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First Quarter Report
Quarter Ending September 30, 2025
INTRODUCTION
Chula Vista City Council adopted the fiscal year 2025-26 budget on May 20, 2025. The Finance Department, in collaboration with other City departments, prepares quarterly financial reports for the General Fund that reflect budget to actual comparisons, projected revenues and expenditures, and highlight ma jor variances that may require additional action or changes to the Amended Budget. Per Section 505 (f) of the City Charter, the Director of Finance has prepared and submitted the quarterly financial report for the quarter ended September 30, 2025 (First Qu arter Report) through the City Manager.
The First Quarter Report is developed using three months of actual financial activity for fiscal year 2025-26 as of September 30, 2025. The data in this report is the most current data available; however, due to th e limited data available, in -depth year -end projections for departmental revenues and expenditures are not included in this report but will be provided in future quarterly financial reports. The focus instead is on the General Fund’s major revenues, as well as any known significant expenditure budget adjustments. As a result of the limited information, the projections are likely to change as the year progresses.
The First Quarter Report provides summary information for the following areas:
Current economic environment
Overview of the General Fund
Details on major General Fund revenues and expenditure categories Discussion on significant General Fund revenue and expenditure variances Recommended budget adjustments to General Fund, Other Funds, and Capital Improvement Project expenditure budgets
The Finance Department will continue to monitor the City’s actual revenues and expenditures and will provide updated projections in subsequent quarterly financial reports.
ECONOMIC OVERVIEW
City staff reviewed information from federal data (U.S. Bureaus of Economic Analysis, Labor Statistics; Federal Reserve; U.S. Treasury), the quarterly UCLA Anderson Economic Outlooks, HdL (City sales tax consultant), the San Diego Tourism Authority, and ot her sources to develop the economic assumptions and growth rates included in the First Quarter Report.
Highlights – National
The UCLA Anderson Forecast for Fall 2025 reports persistent weakness in the U.S. economy in the
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near-term based on declines in e mployment, increases in inflation, and slowing GDP growth. 1 The unprecedented uncertainty surrounding trade policies, new technology investments, and political pressures pose significant risks to their Forecast and its conclusion for a gradual economic recovery starting in mid-2026.1
Unemployment
While the labor market remains strong with a relatively low national unemployment rate of 4.3%, signs of weakness are becoming more apparent in the decline in labor supply affected by restrictive immigration policies and more baby boomers reaching retirement age. 2 Additionally, jobs gains in recent months have slowed and concentrated to just a few sectors. 2 The Forecast expects the labor market to mildly weaken through 2025 through mid-year 2026, recovering through the end of 2026 and in 2027 as tariff effects are normalized and stimulus actions are enacted.1
Inflation
Despite periods of trending downward in 2025, inflation began rising since May and continues to be elevated.3 The seasonally adjusted annual rate of Consumer Price Index was 3.0% in September, the highest since January.4 The Forecast predicts inflation will continue to rise through 2025 as tariff impacts further hit durable goods and services, peak at 3.6% in early 2026, and then begin to moderate.1
Interest Rates
The Federal Open Market Committee (FOMC), part of the Federal Reserve, is committed to Congress’s mandate to promote maximum employment, stable prices (i.e., limited inflation), and moderate long -term interest rates. Reporting that job gains have slowed this year and unemployment remaining low but rising, in its latest meeting in October 2025, the Federal Reserve lowered the federal funds target range by one -quarter (1/4) of a percentage point to 3 -3/4 to 4 percent.5 This change in the rate is aimed to shift stimulate the economy by reducing unemployment levels by lowering the cost of borrowing for consumers and businesses.
The “federal funds rate” established by the FOMC sets the interest rate at which banks lend money to other banks to maintain overnight reserves of funds. When the federal funds rate increases, the cost to banks for lending increases and passed on to businesses and consumers on other borrowing, such as for business investments, credit cards, cars, mortgages and other bank loans. Interest rate fluctuations impact the City’s finances by affecting borrowing costs for capital projects and long - term investments; private investments growth; and investment returns on its cash balances.
Real Gross Domestic Product (GDP)
1 UCLA Anderson School of Management. Weakness Persists in U.S. and California Economies, with Recovery Not Expected Until 2026. 1 Oct. 2025. UCLA Anderson Forecast. 2 U.S. Bureau of Labor Statistics. Economic News Release: Employment Situation Summary. Aug. 2025. US Bureau of Labor Statistics.
3 U.S. Bureau of Labor Statistics. 12-month percentage change, Consumer Price Index, selected categories. U.S. Bureau of Labor Statistics.
4 U.S. Bureau of Labor Statistics. Consumer Price Index – September 2025. 24 Oct. 2025. U.S. Bureau of Labor Statistics. 5 Federal Open Market Committee. Press Release: Federal Reserve issues FMOC statement. 29 Oct. 2025. Federal Open Market Committee.
