1 Fiscal Year 2025-2026
Proposed Budget Overview
Presented to City Council
May 6, 2025
Agenda
2 BUDGET PROCESS
OVERVIEW
GENERAL FUND AND
OTHER FUNDS OVERVIEW
CAPITAL IMPROVEMENT
PROJECTS OVERVIEW
BUDGET PROCESS NEXT
STEPS
Why is the
City budget
important?
Central policy document
Debt Compliance
Spending plan
Management and evaluation tool
Communication tool
4 Annual Budget Cycle
Budget
Cycle
Long-Term
Financial Plan
Budget
Development
Public
Hearings and
Workshops
Budget
Adoption
Budget
Monitoring
Budget Development Timeline
Nov.
Long-Term Financial Plan
Department Budget
Requests
Jan.
Baseline Budget
Development
March
Mid-Year Review
(Q2 Financial Report)
April
Community Budget
Presentations
May
Public Hearings
June
Budget Adopted by
June 30, annually
Public Input
5 Fund Restrictions
6 General Fund
Discretionary use of funds
Special Revenue Funds
Funds legally restricted for a
specific purpose
Enterprise Funds
Operating and reporting
similarly to a private business
perspective (profit-loss)
Sewer funds can only be used
for sewer related projects
Trust/Fiduciary funds
City acts as trustee/agent for
parties outside of the City;
other agencies approve budget
Funds are restricted
Operating Budget vs. Capital Budget
7 Operating Budget
• Ongoing expenditures = ongoing revenues
• One-time revenues fund one-time expenditures
Capital Improvement Projects (CIP) Budget
• The capital budget is for long-term capital improvements, facilities, and equipment where revenues are collected over time. Capital programs often extend beyond a single fiscal year and because of this capital budgets often include expenditures funded by both current year revenues and funds previously collected.
• Procurement, construction or installation of facilities or related equipment which improves, preserves, enhances or modernizes the City’s provision of municipal services • Useful life of at least 5 years, costs in excess of $50K Fiscal Year 2025-2026 Outlook
8 Monitor
and adjust
Targeted
services
expansion
Core
services
maintained
Restrained
growth
General Fund Revenues
(in millions)
9 Category
FY2025
Adopted
FY2026
Proposed Change
Revenues 274.1$ 305.6$ 31.5$ Expenditures 274.1 305.6 31.5
Surplus/(Deficit) -$ -$ -$
General Fund Revenues
(in millions)
10 General Fund Revenues
(in millions)
11 Category
FY2025
Adopted
FY2026
Proposed Change
Major Revenues
Property Taxes 52.0$ 58.4$ 6.5$ Sales Tax 48.0 50.0 2.0 Measure P Sales Tax 29.3 30.8 1.5 Measure A Sales Tax 29.3 30.8 1.5 Franchise Fees 15.1 15.4 0.3 Utility Users Tax 3.9 3.7 (0.2) Motor Vehicle License Fees 31.4 33.8 2.4 Transient Occupancy Taxes 10.0 21.7 11.7 Major Revenues Total 219.0$ 244.7$ 25.8$ Other Revenues 55.2 60.9 5.7 General Fund Revenues Total 274.1$ 305.6$ 31.5$ General Fund Revenues
12 • Increase projected Assessed Valuations ($3.9M)
• Bayfront Hotel and Convention Center tax increment
($2.5M)
Property Taxes
$6.4M
• Bayfront Hotel and Convention Center Transient
Occupancy Taxes ($11.1M)
Transient Occupancy
Taxes $11.7M
• Charges for Services ($2.2M)
• Other Local Taxes ($1.6M)
• Transfers In ($1.1M)
Other Revenues
$6.1M
General Fund Expenditures Transfers removed
(in millions)
13Includes Measure A: Fire Dept $15.4 million and Police Dept $18.3 million
General Fund Expenditures
(in millions)
14 General Fund Expenditures
(in millions)
15 Category
FY2025
Adopted
FY2026
Proposed Change
Personnel Services
