standards and best practices. Ordinance updates will focus on protecting public health and safety, preserving access to public spaces, and supporting consistent enforcement in coordination with outreach and available services.

The strategy will also include coordinated encampment cleanups in coordination with outreach and service providers, to address health, safety, and sanitation concerns in public spaces. These efforts will help reduce impacts on infrastructure and Police responders, improve cleanliness, and support safe and accessible public areas for residents and businesses.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
Through the implementation of a well-designed and coordinated HRP, the City anticipates a measurable reduction in homelessness-related activity. This will result in fewer homelessness-related calls for service to the Police Department, which currently represent the City’s highest call volume, thereby allowing law enforcement resources to be more effectively allocated to other citizen calls for services. In addition, a reduction in encampments is expected to decrease the number of hours Public Works staff spend on encampment cleanup and related maintenance activities.

Strategic (Policy) Initiatives Charter
2b. Address Homelessness
149
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
25 Reduced homelessness activity in the downtown area is also expected to positively influence economic development by improving overall conditions for businesses and increasing investor confidence. A cleaner, safer, and more predictable environment supports private investment, commercial activity, and long-term revitalization efforts.

Finally, decreased homelessness activity in public spaces such as parks, sidewalks, and rights-of-way is expected to reduce community concerns related to health, safety, and accessibility, helping ensure that public spaces remain safe, sanitary, and accessible for all residents and visitors.

Who is the project sponsor?
City Council
Who is the project lead?
City Manager
Other team members and roles?
Director of Public Works (encampment cleanup), Police (Homeless Liaison Officers, Code Enforcement) and Homeless Services Coordinator.

Who are the stakeholders that can determine success or failure? Why? City Council: Will set policy direction, approve changes to applicable ordinance and authorize additional expenditures.

Riverside County: Due to the lack of City resources and programmatic expertise, the City will rely on coordination with County program ( e.g., social services) and additional staff assistance for implementing the City’s plan. Additionally, continued communication with the County Sheriff’s Office will be critical to ensure that the release of inmates is not done in a manner that encourages falling back into homelessness in the City. An MOU with the County, which has now expired, once provided funding resources to the City to fund additional Police Officers, to mitigate the impacts the jail would have on the City. Continued discussions with the goal of renewing the MOU would be significant to the City’s initiative of dealing with the homeless problem.

Non-Profits: Can assist in providing outreach and supportive services.

Can this be accomplished within the current budget?
No
150
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
26 Staff resources dedicated to the development and implementation of the HRP are currently limited, which may impact the City’s ability to implement the program as envisioned. Any additional staffing required to support the program would rely on the General Fund, which is anticipated to experience budget reductions as the City works to address its structural deficit.

If not, how much will be needed?
The development of an HRP is likely to range between $75,000 - $100,000.

In the absence of a formal Homelessness Response Plan, it is difficult to accurately estimate the total cost required for successful implementation. However, based on comparable programs and preliminary assumptions, a high-level estimate for additional staffing ranges from approximately $200,000 to $400,000 annually to support Homeless Services Coordinators and Homeless Liaison Officers.

In addition, the annual cost to contract for encampment cleanup services is estimated to range from approximately $350,000 to $500,000 per year, depending on service frequency, scope of work, and site conditions.

Funding Source: General Fund
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Procurement of services to develop a HRP July 1, 2026

2. Commence development of HRP September 1, 2026

3. Draft of HRP Presented to Council April 1, 2027

4. Approval of HRP June 1, 2027
What are the risks associated with this project? How do we manage these risks?
Lack of Bandwidth: The City has limited capacity in the City Manager’s Office to convene stakeholders and potential partners to develop a Banning HRP. Hence the recommendation to procure services from a consultant to develop the HRP, which will include outreach to both internal and external stakeholders.

Insufficient Funding: The successful implementation of a comprehensive homelessness response requires sustainable funding for outreach, coordination, enforcement, and cleanup activities. Limited or uncertain funding could delay program implementation or reduce effectiveness. Grants could possibly help fill the funding gap.
151
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
27 Lack of coordination or support from Riverside County: The City’s ability to address homelessness effectively depends in part on access to County-provided expertise and bandwidth (e.g., social services, behavioral health resources, and housing programs).

Limited coordination or inconsistent County participation could reduce program effectiveness. Consistent communication with the County would help mitigate this risk.

County Jail Release Practices: The release of inmates from the Riverside County jail can result in individuals returning to homelessness within City limits, undermining local efforts. Consistent communication with the County would help mitigate this risk. 152
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 28 Which Council Strategic (Policy) Initiative does this Charter address? 2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades.

What is the short title for this Strategic Goal?
Complete Wastewater Treatment Plant & Recycled Water Upgrades What is your proposed strategy to accomplish this Goal? Completion of the design and construction of the new Wastewater Treatment Plant (WWTP) will accomplish the following:
• Modernize the Wastewater Treatment Plant (WWTP).
• Meet Regional Water Quality Control Board’s (RWQCB) effluent discharge limits of total nitrogen.
• Produce Title 22–compliant recycled water for irrigation uses. • Diversify City’s water resources.

This initiative represents one of the City’s most complex and resource-intensive infrastructure efforts, involving multiple external agencies, consultants, contractors, and regulatory stakeholders over several years including but not limited to:
• Finish the design and environmental documents prior to construction. • Identify and address any budget shortfalls via raising rates, seeking additional grants, debt service to cover construction costs.
• Obtain RWQCB’s discharge and Title 16 Recycled Water permits. • Complete construction and commission start-up of the new WWTP. • Produce Recycled Water and implement usage.

How does this project address or make a positive impact on the stated SWOTs? How will you know e.g., can you break the Goal down to objectives? Alignment with Water & Wastewater SWOTs:

Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 153
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 29 • Strengths Utilized: Proactive compliance planning, strong in-house operational capability, effective regulatory partnerships.
• Weaknesses Addressed: Impending RWQCB’s effluent discharge water quality limits, replacement of aging treatment infrastructure.
• Opportunities Advanced: Seek additional grant funds, implementation of recycled water use and future renewable energy (solar panels). • Threats Mitigated: Regulatory enforcement risk, escalating regular and emergency upgrade costs due to end-of-life infrastructure.

Who is the Project Sponsor?
The City Manager.

Who is the project lead?
The Director of Public Works.