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The chart below from the U.S. Bureau of Economic Analysis displays recent quarterly results of real GDP, a measure of the value of all goods and services produced in a country over a p eriod of time (adjusted for inflation), which is an economic indicator of growth. In the second quarter (Q2) of 2025, real GDP grew at an annualized rate of 3.8%, rebounding from a 0.6% decline in the first quarter (Q1).6 Continued positive growth each quarter generally allays economists’ concerns that a recession is forthcoming. The Q2 results reflect strong business investment and consumer spending despite persistent inflationary pressures and labor market softness. 7 The Federal Reserve will be closely monitoring this relatively positive economic growth in its policy decisions to reduce inflation.
GDP: Percent Change from Preceding Quarter6
The UCLA Anderson Fall 2025 Forecast predicts GDP growth to slow in 2025 to below 1% by the end of 2025 because of the impacts from tariffs, immigration policy and economic uncertainty, followed by a recovery to 2% by the end of 2026 as the fiscal and monetary stimulus kick in.8
Highlights – California
The UCLA Anderson Fall 2025 Forecast for California highlighted the economic implications of state bills, including: redistricting, emi ssions cap and trade bills, CEQA streamlining development, and film and TV tax credits all affecting business decisions in hiring and investments. 8 However, the California spending reductions outlined by the Legislative Analyst Office indicate future budget problems will offset some of the expansionary effects of these bills.9
6 U.S. Bureau of Economic Analysis. Gross Domestic Product, 2 nd Quarter 2025 (Third Estimate), GDP by Industry, Corporate Profits (Revised), and Annual Update. U.S. Bureau of Economic Analysis. 7 Reuters. US economy notches fastest growth pace in nearly two years in second quarter. 25 Sept. 2025. Reuters. 8 UCLA Anderson. A Summer of Inflection Points: Fall 2025 U.S. Economic Outlook. [Webinar]. 1 Oct. 2025. UCLA Anderson.
9 California Legislative Analyst’s Office. The 2025-26 Multiyear Budget Outlook. 24 May 2025. California Legislative Analyst's Office.
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The latest state employment reports, showing a 5.5% unemployment rate demonstrate a shrinking of the labor force and contraction in the California economy, particularly in the once -strong technology sector, durable goods manufacturing, entertainment and logistics sectors. 10 Some factors impacting California labor include changes in H -1B visas and artificial intelligence (AI) development in the technology sector and a general decline in manufacturing. National immigration policies also exhibiting impacts on the non-durable goods (food) and agriculture sectors.
Overall, California’s economic growth is projected to remain slower than that of the United States as a whole through 2025 and 2026, with potential improvement beginning in 2027 as conditions in the technology sector strengthen. The outlook for the state’s economy remains su bject to several uncertainties, including federal immigration policies and associated deportations, the scope and impact of tariffs and related trade responses and the pace and practical application of artificial intelligence technologies.8
This space is intentionally left blank.
10 California Employment Development Department. Unemployment Rate Remains Steady at 5.5 Percent. 19 Sept. 2025. California Employment Development Department.
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GENERAL FUND OVERVIEW
General Fund revenues are projected to be lower than the Amended Budget by $ 0.6 million, and expenditures are projected to exceed the Amended Budget by $1.1 million. Staff anticipates major revenues to come in lower than budget by $1.6 million and other revenues to exceed the Amended Budget by $1.0 million , detailed in the General Fund Revenues section. As stated earlier , the First Quarter report only includes projections resulting from General Fund’s Major Revenues, as well as any known significant expenditure budget adjustments. In-depth year -end projections for departmental revenues and expenditures will be included in future quarterly financial reports as additional financial data becomes available.
