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May 5, 2026
ITEM TITLE
Annual Budget: Hear the Presentation of the City Manager’s Proposed Budget for Fiscal Year 202 6-27, Consider Acceptance of the Proposed Budget, and Set a Public Hearing for Final Consideration and Adoption Report Number: 26-0066
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
City Council/Successor Agency to the Redevelopment Agency/Housing Aut hority hear the presentation, make necessary revisions to the proposed budgets, as appropriate, and adopt the resolution accepting the City Manager’s proposed budgets for each agency as their proposed budgets, respectively, and set a public hearing for final consideration and adoption of the budgets on May 19, 2026.
SUMMARY
In accordance with the City Charter, the City Manager has submitted the proposed budget for the upcoming fiscal year to the City Council at least 35 days prior to the beginning of fiscal year 2026-27. Staff recommends that the Council/Successor Agency/Housing Authority hear the presentation, provide comments, and propose changes (if any). If City Council is prepared to approve the budget, with or without modifications, as the Cit y Council Proposed Budget, the City Council/Successor Agency/Housing Authority may adopt the resolution and set the time and place for a public hearing for final consideration and adoption of the budget.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a government al fiscal/administrative P a g e | 2
activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
COMMUNITY ENGAGEMENT
Community engagement efforts for this item included: public outreach through social media channels, which advertised City budget meetings an d an online budget survey; citywide Communication Connection newsletters highlighting key financial information; City staff hosting community budget meetings; and an online budget survey. Public comments c ould also be submitted on the development of the budget via a Budget Comment Form on the City’s website, which is available on a continuous basis.
To help inform budget priorities and better understand what services matter most to the community, an anonymous online public survey titled “Budget Development for Fiscal Year 2026 -27” was conducted from February 16, 2026 to March 12, 2026 via the City’s Community Voices portal. The survey was designed to be accessible and user -friendly, allowing residents to provide feedback while also learning about the City’s budget framework. Three hundred and three individuals responded, generating 7,348 responses and 254 written comments, reflecting increased community engagement. Respondents were primarily City residents and represented a range of geographic areas and demographic groups. Results indicate that participants place a high priority on public safety, economic development and public parks . While participants viewed the survey as a positive tool for community involvement, the results also underscore the need to expand public education on the budget development process and enhance community engagement, a priority that will continue to guide the Finance Department ’s work for the fiscal year 2027 -28 budget development process.
Three Community Budget Presentation meetings were held to discuss the fiscal year 2026-27 budget with the community: April 15 th at Civic Library , April 22 nd at Otay Ranch Library , and May 4 th at Norman Park Senior Center. Staff presented an overview of the City’s annual budget development process; preliminary information on the fiscal year 2026 -27 budgeted General Fund revenues and expenditures; highlights for other major funds; and information on the fiscal year 2026-27 Capital Improvement Program (CIP) budget.
Community feedback received through these engagement efforts was considered in the development of the City Manager’s Proposed Budget for fiscal year 2026 -27 and is reflected in the recommendation presented to the City Council.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
On April 9, 202 6, the Measure A Citizens’ Oversight Committee (COC) affirmed that the City Manager’s Proposed Budget for fiscal year 2026-27 for the Measure A Sales Tax Fund was in compliance with the City’s approved Intended Public Safety Expenditure Plan.
On April 16, 2026, the Park and Recreation Commission was presented the City Manager’s Proposed Budget for fiscal year 2026-27 for the Parks and Recreation Department.
As of the publication of this item, the Measure P Citizens’ Oversight Committee (COC) has been unable to convene a quorum to affirm that the City Manager’s Proposed Budget for fiscal year 2026–27 for the Measure P Sales Tax Fund is in compliance with the City’s approved Infrastructure, Facilities, and Equipment P a g e | 3
Expenditure Plan. Staff is currently working to identify a meeting date to obtain COC approval prior to the Council’s adoption of the fiscal year 2026–27 budget.
DISCUSSION
In accordance with the City Charter, the City Manager has submitted the proposed budget for the upcoming fiscal year to the City Council at least 35 days prior to the beginning of fiscal year 2026-27. The City Manager has prepared and provided the proposed operating and capital improvement budgets to the City Council and has also prepared the proposed budgets for the Successor Ag ency to the Redevelopment Agency and the Housing Authority, and presented them to their respective governing bodies, for fiscal year 202 6-27. The City Manager’s Proposed Budget for fiscal year 2026-27 has been made available on the City’s website and a hard copy of the document is available for public review at the City Clerk’s Office. Staff is now seeking City Council input on the City Manager’s Proposed Budget for fiscal year 2026-27.
Once Council has approved the City Manager’s Proposed Budget for fis cal year 2026-27 as its own, with or without changes, staff will make the City Council’s Proposed Budget for fiscal year 202 6-27 available for public review by publishing the budget on the City’s website and making a copy available at the City Clerk’s Office at least ten days prior to the public hearing. If Council chooses to adopt the resolution, the publi c hearing for the final consideration and adoption of the budget will be held on May 19, 2026.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current-year fiscal impact as a result of this action.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact as a result of the City Council accepting the City Manager’s Proposed Budget fiscal year 2026-27 as its own.
With approval of the resolution, City Council will set the time and date for the final consideration and adoption of the fiscal year 2026-27 Proposed Budget on May 19, 2026.
ATTACHMENTS
1. Fiscal Year 2026-27 City Manager’s Proposed Budget
Staff Contacts: Adrian Del Rio, Director of Finance/Treasurer Ed Prendell, Budget and Analysis Manager