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totaled $12.5 million (27 percent of the annual budgeted amount). General Fund expenditures totaled $25.1 million (56.2 percent of the annual budgeted amount). As of January 31, 2026, General Fund expenditures exceeded revenues by $12.63 million. As the City Council has previously discussed, the General Fund operates in a deficit cash flow position during the first portion of the fiscal year due to the timing of the receipt of major sources of revenue including property tax, motor vehicle-in-lieu fees and sales tax. During this period, the General Fund relies on the available fund balance and in recent years has also utilized available cash in other funds to temporarily bridge the cash shortage.
Based upon fiscal activities during the first eight months of the fiscal year and information currently available, staff is proposing adjustments to the Fiscal Year 2025-26 General Fund Budget to more closely align the budget with anticipated revenues and expenditures.
GENERAL FUND REVENUE
The Fiscal Year 2025-26 General Fund budget projected revenue of $46.1 million was based upon information available at the time the budget was adopted in June 2025. Based upon actual revenue received as of January 31st and projected revenue for the remaining four months of the fiscal year, staff is recommending adjustments to the General Fund revenue budget which will increase the budgeted revenue by $1.18 million.
The proposed adjustments to General Fund budgeted revenue include:
Taxes and Franchises
The largest source of revenue to the General Fund is sales tax. Sales tax revenue was budgeted at $14 million. Based upon a combination of decreased gas prices, economic factors influencing some buying decisions and business closures, the City’s sales tax consultant has decreased its projection for sales tax revenue by $127,000 to $13.9 million.
Property tax revenue was budgeted at $8.1 million. However, the City’s property tax consultant has lowered its projection for property tax revenue mainly as a result of slowing home sales from high mortgage interest rates. Budgeted revenue is forecasted to decrease $135,000 to $8 million.
Intergovernmental Revenue
The second largest source of General Fund revenue is motor vehicle-in-lieu fees which is paid by Sacramento County in two installments: 50 percent in January and the remaining 50 percent in May of each year. The City has been notified that the Fiscal Year 2025-26 vehicle-in-lieu fee revenue is projected to total $11.97 million which is $19,000 more than the budgeted amount.
Other reimbursement revenues are cost recovery on mandated programs totaling $333,000.
Investment Revenue
Continued interest rates have had a positive impact on General Fund as rates remain above 4% this fiscal year resulting in an increase of $600,000 in projected interest earnings. Interest revenue will continue to be strong due to the interest earned on growing General Fund Reserves.
Other Revenue
In addition, reimbursable revenues totaling $236,000 are included based on expenses by department. These amounts consist of $24,000 from the Police Department, $82,000 from City ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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Clerk's, $83,500 from the General Services Department and $130,000 from Engineering. These reimbursements help offset departmental operating costs and contribute to the overall increase in projected revenue for the fiscal year, resulting in no net fiscal impact.