Other team members?
The Deputy Director of Water & Wastewater will serve as the principal project manager and will coordinate day-to-day implementation activities. Other members: engineering staff; finance department (budgeting, grants, cash flows); City Attorney; external engineering consultants; construction management team and the WWTP operations staff.

Who are the stakeholders that can determine success or failure? Why? The success of this project depends on coordination with several key stakeholders, including:
• Regional Water Quality Control Board (RWQCB): Permitting authority responsible for approving discharge requirements and compliance.
• State Agencies and Grant Administrators: Provide regulatory alignment and critical external funding.
• City Council: Provides policy direction, budget authorization, and public accountability.
• Ratepayers and Recycled Water Users: Beneficiaries of system reliability, water supply diversification, and cost-effective service delivery. 154
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 30 • WWTP Operations Staff: Essential to successful commissioning, safe operation, and long-term regulatory compliance.

These stakeholders directly influence project outcomes through approvals, funding decisions, implementation support, and operational adoption.

Can this be accomplished within the current budget?
No
If not, how much will be needed?
Current cost estimates indicate an approximate $30 million funding shortfall. To address this gap, the City may pursue a combination of additional grant funding, debt financing, project phasing or scope adjustments, potential changes to the project delivery method, and future rate considerations. These options will be evaluated and brought forward for City Council direction as the project advances.

Funding Source: Water and Wastewater Funds
What are the key milestones with dates leading to completion? Although milestone dates will be refined and updated throughout the project, approximate milestone completion timelines are as follows:

While milestone dates will be refined and updated as the project advances, particularly due to the design-build delivery method and regulatory coordination, the current target timeline is as follows:

Milestone Estimated Dates

1. Final Design and CEQA Permitting December 2026

2. Final Project Financial Plan Approved By
Council
December 2026
(Tentative)

3. Construction Commencement January 2027

4. Process Commissioning and Startup November 2028

5. Title 22 Recycled Water Certification and
RWQCB Compliance December 2028

6. Project Closeout and Transition to Full
Operations January 2029
Milestone dates are subject to adjustment based on permitting timelines, regulatory agency coordination, and construction sequencing.
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2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 31 What are the risks associated with this project? How do we manage these risks?
This project carries risks typical of large infrastructure upgrades, including CEQA clearance, regulatory approvals, construction cost escalation, schedule delays, and potential changes in treatment requirements. In addition, the project currently faces an estimated $30 million funding shortfall, which may necessitate project phasing, scope adjustments, future rate considerations, or debt financing to maintain progress. Any resulting rate increases to fund this project will be difficult to accept given modest income levels in our City.

These risks will be managed through early and ongoing coordination with CEQA and regulatory agencies, disciplined cost and schedule controls under the design-build delivery approach, and regular reporting to executive management and City Council.

Policy decisions regarding scope, rates, or financing will be elevated to Council as needed to keep the project on track.
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2d. Streets Maintenance PMP
32 Which Council Strategic (Policy) Initiative does this Charter address? 2d. Development of a formal Preventative Maintenance Plan (PMP) for the Streets Maintenance—Public Work.

What is the short title for this Strategic Goal?
Streets Maintenance PMP
What is your proposed strategy to accomplish this Goal? The intent of this goal is to develop a formal and documented procedure and priority plan for maintenance of City streets and right of way assets. The plan would address the following items:

1. Planning and Prioritizing Citywide Paving Projects.

This will be accomplished utilizing the Cartegraph Asset Management (now called OpenGov Enterprise Asset Management) platform and the ‘Scenario Builder’ feature to program 5-year repaving/replacement plans. The platform is already set up to recommend preventative measures based on pavement conditions. This would be performed by a Senior Civil Engineer in the Public Works Department, or consulting staff in case of a vacancy.

2. Tracking Citywide Signage and Replacement Needs.

An assessment was conducted and is being entered in the Asset Management System to identify signs that need replacement, and predictions on when signs will need to be replaced. This effort will be supplemented by staff inspection of all signs on a 5-year cycle.

3. Regular Inspections of Citywide Striping by Staff Inspection.

An assessment was conducted and is being entered in the Asset Management System. Bi-annual staff inspections will supplement collected data and maintain fresh striping on City streets.

Due to current vacancies in the Public Works Department, it will be necessary to contract with vendors for the GIS functionality, and to provide support in formalizing the Pavement Management Plan (PMP).

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2d. Streets Maintenance PMP
33 It is anticipated that the necessary annual inspections of signage and striping will take 6 weeks of staff time to perform inspection, log results, and update work orders for maintenance items. With only 3 maintenance workers, there is no staff capacity to accomplish this role. This too would have to be contracted or could be completed by adding one more maintenance worker to an underfunded budget.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
Regular and preventative maintenance of roadway through early and regular applications of slurry asphalt can extend the life of a pavement system by many years.

This earlier application is much cheaper than a substantial overlay or reconstruction later. This will assist in stretching limited funding available for roadway maintenance further and maintain a higher pavement condition on city streets. An effective preventative maintenance procedure will also have a mid to long term benefit of making a larger share of funding available for more expensive full reconstruction activities on roadway that are beyond their useful life. By planning and tracking work in the Asset Management platform, regular reporting can be produced showing stabilized or improving pavement condition indices.

Regular assessment and replacement of signage and striping can reduce potential liabilities against the City in auto accident cases. Predictive models on when certain signs may be failing that is supplemented by staff inspection can identify problems early, and for maintenance to be performed.

Who is the Project Sponsor?
Public Works Director
Who is the project lead?
The project lead would be the Deputy Director of Public Works, implemented by the Public Works Operations Manager (currently vacant) and Senior Engineer (currently vacant).

Other team members?
The Senior Engineer and City Engineer would be responsible for the preparation of the 5-year pavement maintenance plan, preparation of scope of work, and oversight of bidding for pavement maintenance work. These positions would also be responsible for maintaining the Asset Management system when work is completed. 158
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2d. Streets Maintenance PMP
34 The Streets Maintenance Supervisor would have primary responsibility in assigning work, validating inspections, and ensuring that necessary work orders are created and issued to Streets Maintenance staff.

Streets Maintenance Staff would be responsible for the replacement of signage and maintenance work of pavement striping.

Who are the stakeholders that can determine success or failure? Why? The success of the project is dependent on reliable and continued funding from the State through SB1 funding, as well as continued County Measure A funding. Those are the sole funding sources for pavement maintenance operations, and declining revenues that are not replaced with other sources will contribute to project failure.

