CA Review AZ
Meeting Date: Sept. 29, 2026
To: Mayor/President and City Council/Board Members
From: Geoff Patnoe, City Manager
Staff Contact: Brigid Satterlee, Finance Director
[email protected] or 442-339-2429
Subject: General Fund Surplus: Approval of Fiscal Year 2025-26 Budget Carryforward Requests and Appropriation of Unspent Funds to Budget for Fiscal Year 2026-27
Districts: All
Rec
ommended Actions
1) Adopt a City Council resolution approving the fiscal year 2025-26 budget carryforward requests and appropriation of funds to fiscal year 2026-27 and authorizing capital outlay purchases; and
2) Adopt a City Council resolution approving the restriction of General Fund reserves in fiscal year 2026-27 to fund the $7,500,000 contribution to the city’s Section 115 pension trust; and
3) Adopt a City Council resolution reaffirming the purchasing authorization for previously appropriated fleet and Information Technology capital outlay items with available budget; and
4) Adopt a Carlsbad Municipal Water District Board of Directors resolution reaffirming the purchasing authorization for previously appropriated fleet capital outlay items with available budget.
Executive Summary
The City of Carlsbad, like other governments, usually has surplus funds at the end of each fiscal year because revenue exceeded expenditures or budgeted funds were not fully spent.
These unspent funds can be moved into the budget for the following fiscal year in what is referred to as a budget carryforward of funds. The city’s General Fund Surplus Policy was established by City Council Policy 87. In accordance with that policy, staff are presenting the list of budget carryforward requests and appropriation of funds to the fiscal year 2025-26 budget for City Council consideration and approval. The requests are detailed below.
Staff are also reporting that the city is in conformance with City Council Policy 74 on the General Fund Reserve and with City Council Policy 86 on pension funding.
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City Council Policy 87 requires staff to report the status of reserve levels relative to the General Fund Reserve and Pension Funding policies to the City Council on an annual basis, and to bring forward any individual carryforward requests greater than $100,000 for City Council approval.
Explanation & Analysis
Items approved by prior City Council action
The City Council has already approved carrying forward the budget for various items from fiscal year 2025-26 to 2026-27. A list of unspent grant funding and developer deposits previously approved by the City Council through the fiscal year 2026-27 operating budget resolution (Resolution No. 2026-119, adopted on June 16, 2026) is included as Exhibit 5. These items include:
• Grant funding approved but not yet completely expended by the end of the fiscal year for various programs and services, including:
o $3,091 in unspent grant funding in the General Fund
o $2,182,524 in total unspent grant funding in all other funds • Unspent developer deposits received for developer-funded studies and plan check services that were not spent by the end of the fiscal year; these total $104,163 in the General Fund
Council Policy 87 – General Fund Surplus Policy
This policy established the process of using surplus funds after a fiscal year has ended. The policy dictates that the city will take the four action steps listed below to comply with Council Policy 87. Each step is followed by staff’s updates and recommendations.
Step 1 - The city will use surplus funds to replenish any General Fund reserve deficiencies, up to 40%, as set forth in the City Council General Fund Reserve Policy 74.
Assuming all carry forward requests and proposed uses of General Fund reserve are approved, the city’s General Fund reserve is projected to end the fiscal year at approximately $148.8 million, or 60% of the 2026-27 budget, excluding $9.6 million set aside for economic uncertainty.
Step 2 - The city will use surplus funds to replenish any pension liability deficiencies to achieve a pension-funded ratio of no less than 80%, with a target funded ratio range of 80% to 85%.
The unfunded liability is the difference between pension assets and liabilities, while the funded ratio or status is the ratio of pension assets to liabilities. In 2019, the City Council adopted a Pension Funding Policy, City Council Policy 86. This policy states that the city will strive to maintain an 80% funded status. Said another way, the goal of this policy is to keep Carlsbad’s pension debt at no more than 20% of its total liabilities.
From fiscal year 2016-17 through fiscal year 2021-22, the city contributed $56.4 million to CalPERS, the state’s retirement fund for government workers, to reduce the city’s unfunded liability and achieve interest savings. These contributions were in addition to the annual required contributions set by CalPERS.
The City Council approved the establishment of a Section 115 pension trust and a pension investment policy on Sept. 12, 2023, to govern the management of assets within the trust.
Such a trust, established under Section 115 of the Internal Revenue Code, holds assets Sept. 29, 2026
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specifically for pension benefits, providing a dedicated and irrevocable source of funding that cannot be used for other purposes. This allows the city to stabilize pension cost volatility, maintain local control over the city’s assets and earn a potentially higher rate of return than if the assets were kept within the General Fund.
City Council Policy 86 states that “in the event the city is unable to meet the minimum combined pension funded ratio of 80% with current resources (i.e., without borrowing or using reserves), the Finance Director or Deputy City Manager of Administrative Services will identify a reasonable period to return to a minimum 80% funded ratio status.” Rather than making a significant one-time payment to CalPERS, upon establishing the Section 115 pension trust on Sept. 12, 2023, the City Council resolved to contribute the difference between the 74.6% funded status as of June 30, 2022, and the 80% target to the pension trust over a five-year period. Over that five-year period and beyond, assets in the trust would be invested with a “balanced” investment strategy in accordance with the city’s Pension Trust Investment Policy, City Council Policy 98. At the time, staff projected that assets in the trust would meet the 80% funded status target, assuming CalPERS met its annual target rate of return at the end of fiscal year 2027-28.
Since its establishment, the city has made an initial contribution of $10 million in 2023, two additional $7.5 million contributions in 2024 and 2025, and is expected to make two additional annual contributions of $7.5 million with General Fund dollars. As of the most recent Report on City Investments as of July 31, 2026, the trust has earned approximately $6.4 million, or 25.6% of what has been contributed, since its establishment.
Due to recent CalPERS investment performance, the city’s combined funded status has already exceeded 80%, with $25 million of the initially planned $40 million in city contributions completed. Because the city’s funded status changes every year based on CalPERS’ investment performance, it is important that the pension trust continues to serve the city as a pension rate stabilization tool. While the trust helps ensure the city maintains an 80% combined funded ratio, the ultimate funding goal would be for the city to have sufficient assets in the trust to be prepared for further discount rate reductions by CalPERS.