A summary of General Fund revenues through February 26, 2026, and the recommended budget adjustments are provided below:
FY 2024-25
Actual
FY 2025-26
Adopted
YTD
(01/31/2026)
Year-End
Projection
Projected
Over/(Under)
Budget
Budget
Adjustment
Request
TAXES AND FRANCHISES
Property Tax 7,876,660 8,182,326 - 8,047,022 (135,304) (135,000) Sales and Use Tax 13,778,642 14,028,342 5,592,441 13,901,594 (126,748) (127,000) Utility Users Tax 3,077,576 2,650,000 1,479,472 2,650,000 - Franchise Fees 490,042 617,500 - 617,500 -
Franchise Fees Solid Waste 896,369 650,000 463,005 650,000 - Property Transfer Tax 263,107 245,000 131,779 245,000 - Transient Occupancy Tax 90,445 110,000 48,569 110,000 - Total Taxes and Franchises 26,472,839 26,483,168 7,715,266 26,221,116 (262,052)
LICENSES AND PERMITS
Business License 352,807 300,000 212,298 300,000 -
Building Plan Check 358,591 230,129 209,606 230,129 -
Engineering Fees Private Dev 194,337 15,000 17,074 20,000 5,000 Zone Check 17,849 7,600 10,196 13,000 5,400
Building Permits 1,785,527 983,247 939,264 1,000,000 16,753 Engineering Fees Utilities 347,752 175,000 23,602 175,000 - Tree Permit 1,667 1,500 1,344 1,500 -
Transportation Permits 12,628 12,000 3,946 12,000 -
Records Processing/Strong Motion 4,394 8,315 4,995 8,315 - Other Licenses and Permits 53,204 56,720 26,892 56,720 - Total Licenses and Permits 3,128,756 1,789,511 1,449,217 1,816,664 27,153
FINES AND FORFEITURES
Non-Sufficient Funds Penalty 248 100 244 300 200
Vehicle Fines 131,778 152,000 44,323 152,000 -
Red Light Camera Fines 1,068,370 960,000 419,148 960,000 - Total Fines and Forfeitures 1,200,396 1,112,100 463,715 1,112,300 200
INTERGOVERNMENTAL
State Mandated Reimbursements 482 25,000 161,766 165,000 140,000 140,000 Federal Grants/ Reimbursements - - 192,593 193,000 193,000 193,000 Motor Vehicle-in-Lieu Fee 11,676,534 11,954,753 134,114 11,973,783 19,030 Total Intergovernmental 11,677,016 11,979,753 488,473 12,331,783 352,030
USE OF MONEY
Investment Revenue 2,111,186 1,200,000 1,124,702 1,900,000 700,000 700,000 Total Use of Money 2,111,186 1,200,000 1,124,702 1,900,000 700,000
CHARGES FOR SERVICES
Lease Payments 337,238 337,238 256,985 337,238 -
Administrative Fees 36,304 23,760 12,433 23,760 -
Police - Reimbursement Contract Overtime 145,826 150,000 56,539 150,000 - False Alarm/Alarm Permit Fees 97,946 35,000 - 35,000 -
Vehicle Release / Towing 79,655 80,000 43,912 80,000 -
Event Center Rentals 513,629 500,000 276,499 500,000 -
Planning Fees 46,488 45,000 13,629 45,000 -
Animal Control Fees and Charges 12,895 55,000 381 55,000 - Total Charges for Services 1,269,981 1,225,998 660,377 1,225,998 -
CONTRIBUTIONS
Donations / Sponsorships 27,420 25,000 7,504 25,000 -
Developer Contributions - - - - -
Total Contributions 27,420 25,000 7,504 25,000 -
OTHER
Miscellaneous Revenue 474,677 18,000 33,230 65,000 47,000 45,000 Reimbursement Revenue 219,120 335,000 355,345 654,500 319,500 319,500 Internal Service Fund Charges/Cost Allocations 1,666,448 1,633,240 - 1,633,240 - Recovery of Labor & Benefits - 260,000 104,319 260,000 - Restitution/Public Property Damage Recovery 126,618 26,000 62,325 70,000 44,000 44,000 Police Department Sales 1,550 5,000 3,001 5,000 -
Transfers In - - - -
Total Other 2,488,413 2,277,240 558,219 2,687,740 410,500 Total General Fund Revenue $ 48,376,007 46,092,770 12,467,472 47,320,601 1,227,831 1,179,500
CITY OF CITRUS HEIGHTS
FY 2025-26 General Fund Revenue
As of February 26, 2026
ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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GENERAL FUND EXPENDITURES
The Fiscal Year 2025–26 budget includes General Fund expenditure appropriations of $44.6 million, with $25.1 million (69.9 percent) expended as of February 28, 2026.
Overall expenditures are currently trending below budget. The adopted budget already incorporated a vacancy factor to offset projected salary and benefit savings. Based on year-todate activity, staff anticipates vacancy savings may exceed the budgeted factor; however, as this is the first year implementing the vacancy factor methodology, staff is taking a conservative approach and will provide a more comprehensive update at the Mid-Cycle Budget Report.