Can this be accomplished within the current budget?
No
If not, how much will be needed?
Office work by the Senior Engineer and the Public Works Operations Manager can be accomplished when those positions are filled. The annual inspections and maintenance work by streets maintenance staff will require additional contractor monies or 1 additional streets maintenance work.

The Pavement Management Plan completed by a consultant is estimated at $150,000 as a 1-time expense.

Funding Source: SB-1, Measure, General Fund
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Integration of roadway asset data into the City’s
GIS system and Asset Management platform.

April to June 2026

2. Complete Pavement Management Plan via
consultant
April to June 2026

3. Revised PMP street maintenance activities begin January to March 2027 159
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2d. Streets Maintenance PMP
35 What are the risks associated with this project? How do we manage these risks?
Changes in funding levels and allocations from the State and County are the greatest risk to the success of the project. Staying informed on legislation to plan for changes is key. Without the extra funds mentioned above, this project will not survive. 160
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3a. Develop New Economic Development Plan (EDP)
36 Which Council Strategic (Policy) Initiative does this Charter address? 3a. Develop New Economic Development Plan (EDP)—City Manager What is the short title for this Strategic Goal?
Develop New Economic Development Plan (EDP)
What is your proposed strategy to accomplish this Goal? This effort will result in a comprehensive Economic Development Plan (EDP) that establishes a clear economic vision, prioritizes key industries and opportunity areas, and aligns City policies and incremental decisions, infrastructure investments, staffing, regulatory and other systems to support sustainable growth. The multiple goals of the EDP will be to pursue the Council’s Vision, that we “...promote and support a high quality of life... foster new opportunities...” The EDP is also key for Council pursuit of its mission, that we create ”...a prosperous environment to live, work and play...” And it is clear from other parts of this Strategic Plan, the City needs additional revenues to sustain the level of services Banning residents deserve and expect.

This Strategic Initiative will result in the City’s Economic Development Policy framework that will create a consistent, Council-endorsed approach to decision-making across all departments and at the Council level. The framework will:
• Define priority industries, corridors, and opportunity sites. • Align land use, infrastructure, utilities, and permitting processes with economic goals.
• Strengthen the City’s role as a “business-friendly, one-stop shop” for business and development.
• Improve organizational capacity, staffing stability, and internal systems. • Provide clear direction for subsequent initiatives.
• Targeted business attraction, retention, workforce partnerships, and branding This effort will be aspirational but also grounded with the realities of the marketplace, what the community will support, and it affects the quality of life and ability to provide municipal services.

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3a. Develop New Economic Development Plan (EDP)
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3a. Develop New Economic Development Plan (EDP)
37 Finally, this EDP strategy must include a public outreach and educational component or else the final product will not be accepted and supported, especially as it gets implemented.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
The relevant SWOTs are many: there is a significant amount of underutilized land, and the downtown area shows clear opportunities for reinvestment and revitalization; the residential dominance of the City does not provide adequate resources to sustain their City—the major service provider to them; the City’s reputation is one of antidevelopment; the City organization is not sustainable without substantial more resources; the per capita income is low compared to Riverside County and California; while, Banning’s unemployment rate is high compared to Riverside County and California; and, a major Interstate Highway runs through our City, which is an asset for certain land uses.

While much of the above variables can be construed as negative factors; they do suggest there is potential for development and growth.

Who is the project sponsor?
City Manager in close coordination with the City Council Who is the project lead?
Economic Development Manager in close coordination with the City Manager Other team members and roles?
Multiple departments heads in various stages of the project (i.e. Community Development Director, Public Works Director, Police and Fire Chiefs, Finance Director and Parks & Recreation Director).

City Council, local business and property owners, residents, developers, regional partners, the Morongo Band of Mission Indians and state agencies.

Can this be accomplished within the current budget?
No.

If not, how much will be needed?
$125,000 -$200,000
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3a. Develop New Economic Development Plan (EDP)
38 Funding Source: General Fund
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Procure contracted services to develop EDP March to June 2026

2. Data collection, market analysis, stakeholder
engagement, and system assessments
July to September 2026

3. Draft EDP prepared, internal alignment and policy
refinement workshops with stakeholders and
Council
October to December
2026

4. Council reviews, refines and adopts EDP January to March 2027

5. Annual progress reporting and performance
monitoring
ongoing
What are the risks associated with this project? How do we manage these risks?
Developing consensus among stakeholders on what is viable, realistic and appropriate economic development will be a challenge. Banning has a history of being a bedroom community and will push back against certain land use changes.

Other residents have desires for certain economic development that will not be realistic for some time in Banning. The public outreach effort needs input on future goals, but it also requires an education component, so residents develop informed expectations.
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3b.
39 Which Council Strategic (Policy) Initiative does this Charter address? Strengthening and Diversifying the Local Economy – Community & Economic Development
What is the short title for this Strategic Goal?
Inventory and Activate Underutilized Land in the Downtown What is your proposed strategy to accomplish this Goal? In conjunction with the development of a new Economic Development (ED) Plan, the City will conduct a comprehensive inventory of underutilized and City-owned land in the downtown core and pursue strategies to sell, lease, or activate these properties in alignment with long-term fiscal and economic objectives.

The strategy includes:
• Creating a parcel-by-parcel inventory of City-owned and underutilized downtown land
• Evaluating highest and best use scenarios aligned with the ED Plan and General Fund Workout Plan
• Identifying targeted incentives and development tools to encourage private investment
• Actively marketing priority sites to developers and regional partners • Engaging residents and stakeholders through a structured outreach program This effort recognizes that economic development and the City’s fiscal future are inseparably linked, and that land assets must be strategically leveraged to support sustainable revenue generation.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
This project directly addresses several key SWOT findings:

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3b.
40 Strengths
• Strategic downtown location and City land ownership
• Proximity to civic uses, transit corridors, and existing infrastructure Weaknesses
• Underutilized land and fragmented development patterns • Limited proactive land marketing and activation
Opportunities
• Ability to catalyze downtown revitalization through targeted redevelopment • Potential to generate new General Fund revenues and economic activity Threats
• Continued stagnation or loss of investment to competing cities • Ongoing fiscal pressures without new revenue sources
How success will be measured:
• Completion of a downtown land inventory
• Number of sites marketed, activated, or entitled
• Properties sold and/or leased
• Increase in assessed valuation, sales tax, or other General Fund revenues Who is the project sponsor?
City Manager
Who is the project lead?
Economic Development Manager
Other team members and roles?
Finance Department (fiscal analysis); Community Development Department (land use, zoning, entitlement support); and Public Works Department (infrastructure feasibility and constraints).
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3b.
41 Who are the stakeholders that can determine success or failure? Why? • City Council – Policy direction and approvals
• City Manager & Executive Team – Strategic alignment and implementation • Residents and Downtown Businesses – Community support and buy-in • Developers and Investors – Capital investment and project execution Their engagement is critical because successful land activation requires policy alignment, market interest, and community trust.