With the initial contribution of $10 million, two subsequent $7.5 million contributions, this year’s proposed $7.5 million contribution and the one remaining planned annual contribution of $7.5 million – assuming an annual rate of return of 6.25% – not only would the city’s funded status reach 80% over a five-year period, but over a 20-year period there would be sufficient assets in the trust to fund a potential reduction in CalPERS’ discount rate from the current 6.8% to 6.25%. At the time the pension trust was established, the potential reduction in CalPERS’ discount rate represented an additional $118 million in unfunded pension costs for the City of Carlsbad.
Staff recommend the City Council approve the restriction of General Fund reserves in fiscal year 2026-27 to fund the third contribution of $7.5 million, and fourth overall contribution since its inception, to the pension trust. The accounting for this $7.5 million contribution does not require the City Council to approve a budget appropriation or transfer of General Funds. Instead, if the City Council approves the contribution, this money will be marked as restricted and reported that way in the city’s financial statements. The resolution approving the restriction of the $7.5 million contribution to the pension trust is attached as Exhibit 2.
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Step 3 - The City Manager is authorized to approve carrying forward any unspent and unencumbered budget for a particular item equal to or less than $100,000 into the following fiscal year. These items will be one-time expenditures and not for ongoing services, programs or personnel.
The Finance Department asked the city’s departments to submit budget carryforward requests for one-time expenses and not for ongoing services, programs or personnel in July 2026. The City Manager reviewed all requests and approved $806,829 in General Fund carryforward requests and $801,665 in carryforward requests from other funds. All individual items are less than $100,000. Exhibit 6 contains a list of all City Manager-approved requests.
Step 4 - Items equal to or greater than $100,000 will be brought forward for City Council consideration to approve the use of any remaining surplus funds.
The City Manager completed a preliminary review of department-submitted budget carryforward requests greater than $100,000 for submission to the City Council. The requested items over $100,000 requiring City Council approval are listed and described in the following section. The General Fund carryforward requests total $5,971,400 and the non- General Fund requests total $8,959,226. The lists of these requests are included as Attachment A to Exhibit 1.
General Fund requests for City Council approval
• Carlsbad Village Trenching - $5,220,000
The Carlsbad Strategic Plan includes a strategic objective to work with the San Diego Association of Governments (SANDAG) and the North County Transit District to prioritize, determine costs and work with state and federal representatives to seek funding for preliminary design and technical studies for lowering the railroad tracks in the Village. The fiscal year 2023-24 budget appropriated $5.22 million from the General Fund Reserve for this effort, and the budget has been carried forward across fiscal years since. In the SANDAG 2026-27 Program Budget, $20.8 million has been appropriated to advance the Carlsbad Village Double-Track Trench Project. According to SANDAG staff, with these two funding sources secured, the project is considered fully funded through the preliminary engineering and environmental clearance phase. In addition, following the city’s 2024-25 and 2025-26 submissions under the federal Community Project Funding/Congressionally Directed Spending program, the city was notified in February 2026 that the 2025-26 federal Transportation, Housing and Urban Development appropriations bill was signed into law, including $1 million for the project at the request of Congressman Mike Levin. This federal funding is expected to offset $1 million of the city’s contribution. However, a final grant agreement has not been executed; therefore, this request carries forward the original $5.22 million budgeted for this project.
• Fire mitigation - $300,000
The Parks & Recreation Department requests $300,000 to assist with further brush management efforts in city-owned urban forests (e.g., Hosp Grove, Woodbine Banks, Batiquitos Lane, Village H and other areas). This is a continuation of efforts that began during fiscal year 2024-25 as a mid-year budget request. This funding would continue to Sept. 29, 2026
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support a three-pronged management approach, including maintenance pruning of tree canopies, selective removal of non-inventoried trees in the interior of the urban forests that are dying or significantly declining and weed abatement throughout the urban forests to reduce ground level vegetation.
• Safer streets - $281,400
The City Council appropriated $2 million in August 2022 to support the city’s coordinated efforts to increase attention and resources on a range of solutions to traffic safety under the local emergency it had declared, including infrastructure, safety, enforcement and safe driving and riding education. The City of Carlsbad declared a local state of emergency on Aug. 23, 2023, in response to an increase in collisions involving bikes and e-bikes, ending that state of emergency on Sept. 8, 2023. Since the original local emergency, budget from this appropriation has been carried forward and distributed to departments, as needed, to support the original effort to enhance traffic safety.
• Bank fees - $170,000
The city moved to a new vendor for payment processing for better payment reliability and security. The new payment solution offers more consistency, technical support and reduces the risk of facing any delays in cash flows. This carryforward request covers the increase in fees paid by the city offering this upgraded payment solution. Future ongoing budget needs will be requested during the annual budget process.
Non-General Fund requests for City Council approval
• Complete 2025-26 approved vehicle purchases - $7,642,063 Due to supply chain issues impacting the availability of vehicles and related outfitting items, the city was unable to purchase some vehicles that had been slated for replacement in 2025-26 before the end of the fiscal year. This request carries forward budget to replace and outfit the remaining vehicles with existing appropriations approved in prior years’ budget processes. It also increases the appropriation and purchasing authority for a fire apparatus brush truck by $31,745, bringing the total from $668,255 to $700,000 due to an updated vendor quote.
• Complete 2025-26 approved Information Technology replacement purchases - $971,762 This request carries forward funds to complete the remaining replacements planned in the fiscal year 2025-26 budget. The funds are needed to ensure all city hardware is replaced on a timely basis. Items to be purchased include computers, switches, servers, routers, firewalls and miscellaneous infrastructure. No item costs over $250,000.
• Unspent Agricultural Mitigation Fee revenue - $195,401 The Agricultural Conversion Mitigation Fee funds are requested to be carried forward to support eligible projects that are consistent with the purpose of the program. Funding for the city's Agricultural Conversion Mitigation Fee program comes from fees that are paid by developers when agricultural land in the city’s coastal zone is used for development. The funds must be used to support projects that improve and preserve agricultural lands for continued agricultural production and protect and enhance Carlsbad’s natural resources, including the coastal and lagoon environment, lagoon nature centers, and beaches for public use. The funds are available for eligible projects Sept. 29, 2026
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as they are identified and approved by the Agricultural Conversion Mitigation Fee Advisory Committee and the City Council.