Fiscal Year 2025-26 General Fund Overview
Table 1 in millions
Adopted Budget Amended
Budget
Year-end
Projection Variance¹
Revenue Source
Major Revenues
Property Tax $ 58.4 $ 58.4 $ 58.0 $ (0.5) Property Tax in lieu of VLF 33.5 33.5 33.6 0.1 Sales Tax 51.2 51.2 51.2 - Measure P Sales Tax 30.8 30.8 30.8 - Measure A Sales Tax 30.8 30.8 30.8 - Franchise Fees 15.4 15.4 15.7 0.3 Transient Occupancy Tax 21.7 21.7 20.1 (1.6) Utility Users Tax 3.7 3.7 3.7 0.1 Major Revenues Subtotal 245.6 245.6 244.0 (1.6) Other General Fund Revenues
Other Revenues 60.0 60.0 61.0 1.0 Other General Fund Revenues Subtotal 60.0 60.0 61.0 1.0
Total Revenues/Sources $ 305.6 $ 305.6 $ 305.0 $ (0.6) Expenditures
Personnel Services $ 161.8 $ 162.0 $ 161.9 $ 0.1
Non-Personnel
Supplies and Services 28.6 32.3 33.4 (1.1) Other Expenses 2.7 6.3 3.3 3.0 Transfers Out 100.0 100.0 103.0 (3.0) Internal Services 4.6 4.6 4.6 - Utilities 7.7 7.7 7.7 - Other Expenditures Category² 0.2 0.4 0.4 - Non-Personnel Subtotal 143.8 151.3 152.5 (1.1)
Total Expenditures $ 305.6 $ 313.3 $ 314.4 $ (1.1)
Use of Prior Year Fund Balance $ - $ (7.7) $ (7.7) $ -
Total General Fund Surplus/(Deficit) $ - $ - $ (1.6) $ 1.6 1 Variance compares the Amended Budget and the Year-End Projection. 2 Other Expenditures Category includes: Other Capital, Non-CIP Projects Expenditures and CIP Project Expenditures. *Tables may not tie due to rounding
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GENERAL FUND REVENUES
As identified in Table 1 above, the City’s General Fund revenues are projected to be lower than the Amended Budget by approximately $ 0.6 million. This is primarily due to a shortfall in Transient Occupancy Tax (TOT) of $1.6 million reflecting a delay in the anticipated opening of two hotels, now expected to begin operations next fiscal year instead of fiscal year 2026, along with updated revenue assumptions informed by actual receipts in fiscal year 2024 –25. Franchise Fees, Property Tax in Lieu of VLF, Utility Users’ Tax and Other Revenues are projected to exceed the Amended Budget by approximately $1.5 million combined.
Fiscal Year 2025-26 General Fund Overview
Table 2 in millions
Revenue Source Adopted
Budget
Amended
Budget
Year-end
Projection Variance¹
Major Revenues
Property Tax $ 58.4 $ 58.4 $ 58.0 $ (0.5) Property Tax in lieu of VLF 33.5 33.5 33.6 0.1
Sales Tax 51.2 51.2 51.2 -
Measure P Sales Tax 30.8 30.8 30.8 -
Measure A Sales Tax 30.8 30.8 30.8 -
Franchise Fees 15.4 15.4 15.7 0.3
Transient Occupancy Tax 21.7 21.7 20.1 (1.6)
Utility Users’ Tax 3.7 3.7 3.7 0.1
Major Revenues Subtotal 245.6 245.6 244.0 (1.6)
Other General Fund Revenues
Other Revenues 60.0 60.0 61.0 1.0
Other General Fund Revenues Subtotal 60.0 60.0 61.0 1.0 Total General Fund Revenues Surplus/(Deficit) $ 305.6 $ 305.6 $ 305.0 $ (0.6)
Property Tax
Property tax revenue derived from ad valorem taxes on real property and tangible personal property within the City boundaries. Property tax is administered by the County of San Diego and is limited by Proposition 13 to a general rate of 1% of assessed value. Currently, the City receives approximately 12. 4% of property taxes revenues assessed for Chula Vista properties.
Property tax is the City’s largest revenue source, representing 19.1% of General Fund revenues in the Adopted Budget. Property tax is projected to be $58.0 million, a $0.5 million decrease compared to the Adopted Budget. Projected property tax revenues include adjustments for the major property addition of the Gaylord Pacific Resort and Convention Center, however, are slightly decreased based on final updates to the assessed value from the County Assessor.
Based on the Zillow Home Value Index - September 2025, Chula Vista’s median home price for a single-family home was $875,384, a 2% year -over-year decline. A cooling trend in the housing market is apparent, with declines in sales across the San Diego region. Buyer enthusiasm has waned due to affordability constraints and mortgage rates remaining high despite recent Fede ral Reserve interest cuts. A slowdown in home sales will have some degree of impact on the growth of property
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taxes in the City as homes are typically reassessed at higher values upon major construction/improvements or sale, with home prices generally increasing over time. Property tax growth is otherwise limited by the cap on Proposition 13 on assessed value growth to the lesser of the California Consumer Price Index (CPI) or 2%.
Source: Chula Vista Zillow Home Values Index (https://www.zillow.com/home-values/51405/chula-vista-ca/)
Property Tax in Lieu of VLF
Vehicle License Fees (VLF) revenues are generated from vehicle license fees paid with vehicle registrations with the State of California and then allocated to cities and counties. VLF fluctuate with changes in assessed values within the City.
Property tax in lieu of VLF is projected to be $33.6 million, a $0.1 million increase compared to the Adopted Budget. Projections for fiscal year 2026 are based on updated information from the County, a 6.5% increase compared to fiscal year 2025 actual revenues.