Can this be accomplished within the current budget?
No
If not, how much will be needed?
Estimated additional funding: $100,000, depending on the level of market analysis, consultant support, and outreach efforts required.

Initial inventory work and internal coordination can be completed using existing staff resources. However, market studies, appraisals, valuation, developer outreach, and incentive structuring may require additional funding.

Funding Source: General Fund
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Complete inventory of City-owned and
underutilized downtown land
June, 2026

2. Council review and policy direction on priority
sites
September, 2026

3. Procure services for appraisals, market analysis,
etc.

January, 2027

4. Marketing and developer outreach July, 2027

5. Site disposition, activation and development Ongoing 166
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3b.
42 What are the risks associated with this project? How do we manage these risks?
Implementation of an economic development strategy involves risks, including limited developer interest due to market conditions, community concerns related to land disposition or change, infrastructure or entitlement constraints, and potential misalignment between fiscal needs and development timing.

These risks will be managed through phased implementation and flexible development tools, early and ongoing community outreach, close coordination with stakeholders, and the use of objective market data to guide informed decision-making. 167
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4a. Banning’s Workout Plan to Fiscal Sustainability
43 Which Council Strategic (Policy) Initiative (SI) does this Charter address? 4a. Develop & Implement Banning’s Financial Workout Plan to Sustainability—Finance and City Manager.

What is the short title for this Strategic Goal?
Banning’s Workout Plan to Fiscal Sustainability
What is your proposed strategy to accomplish this Goal? Once the clean up the financial “books” is finished by catching up accounting activities to develop the City’s current fiscal position (from 7/1/24 to current), largely focused on the General Fund and Internal Service Funds (ISFs); the recommended plan would be to develop a 10-year Fiscal Forecast into the future. From this exercise, options to bring these funds into a sustainable condition can be developed for Council consideration.

The most immediate action would be to bring the FY 25-26 books current in order to review the FY 25-26 budget, mid-year expenditure activity and consider any emergency changes to the budget. The City then should develop a transparent operating and capital budget for Council adoption (FY 26-27) after considering the current and expected 1 and 10-year fiscal estimates.

Creating a robust CFD program is just one of many potential actions towards creating a sustainable position for the City’s General and ISF Funds.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
There is no other Strategic Initiative that is so foundational to almost all the other SI’s and SWOTs--especially the Weaknesses and Threats. The City cannot assertively address all the proposed SI’s until the fiscal position is known, now and into the future.

Additionally, the City’s fiscal position will be key to other policy decisions (e.g., Council approaches to Economic Development, etc.).

Who is the project sponsor? (Advocate and decision maker, when needed) City Council
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4a. Banning’s Workout Plan to Fiscal Sustainability
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4a. Banning’s Workout Plan to Fiscal Sustainability
44 Who is the project lead?
City Manager
Other team members and roles?
Finance Director, accounting staff and contracted assistance are all critical to updating the fiscal data; evaluating the results and implications; forecasting the future; and, facilitating discussions with the Council on options to move forward.

Who are the stakeholders that can determine success or failure? Why? Outside regulatory and oversight agencies and Banning citizens (see discussion on risks below).

Can this be accomplished within the current budget?
No. This effort was not anticipated in the current budget; however, there is substantial salary savings in the Finance budget that can cover some of these costs If not, how much will be needed?
The City’s current allocation of resources includes approximately $500,000 for contracts with LSL (the accounting firm that is tasked with cleaning up the books) among other activities; a current contract with Urban Futures for the fiscal forecast and other financial advisory services, Bob Deis with Sloan Sakai, LLP and the City Attorney’s office. This figure will increase due to an expanded scope of work with LSL to assume more accounting duties. A part of these costs will be covered with salary savings from vacancies.

Funding Source: Cost allocated to departments Citywide.

What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. FY 24-25 books are caught up and fiscal position is
known.

April to June 2026

2. FY 25-26 fiscal activity is caught up and known and
estimated year-end numbers are updated.

April to June 2026

3. Review and update Fiscal policies with Council. As part of the 26-27 Budget process. Budget
to be adopted prior to July
1, 2026.
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4a. Banning’s Workout Plan to Fiscal Sustainability
45 Milestones Estimated Dates

4. The 10-year fiscal forecast is completed, and FY 26- 27 budget is subsequently developed.

The forecast can be
completed 30 days after
completion of 1 & 2
above. The budget needs
to be completed by June
30, 2026.

5. At the completion of item 4, Council reviews options and decides what actions to implement and
eliminate current and future negative fund balances.

The Council decisions from this milestone become
Banning’s Workout Plan to Sustainability.

After the completion of
item 1 through 4.

June to July 2026
What are the risks associated with this project? How do we manage these risks?
There are several potential risks. These include: 1) Outside Agencies withholding funding or otherwise delaying the City’s ability to move forward with a Workout Plan; 2) To the extent that the City needs Banning residents to approve options for more resources, they may not approve them; 3) Once the books are caught up and the fiscal condition is known, aggressive budget/service cuts may have to be part of the path to sustainability; 4) Even though this Council largely inherited the current situation, Banning residents may blame the current Council members for the problem; and 5) The City may experience more turnover in key management staff or be unsuccessful in hiring and retaining staff.