At this time, staff is requesting targeted adjustments totaling $522,850 to align expenditures with current operational needs. These adjustments primarily reflect operating expenditure requirements that were not fully known at the time of budget adoption. Of this total, $319,500 consists of reimbursable expenses that will have no net fiscal impact on the General Fund.
Additionally, $106,750 represents one-time increases specific to this fiscal year, while $96,600 reflects ongoing increases that will impact future years.
The Fiscal Year 2025–2026 General Fund Expenditures table that follows includes a column titled “Budget Adjustment.” This column reflects the net impact of proposed operating expenditure adjustments along with salary and benefit changes. Detailed explanations of the recommended adjustments in both categories are provided below.
Salary & Benefits
Vacancy savings are projected to exceed the budgeted $1.5 million, largely attributable to personnel vacancies in the Administrative Services, Police, and General Services Departments.
CalPERS Unfunded Actuarial Liability (UAL) expenditure was approximately $80,000 below budget.
Operating Expenditures (Non-Salary & Benefits) - $522,850 The proposed budget adjustments listed below, by department, reflect operating expenditure (Non-Salary & Benefits) requests:
Police Department
The Police Department anticipates an increase in animal contracts of approximately $6,100 due to expanded wildlife rescue services. Additionally, a one-time increase of $15,000 is recommended for the current fiscal year to address the uptick in Police Recruits through the academy. There is also a reimbursable expense of $24,400, which will be offset by corresponding revenues, resulting in no net fiscal impact.
Administrative Services Department
The Administrative Services Department is requesting an increase of $90,500 in its operating budget due to rising software costs. This includes a significant increase in CLETS software maintenance expenses and reflects the impact of VMW are transitioning from perpetual licenses to annual subscriptions. Additionally, there have been miscellaneous software maintenance cost ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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increases for applications such as Cradlepoint, ESET, ESRI, Genetec, Lexus Nexus, Magnet Forensics, POSS, S2, and eSOPH, among others, which are necessary to support ongoing departmental operations.
City Manager’s Office
City Attorney is projecting an increase of $84,000 to address heightened activity related to Code enforcement and Mall-related legal matters. This adjustment reflects the need for additional legal support and resources to manage ongoing and anticipated caseloads associated with these issues.
Within the City Clerk’s division, the increase of $82,000 is for PEG funding to upgrade Council Chambers equipment resulting in no net fiscal impact to the General Fund.
General Services Department
The cost to replace projectors in the Council Chambers is $83,500, which is a CIRA reimbursable expenses that will also be offset by revenues, also having no net impact on the General Fund. Sayonara Center recently needed an unplanned backflow maintenance of $7,750.
The Engineering division is projected to go over budget by $130,000 due claims and Right of Way damages reimbursable expenses. Staff do not recommend increasing the budget since these costs will be offset by revenues, resulting in no net fiscal impact.
A summary of General Fund expenditures as of February 26, 2026, and the recommended budget adjustment is provided below:
ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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American Rescue Plan Act Funds
The City received $15,676,972 in ARPA funds. These were deposited into a General Fund subaccount for tracking and auditing. The ARPA funds have been fully committed. Below is a summary of the funds as of December 31, 2025.
TEN YEAR FINANCIAL FORECAST
As a strategic fiscal planning tool, the City maintains a long-term financial forecast. Because this forecast is based upon data currently available, it is updated periodically to reflect new information regarding anticipated future revenues and expenditures. The financial forecast covers a ten-year period for the City’s General Fund. City Council last reviewed the Financial Forecast during the biannual budget adoption at the June 11, 2025, meeting. Audited financials showed in the Annual Comprehensive Financial Report an increase of $2.8 million largely due to higher than anticipated revenues such as investment revenues, building permits, engineering fees, red-light camera fines, and savings in expenditures due to staffing vacancies. The Ten-Year Financial Forecast has been updated and includes the following changes:
- Fiscal Year 2024/25 – Includes year-end actual revenue and expenditures - Fiscal Year 2025/26 - Reflects the Mid-Year budget projections.