Sales Tax
The Bradley -Burns Uniform Local Sales and Use Tax (Sales Tax) tax revenue is generated from a percentage tax imposed on the sale of retail goods and services that occur within the City of Chula Vista. Sales tax revenue is highly sensitive to economic conditions and reflects the factors that drive taxable sales, including levels of unemployment, consumer confidence, per-capita income, and business investment. The total citywide sales tax rate is 8.75%, of which the City’s General Fund receives 1.0% of all taxable sales transactions within the City, not including the additional voter-approved sales taxes for Measure P and A.
Sales tax revenue represents the second largest General Fund revenue source, representing 16.8% of the General Fund revenues in the Adopted Budget . Sales tax is projected to be $51.2 million , resulting in no change when compared to the Adopted Budget.
Chula Vista’s largest economic segments include general consumer goods, state & county pools (sales tax revenues from transaction with no specific place of sale, allocated to local jurisdictions on a proportional basis), restaurants & hotels and autos & transportation. Combined, these categories account for approximately 76% of total sales tax revenues. Recent data for the first fiscal year quarter of 2026 indicate a 2.9% increase in taxable sales compared to the same quarter of 2025. As $400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Sept.
2019
Sept.
2020
Sept.
2021
Sept.
2022
Sept.
2023
Sept.
2024
Sept.
2025
Median Home Price
Chula Vista Single Family Homes
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a result, fiscal year 2026 sales tax revenue is expected to remain consistent with the Adopted Budget projection of $51.2 million. The opening of the Gaylord Pacific Resort and Convention Center on May 15, 2025, is anticipated to generate a boost in sales tax revenue from visitor spending beyond the Gaylord property, as guests venture into surrounding areas and contribute to broader local retail and dining activity.
While the development of the Adopted Budget assumed continued stable employ ment rates and consumer confidence indicators, it did not anticipate the continuing fluctuations in consumer behavior and general economic uncertainty. The City’s largest sector, general consumer goods, showed a slight increase in sales tax revenue compare d to the first quarter in 2025; however, the City remains mindful of recent decreases in consumer confidence. Primary economic indicators that drive consumer spending and growth in sales tax receipts include the unemployment rate and consumer confidence. D espite these headwinds, solid activity from local restaurants, including quick-service and fast-causal establishments has remained resilient.
Sales tax revenue will continue to be closely monitored and updated in the Second Quarter Report to account for any changes in spending trends or other economic indicators impacting sales tax receipts.
Measure P Sales Tax - Voters approved Measure P in November 2016 as a temporary, ten - year, half-cent sales tax dedicated to addressing high -priority deferred maintenance needs.
In 2024, voters approved the continuation of Measure P through 2037. While the revenue generated from the Measure P sales tax is collected in the General Fund, the General Fund transfers this revenue to the Measure P Sales Tax Fund for accountability and transparency in the usage of these funds. These actions result in an overall net zero impact to the General Fund. Measure P sales tax is projected to be $30.8 million , resulting in no change when compared to the Adopted Budget.
Measure A Sales Tax - Voters approved Measure A in June 2018, established as a permanent half-cent sales tax to fund critical p ublic safety needs and enhance staffing levels. Similar to Measure P sales tax, revenue is collected and tracked within the General Fund, and transfer to the Measure A Sales Tax Fund for accountability and transparency in the usage of these funds. Separate accounts (one for the Fire department and one for the Police department) were established to support the monitoring and allocation of these funds. These actions result in an overall net zero impact to the General Fund. Measure A sales tax is projected t o be $30.8 million, resulting in no change when compared to the Adopted Budget.
Franchise Fees
Franchise fee revenues are generated from agreements with private utility companies in exchange for use of the City’s rights -of-way. The fee compensates the City for the use of its property, such as its streets. Franchise fees are collected from three primary sources: San Diego Gas & Electric (SDG&E) (2% on gas and 1.25% on electricity), Republic Services trash collection franchises (20% fee), and AT&T and Cox Communications cable franchises (5% fee).
Franchise fee revenue is projected to be $15.4 million, a $0.3 million increase compared to the Adopted Budget. The change is largely due to an increase in trash collection revenue from Republic
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Services, the c ity’s waste services provider. SDG&E franchise revenues remain static, while cable franchise revenues are down . The decrease represents the number of subscription service subscribers for cable television providers (premium video, equipment rental, on -demand, and programming services) as more customers continue to move to streaming services.
Transient Occupancy Tax
Transient Occupancy Tax (TOT) is a tax imposed on occupants of hotel and motel rooms, short-term rentals, and RV parks within the City. The current TOT tax rate in the City is 10%. Major economic drivers for TOT revenue include room rates, average occupancy rates, and seasonal and non -seasonal tourism. The City of Chula Vista has experienced strong growth in TOT in recent years with a number of new hotel developments on both the west and eastern portions of the City as well as an expansion of the short -term rentals compliance program.
Additionally, it is important to note that the TOT revenue generated fr om the RV Park and the Gaylord Pacific Resort & Convention Center in the Bayfront area is transferred out from the General Fund to a separate fund as part of the contractual requirements for the Gaylord Pacific Resort & Convention Center project.