Strategies to manage these risks include:
1) Being transparent on the enormity and causes of this fiscal crisis as a tool to inform future corrective steps--ensuring they are not repeated:
2) Meeting or beating the Milestone Dates above to communicate our seriousness and wherewithal to put the City back onto a sustainable footing; 3) Being transparent with our employees and reinforcing our commitment to them; and
4) Actively communicate our challenges and plans with Banning residents, especially at each milestone to reinforce each step is part of a coordinated plan- -providing the services residents need and deserve. This communication plan needs to be implemented via new avenues and in new ways to ensure resident’s understanding and support.
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4b. Two Phase Evaluation of City’s Utility Billing Function. 46 Which Council Strategic (Policy) Initiative does this Charter address? 4b. Do In-Depth Evaluation of the City’s Utility Billing (UB) Program and Its Tools/Systems Used to Complete its Work.

What is the short title for this Strategic Initiative?
Two Phase Evaluation of City’s Utility Billing Program.

What is your proposed strategy to accomplish this Goal? The strategy to ultimately accomplish the underlying purposes of this Initiative (i.e. to ensure the program that is responsible for billing and collecting over half of the City’s overall revenues is using best practices, includes two phases). First, is to complete the Strategic Administrative Initiative 4e. Address the Software Issues and IT Support That is Behind the Current Utility Billing (UB) Crisis. After this is completed and systems are stabilized, the overall program evaluation of the UB function as part of this Initiative will be considered, possibly as part of an overall assessment of replacing the Finance— Accounting system as well.

Phase 1—which has already started, includes bringing in Navaline to evaluate the workflow vis-à-vis the latest version of their software. From this assessment the vendor will propose and possibly install the latest version of their software. The Council will be kept apprise of this next step. Once the upgrade is complete and the program is stabilized, staff will report out the results and possible next steps (e.g.

Phase 2).

Possible Phase 2—Consider acquiring independent professional assistance who has expertise in the utility billing area that can evaluate the entire UB program--from evaluating the current systems and methods to retrieving usage data; manipulating that data for billing purposes; assessing the customer service component, and its interface with our Finance-Accounting systems.

The consulting firm will then make observations on the current processes, albeit with the latest Navaline software version, and systems by identifying best practices and provide recommendations. The criteria in determining recommendations will be maintaining accuracy of usage data, improving efficiency and timeliness of billings, improving customer service, and ensuring smooth interfacing with our current Finance-Accounting systems.

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4b. Two Phase Evaluation of City’s Utility Billing Function. 47 Given the current financial picture and recent history, the City will seek a possible phasing of consultant’s recommendations based on the risk-return tradeoff on options. Another component will include ensuring IT staff become part of this project to enhance their knowledge and support of the Utility Billing system in the future.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
The SWOT discussion highlighted the problematic interface between meter-reading and billing software’s (Navaline); the high reliance on slow manual support for the program; the need for additional training in IT systems and Utility Billing best practices and the lack of trust in the program and its output. The SWOT discussion also highlighted that over half of the City’s revenues come from this program; thus, when it’s not properly working, it can have significant impacts on the City’s finances and cash flow.

This Strategic Initiative will be designed to evaluate these issues and enhance expertise in house. It should result in a more efficient, timely and reliable Utility Billing program for the future.

Who is the project sponsor?
City Manager
Who is the project lead?
Finance Director or Deputy Finance Director (positions currently vacant).

Other team members and roles?
The Utility Billing Manager and a senior managers in Public Works (Electric, Water and Wastewater) will be key members of the team.

Who are the stakeholders that can determine success or failure? Why? The key stakeholders are: Finance—both accounting and Utility Billing staff, the managers of the three utilities, customers and the City Council.

Can this be accomplished within the current budget?
No
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4b. Two Phase Evaluation of City’s Utility Billing Function. 48 If not, how much will be needed?
Phase 1
Staff is currently establishing a purchase order with Navaline experts to assess the current UB workflow to ensure that staff is utilizing the software as efficiently as possible. The estimated cost is $25,000.

Additionally, staff anticipates that upgrades to the existing utility billing software will be required in order to bring Navaline to the most current and supported version.

Estimated cost for the upgrades range $175,000 to $200,000 for the first year with an increase in annual cost of about $75k.

Phase 2 TBD
Funding Source: Cost allocated to utilities
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Phase 1: Navaline, our current software vendor
assesses current UB workflow and system
utilization and evaluates value of installing
software upgrades
May 2026

2. Phase 1: Based on Navaline evaluation consider
installing their upgrades (6-8 months)
January 2027

3. Phase 2: After UB program has stabilized and
proficient in use of the Navaline upgrades, evaluate
the pros and cons of a programmatic assessment
of the UB function.

June 2027

4. Phase 2: Issue RFP, solicit consulting firms with
expertise in Utility Billing programs without
financial ties to current systems, and pick best firm
July 2027

5. Phase 2: Conduct UB Program Assessment which
may recommend a migration to new software.

September 2027

6. Phase 2: Review Assessment Report
recommendations and develop proposed
Implementation Plan for City Manager and
ultimately City Council review and approval.

November 2027
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4b. Two Phase Evaluation of City’s Utility Billing Function. 49 What are the risks associated with this project? How do we manage these risks?
Given the recent history, a two-phase approach will appropriately manage the risk.

Milestone 2 will provide a more detailed assessment of upgrading the current software (i.e., with the same vendor, Navaline). This may require hardware upgrades. Staff will report out to Council at this stage.

If it is agreed that there is adequate benefit to complete a more robust assessment of the entire UB program, this would be done at Milestone 3. There is limited risk in conducting and completing this assessment of the Utility System. Future risks cannot be fully evaluated until issues and options are identified and vetted. However, more involvement with IT staff on this project will add to the capacity of managing risk with this software.
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4c. Protecting the Pass: The Banning PD’s Growth Strategy 50 Which Council Strategic (Policy) Goal does this Charter address? 4c. Develop & Implement a Proactive Outreach and Hiring Program For Police—Police, Human Resources and City Manager
What is the short title for this Strategic Goal?
Protecting the Pass: The Banning PD’s Outreach and Growth Strategy What is your proposed strategy to accomplish this Goal?

1. Complete & Begin Implementing the Recommendations From the PD Assessment Study—the goal here is to articulate that BPD is a desirable employer and workplace.

2. Banning’s Targeted Sourcing Channels—start working on developing potential resources for candidates, such as community colleges and high schools.

3. Digital Presence & Modernized Application—Develop a stronger online and visual media presence for our recruitments. Application processes should be updated.

4. Community-Centric Evaluation—Involve the community through job fairs and community meetings.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
A proactive outreach and hiring program acts as a vital bridge between the department's current struggles and its untapped potential. By shifting from a reactive stance to a strategic, proactive one, the department can address its 30% vacancy rate while simultaneously healing internal culture.