• City website Americans with Disabilities Act compliance services - $150,000 California Assembly Bill 434 requires that any web services provided by a municipality meet specified web content accessibility guidelines. In addition to the city’s website, the city works with over 90 vendors that provide online web content. This includes online databases provided by the library, online payment portals and civic engagement tools.
Last year, the City Council appropriated $150,000 in carryforward funds for the city to contract with a consultant specializing in Americans with Disabilities Act compliance to audit the city’s website and other digital and contracted web services. Following completion of that audit, this request will allow the city to carry out remediation for all applicable audit findings, provide training and dedicated office hours for city staff to address accessibility challenges, and ensure that all documents published to the city website meet all required standards.
Additional items
Carlsbad Municipal Code Section 3.28.050(D)(3) authorizes the City Manager to purchase goods for up to $250,000 per agreement year and capital outlay items up to the amount approved by the City Council in the annual budget. Staff anticipate the city will purchase multiple capital outlay items that are individually within the City Manager’s purchasing authority but may exceed his purchasing authority if, for example, items are purchased in bulk to take advantage of pricing discounts. To ensure the City Manager has the authority to purchase these capital items both individually and together, as appropriate, staff is requesting the City Council reaffirm previously approved pending fleet and Information Technology capital outlay purchases. There is no increase to budget, departmental chargebacks, or overall purchasing authority by approving these items.
The resolution approving this purchasing authority for the city is attached as Exhibit 3, and the applicable capital outlay list is attached to Exhibit 3 as Attachment A. The resolution approving this purchasing authority for the Carlsbad Municipal Water District is attached as Exhibit 4, and the applicable capital outlay list is attached to Exhibit 4 as Attachment A.
Fiscal Analysis
City Council Policy 87 defines “surplus” as actual revenues less actual expenditures, plus any unspent and unencumbered expenditure budget. The table below calculates the surplus available for the City Council’s consideration in accordance with the policy. All figures presented below are unaudited.
Summary of General Fund surplus at 2025-26 fiscal year-end FY 2025-26 revenues $248,039,481
FY 2025-26 expenditures* 247,084,538
FY 2025-26 surplus $ 954,943
Unspent and unencumbered budget 16,479,878
Carryforward authority (surplus + unspent budget) $ 17,434,821 *Excludes encumbrances
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The table below presents the effect on the budget surplus if the City Council were to approve all presented carryforward requests and additional staff-recommended options.
Summary of staff-recommended General Fund budget actions Carryforward authority (surplus + unspent budget) $17,434,821 Previously approved grants/developer deposits 107,254
Fourth pension trust contribution* 7,500,000
City Manager-approved carryforward requests $100,000 and below 806,829 City Council-approved carryforward requests above $100,000 5,971,400 Total spending $14,385,483
Remaining authority $3,049,338
*Does not require appropriation
The following table presents a summary of the General Fund at 2025-26 fiscal year-end after considering approval of the items presented above and the new General Fund reserve in comparison to the policy.
Effect of carryforward budget decision on the General Fund reserve Reserve
balance
Reserve
percent*
Unassigned fund balance as of July 1, 2025 154,107,692
FY 2025-26 surplus $ 954,943
Reduction in Asset Replacement Reserve 2,900,000
Initial unassigned fund balance as of 2025-26 FYE $157,962,635 63% Proposed use of surplus and unspent budget** -9,165,483 Updated estimated unassigned fund balance $148,797,152 60% 40% minimum reserve policy $99,756,433 40%
Funds in excess of reserve requirement $49,040,719 20%
*Calculated as a percentage of the FY 2026-27 adopted budget of $249,391,083 **Excludes the $5.22 million railroad trenching carryforward for purposes of the fund balance projection, as the beginning unassigned fund balance already excluded this amount as assigned.
Contributions to pension trust
As of CalPERS’ actuarial reports dated June 30, 2025 (released in August 2026), the city’s current pension-funded ratio is 79.7%, representing a shortfall of approximately $3 million from the 80% policy target.
As of July 31, 2026, the city’s pension trust had $31.2 million, which included a $10 million initial contribution, two $7.5 million subsequent contributions and $6.4 million of net investment earnings. Based on CalPERS’ most current actuarial valuations and the pension trust’s assets as of July 31, 2026, the city’s combined funded status is 82.8%.
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Although the city has met the 80% funded status ahead of the projected five-year timeline, staff recommend making this year’s scheduled contribution to the pension trust. This will allow the pension trust to continue to serve as a pension rate stabilization tool and support the city’s goal of accumulating enough funds to cover the additional costs associated with a potential future reduction in CalPERS’ discount rate, or CalPERS’ expected rate of return. Contributions to the trust will move General Fund dollars from “unassigned” fund balance to “restricted” fund balance in the General Fund. These funds will be counted toward the city’s funded ratio as set forth in City Council Policy 86, as amended, and mitigate budgetary pressures resulting from potential future volatility in CalPERS’ required contributions made by the city.
If this request is approved, the city will contribute $7.5 million from the General Fund to the pension trust and the city’s combined funded status will be 83.5%. The City Council will have the opportunity to review and approve each transfer to and from the pension trust.
Options
Options for surplus budget and the General Fund reserve Staff are presenting several options to deploy budget surplus from fiscal year 2025-26 for the City Council’s consideration:
Option 1: Adopt a resolution approving a General Fund contribution of $7.5 million to the Section 115 pension trust as specified in Exhibit 2.
Pro
• Over a five-year period, beginning in fiscal year 2023-24, the city planned to contribute assets to the pension trust to reach a combined 80% funded status; this contribution follows the City Council’s initial direction and will bring the combined funded status to
83.5%.
• Assets in the pension trust are likely to appreciate at a higher rate than the city’s general investment portfolio and must be used for pension-related costs, mitigating pension rate volatility due to periods of CalPERS’ poor investment performance or changes to their assumptions.
Con
• Funds that would have been contributed to the trust could be used for other purposes.