TOT revenue is projected to be $21.7 million , a decrease of $1.6 million compared to the Adopted Budget. The projection reflects a delay in the anticipated opening of two hotels, now expected to begin operations next fiscal year instead of fiscal year 2025 -26, along with updated revenue assumptions informed by actual receipts in fiscal year 2024–25. Together, these changes result in a lower estimated growth rate compared to the Adopted Budget assumptions.
Utility Users’ Tax
Utility User’s Tax (UUT) is a local excise tax imposed on the consumption of utility services by residents and businesses. Specifically, the City imposes a UUT on the use of telecommunications (cable, telephone) at the rate of 4.75% of gross receipts and UUT on natural gas services of $0.00919 per therm and $0.00250 per kilowatt on electricity services, which equates to approximately a 1% tax. UUT is collected by utility companies as part of its regular billing and then remit to the City.
UUT is projected to be $3.7 million, a $0.1 million increase compared to the Adopted Budget. While some modest growth is anticipated in revenues from the natural gas and electricity utilities based upon population growth and the increases in utility prices, adoption of solar energy and conservations efforts suggest a decline in consumption of those utilities which reduce revenues.
Additionally, consumption of telecommunications utilities is also expected to continue to decline due to changes in technology and consumer preferences.
Other Revenues
Other Revenues include the following revenue categories: Charges for Services, Federal Revenue, Fines and Penalties, Licenses & Permits, Other Revenue, State Revenue, Transfers In and Use of Money/Property. As stated earlier, Other Revenues category is anticipated to exceed the Adopted Budget by $1.0 million. The increase is primarily due to new program revenue in the Economic Development Department for the Bayfront Shuttle Program that was not included in the Adopted Budget due to the timing of the contract occurring after the release of the Adopted Budget (this is offset by an increase in expenditures, resulting in no net fiscal impact) . State Revenues category reflects a variance of $0.1 million attributed to actuals received for VLF in excess from the St ate
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Controller’s Office. The Transfers In category reflects a decrease of $0.1 million in the Information Technology department for staff time reimbursements due to the expiration of a grant. Detailed departmental revenue projections will be provided for the Second Quarter Financial Report.
Fiscal Year 2025-26 General Fund Overview
Table 3 in millions
Revenue Source Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Other Revenues
Charges for Services $ 13.6 $ 13.6 $ 13.6 $ - Federal Revenue 0.5 0.5 0.5 - Fines and Penalties 1.1 1.1 1.1 -
Licenses & Permits 2.0 2.0 2.0 - Other Revenue 20.7 20.7 21.8 1.0 State Revenue 1.4 1.4 1.4 0.1 Transfers In 15.0 15.0 14.9 (0.1) Use Money/Property 5.6 5.6 5.6 - Total Other Revenues $ 60.0 $ 60.0 $ 61.0 $ 1.0
Departmental Revenues
Table 4 below provides the Amended General Fund revenues budget, projected year-end revenues, and the variance (difference) between both at the department level.
Fiscal Year 2025-26 General Fund Departmental Revenues
Table 4 in thousands
Department Amended
Budget
Year-end
Projection Variance
City Clerk $ 65.6 $ 67.5 $ 1.9 City Attorney 439.0 440.8 1.8 Administration 167.7 168.8 1.1 Information Technology 336.0 249.6 (86.4) Human Resources 1,595.4 1,595.4 - Finance 1,203.3 1,211.7 8.4 Non-Departmental 17,860.4 17,940.2 79.8 Animal Care Facility 1,090.3 1,091.8 1.5
Economic Development 573.0 1,587.8 1,014.8 Development Services 2,264.9 2,251.3 (13.6) Engineering/Capital Projects 8,579.3 8,579.3 - Police 6,318.5 6,318.5 - Fire 5,553.4 5,553.4 - Public Works 9,097.9 9,101.2 3.3 Parks and Recreation 4,272.4 4,272.4 - Library 585.2 585.2 - Total Departmental Revenue $ 60,002.4 $ 61,014.9 $ 1,012.6
This section documents the justifications for significant budget variances with an anticipated impact greater than $250,000. The largest variance is in the Economic Development Department.
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Economic Development – Increase of $1.0 million due to additional program reve nue from the Metropolitan Transit System (MTS) for the Bayfront Shuttle Program. These revenues were not included in the Adopted Budget due to timing of the contract and are offset by expenditures in Supplies and Services.
GENERAL FUND EXPENDITURES
General Fund expenditures are projected to exceed the Amended Budget by $1.1 million. As stated earlier, the First Quarter Report projections only reflect known significant expenditure budget adjustments. More comprehensive year -end projections for depart mental revenues and expenditures will be presented in subsequent quarterly reports as additional financial data becomes available.