A summary of the Ten-Year Financial Forecast is provided below. The full model is included as an attachment to this report for better viewing.
Total Award $ 15,676,972
Completed Projects Actual
Small Business COVID Recovery Grant $ 281,111
Block Party Trailer - Economic Development+ $ 27,794
Patriotic Event+ $ 68,438
Proposed Grant Strategy+ $ 60,000
Police Fleet Vehicles & Equipment $ 1,800,000
Community Projects Grant Program**+ $ 72,400
Cares Commuinity Pride and Cleanliness Campaign+ $ 38,607 Sound Wall Beautification+ $ 105,986
Business Attraction Incentive Program**+ $ 87,363
Public Safety Positions to PrePandemic Levels $ 7,749,590 I.T. Critical, Major Projects; Execute Contract Tyler Technologies+ $ 1,229,601 In Process Projects Commited
Actual thru
12/31/25
Remaining
balance
Beautification Crew Pilot Program + $ 875,000 $ 535,819 $ 339,182 Public Safety Communications Center Critical Needs $ 600,000 $ 473,283 $ 126,717 General Government Services & Critical Projects $ 2,681,082 $ 2,514,146 $ 166,936 Committed funds $ 15,676,972
Spent $ 15,044,137
Remaining Committed $ 632,835
Current Balance $ (0) Funds to allocate/reallocate
+ City Council Strategic Objective
** dependent on program subscription
American Rescue Plan Act
ITEM 10
Subject: Fiscal Year 2025-26 Mid-Year Budget Adjustment and Financial Forecast Update Date: March 11, 2026
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The information on Fiscal Year 2025/26 General Fund Mid-Year budget analysis and the updated Ten-Year Financial Forecast was provided to the Finance and Administration Committee on March 5, 2026.
Attachments
1. Resolution
2. Ten Year Financial Forecast
General Fund Ten Year Financial Forecast
With Partial Street Funding
2/28/2026
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2025-26 FY 2026-27 FY 2027-28 Actual Actual Actual Adopted Projected Adopted Projected Beginning Reserve Balance 11,867,532 22,427,088 30,672,747 35,327,665 34,256,555 33,970,426 30,850,688 TOTAL REVENUE 44,442,810 46,170,045 48,376,007 46,092,770 47,320,601 46,625,246 47,409,870 TOTAL OPERATING EXPENDITURES (35,788,536) (41,984,301) (43,926,736) (44,621,102) (45,063,954) (45,744,984) (46,770,974) Net Operating Position 8,654,274 4,185,744 4,449,271 1,471,668 2,256,647 880,262 638,896 ARPA 3,252,312 4,059,914 4,205,647 1,957,223 1,957,223
STREET REPAIRS (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) Auburn Blvd - Phase 2 Match
Auburn Facility Improvements (500,000) (500,000)
Ending Reserve Balance 23,774,118 30,672,747 35,327,665 34,256,555 33,970,426 30,850,688 27,489,584 Minimum Reserve per City Council Policy - 17% $ 6,084,051 $ 7,137,331 $ 7,467,545 $ 7,585,587 $ 7,660,872 $ 7,776,647 $ 7,951,066 Over(under) Reserve Target 17,690,067 23,535,415 27,860,120 26,670,968 26,309,554 23,074,041 19,538,518 City Manager Target Reserve - 25% $ 8,947,134 $ 10,496,075 $ 10,981,684 $ 11,155,276 $ 11,265,988 $ 11,436,246 $ 11,692,744 Over(under) Reserve Target 14,826,984 20,176,671 24,345,981 23,101,280 22,704,437 19,414,442 15,796,840 ITEM 10
RESOLUTION NO. 2026 - ____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS
HEIGHTS APPROVING AMENDMENTS TO THE FISCAL YEAR
2025-26 BUDGET
WHEREAS, on June 11, 2026, the City Council adopted the budget for the City of Citrus Heights for Fiscal Year 2025-26; and
WHEREAS, based upon a review of revenues and expenditures, staff has recommended amendments to the Fiscal Year 2025-26 Budget; and
WHEREAS, the Finance and Administration Committee reviewed the proposed budget amendments on March 5, 2026; and
WHEREAS, the City Council has reviewed information on the status of revenues and expenditures for the 2025-26 Fiscal Year which are the basis for the recommended budget amendments.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Citrus Heights approves amendments to the Fiscal Year 2025-26 Budget as provided for in the attached Exhibit A.
PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 11th day of March 2026, by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSTAIN: Council Members:
ABSENT: Council Members:
MariJane Lopez-Taff, Mayor
ATTEST:
Amy Van, City Clerk
ITEM 10
FY 2024-25
Actual
FY 2025-26
Adopted
YTD
(01/31/2026)
Year-End
Projection
Projected
Over/(Under)
Budget
Budget
Adjustment
Request
TAXES AND FRANCHISES
Property Tax 7,876,660 8,182,326 - 8,047,022 (135,304) (135,000) Sales and Use Tax 13,778,642 14,028,342 5,592,441 13,901,594 (126,748) (127,000) Utility Users Tax 3,077,576 2,650,000 1,479,472 2,650,000 - Franchise Fees 490,042 617,500 - 617,500 -
Franchise Fees Solid Waste 896,369 650,000 463,005 650,000 - Property Transfer Tax 263,107 245,000 131,779 245,000 - Transient Occupancy Tax 90,445 110,000 48,569 110,000 - Total Taxes and Franchises 26,472,839 26,483,168 7,715,266 26,221,116 (262,052)
LICENSES AND PERMITS
Business License 352,807 300,000 212,298 300,000 -
Building Plan Check 358,591 230,129 209,606 230,129 -
Engineering Fees Private Dev 194,337 15,000 17,074 20,000 5,000 Zone Check 17,849 7,600 10,196 13,000 5,400
Building Permits 1,785,527 983,247 939,264 1,000,000 16,753 Engineering Fees Utilities 347,752 175,000 23,602 175,000 - Tree Permit 1,667 1,500 1,344 1,500 -
Transportation Permits 12,628 12,000 3,946 12,000 -
Records Processing/Strong Motion 4,394 8,315 4,995 8,315 - Other Licenses and Permits 53,204 56,720 26,892 56,720 - Total Licenses and Permits 3,128,756 1,789,511 1,449,217 1,816,664 27,153
FINES AND FORFEITURES
Non-Sufficient Funds Penalty 248 100 244 300 200
Vehicle Fines 131,778 152,000 44,323 152,000 -
Red Light Camera Fines 1,068,370 960,000 419,148 960,000 - Total Fines and Forfeitures 1,200,396 1,112,100 463,715 1,112,300 200
INTERGOVERNMENTAL
State Mandated Reimbursements 482 25,000 161,766 165,000 140,000 140,000 Federal Grants/ Reimbursements - - 192,593 193,000 193,000 193,000 Motor Vehicle-in-Lieu Fee 11,676,534 11,954,753 134,114 11,973,783 19,030 Total Intergovernmental 11,677,016 11,979,753 488,473 12,331,783 352,030
USE OF MONEY
Investment Revenue 2,111,186 1,200,000 1,124,702 1,900,000 700,000 700,000 Total Use of Money 2,111,186 1,200,000 1,124,702 1,900,000 700,000
CHARGES FOR SERVICES
Lease Payments 337,238 337,238 256,985 337,238 -
Administrative Fees 36,304 23,760 12,433 23,760 -
Police - Reimbursement Contract Overtime 145,826 150,000 56,539 150,000 - False Alarm/Alarm Permit Fees 97,946 35,000 - 35,000 -
Vehicle Release / Towing 79,655 80,000 43,912 80,000 -
Event Center Rentals 513,629 500,000 276,499 500,000 -
Planning Fees 46,488 45,000 13,629 45,000 -
Animal Control Fees and Charges 12,895 55,000 381 55,000 - Total Charges for Services 1,269,981 1,225,998 660,377 1,225,998 -
CONTRIBUTIONS
Donations / Sponsorships 27,420 25,000 7,504 25,000 -
Developer Contributions - - - - -
Total Contributions 27,420 25,000 7,504 25,000 -
OTHER
Miscellaneous Revenue 474,677 18,000 33,230 65,000 47,000 45,000 Reimbursement Revenue 219,120 335,000 355,345 654,500 319,500 319,500 Internal Service Fund Charges/Cost Allocations 1,666,448 1,633,240 - 1,633,240 - Recovery of Labor & Benefits - 260,000 104,319 260,000 - Restitution/Public Property Damage Recovery 126,618 26,000 62,325 70,000 44,000 44,000 Police Department Sales 1,550 5,000 3,001 5,000 -