Option 2: Approve all or a combination of the individual carryforward requests equal to or greater than $100,000 presented above and listed in Attachment A to Exhibit 1. Staff will appropriate the approved carryforward requests to fiscal year 2026-27.
Pro
• Provides the resources needed to execute the programs as detailed in Attachment A to Exhibit 1.
Con
• The funds used would not be available for other programs the City Council may wish to fund.
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Option 3: Adopt resolutions reaffirming the City Council’s/Board of Directors’ purchasing authorization for previously appropriated capital outlay items with available budget.
Pro
• Staff can continue with the capital outlay purchasing plan to purchase all items with previously appropriated and available budget.
Con
• Staff may face disruptions when purchasing capital outlay items with available budget if they are combined in one purchase order or involve multiple purchases within one agreement year, resulting in purchasing delays and requiring staff to obtain City Council purchasing authority as issues arise.
Option 4: Take no action on the carryforward requests or use of General Fund reserve brought forward for City Council approval.
Pro
• Funds would be returned to the reserve account and be available to support future needs.
Con
• Departments will be unable to fully implement planned programs and expenditures. • Staff may face delays in obtaining appropriate purchasing authority to move forward with planned and budgeted capital outlay purchases.
• If the fourth pension trust contribution toward the city’s five-year funding strategy is not approved, then the five-year funding strategy as originally set forth in Resolution No. 2023-252 will not be followed.
Staff recommend Options 1, 2 and 3.
Next Steps
City Council and City Manager approved carryforward requests will be appropriated to the fiscal year 2026-27 budget in accordance with City Council direction. If the action is approved, the General Fund reserve will be restricted to make the third of four planned $7.5 million contributions to the pension trust. Staff will continue with planned purchases within existing budget authority and the clarified purchasing authority.
The annual fiscal year audit is currently underway for 2025-26. City staff will return to the City Council to present the results of the financial audit and the status of the city’s General Fund reserve after the final audit opinion has been issued.
Environmental Evaluation
The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA, Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and the CEQA Guidelines.
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Exhibits
1. City Council resolution – Carryforward approval
2. City Council resolution – Contribution to pension trust
3. City Council resolution – Reaffirmation of capital outlay purchasing authority
4. Carlsbad Municipal Water District Board of Directors resolution – Reaffirmation of capital outlay purchasing authority
5. Items approved by previous City Council and/or Board action, including unspent grant and developer balances
6. List of City Manager/Executive Manager approved FY 2025-26 General Fund and non- General Fund carryforward budget requests
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RESOLUTION NO. 2026-184
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE FISCAL YEAR 2025-2 6 BUDGET
CARRYFORWARD REQUESTS AND APPROPRIATION OF FUNDS TO
FISCAL YEAR 2 026-27 AND AUTHORIZING CAPITAL OUTLAY PURCHASES WHE
REAS, the City Council of the City of Carlsbad, California, established its General Fund Surplus Policy (City Council Policy No. 87) for the appropriation of surplus funds resulting from General Fund actual revenues exceeding total actual expenditures, plus any unspent and unencumbered expenditures budgeted for a given fiscal year; and
WHEREAS, at the close of fiscal year 2025-26, the city’s unaudited General Fund reserve balance was 63% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 202 5-26, the remaining unaudited unspent and unencumbered expenditure budget for the General Fund is $ 16.5 million of which $107,254 has been carried forward because of a previous City Council resolution, resulting in an unspent budget of $16.3 million; and
WHEREAS, at the close of fiscal year 2025-26, the General Fund surplus, or actual revenues less actual expenditures, was $1.0 million; and
WHEREAS, in accordance with City Council Policy No. 87, the City Manager has approved individual items of less than $100,000 that total $806,829 in General Fund carryforward requests and $801,665 in carryforward requests for other non-General Fund funds; and WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any unspent and unencumbered budget for a particular item equal to or greater than $100,000; and WHEREAS, department carryforward requests submitted for City Council approval that total $5,971,400 in General Fund carryforward requests and $ 8,927,481 in carryforward requests for other non-General Fund funds are listed in Attachment A to this resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA, Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and the CEQA Guidelines.
3. That the budget carryforward requests shown in Attachment A to this resolution are approved for carryforward from fiscal year 2025-26 to fiscal year 2026-27.
4. That the City Manager, or designee, is authorized to purchase the capital outlay items as shown in Attachment A.
5. That the City Manager, or designee, is authorized to appropriate carryforward budgets to the funds in the amounts shown in Attachment A.
PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad and the Board of Directors of the Carlsbad Municipal Water District on the 29th day of September, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
_______
______________________________
KEITH BLACKBURN, Mayor
_______
_______________________________
SHERRY FREISINGER, City Clerk
(SEAL)
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DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE AMOUNT
Finance General Fund Bank fees Other 170,000
Miscellaneous Non-Departmental General Fund Carlsbad Village Trench project Other 5,220,000 Miscellaneous Non-Departmental General Fund Safer Streets Together program support Other 281,400 Parks & Recreation General Fund Professional services for fire management in the city's urban forest areas Professional Services 300,000 Fleet & Facilities Non General Fund Annual Vehicle Replacement Fund carryforward* Other 7,642,063 Housing & Homeless Services Non General Fund Agricultural Mitigation Fee funds Other 195,401 Information Technology Non General Fund Annual IT Replacement Fund carryforward Capital Outlay 971,762 CITY OF CARLSBAD FY 2025-26 to FY 2026-27
CARRYFORWARD BUDGET REQUESTS FOR CITY COUNCIL CONSIDERATION (ITEMS EQUAL TO OR GREATER THAN $100,000)
Attachment A
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RESOLUTION NO. 2026-185 .