Fiscal Year 2025-26 General Fund Overview
Table 5 in millions
Expenditures Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Personnel Services $ 161.8 $ 162.0 $ 161.9 $ 0.1 Non-Personnel
Supplies and Services 28.6 32.3 33.4 (1.1) Other Expenses 2.7 6.3 3.3 3.0
Transfers Out 100.0 100.0 103.0 (3.0) Internal Services 4.6 4.6 4.6 - Utilities 7.7 7.7 7.7 - Other Expenditures Category 0.2 0.4 0.4 - Non-Personnel Subtotal 143.8 151.3 152.5 (1.1)
Total Expenditures $ 305.6 $ 313.3 $ 314.4 $ (1.1)
Personnel Services
Preliminary projections for Personnel Services are anticipated to be lower than the Amended Budget by $0.1 million . Projections include a nticipated savings in the Information Technology Department offset by an expected overage Supplies & Services category for contractual services.
Fiscal Year 2025-26 General Fund Overview
Table 6 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Personnel Services
Salary $ 103.7 $ 104.0 $ 103.9 (0.1) Hourly 4.5 4.5 4.5 -
Overtime 10.9 10.9 10.9 - PERS 16.3 16.3 16.3 -
FLEX 15.9 15.9 15.9 -
Other Personnel 10.5 10.5 10.5 - Total Personnel Services $ 161.8 $ 162.0 $ 161.9 $ (0.1)
Supplies and Services
The Supplies and Services category is anticipated to exceed the Amended Budget by $1.1, primarily
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due to a budget adjustment for the Bayfront Shuttle Program, discussed earlier in the report.
Fiscal Year 2025-26 General Fund Overview
Table 7 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Supplies and Services $ 28.6 $ 32.3 $ 33.4 $ 1.1 Total Supplies and Services $ 28.6 $ 32.3 $ 33.4 $ 1.1
Other Expenses
The Other Expenses category includes a wide variety of relatively minor costs of the General Fund, such as sales tax administration costs, small tools, credit card transaction fees and bank charges, and reimbursements to other agencies. The Other Expenses category is projected to be $3.0 million below the Amended Budget. This variance is primarily due to an anticipated public liability expenditure that was originally anticipated to occur within the Other Expenses category but is now expected to be recorded as a Transfer Out from the General Fund to the Public Liability Fund.
Fiscal Year 2025-26 General Fund Overview
Table 8 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Other Expenses $ 2.7 $ 6.3 $ 3.3 $ (3.0) Total Other Expenses $ 2.7 $ 6.3 $ 3.3 $ (3.0)
Transfers Out
The Transfers Out category represents authorized transfers of cash between City funds and is projected to exceed the Amended Budget by $3.0 million. As noted above, this variance corresponds to the reclassification of the anticipated public liability payment from the Other Expenses category to the Transfers Out category, aligning the expenditure with its proper accounting treatment.
Fiscal Year 2025-26 General Fund Overview
Table 9 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Transfers Out $ 100.0 $ 100.0 $ 103.0 $ 3.0 Total Transfers Out $ 100.0 $ 100.0 $ 103.0 $ 3.0
Internal Services
Expenditures in this category are for vehicle maintenance charges associated with the use of City vehicles and equipment. These charges are based on the actual vehicles that reside within a department and include costs ranging from routine maintenance (oil changes, preventive maintenance) to major repairs (transmission repair, accident repair), as well as fuel costs. Internal services are projected to remain at budget through fiscal year end.
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Fiscal Year 2025-26 General Fund Overview
Table 10 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Internal Services $ 4.6 $ 4.6 $ 4.6 $ - Total Internal Services $ 4.6 $ 4.6 $ 4.6 $ -
Utilities
The Utilities category is currently projected to be at budget. Detailed projections will be provided in subsequent quarterly financial reports.
Fiscal Year 2025-26 General Fund Overview
Table 11 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Utilities $ 7.7 $ 7.7 $ 7.7 $ - Total Utilities $ 7.7 $ 7.7 $ 7.7 $ -
Other Expenditures Category
The Other Expenditures Category is comprised of Other Capital, Non-CIP Projects Expenditures and CIP Project Expenditures budget categories. The Other Expenditures Category is currently projected consistent with the Amended Budget.
Fiscal Year 2025-26 General Fund Overview
Table 12 in millions
Expenditure Category Adopted
Budget
Amended
Budget
Year-end
Projection Variance
Other Expenditures Category $ 0.2 $ 0.4 $ 0.4 $ - Total Other Expenditures $ 0.2 $ 0.4 $ 0.4 $ -
Departmental Expenditures
Table 13 below provides the Amended General Fund expenditure budget, projected year -end expenditures, and the variance (difference) between both at the department level.