Transfers In - - - -
Total Other 2,488,413 2,277,240 558,219 2,687,740 410,500 Total General Fund Revenue $ 48,376,007 46,092,770 12,467,472 47,320,601 1,227,831 1,179,500
CITY OF CITRUS HEIGHTS
FY 2025-26 General Fund Revenue
As of February 26, 2026
3/3/2026 10:08 PM FY 2026 Budget Dev GF Revenue Summary Projection ITEM 10
General Fund Ten Year Financial Forecast
With Partial Street Funding
2/28/2026
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 Actual Actual Actual Adopted Projected Adopted Projected Projected Projected Projected Projected Projected Beginning Reserve Balance 11,867,532 22,427,088 30,672,747 35,327,665 34,256,555 33,970,426 30,850,688 27,489,584 24,165,924 20,910,259 18,016,557 15,432,885 TOTAL REVENUE 44,442,810 46,170,045 48,376,007 46,092,770 47,320,601 46,625,246 47,409,870 48,497,535 49,640,560 51,102,959 52,579,442 54,161,308 TOTAL OPERATING EXPENDITURES (35,788,536) (41,984,301) (43,926,736) (44,621,102) (45,063,954) (45,744,984) (46,770,974) (47,821,194) (48,896,225) (49,996,662) (51,163,113) (52,326,205) Net Operating Position 8,654,274 4,185,744 4,449,271 1,471,668 2,256,647 880,262 638,896 676,341 744,335 1,106,298 1,416,329 1,835,103 ARPA 3,252,312 4,059,914 4,205,647 1,957,223 1,957,223
STREET REPAIRS (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) Auburn Blvd - Phase 2 Match
Auburn Facility Improvements (500,000) (500,000)
Ending Reserve Balance 23,774,118 30,672,747 35,327,665 34,256,555 33,970,426 30,850,688 27,489,584 24,165,924 20,910,259 18,016,557 15,432,885 13,267,989 Minimum Reserve per City Council Policy - 17% $ 6,084,051 $ 7,137,331 $ 7,467,545 $ 7,585,587 $ 7,660,872 $ 7,776,647 $ 7,951,066 $ 8,129,603 $ 8,312,358 $ 8,499,432 $ 8,697,729 $ 8,895,455 Over(under) Reserve Target 17,690,067 23,535,415 27,860,120 26,670,968 26,309,554 23,074,041 19,538,518 16,036,321 12,597,901 9,517,124 6,735,156 4,372,534 City Manager Target Reserve - 25% $ 8,947,134 $ 10,496,075 $ 10,981,684 $ 11,155,276 $ 11,265,988 $ 11,436,246 $ 11,692,744 $ 11,955,299 $ 12,224,056 $ 12,499,165 $ 12,790,778 $ 13,081,551 Over(under) Reserve Target 14,826,984 20,176,671 24,345,981 23,101,280 22,704,437 19,414,442 15,796,840 12,210,626 8,686,203 5,517,391 2,642,107 186,438 O:\Budget\25-26 & 26-27 Annual Budget\Mid Year\New folder (2)\DRAFT 10-Year Forecast 25-26 FINAL ITEM 10
CITY OF CITRUS HEIGHTS
CITY COUNCIL STAFF REPORT
MEMORANDUM
DATE: March 11, 2026
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FROM: Casey Kempenaar, Community Development Director
Regina Cave, General Services Director
Alison Bermudez, Senior Planner
SUBJECT: Discussion and Direction on the Renaming of Sayonara Drive Recommendation
At their December 10, 2025 meeting during Items Requested by Council Members, two members of the City Council expressed interest in exploring the potential renaming of Sayonara Drive in recognition of the significant neighborhood reinvestment and the new residential community currently taking shape. The street is undergoing a notable transition, marked by the development of new owner-occupied housing and broader revitalization efforts.