A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE RESTRICTION OF GENERAL FUND RESERVES IN FISCAL YEAR 202 6-27 TO FUND THE $7,500,000 CONTRIBUTION TO THE CITY’S SECTION 115 PENSION TRUST
W
HEREAS, City Council ’s General Fund Surplus Policy (City Council Policy No. 87) allows for General Fund reserve levels in excess of the 40% target requirement to be used for one -time opportunity cost purposes at the discretion of the City Council; and WHEREAS, at the close of fiscal year 2025-26, the city’s unaudited General Fund reserve balance was 63% and has exceeded its General Fund Reserve Policy (City Cou ncil Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 202 5-26, the remaining unaudited unspent and unencumbered expenditure budget for the General Fund was $16.5 million of which $107,254 has been carried forward because of a previous City Council resolution, resulting in an unspent budget of $ 16.3 million; and
WHEREAS, at the close of fiscal year 2025-26, the General Fund surplus, or actual revenues less actual expenditures, was $1.0 million; and
WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any unspent and unencumbered budget for a particular item equal to or greater than $100,000; and WHEREAS, a Section 115 Pension Trust was established by the City Council on September 12, 2023; and
WHEREAS, City Council Policy No. 86 strives to maintain a combined pension -funded status of 80% and allows assets in the city’s Section 115 Pension Trust to count towards the city’s combined pension-funded status; and
WHEREAS, as of CalPERS’ June 30, 2025, actuarial valuation report, the city’s combined funded status was 79.7%; and
WHEREAS, the city’s Section 115 Pension Trust shall be funded over a period of five fiscal years in order to achieve and maintain an 80% combined pension-funded status.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA, Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and the CEQA Guidelines.
3. That a contribution to the city’s Section 115 Pension Trust in the amount of $7,500,000 is approved.
PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad and the Board of Directors of t he Carlsbad Municipal Water District on the 29th day of September, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
_______
______________________________
KEITH BLACKBURN, Mayor
_______
_______________________________
SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 29, 2026
Item #10 Page 15 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009
Exhibit 3
RESOLUTION NO. 2026-186 .
A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, REAFFIRMING THE PURCHASING AUTHORIZATION FOR
PREVIOUSLY APPROPRIATED FLEET AND INFORMATION TECHNOLOGY
CAPITAL OUTLAY ITEMS WITH AVAILABLE BUDGET
W
HEREAS, Carlsbad Municipal Code Section 3.28.050(D)(3) authorizes the City Manager to purchase goods for up to $250,000 per agreement year and authorizes the City Manager to purchase capital outlay items for up to the amount approved by the City Council in the annual budget; and WHEREAS, staff anticipate the city will purchase multiple capital outlay items that are individually within the City Manager’s purchasing authority but may exceed his purchasing authority if, for example, purchased in bulk to take advantage of pricing discounts; and WHEREAS, to ensure the City Manager has the authority to purchase these capital items both individually and together, as appropriate, staff is requesting the City Council reaffirm pending fleet and Information Technology capital outlay purchases, previously approved in the operating budgets in fiscal years 2024-25, 2025-26, 2026-27, and mid-year 2025-26 (Attachment A); and WHEREAS, there is no increase to the budget, departmental chargebacks, or overall purchasing authority by approving these items.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA , Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.
3. That the items and amounts as shown in Attachment A requiring City Council approval are adopted as capital outlay items in FY 2026-27, totaling $7,211,245.
Sept. 29, 2026
Item #10 Page 16 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad and the Board of Directors of the Ca rlsbad Municipal Water District on the 29th day of September, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
_______
_______________________________
KEITH BLACKBURN, Mayor
_______
_______________________________
SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 29, 2026
Item #10 Page 17 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009
Fleet Replacement
Fiscal Year Adopted Budget
Approving
Authority Department Unit ID Description Approved budget Remaining unencumbered
available budget
2024-25 City Fire F517 Seagrave type 1 pumper - diesel 1,552,178$ 1,552,178$ 2024-25 City Fire F518 Seagrave type 1 pumper - diesel 1,552,178$ 1,552,178$ 2025-26 City Transportation S154 All electric forklif t 40,000$ 40,000$ 2025-26 City Transportation S471 3/4 ton utility be d 96,994$ 96,994$ 2024-25 City Transportation S400 3/4 ton pickup Crew Cab - gasolin e 74,371$ 13,729$ 2024-25 City Transportation S418 3/4 ton pickup Crew Cab - gasolin e 75,000$ 14,358$ 2025-26 City Police A492 Sedan with Lighting & Vaul t 45,000$ 6,449$ 2025-26 City Police A468 Sedan with Lighting & Vaul t 44,405$ 10,873$ 2025-26 City Police A462 SUV with Lighting & Vaul t 55,000$ 9,261$ 2024-25 City Police A417 Sedan with Lighting & Vaul t 40,000$ 40,000$ 2025-26 City Parks & Recreation P244 E-Transit Utilit y 80,000$ 80,000$ 2024-25 & 2025-26 mid-year City Utilities U229 Service utility truck - 1 ton 150,000$ 150,000$ 2026-27 City Fire F444 3/4 Ton Pickup with Battalion Chief Outfitting Packag e 135,000$ 135,000$ 2026-27 City Fire F500 3/4 Ton Pickup with Battalion Chief Outfitting Packag e 135,000$ 135,000$ 2026-27 City Fire F465 Toyota Tacoma with Camper Shell & 'Prevention' Outfitting Packag e 63,043$ 63,043$ 2025-26 City Transportation S409 Toyota sedan - all electri c 40,000$ 6,471$ 2025-26 City Construction Management & Inspection Z504 Toyota sedan - all electri c 40,000$ 6,471$ 2025-26 City Construction Management & Inspection Z509 Toyota sedan - all electri c 40,000$ 6,471$ 2024-25 City Transportation S401 1 ton truck utility bed - diese l 117,642$ 909$ 2026-27 City Construction Management & Inspection Z458 Toyota BZ AW D 45,000$ 45,000$ 2026-27 City Construction Management & Inspection Z753 Toyota BZ AW D 45,961$ 45,961$ 2026-27 City Construction Management & Inspection B502 Toyota BZ AW D 45,000$ 45,000$ 2026-27 City Transportation Z773 Small Pickup Truck - With Camper Shell, Ladder Rack & Electronic /Slope Meter s 37,605$ 37,605$ 2026-27 City Transportation S436 1 Ton - Class 4 Cab & Chassis with Dump Bod y 250,000$ 250,000$ 2026-27 City Fleet & Facilities Z203 Vestil Powered Trailer Mover - PMM 3000 - 1 5 20,000$ 20,000$ 2025-26 City Police A443 Ford PIU hybrid Patrol 84,009$ 4,521$ 2025-26 City Police A442 Ford PIU hybrid Patrol 84,009$ 4,521$ 2025-26 City Police A1185 Ford