Personnel Services 118.0$ 128.4$ 10.4$ Salary Savings (3.8) (3.5) 0.3 Retirement Benefits 17.6 21.0 3.4 Health Insurance 15.0 15.9 0.9 Personnel Services Total 146.9$ 161.8$ 14.9$ Supplies and Services 25.7 28.6 3.0 Other Expenses 2.2 2.7 0.5 Internal Service 4.7 4.6 - Capital 0.2 0.2 - Utilities 6.8 7.7 0.9 Transfers Out 87.7 100.0 12.3 Total General Fund Budget 274.1$ 305.6$ 31.5$ General Fund Expenditures
16 • Labor costs tied to MOU agreements ($10.6M)
• Pension cost increases ($3.4M)
• Health Insurance cost increases ($0.9M)
Personnel $14.9M
• Increase to insurance premiums ($1.7M)
• Estimated election costs in June 2026 ($0.7M)
• Increase to software and supplies costs ($0.6M)
Supplies & Services
$3.0M
• Rising gas, electric, and water costs ($0.9M)Utilities $0.9M • Measure A and Measure P Sales Tax transfers ($3M)
• Bayfront contractual transfers ($14.9M)
• Debt Service & other funds transfers (-$5.8M) decrease Transfers $12.3M
City Pension Costs
In recent years, large Unfunded
Accrued Liability to CalPERS
retirement system
Feb. 2021, City issued $355 million
in Pension Obligation Bonds (POBs)
at an interest rate of 2.54%, to pay
off UAL*
Policy to set aside 75% of any
surpluses generated into the
Pension Reserve Fund (Section 115
Trust) to fund future liabilities/UAL
that may arise
CalPERS investment returns since
the POB was issued have ranged
from a high of 22.4% to a low of
negative 7.5%. The net result is a
new UAL
17 *as of June 30, 2019 CalPERS valuation report
Unfunded Accrued Liability (UAL)
General Fund
Expenditures
by Department
(in millions)
18 Department
FY2025
Adopted
FY2026
Proposed Change
City Council 1.7$ 1.8$ 0.1$ City Clerk 1.6 2.3 0.7 City Attorney 3.8 3.9 0.2 Administration 3.2 3.3 0.1 Information Technology 4.7 5.2 0.5 Human Resources 4.0 4.2 0.2 Finance 5.1 5.8 0.7 Non-Departmental 98.8 112.8 14.0 Animal Care Services 3.6 4.0 0.4 Economic Development 1.3 0.6 (0.7) Development Services 3.3 3.3 0.0 Engineering/Capital Projects 12.0 12.2 0.2 Police 59.5 66.3 6.9 Fire 37.2 41.3 4.1
Public Works 24.3 27.4 3.2 Parks and Recreation 5.9 6.6 0.7 Library 4.2 4.6 0.4 Total General Fund Budget 274.1$ 305.6$ 31.5$ General Fund
Staffing
19 Staffing by Department
FY 2025
Adopted
FY 2026
Proposed Change
Administration 13.00 11.00 (2.00) Animal Care Services 29.30 29.30 - City Attorney 17.00 17.00 - City Clerk 10.00 10.00 - City Council 14.00 14.00 - Development Services 22.00 21.00 (1.00) Economic Development 8.00 3.00 (5.00) Engineering/Capital Projects 60.00 60.00 - Finance 35.00 35.00 - Fire 165.00 165.00 - Human Resources 22.00 22.00 - Information Technology Services 21.00 21.00 - Library 22.50 23.50 1.00
Parks and Recreation 20.00 20.00 - Police 328.00 330.00 2.00
Public Works 128.00 135.00 7.00 General Fund Total 914.80 916.80 2.00 FTE - Full Time Equivalent
General Fund Highlights
20 Improved community
services
• Casa Casillas art
center full-year
operations
• Expanded Parks &
Recreation
programming
• Parks maintenance
and Open space
upkeep
Expanded public
safety
• Fire
• Bayfront Fire Station
services expansion
• Police
• Enhanced training
and development
Bayfront Hotel and
Convention Center
• Transfer of revenues
obligated to the
Bayfront project
Other Funds
Other Funds
Expenditures
by Fund
Category
(in millions)
22 Fund Category
FY2025
Adopted
FY2026
Proposed Change