Staff are seeking City Council direction on whether to proceed with the renaming process, along with confirmation of the proposed outreach strategy and project timeline.
Background
Prior to the City’s incorporation in 1997, Sayonara Drive was widely known locally and regionally for longstanding social and physical challenges, including crime, overcrowding, traffic safety concerns, deferred building maintenance, and absentee property ownership.
Following incorporation, the City initiated focused efforts to improve conditions along the corridor. These efforts included development of a Strategic Plan that guided a series of public investments and actions, such as installation of street lighting, various traffic and pedestrian safety enhancements, and the eventual acquisition and demolition of uninhabitable structures.
The Strategic Plan established framework for long-term revitalization of the area, including the development of replacement housing intended to promote stable, owner-occupied residences.
Through a partnership with Habitat for Humanity of Greater Sacramento, construction is currently underway to deliver 26 new single-family homes on parcels previously occupied by substandard units.
ITEM 11
Subject: Renaming of Sayonara Drive - Discussion and Direction Date: March 11, 2026
As this new residential community takes shape, the City has the opportunity to consider actions that reflect and support the neighborhood’s ongoing transformation. Renaming the street represents one potential step toward establishing a renewed identity distinct from historical conditions.
Fiscal Impact
Should the renaming of Sayonara Drive proceed, costs would be incurred for staff time to administer the naming process, along with minor public outreach expenses (e.g., advertising, social media promotion, informational materials, or similar efforts). In addition, direct costs would be associated with the replacement of street signage. The estimated cost for replacement of all Sayonara street name signs is approximately $10,700 total including installation. A total of eight signs would require replacement, including two large mast arm signs over Sunrise Boulevard, requiring extensive traffic control.
Additionally, as a result of the renaming, there may be costs incurred by the affected residents of Sayonara Drive, such as costs for replacement of drivers’ licenses or official identification cards, and replacement banking checks to reflect the name change. This cost is currently unknown as the total number of affected residents is unknown at this time.
Discussion
The City does not maintain a formal policy governing the renaming of existing streets. In June 2024, the City Council adopted a naming policy applicable to City-owned assets, such as parks, buildings, and facilities. That policy specifically exempted street naming. Accordingly, the City Council retains full discretion in determining how to proceed with street renaming.
To assist the City Council in this discussion, staff provides the following factors for consideration:
• The number of addresses that would be affected;
• Potential inconvenience to residents, property owners, and tenants; • The level of support among affected property owners;
• Whether a public purpose or community benefit would be served by the proposed change;
• Issues that may be raised through public outreach; and • Any other factors the City Council deems relevant.
Habitat for Humanity of Greater Sacramento
Habitat for Humanity of Greater Sacramento has been a key partner in the redevelopment of Sayonara Drive and is nearing completion of the selection process for the future homeowners of the 26 new residences currently under construction. During this process, several prospective homeowners expressed concerns about living on Sayonara Drive due to the street’s historical reputation.
Habitat for Humanity’s mission is to build and strengthen communities by expanding opportunities for stable, owner-occupied housing. The Sayonara Drive project reflects this ITEM 11
Subject: Renaming of Sayonara Drive - Discussion and Direction Date: March 11, 2026
mission by establishing a new neighborhood of homeowners who have invested significant time and effort to achieve homeownership.