PIU hybrid Patrol 84,009$ 4,445$ 2025-26 City Police A488 EV Blazer (Investigations UC ) 85,000$ 36,190$ 2026-27 City Police A1072 SUV - Make/Model TBD 55,000$ 55,000$ 2026-27 City Police A1143 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 37,456$ 2026-27 City Police A1233 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1067 Homeless Outreach Truck (electric) 90,000$ 90,000$ 2026-27 City Police A1182 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1202 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1184 Ford Police Patrol Interceptor - Patrol Single Cage 90,000$ 90,000$ 2026-27 City Police A1105 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1188 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1181 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1106 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1180 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1103 Ford Police Patrol Interceptor - Patrol Single Cag e 90,000$ 90,000$ 2026-27 City Police A1121 BMW RT Patrol Outfitted 50,000$ 6,090$ 2026-27 City Police A1151 BMW RT Patrol Outfitted 50,000$ 6,090$ 2026-27 City Police A1153 BMW RT Patrol Outfitted 50,000$ 6,909$ 2026-27 City Police A1314 *Accident Totaled* Ford Police Patrol Interceptor - Patrol Single Cage 90,000$ 90,000$ 2026-27 City Parks & Recreation P407 3/4 Ton Utility Flat Bed with Toolboxe s 100,000$ 100,000$ 6,631,405$ 5,704,172$
Attachment A
Sept. 29, 2026
Item #10 Page 18 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009 Information Technology Replacement
Fiscal Year
Adopted
Budget
Approving
Authority Department
# of
Units Description Approved budget
Remaining unencumbered
available budget
2026-27 City Information Technology 16 Desktop 22,674$ 22,674$ 2026-27 City Information Technology 143 Laptop 389,602$ 236,602$ 2026-27 City Information Technology 2 Infrastructure 6,142$ 6,142$ 2026-27 City Information Technology 7 Switches 130,701$ 130,701$ 2026-27 City Information Technology 7 Unified Communication 99,327$ 99,327$ 2026-27 City Information Technology 10 Wireless Access Points 39,865$ 39,865$ 2025-26 City Information Technology 253 Desktop 237,097$ 237,097$ 2025-26 City Information Technology 52 Laptop 247,908$ 247,908$ 2025-26 City Information Technology 1 Firewall 150,850$ 150,850$ 2025-26 City Information Technology 5 Infrastructure 170,676$ 170,676$ 2025-26 City Information Technology 1 Router 15,527$ 15,527$ 2025-26 City Information Technology 17 Switches 135,846$ 135,846$ 2025-26 City Information Technology 8 Wireless Access Points 13,858$ 13,858$ 1,660,073$ 1,507,073$
Fleet and Information Technology Replacement Total 8,291,478$ 7,211,245$ Sept. 29, 2026
Item #10 Page 19 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009 Exhibit 4
RESOLUTION NO. 1812
A RE
SOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD
MUNICIPAL WATER DISTRICT OF THE CITY OF CARLSBAD, CALIFORNIA,
REAFFIRMING THE PURCHASING AUTHORIZATION FOR PREVIOUSLY
APPROPRIATED FLEET CAPITAL OUTLAY ITEMS WITH AVAILABLE BUDGET WHE
REAS, the Carlsbad Municipal Water District Code Section 1.16.030 authorizes the Executive Manager to purchase goods for up to $250,000 per agreement year and authorizes the Executive Manager to purchase capital outlay items for up to the amount approved by the Board of Directors in the annual budget; and
WHEREAS, staff anticipate the district will purchase multiple capital outlay items that are individually within the Executive Manager’s purchasing authority but may exceed his purchasing authority if, for example, purchased in bulk to take advantage of pricing discounts; and WHEREAS, to ensure the Executive Manager has the authority to purchase these capital items both individually and together, as appropriate, staff is requesting the Board of Directors reaffirm pending fleet capital outlay purchases, previously approved in the operating budgets in fiscal years 2024-25, 2025-26, 2026-27, and mid-year 2025-26 (Attachment A); and WHEREAS, there is no increase to the budget, departmental chargebacks, or overall purchasing authority by approving these items.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA , Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.
3. That the items and amounts as shown in Attachment A and requiring Carlsbad Municipal Water District Board of Directors approval are adopted as capital outlay items in FY 2026-27, totaling $458,957.
Sept. 29, 2026
Item #10 Page 20 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Municipal Water District and the City Council of the City of Carlsbad on the 29th day of September, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
_______
_______________________________
KEITH BLACKBURN, President
_______
_______________________________
SHERRY FREISINGER, Secretary
(SEAL)
Sept. 29, 2026
Item #10 Page 21 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009
Carlsbad Municipal Water District
Fiscal Year Adopted Budget
Approving
Authority Department Unit ID Description Approved budget Remaining unencumbered
available budget
2024-25 CMWD Utilities W434 All electric Silverado EV 61,092$ 61,092$ 2024-25 CMWD Utilities W1036 1/2 ton pickup truck 48,396$ 48,396$ 2025-26 CMWD Utilities W252 All electric forklift 44,000$ 44,000$ 2026-27 CMWD Utilities W1011 Ford Maverick 42,037$ 42,037$ 2026-27 CMWD Utilities W730 F550 - Service Body with Specialty Accessories & Equipment 250,000$ 250,000$ 2025-26 CMWD Utilities W1039 All electric Silverado EV 60,000$ 7,112$ 2024-25 CMWD Utilities W433 All electric Silverado EV 61,092$ 6,320$ 566,617$ 458,957$
Attachment A
Sept. 29, 2026
Item #10 Page 22 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE AMOUNT
Community Development General Fund Carryforward of developer funded revenue Grant balance or developer deposit 104,163 ibrary & Cultural Arts General Fund Adult Literacy Grant funds Grant balance or developer deposit 3,091 nvironment Sustai
nability Non General Fund Beverage Containe r Grant funds FY 24-25 Grant balance or developer deposit 216 nvironmental
Sustainability Non General Fund Beverage Containe r Grant funds FY 25-26 Grant balance or developer deposit 27,494 nvironmental
Sustainability Non General Fund Senate Bill 1383 Grant funds Grant balance or developer deposit 12,797 ire Non Gene
ral Fund Regional Urban Search and Rescue Task Forc e 13 Reimbursement Program Grant balance or developer deposit 45,700 Housing & Homeless Services Non General Fund Encampment Resolution Program funds Grant balance or developer deposit 1,015,439 Housing & Homeless Services Non General Fund Community Development Block Grant (CDBG) funds Grant balance or developer deposit 925,546 olice Non General Fund Office of Traffic Safety Grant funds Grant balance or developer deposit 133,349 olice Non General Fund Operation Stonegarden Grant funds Grant balance or developer deposit 21,983 Genera
l Fund Total 107,254
Non General Fund Total 2,182,524
GRAND TOTAL 2,289,77 8
ote: These are unaudited figures, subject to change.