Capital Funds 0.9$ 3.1$ 2.2$ Debt Funds 33.8 33.9 0.1 Development Funds 44.7 11.0 (33.7) Enterprise Funds 35.4 40.8 5.4 Gas Tax Fund 14.6 15.6 1.0 Grant Funds 12.2 13.5 1.3 Internal Service Funds 15.3 16.2 1.0 Measure A Sales Tax Fund 43.5 33.7 (9.8) Measure P Sales Tax Fund 18.8 17.0 (1.8) Open Space Funds 23.5 31.7 8.2 Other Funds 18.5 34.4 15.9 Pension/Debt Reserve - 0.2 0.2 Sewer Funds 52.2 52.3 0.1 Successor Agency Funds 8.1 8.1 - Other Funds Expenditures Total 321.2$ 311.3$ (9.9)$ Other Funds Staffing
23 Staffing by Fund
FY 2025
Adopted
FY 2026
Proposed Change
Advanced Life Support Fund 5.00 5.00 - CV Housing Authority Fund 11.00 12.00 1.00 Development Services Fund 63.00 65.00 2.00 Environmental Services Fund 9.00 9.00 - Federal Grants Fund 44.00 42.00 (2.00) Fleet Management Funds 13.00 13.00 - Gas Tax Fund 2.00 2.00 - Measure A Fund 120.00 140.00 20.00 Sewer Fund 50.00 51.00 1.00 Transportation Fund 70.00 70.00 - Other Funds Total 387.00 409.00 22.00 FTE - Full Time Equivalent
Other Funds Highlights
24 • Reduction for Heritage Road Bridge Replacement
CIP project
Other Transportation Fund
• Scheduled projects based on Measure P spending
plan categories for Public Safety equipment, debt,
and infrastructure.
Measure P Sales Tax
• 20 additional positions (8 Police, 12 Fire)
• Reduction of CIP budget for Training facility
Measure A Sales Tax
• Increase transfer for the Bayfront Lease Revenue
Fund.
Other Funds
Fiscal Year 2026
Capital Improvement
Program Summary
Department of Engineering & Capital Projects
TransNet
Voter approved, ½ cent sales tax measure for Transportation Projects in San Diego County
Administered by SANDAG
Compliance oversight by TransNet Independent Taxpayer
Oversight Committee (ITOC)
Congestion Relief (Minimum 70%)
• Construct new or expanded facilities • Major roadway rehab • Traffic signal coordination • Traffic improvements
Maintenance (Maximum 30%)
• Pothole repairs • Crack sealing• Resurfacing • Striping • Signage • Bridge maintenance • Routine inspections
Storm Drain Fund
Storm Drain Fee Revenue
Funded by monthly service fees charged to property owners Dedicated exclusively to stormwater-related purposes in compliance with the Federal Clean Water Act and local
NPDES permit requirements.
Storm Drain System
• Clean inspect, and maintain storm drain inlets, underground systems, channels, and ditches • Activities for compliance with National Pollutant Discharge Elimination System (NPDES) Permit • Activities required for Clean Water Act compliance • Storm Drain and BMP Inspection and compliance programs
Funding Description Approved Uses
Highway User’s Tax
Gas tax revenues for roadway projects and maintenance
Road Maintenance and Rehab Account (RMRA/SB-1)
Funded by gas tax with focus on repairing and preserving state roads and bridges
Roadway Maintenance
• Streets • Signals • Signs • Guardrails • Drainage • Traffic control devices • Lighting • Non-motorized traffic facilities • Sidewalks • Transportation-related projects
RMRA must be used for road maintenance and critical safetyGas Tax FY 2026 CIP FUNDING
Funding Description Approved Uses
Measure P
Sewer Enterprise
Funds
Highway Bridge
Program (HBP)
Federal Grant
First award for Heritage Road Bridge was FY 2016
Covers 88.53% of participating grant expenses
Matching funds (11.47%) funded by Transportation DIF
Highway Bridges
Program provides funding for states to improve the condition of highway bridges through replacement, rehabilitation, and systematic preventive maintenance.