Staff is concurrently proceeding with Strategic Initiative 1b. The Police Department Assessment to assist us in making BPD an employer of choice.

Who is the project sponsor?
City Manager
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4c. Protecting the Pass: The Banning PD’s Growth Strategy 51 Who is the project lead?
Human Resources Director
Other team members and roles?
Police Chief, Human Resources Manager and Police management Who are the stakeholders that can determine success or failure? Why? The Banning Police Officers and Manager’s Association(s); their members feel the biggest impact of the staffing shortage. The staffing issues impact morale and efficiency.

The Community: Response times are hindered by lack of staff and the community loses confidence in their department.

Can this be accomplished within the current budget?
Yes
If not, how much will be needed?
What are the key milestones with dates leading to completion? Milestones Estimated Dates

1. Kick-off meeting between Police & Human
Resources
May 2026

2. Develop materials for recruitments that highlight
department and city
August 2026

3. Develop a recruitment advertising plan and include
potential job fairs in community
October 2026
What are the risks associated with this project? How do we manage these risks?
We will not be able to determine the risks until we have our preliminary project kick-off meeting (s).
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4d. Strategic Plan Implementation—City Manager
52 Which Council Strategic (Policy) Initiative does this Charter address? 4d. Strategic Plan Implementation—City Manager
What is the short title for this Strategic Goal?
Same
What is your proposed strategy to accomplish this Goal? There is no other initiative that will be so impactful to the City organization’s future but also to the community’s future as well.

This Strategic Initiative is focused on 1) keeping this holistic plan together and alive; 2) ensuring that future actions and decisions are in alignment with this plan, and if not, there must be a discussion and reconciliation of the two; and 3) being transparent and bringing the Plan Dashboard in front of the Council consistent what is proposed in the Plan.

How does this project address or make a positive impact on the stated SWOTs? How will you know?
This Initiative impacts and is responsive to ALL the other SWOTs; thus, there are too many to list here. We will know the relative positive impacts as we report out with the Plan Dashboard and our relative progress, found in the Implementation Phase.

Who is the project sponsor?
City Council
Who is the project lead?
City Manager
Other team members and roles?
The City Directors are key team members and project leads on various initiatives, both administrative and policy related.

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4d. Strategic Plan Implementation—City Manager
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4d. Strategic Plan Implementation—City Manager
53 Who are the stakeholders that can determine success or failure? Why? The City Council and City Manager are the biggest stakeholders that can maintain future decisions and overall direction consistent with the Plan. These two stakeholders determine the necessary obsession and success of this Plan. Banning residents are also key stakeholders.

Can this be accomplished within the current budget?
No.

If not, how much will be needed?
As this Strategic Plan is tackled over these next five years, the City Manager will need a higher-skilled Assistant City Manager to assist in Plan implementation. And this covers only the overall project (Plan) management. The individual Strategic Initiative Charters identify the resource needs for their respective implementation.

What are the key milestones with dates leading to completion? The general milestones for Plan implementation include reporting out to the Council every 3 months for the first year and every 6 months thereafter. This reporting out schedule is to assist in discussing progress, bottlenecks, and revisions moving forward. However, individual Strategic Initiatives have their own schedules, milestones, resource needs and completion dates. Please refer to each for details.

What are the risks associated with this project? How do we manage these risks?
The risks from not implementing this Strategic Plan are numerous and substantial, the details of which are in each Strategic Initiative discussion in this section.

However, the risks of not being successful with making substantial change in the City risks creating credibility issues and a loss of confidence in Banning residents, the business community, and potential investors in Banning’s future.