CITY OF CARLSBAD FY 2025-26 TO FY 2026-27
CARRYFORWARD BUDGET LIST OF ITEMS APPROVED BY PREVIOUS CITY COUNCIL/BOARD ACTION
AND UNSPENT GRANT AND DEVELOPER BALANCES
Exhibit 5
Sept. 29, 2026
Item #10 Page 23 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE AMOUNT
City Clerk General Fund Election and Publishing costs Other 30,000 City Manager General Fund Carlsbad 75th Anniversary celebration costs Professional Services 75,000 Community Development General Fund Update City Engineer Standards for private development projects Professional Services 95,000 Community Development General Fund Review TDM ordinance in response to Nov. 12, 2024 City Council minute motion Professional Services 45,000 Construction Management & Inspection General Fund Additional training budget for new team members Professional Services 3,250 Economic Development General Fund Economic Development Strategic Plan update Professional Services 75,000 Environmental Sustainability General Fund Erosion control and non-native vegetation removal services Professional Services 40,000 Fire General Fund High temperature remote microphones Equipment & Supplies 33,000 Fire General Fund 75th Anniversary Carlsbad Fire Department uniform badges and patches Equipment & Supplies 20,000 Human Resources General Fund Contract support for class and compensation requests Professional Services 50,000 Parks & Recreation General Fund Pine Avenue Community Center furniture repair and replacement Equipment & Supplies 65,149 Parks & Recreation General Fund Hosp Grove gate installation Other 15,000 Parks & Recreation General Fund Magee Park interpretive panels Professional Services 22,000 Parks & Recreation General Fund Slope repair and erosion control at the Crossings Preserve Professional Services 20,000 Parks & Recreation General Fund Automated security gate for Parks Maintenance Yard Professional Services 20,000 Police General Fund COPPS Team vehicle outfitting funds Capital Outlay 25,000 Transportation General Fund All-Way stop installations Professional Services 90,430 Transportation General Fund Local Roadway Safety Plan (LRSP) update Professional Services 83,000 Information Technology Non General Fund Cloud comput ing and critical cybersecurity resources Other 75,000 Information Technology Non General Fund Library asset collection application update Other 50,000 Information Technology Non General Fund Service request management services Other 82,000 Information Technology Non General Fund Utility fixed network application updates Other 55,000 Information Technology Non General Fund Senate Bill 122 compliance funds Other 90,000 Library & Cultural Arts Non General Fund Homebound library patron services - donation funds Equipment & Supplies 25,000 Library & Cultural Arts Non General Fund Schulman Auditorium programming - endowment funds Professional Services 21,200 Parks & Recreation Non General Fund Monument sign package at The Crossings Golf Course Capital Outlay 40,000 Parks & Recreation Non General Fund Sand rake replacement for The Crossings Golf Course Capital Outlay 35,000 Parks & Recreation Non General Fund Canyons Patio Wind Wall - West side patio at The Crossings Golf Course Capital Outlay 75,000 Utilities Non General Fund Outfitting for replacement for tank and ladder on gapVax vehicle for wastewater services Capital Outlay 5,500 Utilities Non General Fund DuraTracker flow monitoring devices for wastewater services Equipment & Supplies 43,100 Utilities Non General Fund Wastewater push camera replacement Capital Outlay 35,000 Utilities Non General Fund Utilities wastewater equipment storage container Capital Outlay 4,500 General Fund Total 806,829
Non General Fund Total 636,300
GRAND TOTAL 1,443,129
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE AMOUNT
Utilities Non General Fund Water service truck replacement Capital Outlay 50,365 Utilities Non General Fund Replacement of forklift for water services Capital Outlay 23,500 Utilities Non General Fund New safety light outfitting for existing water services vehicle Capital Outlay 5,000 Utilitie
s Non General Fund Water service and valve exerciser truck replacement Capital Outlay 50,000 Utilities Non General Fund Utilities water equipment storage container Capital Outlay 4,500 Utilities Non General Fund Maerkle hydroelectric generator pump and motor repair Equipment & Supplies 32,000 Non General Fund Total 165,365
GRAND TOTAL 165,365
(ITEMS LESS THAN $100,000)
CITY OF CARLSBAD FY 2025-26 TO FY 2026-27
CARRYFORWARD BUDGET REQUESTS APPROVED BY CITY MANAGER
(ITEMS LESS THAN $100,000)
CARLSBAD MUNICIPAL WATER DISTRICT FY 2025-26 TO FY 2026-27
CARRYFORWARD BUDGET REQUESTS APPROVED BY EXECUTIVE MANAGER Exhibit 6
Sept. 29, 2026
Item #10 Page 24 of 24
Docusign Envelope ID: C737AD88-511C-8F42-8396-682F125A8009 General Fund Surplus:
Fiscal Year 2025-26 Review
Zach Korach, Deputy City Manager, Administrative Services Brigid Satterlee, Finance Director
September 29, 2026
BUDGET CARRYFORWARDS
ITEM 10: GENERAL FUND SURPLUS
City Council Policy No. 87 – General Fund Surplus Policy • The city will use surplus funds to replenish:
- any General Fund Reserve deficiencies; and
- any pension liability deficiencies.
• The City Manager is authorized to approve the carry forward of unspent budget for an item up to $100,000.
• Items equal to or greater than $100,000 will be brought forward for City Council approval.