Voter approved, 10-year, ½ cent sales tax increase
to fund high priority infrastructure needs
Collection began in 2017
Voter-approved extension through March 31, 2037
Compliance oversight by Citizens’ Oversight Committee
Expenditure Plan Priorities
•Pave/repair streets, • Upgrade aging public safety facilities & equipment • Replace storm drains • Repair older
libraries, senior center, recreation centers • Improve traffic signal system
Citywide Sewer Facilities Replacement/Rehabilitation
• Pipe /manhole rehabilitation • Pipeline upsize• Sewer Access Road rehabilitation• Pump/Lift station upgrades • Sewer structure improvements • Maintenance/expansion of conveyance system • Sewer related street repairs
Funded by monthly service fees, permit and system
connection fees, and sewer development impact fees
Sub Funds:
• Sewer Income Fund • Trunk Sewer Capital Reserve
• Sewer Service Revenue Fund • Sewer DIFs
FY 2026 CIP FUNDING
Gas Tax
$10.2M
34.87%
Hwy Bridge Program
$1.4M
4.93%
Measure P
$3.4M
11.66%
CV Muni Golf Course
$200K
0.68%
Sewer Fac Replacement
$3.5M
11.78%
Storm Drain Fund
$700K
2.39%
TransNet
$9.9M
33.67%
BY FUNDING SOURCE
Capital Improvement Program: $29.3 Million
Capital Improvement Program: $29.3 Million
BY ASSET MANAGEMENT SYSTEM
Buildings
$133K
0.46%
Drainage
$1.3M
4.35%
General Gov't
$390K
1.33%
Parks
$1M
3.42%
Roadway
$23M
78.66%
Wastewater
$3.5M
11.78%
Major Building ProjectsBuilding Projects
Citywide Building Repair Efforts to Continue in FY 26
PUBLIC BUILDINGS
– Citywide Public Building Repairs
• Roof Replacement
• HVAC
• General Building Repairs
FY2026 Proposed:
$ 133k Citywide Building Repairs (Measure P)
Measure P Expenditure Plan
Major Building ProjectsPark Projects
PARK IMPROVEMENTS
• Playgrounds
• Sports Courts and Fields
• Irrigation / Plumbing
• Park Lighting
• Park Amenities:
• BBQ Grills
• Benches / Picnic Tables
• Drinking Fountains
• Pathways / Jogging Trails
FY2026 Proposed:
• $1M Park Infrastructure (Measure P)
Locate City Parks and Amenities
Major Building ProjectsDrainage
DRAINAGE
- Inspect, Clean and Repair:
• Storm drain inlets
• Underground pipes
• Channels
• Grates and manholes
• Flood Prevention Measures
• Activities to ensure compliance with regional
stormwater regulations
FY2026 Proposed:
• $ 1.3M (Storm Drain Fund)
Drainage Master Plan
Major Building Projects
Roadway Projects
Pavement
STREET PAVEMENT & REHAB
• Resurfacing
• Pavement Overlays
• Slurry Seals
FY2026 Proposed:
• $ 15.7M (Gas Tax , TransNet)
Pavement Management System
Major Building ProjectsRoadway Projects
Traffic Signals
TRAFFIC SIGNAL REPAIR AND UPGRADE
• Upgrades
• Modifications
• Traffic Signal System Optimization Program
• Pedestrian Improvements
FY2026 Proposed:
• $ 3.1M (Gas Tax, TransNet, Measure P)
Traffic Engineering
• Pedestrian & Bicycle Safety Plan
• Local Road Safety Plan
Major Building ProjectsRoadway Projects
Sidewalks
SIDEWALK REPLACEMENT
• Citywide Panel Replacement
• Sidewalk Replacement Program
• Replaces damaged curb, gutter, sidewalk, and
driveway aprons in public right-of-way
• Pedestrian Curb Ramp Program