As the owner of most parcels along Sayonara Drive, Habitat for Humanity of Greater Sacramento has indicated its full support for street name change as a means of reinforcing the area’s ongoing transformation and supporting the emerging residential community.
Outreach
Public outreach will be a key component of the street renaming process. Consistent with City practices, staff would conduct outreach to ensure that affected residents, property owners, businesses, and other stakeholders are informed and provided opportunities to participate.
Outreach efforts may include mailed notifications, on-site postings, City website updates, digital communication channels, and opportunities for public comment and in-person information sharing meetings. Feedback received through the outreach process would be compiled and presented to the City Council to support its consideration and final decision.
As part of the outreach process, staff will invite community members to submit potential street names for consideration. Submitted names will be reviewed for consistency with applicable City policies and naming standards, and a refined list of eligible options will be presented to the City Council. Staff may also incorporate a community input component, such as a public survey, to gauge stakeholder preferences. While community feedback will help inform the process, the City Council will retain final authority for selection of the street name.
Next Steps
Staff requests that the City Council review the information provided and direct staff on whether to proceed with the proposed street rename efforts.
Should the Council provide direction to proceed, staff presents the following option for consideration:
Rename Sayonara Drive from Sunrise Boulevard to San Simeon Drive This option represents staff’s preferred approach and would apply the name change to all properties currently addressed on Sayonara Drive.
Number Parcels Number Parcels
Owner Occupied
Number Parcels NonOwner OccupiedNumber Units
20 from Sunrise Blvd to
Lialana Way*
1 19 74
20 from Lialana Way to San
Simeon Drive*
12 8 40
40 total* 13 27 114
*Does not include HfH parcels or public owned parcels (30 total) ITEM 11
Subject: Renaming of Sayonara Drive - Discussion and Direction Date: March 11, 2026
Alternative Option Rename Sayonara Drive from Sunrise Blvd to Lialana Way Alternatively, the Council may consider a partial renaming. The segment between Lialana Way and San Simeon Drive presents a logical transition point, should there be insufficient support to rename the full length of the street.
Regardless of the option selected, the project would be initiated within a compressed timeframe.
The goal is to complete the street name change prior to occupancy of the Habitat for Humanity homes, which is June 2026.
To meet this objective, the following timeline is proposed:
Phase 1 -Outreach/Survey March 13th through April 15th
o Prepare mailing list of all property owners and tenants on the street o Send letter explaining the reason for proposed change • Initial survey of opposition or support
• Include timeline and FAQs
o Mail letters and allow 3 weeks for responses
o Collect feedback and document support/opposition
o Conduct follow-up calls or emails if needed
Phase 2 – Public Outreach
o Solicit name suggestions
Phase 3 – Public Workshop April 15th
o Hold Community Workshop
Phase 4: City Council Hearing May 13th
o Council Selection of Name
Phase 5: Implementation June
o Notify:
• Property owners and businesses
• Post Office
• County Assessor
• Utilities
• Emergency services
• GIS and mapping agencies (Google, Apple, etc.)
• Order and install new street signs
• Allow transition period for address updates
In closing, the proposed street renaming represents an opportunity to support and reflect the substantial public and private investment made in the Sayonara Drive neighborhood. The area is undergoing a meaningful transition toward stable, owner-occupied housing, consistent with the City’s long-standing revitalization objectives. Staff requests that the City Council review the information presented and provide direction on whether to proceed with the renaming. Should the Council elect to move forward, staff will implement the proposed outreach plan and return with community feedback and a final recommendation for Council consideration.
Attachment 1: Map of Sayonara Drive
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Properties Addressed as Sayonara
Parcels Sunrise to Lialana Way Properties publicly owned (4) Parcels Lialana Way to San Simeon Parcels owned by HFHGS (26) Attachment 1
ITEM 11