2 FISCAL YEAR 2025-26
GENERAL FUND SURPLUS
Year-end Summary: Total
FY 2025-26 revenues $248,039,481
FY 2025-26 expenditures 247,084,538
FY 2025-26 surplus $954,943
Unspent and unencumbered budget 16,479,878
Carryforward authority (surplus + unspent budget) $ 17,434,821 ITEM 10: GENERAL FUND SURPLUS
3 GENERAL FUND RESERVE REQUIREMENTS
ITEM 10: GENERAL FUND SURPLUS
City Council Policy No. 74 – General
Fund Reserve Guidelines
• Maintain General Fund reserves at
a target of 40% of General Fund
annual operating expenditures.
• At the discretion of the City
Council, reserve levels in excess of
the 40% target requirement may
be used for one-time
opportunities.
4 0
20 40
60 80
100
120
140
160
180
June 30, 2026 Initial Unassigned
$158.0M
63%
Policy 40%,
$99.8M
ITEM 10: GENERAL FUND SURPLUS
*Annual rates of return/loss were earned in preceding fiscal years and incorporated into subsequent actuarial valuation reports
PENSION LIABILITY STATUS
CalPERS Miscellaneous & Safety Plan Status
June 30, 2024 June 30, 2025
Total Liability $961,656,866 $1,007,899,688
Market Value of Assets $728,126,246 $803,339,275
Unfunded Liability $233,530,620 $204,560,413
Funded Ratio 75.7% 79.7%
CalPERS Target Rate of Return 6.8% 6.8%
CalPERS Rate of Return* 9.3% 11.6%
5 ITEM 10: GENERAL FUND SURPLUS
RECOMMENDED FUNDING SCHEDULE
GOAL: Achieve investment balance to maintain 80%
funded status and fund a reduction in CalPERS discount
rate from 6.8% to 6.25% over a 20-year time horizon
$10M $7.5M 6.25% $118M+ X =
Initial
investment
4 annual
contributions
Target rate of
return
In 20 years
6 ITEM 10: GENERAL FUND SURPLUS
• Section 115 Trust has earned
$6.4 million since inception
• Current combined funded
status is 82.8%, including both
assets with CalPERS and assets
held in Section 115 Trust
• If fourth contribution of $7.5
million is approved, combined
funded status would be 83.5%
PENSION LIABILITY STATUS
$841,584,124.61
83.5%
$166,315,563.39
16.5%
Funded Status with Section 115 Trust
Funded Unfunded
7 SUMMARY OF CARRYFORWARD REQUESTS
AUTHORIZED BY CITY MANAGER
Fund Amount
General Fund $806,826
Non-General Fund $801,665
Examples:
• Economic Development Strategic Plan update
• Complete Police COPPS Team vehicle outfitting
• All-way stop installation
• Pine Avenue Community Center furniture repair and replacement 8 ITEM 10: GENERAL FUND SURPLUS
CARRYFORWARD REQUESTS FOR CITY COUNCIL
APPROVAL
ITEM 10: GENERAL FUND SURPLUS
9 General Fund $5,971,400
Carlsbad Village Trenching $5,220,000
Safer Streets Together program support $281,400
Fire mitigation professional services in urban forest areas $300,000 Bank fees $170,000
CARRYFORWARD REQUESTS FOR CITY COUNCIL
APPROVAL
ITEM 10: GENERAL FUND SURPLUS
10 Non-General Fund $8,959,226
Complete Fleet vehicle replacements from prior fiscal year $7,642,063 Complete Information Technology replacements from prior fiscal year $971,762 Agricultural Mitigation Fee funds $195,401
City website ADA compliance $150,000
CAPITAL OUTLAY PURCHASING AUTHORITY
ITEM 10: GENERAL FUND SURPLUS
• The City Manager can approve purchases up to $250,000 per agreement year, as well as capital outlay items up to the budgeted amount approved by City Council • The city may purchase multiple capital outlay items that are individually within this purchasing authority but may exceed it if multiple items are purchased together • Staff is requesting the City Council reaffirm previously approved Fleet and Information Technology capital outlay purchases to ensure adequate purchasing authority is available
• No increase to budget, departmental chargebacks, or overall purchasing authority 11 SUMMARY OF RECOMMENDED
GENERAL FUND BUDGET ACTIONS
Carryforward authority (surplus + unspent budget) $17,434,821 Previously approved grants/developer deposits 107,254
Fourth Section 115 Trust contribution* 7,500,000
City Manager approved requests below $100,000 806,829
City Council approved requests above $100,000 5,971,400 Total spending $14,385,483
Remaining authority $3,049,338
ITEM 10: GENERAL FUND SURPLUS
*Does not require appropriation
12 FISCAL YEAR 2025-26 GENERAL FUND
RESERVE SUMMARY
Year-end summary: Total Reserve %*
Unassigned at 2025-26 FYE $157,962,635 63%
Proposed use of surplus + unspent budget** -$9,165,483 -3% Updated estimated unassigned fund balance $148,797,152 60% 40% minimum reserve policy $99,756,433 40%
Funds in excess of reserve requirement $49,040,719 20%
ITEM 10: GENERAL FUND SURPLUS
*Calculated as a percentage of the FY 2026-27 adopted budget of $249,391,083 **Excludes the $5.22 million railroad trenching carryforward for purposes of the fund balance projection, as the beginning unassigned fund balance already excluded this amount as assigned. 13 RECOMMENDED ACTIONS
ITEM 10: GENERAL FUND SURPLUS
• Adopt a City Council resolution approving the fiscal year 2025-26 budget carryforward requests and appropriation of funds to fiscal year 2026-27 and authorizing capital outlay purchases; and
• Adopt a City Council resolution approving the restriction of General Fund reserves in fiscal year 2026-27 to fund the $7,500,000 contribution to the city's Section 115 pension trust; and
• Adopt a City Council resolution reaffirming the purchasing authorization for previously appropriated fleet and Information Technology capital outlay items with available budget; and
• Adopt a Carlsbad Municipal Water District Board of Directors resolution reaffirming the purchasing authorization for previously appropriated fleet capital outlay items with available budget.
14 QUESTIONS?
ITEM 10: GENERAL FUND SURPLUS
15