This Plan needs to continue to be in the forefront of the Council’s agenda for the next five years.
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54 LEGEND
On schedule
Behind schedule
Strategic Initiatives Dashboard Report--date Delayed
STRATEGIC GOAL 1—ENSURING PUBLIC SAFETY Goal 1
1st Tier Policy Related Initiatives Status Explanation
• 1a. Create Banning’s Emergency Operation Plan—CM
• 1b. Provide One-Time Resources and Independently Evaluate the Police Department—HR & Police
STRATEGIC GOAL 2—PROTECTING AND IMPROVING QUALITY OF
LIFE
Goal 2
1ST Tier Policy Related Initiatives Status Explanation
• 2a. Address The Lack of Animal Control and Shelter—CM • 2b. Address Homelessness—CM
• 2c. Complete Wastewater Treatment Plan & Recycled Water Upgrades—PW
• 2d. Develop Formal Preventative Maintenance Plan (For Streets)— PW
STRATEGIC GOAL 3—STRENGTHEN LOCAL ECONOMY Goal 3
1st Tier Policy Related Initiatives Status Explanation
• 3a. Develop New Economic Development (ED) Plan—CM
• 3b. Inventory & Activate Underutilized Land in Downtown—CM & CD STRATEGIC GOAL 4—MAINTAIN EFFECTIVE & EFFICIENT SERVICES Goal 4 1st Tier Policy Related Initiatives Status Explanation
• 4a. Develop and Implement Banning’s Financial Workout Plan to Sustainability—Finance & CM
• Finish Cleaning Up the Books
• Fiscal Plan to Eliminate Massive Risk Mgmt. And Other Internal Service Fund Deficits
• Engage Special Tax Consultant to Create CFD Program for Svcs. • Review and Update Fiscal Management Policies
• Develop Transparent Spending Plan i.e., Improved Budget • 4b. Do In-Depth Evaluation of the City’s Utility Billing Function and Tools-- Finance
• 4c. Develop & Implement a Proactive Outreach & Hiring Program For Police—HR & Police
• 4d. Strategic Plan Implementation—CM
Sample Dashboard Report for periodic reporting to Council 179
55 APPENDIX A
Banning’s SWOTs
Strengths, Weakness, Opportunities and
Threats
Please refer to separate Appendix A
This compilation of SWOTs is the basis for the
Strategic Plan and its associated Strategic
Initiatives. It was this listing and related
narrative that was the basis for a day-long
City Council Workshop on 11/25/25. The
Workshop purpose was to thoroughly
understand the SWOTs and develop priorities
moving forward to address them.
180
Updated 6-16-26 /cmd
0001– General 400 – Police Facilities Development
1000 – City Council 410 – Fire Facilities Development
1200 – City Manager 420 – Traffic Control Facility Fund 1210 – Economic Development 421 – Ramsey/Highland Home Road Signal 1220 – Public Information 430 – General Facilities Fund 1230 – Grants Management 441– Sunset Grade Separation Fund 1300 – Human Resources 444 – Wilson Median Fund
1400 – City Clerk 445 – Hargrave Grade Separation Fund 1500 – Elections 451 – Park Development Fund 1800 – City Attorney 470 – Capital Improvement Fund
1900 – Fiscal Services
1910 – Purchasing & A/P
2060 – TV Government Access 2200 – Police 660 – Water Fund 2210 – Dispatch 661 – Water Capital Facilities Fund
2300 – Animal Control 662 – Irrigation Water Fund
2400 – Fire 663 – BUA Water Capital Project Fund
2700 – Building Safety 669 – BUA Water Debt Service Fund 2740 – Code Enforcement 680 – Wastewater Fund
2800 – Planning 681 – Wastewater Capital Facility Fund
3000 - Engineering 682 – Wastewater Tertiary Fund
3600 – Parks 683 – BUA Wastewater Capital Project Fund
4000 - Recreation 685 – State Revolving Loan Fund
4010 – Aquatics 689 – BUA Wastewater Debt Service Fund
4020 – Day Care 4050 – Sr. Center Enterprise Funds
4060 – Sr. Center Advisory Board 600 – Airport Fund
4080 – Stagecoach Days 610 – Transit Fund
4800 – Debt Service 5800 – Transit Fixed Route 5400 – Community Enhancement 5850 – Transit Dial a Ride 9600 – Refuse 670 – Electric Fund
7000 – Electric
7010 – Generation & Transmission
Special Revenue F u n d s
002 – Developer Deposit Fund 672 – Rate Stability Fund 005 – Successor Agency Admin Fund 673 – Electric Improvement Fund 100 – Gas Tax Street Fund 674 – ’07 Electric Revenue Bond Project Fund 101– Measure A Street Fund 675 – Public Benefit Fund
102 – RMRA (SB1) Gas Tax Fund 678 – ’07 Electric Revenue Bond Debt Service Fund 105 – NPDES Storm Water Internal Service Funds 110 – CDBG Fund 700 – Risk Management Fund 111 – Landscape Maintenance 5020 – Workers Compensation 132 – Air Quality Improvement Fund 5030 – Unemployment Insurance 140 – Asset Forfeiture/Police Fund 5040 – Liability Insurance 148 – Supplemental Law Enforcement 5300 – City Attorney 150 – State Park Bond Fund 702 – Fleet Maintenance
200 – Special Donation Fund 703 – Information Systems Services 201– Sr. Center Activities Fund 704 – Building Maintenance 4050 – Senior Center 705 – Support Services
4060 – Senior Center Advisory Board 761 – Utility Billing Administration 202 – Animal Control Reserve Fund 3100 - Account & Collection Service 2 03 – Police Volunteer Fund 3110 - Meter Reading Service 221 – CSCDA CFD 2020-02 Atwell
222 – ARPA – American Rescue Plan Successor Agency Funds 300 – City Administration COP Debt Service 805 – Redevelopment Obligation Retirement Fund 360 – Sun Lakes CFD #86- 1 810 – Successor Housing Agency 365 – Wilson Street #91-1 Assessment Debt 830 – Debt Service Fund 370 – Area Police Computer Fund 840 - Bond Expenditure Agreement (BEA) Project Fund 375 – Fair Oaks #2004-01 Assessment Debt 841- Bond Expenditure Agreement (BEA) Low/Mod Fund 376 – Cameo Homes 850 – Successor Agency
Fund/Department Legend
Banning Utility Authority Funds
Capital Improvement Funds
181
Fund No.