Fiscal Year 2025-26 General Fund Departmental Expenditures Table 13 in thousands
Department Amended
Budget
Year-end
Projection Variance
City Council $ 1,873.4 $ 1,873.4 $ - Boards & Commissions 2.1 2.1 - City Clerk 2,273.9 2,273.9 - City Attorney 4,111.4 4,111.4 - Administration 3,284.6 3,284.6 - Information Technology 5,211.9 5,238.6 (26.7) Human Resources 4,181.6 4,181.6 - Finance 5,785.7 5,785.7 - Non-Departmental 119,421.4 119,380.1 41.4 Animal Care Facility 4,022.9 4,022.9 - Economic Development 764.6 1,834.7 (1,070.2)
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Department Amended
Budget
Year-end
Projection Variance
Development Services 3,333.4 3,333.4 - Engineering/Capital Projects 11,815.4 11,815.4 - Police 66,284.0 66,284.0 - Fire 41,467.0 41,467.0 - Public Works 28,230.6 28,230.6 - Parks and Recreation 6,636.9 6,636.9 - Library 4,627.0 4,627.0 - Total Expenditure Budget $ 313,327.7 $ 314,383.2 $ (1,055.5)
This section documents the justifications for significant budget variances with an anticipated impact greater than $250,000. The largest variance is in the Economic Development Department.
Economic Development – Increase of $1. 1 million due to additional program expenses for the Bayfront Shuttle Program offset by an i ncrease of $1.0 million of program revenue from the Metropolitan Transit System (MTS). These expenditures were not included in the Adopted Budget due to timing of the contract.
FISCAL YEAR 2025-26 BUDGET ADJUSTMENTS
General Fund Budget Adjustments
In the General Fund, some of the transfers are between expense categories within the same Department and some transfers are between Departments. There are also proposed budget adjustments reflecting increased revenues and increased expenditures where need ed to address unanticipated expenditure category overages and ensure accurate year -end reporting. The recommended budget adjustments are shown in the table below.
Table 14
Department Personnel Non-Personnel Total Total
Services Expenditures Expenditures Revenue Net Impact
City Council $ 14,640 $ - $ 14,640 $ - $ 14,640 Information Technology (94,380) 121,094 26,714 - 26,714 Non-Departmental - (41,354) (41,354) - (41,354) Economic Development - 1,070,160 1,070,160 (1,070,160) 1,070,160 Total General Fund $ (79,740) $ 1,149,900 $ 1,070,160 $ (1,070,160) $ -
City Council: Increase to Personnel Services appropriations of $14,640 for anticipated expenditures omitted from the Adopted Budget.
Information Technology: Transfer of appropriations from Personnel to Non-Personnel Expenditures for contractual services of $94,380 and an additional increase in Non -Personnel Expenditures appropriations of $26,714 for Canva graphic design licenses.
Non-Departmental: Reduction to appropriations of $41,354 from savings in Supplies & Services.
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Economic Development : Increase to Non -Personnel Expenditures of $1,070,160 fully offset with revenues from the Metropolitan Transit System (MTS) for the Bayfront Shuttle Program that were not included in the Adopted Budget due to timing of the contract.
Other Fund Budget Adjustments
The recommended adjustments for funds outside of the General Fund are included in the table below. The adjustments are offset by additional revenues or the available fund balance of the respective funds.
Table 15
Personnel
Non-
Personnel Total Total
Other Funds Services Expenditures Expenditures Revenue Net Impact Capital Improvement Projects $ - $ 780,266 $ 780,266 $ - $ 780,266 2018 Measure A Sales Tax - 400,000 400,000 - 400,000 Equipment Vehicle Replacement - 335,000 335,000 - 335,000 Parking Meter - 100,000 100,000 - 100,000
CFD 97-1 Otay Ranch* - 60,262 60,262 - 60,262
CFD 98-3 Sunbow 2* - 34,350 34,350 - 34,350
Other Grants 25,000 125,000 150,000 (125,000) 25,000 CFD 13-M Otay Ranch Village 2* - 17,745 17,745 - 17,745 CFD 08M Vlg 6 McMillin & OR* - 15,678 15,678 - 15,678 Sewer Facility Replacement - 14,585 14,585 - 14,585 CFD 99-2 Otay Ranch Vlg 1 West* - 13,002 13,002 - 13,002 CFD 09M ORV II Brookfield-Shea* - 11,195 11,195 - 11,195 CFD 18M Village 3 Otay Ranch* - 9,062 9,062 - 9,062 CFD 07M Eastlake Woods & Vista* - 8,686 8,686 - 8,686 CFD 12-M Otay Ranch Village 7* - 6,724 6,724 - 6,724 CFD 12M Village 7 Otay Ranch* - 5,369 5,369 - 5,369 Open Space District #14* - 4,482 4,482 - 4,482
Open Space District #31* - 4,261 4,261 - 4,261
Eastlake Maintenance Dist I* - 3,654 3,654 - 3,654
Chula Vista Muni Golf Course - 3,246 3,246 - 3,246