FY2026 Proposed:
• $ 2.7M (Measure P , TransNet)
Active Transportation Plan
Major Building ProjectsMajor Projects
Roadway
Main Street – Nirvana Ave to Heritage Rd
Heritage Road Bridge Replacement
Construction Began December 2024
Completion Anticipated Summer 2027
HERITAGE ROAD BRIDGE REPLACEMENT
– Widen Heritage Road
• Main Street to Entertainment Circle
• Heritage Road Bridge Replacement
• 4 Lanes to 6 Lanes
• Sidewalk
• Bike Lanes
– Widen Main Street
• Nirvana Avenue to Heritage Road
• 6-Lane Major
FY2025 Proposed:
• $ 1.4M (Highway Bridge Program (HBP) Grant)
Major Building ProjectsMajor Projects
Wastewater
SEWER FACILITY REPLACEMENT
• Rehabilitation and Upsizing
• Access Road Rehabilitation
• Manhole Inspections
• CCTV Inspection of Sewer Main
FY2026 Proposed:
• $ 3.5M (Sewer Facility Replacement Fund)
Wastewater Master Plan
5-Year Capital Improvement Program
CIP Appropriations by Fiscal Year and Asset Type
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
FY22
$49.2M
FY23
$50.5M
FY24
$66.6M
FY25
$81.2M
FY26
$29M
Building Drainage General Gov't Parks Roadway Wastewater TOTAL CIP Capital Improvement Program
CIP Program Summary Total CIP
Budget
% of Budget
Used to Date
CIP Program FY2018-FY2025 $977.1M 65%
CIP Program FY2026 $29.3M -
Total FY2026 CIP Program $1.01B 63%
Bayfront
$327.3M
32.53%
Building
$271.8M
27.03%
Drainage
$24M
2.51%
General Government
$29M
2.90%
Parks
$39.2M
4.00% Roadway
$247.3M
26.87%
Sewer
$38.3M
4.15%
MULTI-YEAR CAPITAL BUDGET SUMMARY: FY 2018 – FY 2026
Challenges to Maintaining a
Balanced Budget
40 • Impacts from economic
slowdown/inflation
• Increase costs for labor, goods and
services, utilities, and insurance
premiums
• CalPERS investment losses
• Unfunded Actuarial Liabilities –
growing from an annual
contribution of $6M to
approximately $12.8M citywide in
5 years
• Deferred and ongoing maintenance of
City’s infrastructure
40 Updates to the
City Manager’s
Proposed
Budget
41 • Public Facilities DIF Fund
Include the Feasibility Study for the Police Department substation based on a Council referral received in
March 2025
• Increase the CIP budget by $300,000 utilizing
available fund balance
• General Fund
Unfreeze 1.0 Administrative Secretary position in the
City Council Department to provide administrative
support
• Personnel Services $ 107,927
• Salary Savings $(107,927)
• Total Costs $ -
Next Steps
42 MAY 20
City Council public hearing and
adoption of FY 2025-26 Proposed
Budget and Capital Improvement
Program Budget
Additional comments can be
submitted on the City’s website
(Chulavistaca.gov/budget)
Fiscal Year 2025-26
Priorities from Strategic Plan
Planning for Measure P 2.0
Recommended Action
43 Approve the “Resolution of the City Council/Successor Agency to the Redevelopment Agency /Housing Authority of the City of Chula Vista accepting the City Manager’s Proposed Operating and Capital Improvement Budgets for Fiscal Year 2025-26 for each agency as their Proposed Budgets, respectively, and setting the time and place for a public hearing for final consideration and adoption of the same” on May 20, 2025.