FY25
Beginning FB
FY25 Actual
Revenue
FY25 Actual
Expenses
FY25 Estimated
Ending FB
FY26 Actual
Revenue
FY26 Actual
Expenses
FY26 Estimated
Ending FB
FY27 Proposed
Revenues
FY27 Proposed
Expenses
FY27 Estimated
Ending FB
001 1,798,554 $ 35,809,614 $ 42,994,251 $ (5,386,083) $ 29,278,282 $ 33,634,161 $ (9,741,963) $ 31,963,492 $ 31,944,358 $ (9,722,828) $ 002 (1,083,282) 142,276 143,986 (1,084,992) 11,316 12,779 (1,086,454) - - (1,086,454) 005 2,011,582 250,000 2,261,582 - - 1,170 (1,170) - - (1,170) 100 (845,660) 1,678,313 2,713,159 (1,880,505) 994,102 2,728,871 (3,615,275) 2,347,404 1,673,949 (2,941,819) 101 963,390 1,379,938 1,050,454 1,292,874 1,631,954 6,193,866 (3,269,037) - - (3,269,037) 102 864,713 852,114 747,769 969,058 807,747 342,099 1,434,706 - - 1,434,706 103 - - - - - - - - - -
105 - - 36,901 (36,901) - 30,638 (67,539) 100,000 67,290 (34,829) 110 (54,230) 1 23,620 (77,849) 486,863 560,294 (151,281) 744,481 744,481 (151,280) 111 85,182 159,854 189,418 55,619 74,027 178,478 (48,832) 164,031 194,240 (79,041) 132 317,448 62,781 4,636 375,593 30,300 - 405,893 - - 405,893 140 1,761 55 - 1,816 4,437 - 6,252 4,413 - 10,665
148 17,068 367,963 1,540 383,490 41,190 2,499 422,180 239,996 129,212 532,964 150 (116) - - (116) - - (116) - - (116)
200 39,510 5,212 - 44,721 2,268 - 46,990 - - 46,990
201 63,947 14,502 3,125 75,323 10,490 2,969 82,844 - - 82,844 202 (113) - - (113) - - (113) - - (113)
203 6,740 1,710 - 8,451 (10) - 8,440 - - 8,440
221 590,693 412,798 24 1,003,467 526,807 739,598 790,676 840,825 275,306 1,356,195 222 - 1,468,351 1,468,351 - - - - - - -
300 5,984 2 - 5,987 (2) - 5,984 - - 5,984
360 38,168 1,093 - 39,261 (50) - 39,211 700 - 39,911
365 59,069 2,263 - 61,332 (103) - 61,229 1,800 - 63,029 370 (610) - - (610) - - (610) - - (610)
375 357,976 197,571 200,024 355,522 91,062 197,382 249,202 188,259 188,259 249,202 376 (135) - - (135) - - (135) - - (135)
400 305,249 1,434,216 172 1,739,293 356,632 - 2,095,925 - - 2,095,925 410 1,441,108 927,422 176 2,368,354 236,126 - 2,604,480 - - 2,604,480 420 2,137,290 130,840 170,277 2,097,853 4,117 288,299 1,813,670 - - 1,813,670 430 499,229 534,492 22,324 1,011,397 226,044 - 1,237,441 - - 1,237,441 441 (11) - - (11) - - (11) - - (11)
444 412,187 11,797 116 423,868 (536) - 423,332 - - 423,332 451 300,126 376,497 108,107 568,516 6,989 149,187 426,318 100,000 135,671 390,647 470 687,685 31,426 3,220 715,891 2,370 - 718,261 - - 718,261 600 2,053,238 148,484 568,654 1,633,069 7,206 321,172 1,319,103 170,650 422,192 1,067,561 610 2,050,226 5,905,866 2,796,745 5,159,347 2,615,788 3,811,183 3,963,952 13,180,348 3,729,113 13,415,187 All Water Funds 28,350,909 43,235,049 17,042,632 54,543,325 23,853,067 22,759,543 55,636,850 20,137,480 12,777,923 62,996,406 All Electric Funds (11,956,519) 42,831,214 41,607,957 (10,733,262) 43,210,112 35,177,510 (2,700,660) 53,855,393 44,822,471 6,332,262 All Wastewater Funds 22,407,804 14,621,560 6,087,034 30,942,329 9,902,136 4,650,456 36,194,009 9,815,395 4,782,019 41,227,385 690 1,042,519 - - 1,042,519 - 4,430 1,038,088 - - 1,038,088 All ISF Funds (12,034,633) 15,074,530 16,646,163 (13,606,266) 14,763,733 11,278,245 (10,120,777) 15,603,473 15,443,286 (9,960,590) 805 1,903,033 2,457,551 2,537,285 1,823,299 806,923 - 2,630,221 2,433,817 2,433,762 2,630,276 810 1,411,177 159,459 272,346 1,298,289 22,994 386,074 935,209 - 100,000 835,209 830 (22,309,564) 2,192,197 909,125 (21,026,492) 2,191,282 2,193,602 (21,028,812) 2,433,762 2,159,000 (20,754,050) 840 3,611,589 382 972 3,610,999 32 - 3,611,031 - - 3,611,031 841 545,662 - 24 545,638 - - 545,638 - - 545,638
850 (2,578,505) - 656 (2,579,161) - - (2,579,161) - - (2,579,161) $ 172,879,392 25,517,434 $ 140,612,824 $ 57,784,002 $ 132,195,694 $ 125,644,507 $ 64,335,189 $ 154,325,719 $ 122,022,532 $ 96,638,376 $

ESTIMATED ENDING FUND BALANCES BY FUND
8/14/2026
1 182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
Banning Electorate
City Treasurer City Clerk
City Council
City Manager
Asst City
Manager
Development
Services
Building &
Safety
Fire Marshall
Planning Engineering
Capital
Improvement
Program
Public Works
(Streets/Parks/
Bldg Mtnce)
Water/
Wastewater Electric Utility Transit Airport Refuse
Police
Patrol
Dispatch/Reco
rds/Evidence
Detective
Bureau
Animal Control
Code
Enforcement
OES
Finance
Fiscal Services
Purchasing
Utility Billing
Budget
Human
Resources
Labor/Employee
Relations
Risk
Management
Information
Technology
Economic
Development
Deputy City
Clerk
241
Chief
Lieutenant
Team 1
Sergeant
Corporal
Officer
Officer
Officer
Officer
Team 2
Sergeant
Corporal
Officer
Officer
SRO Officer
HLO Officer
Team 3
Sergeant
Officer
Officer
Officer
Officer
Officer
Team 4
Sergeant
Corporal
Officer
Officer
Officer
HLO Officer
Dispatch
Dispatcher
Dispatcher
Dispatcher
Dispatcher
Dispatcher
Dispatcher
Detective
Bureau
Detective Sgt
Detective
Detective
Detective
PACT
Records/
Evidence ACO Code
Enforcement
Banning Police Department
Proposed Organizational Chart
FY 2027
242
Dept FY 2027 CLASSIFICATION FY 2024-
2026 FTEs
FY 2027
FTEs Variance
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
1000 1 Council Member 1.00 1.00 0.00
5 Council 5.00 5.00 0.00
1200 Homeless Services Coordinator 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Case Manager Specialist 1.00 - (1.00)
1200 Communications Manager 1.00 - (1.00)
1200 Grants Program Manager 1.00 - (1.00)
1200 Assistant City Manager (see Water Fund pg. 6) 1.00 - (1.00) 1200 1 City Manager 1.00 1.00 0.00
1 City Manager 9.00 1.00 (8.00)
1210 1 Economic Development Manager 1.00 1.00 0.00
1 Economic Development 1.00 1.00 0.00
1300 1 Senior Human Resources Generalist 1.00 1.00 0.00 1300 1 Human Resources Generalist 1.00 1.00 0.00
1300 Risk & Safety Analyst 1.00 - (1.00)
1300 Human Resources Manager 1.00 - (1.00)
1300 1 Human Resources Director 1.00 1.00 0.00
3 Personnel 5.00 3.00 (2.00)
1400 1 Deputy City Clerk 1.00 1.00 0.00
1400 1 City Clerk 1.00 1.00 0.00
2 City Clerk 2.00 2.00 0.00
1900 1 Budget and Financial Analyst 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 1 Accounting Specialist 1.00 1.00 0.00
1900 Accounting Specialist 1.00 - (1.00)
1900 1 Accountant 2.00 1.00 (1.00)
1900 1 Accounting Supervisor 1.00 1.00 0.00
1900 1 Senior Accountant 1.00 1.00 0.00
1900 Deputy Finance Director 1.00 - (1.00)
1900 1 Finance Director 1.00 1.00 0.00
1900 1 City Treasurer 1.00 1.00 0.00
10 Finance 13.00 10.00 (3.00)
City of Banning
Authorized Position List for FY 2026-2027