Open Space District #18* - 3,053 3,053 - 3,053
Open Space District #10* - 2,397 2,397 - 2,397
CFD 11-M Rolling Hills McM* - 1,847 1,847 - 1,847
Open Space District #05* - 1,437 1,437 - 1,437
CFD 14M-A-EUC Millenia* - 838 838 - 838
CFD 14M-2-EUC Millenia* - 805 805 - 805
Open Space District #06* - 756 756 - 756
Permanent Endowments - 500 500 - 500
CFD 19M Freeway Commercial 2* - 427 427 - 427
2017 CREBs LRBs - - - (780,266) (780,266)
Federal Grants 69,726 165,655 235,381 (549,411) (314,030) Public Liability Trust - 2,827,387 2,827,387 (2,827,387) - State Grants 245,262 667,429 912,691 (912,691) -
Donations - 27,000 27,000 (27,000) -
Local Grants (18,100) - (18,100) 18,100 -
Total Other Funds $ 321,888 $ 5,652,098 $ 5,973,986 $(5,203,655) $ 770,331
Below are additional details of recommended expenditure budget adjustments exceeding $75,000:
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Capital Improvement Projects : Increase to Non -Personnel Expenditures in the Transfers Out category from excess bond proceeds needed to be allocated to the 2017 CREBs LRBs Fund of $780,266.
2018 Measure A Sales Tax : Increase to Non -Personnel Expenditures of $400,000 in the Capital category from available fund balance for the purchase of vehicles. This item was presented to the Measure A Citizen’s Oversight Committee and was found to be in compliance with the Measur e A Expenditure Plan on October 9, 2025.
Equipment Vehicle Replacement: Increase to Non-Personnel Expenditures of $335,000 in the Capital category from available fund balance for the purchase of replacement vehicles.
Parking Meter Fund : Increase to Non -Personnel Expenditures of $100,000 from available fund balance for CIP Project # STL0480 “Third Ave ADA Parking Stalls ” for additional Americans with Disabilities Act (ADA) compliant parking on Third Avenue.
Other Grants – Increase to Personnel and Non-Personnel Expenditures of $150,000 partially funded by increased revenues of $125,000 and from available fund balance for various grants in Animal Services, Library, Public Works and Fire Departments.
2017 CREBs LRBs : Increase to estimated revenues of $780,266 in the Transfers In category for a transfer from the Capital Improvement Projects Fund returning bond proceeds to the bond fund.
Federal Grants : Increase to Personnel and Non -Personnel Expenditures for a total of $235,381, offset with estimated revenues of $549,411 for various grants in the Police Department. Increased revenues include the USDA grant match in the Public Works Department.
Public Liability Trust : Increase to Non -Personnel Expenditures fully offset with an increase of revenues of $2,827,387 resulting from General Fund transfer.
State Grants: Increase to Personnel and Non-Personnel Expenditures fully offset with an increase of revenues of $912,691 for various grants in the Police and Library departments.
Local Grants: Transfer of Non-Personnel Expenditures from the Other Capital category to Supplies and Services of $200,000; and a d ecrease to Personnel expenditures and estimated revenues of $18,100 to align budget to grant award.
Various Community Facilities Districts (CFD) and Open Space Districts (OSD) – Funds listed with an asterisk (*) include an increase in Non-Personnel Expenditures in the Transfers Out Category for a combined total of $206,030 for the USDA grant match in Public Works.
Capital Improvement Project Adjustments
The recommended adjustments for the Cap ital Improvement Project expenditure budgets are included in the table below. The adjustments are offset by additional revenues or the available fund balance of the respective funds.
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Table 16
Fund Project
CIP Project
Expenditures
Total
Expenditures
2016 Measure P Sales Tax GGV0231 – Civic Center & South Libraries $ (500,000) $ (500,000) 2016 Measure P Sales Tax GGV0271 – Civic Ctr Library Infra Renovation 250,000 250,000 2016 Measure P Sales Tax GGV0272 – South Library Infra Renovation 250,000 250,000 2016 Measure P Sales Tax GGV0242 – Fire St 2 Fueling Tank Replace (321,343) (321,343) 2016 Measure P Sales Tax GGV0339 - Fire Facility Repairs 321,343 321,343 Transportation Sales Tax STM0414 – Pavement Major Rehab FY23/24 (200,000) (200,000) Transportation Sales Tax STL0454 – ADA Pedestr Curb Ramps Program FY22 200,000 200,000 Parking Meter STL0480 – Third Ave ADA Parking Stalls 100,000 100,000 Sewer Facility Replacement SWR0308 – Sewer Access Rd Rehab Prog FY18/19 14,585 14,585 Total Amendments $ 114,585 $ 114,585