Quarterly
Budget Update
Quarter 2
FY 2026
February 4, 2026
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Overview
Budget Adjustments & Revenue Estimates
City Management is pleased to present this quarterly update summarizing the City’s overall budget activity through Quarter 2 (December 31, 2025) for Fiscal Year (FY) 2026. The City’s fiscal year is July 1
st through June 30th
. For audited
information, or to find greater detail, please refer to the City’s annual financial statement, which is released by December 31st following the end of the fiscal year.
The revenue projections and budget expenditures presented in this update include budget adjustments approved by the City Council, continuing appropriations, and prior year encumbrances. This quarter also includes updated information for mid-year revenue projections.
General Fund Financial Condition
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 The City’s General Fund is the primary source of discretionary resources that funds many of the services provided to the citizens of the City of Corona. The General Fund is made up of the General Fund, Measure X Fund, Corona Mall Properties Fund, Community Benefit Fund, Historic Civic Center Fund, and the Pension Stabilization Trust Fund.
The General Fund inflows (revenue and transfers in) for FY 2026 are currently estimated at $242.4 million. Based on Mid-Year projections, the updated estimate is $250.1 million, an increase of $7.7 million. The revenue changes will be discussed later in the newsletter.
The City has received or recorded 38.8% of the estimated General Fund inflows, through the end of Quarter 2 (at the time this information was prepared). Overall, inflows are down by 5.5% when compared to the same quarter of FY 2025.
As of Quarter 2 of FY 2026, the General Fund has expended 33.7% of its cumulative budget. The current savings is primarily due to capital improvement projects which will take multiple years to complete. Comparing Quarter 2 of FY 2026 to FY 2025, expenditures are down by 2.6%, or $2.7 million.
Budget
Balancing
General Fund Reserves
The General Fund has multiple reserves in fund
balance for various purposes. For the full list,
please reference the City’s financial statements,
Note 14 (for Fiscal Year Ending June 30, 2025,
page 114). This quarterly update highlights
three of those reserves. FY 2025 audited
amounts are noted in the table.
Emergency Contingency
1 Equal to 3 months of operating expenditures
Adjusted at the end of each fiscal year
2 3
$53,883,396
Reserve for pension related expenditures – debt
service payments for the Pension Obligation
Bonds or the City’s CalPERS unfunded accrued
liability (UAL) contributions.
Pension
Stabilization
$54,892,853
Unspent Measure X funds that don’t roll into
next FY will go into the reserve
Reserve amount discussed with Council each
year through the budget cycle
Measure X
Reserves
$13,206,477
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 General Fund Inflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Top Five Revenues
The City’s top five General Fund revenue categories account for approximately 99.0% of the total estimated General Fund inflows for FY 2026. Focusing on these sources can provide a useful understanding of the City’s income position.
The bar graph to the right illustrates the performance of the top five revenues as compared to the same quarter of the prior two fiscal years.
General Fund Revenues
Top 5 Revenues Compared
Quarter 2
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50 Millions
FY 2024
FY 2025
FY 2026
At the end of Quarter 2, Property Tax is the largest General Fund revenue category. The total for property tax is $43.8 million, an increase of $1.7 million, or 4.1%, over the prior fiscal year. The increase is primarily in secured property taxes. The majority of property tax revenues are recorded as revenue and booked as a receivable, once the annual report is received from the County of Riverside (generally November/December). Year-end adjustments “true-up” the amounts to the actual cash received.
Property Tax 01
At the end of Quarter 2, Sales Tax is the second largest General Fund revenue category. This category includes the City’s portion of sales tax, Measure X, Prop. 172 sales tax, and allowance for sales tax agreements. As of Quarter 2, the total received is $33.6 million. At the time this information was prepared, the revenues are up by 2.0%, or $0.7 million as compared to the prior year.
Sales Tax 02
The Current Services category is the third largest category at the end of Quarter 2. Activity in this revenue group include plan check fees, engineering and inspection fees, recreation revenues, and the Emergency Medical Services Program. At the end of Quarter 2, the total received is $7.9 million. Overall, the Current Services category is up by 17.2%, or $1.2 million, as compared to the same quarter in FY 2025. When comparing to the prior fiscal year, the increase is primarily due to Fire Service Agreements, Engineering and Inspections Services, Paramedic Program Services, and the After School Recreation Program.
Current Services 03
General Fund Inflows Top Five Revenues
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 At the end of Quarter 2, a total of $5.5 million has been received in the Other Taxes category. Items in this revenue group include Franchise Fees, Transient Occupancy Taxes (TOT), Business License Taxes, and Cannabis Taxes. Other Taxes are down 1.7%, or $94,448 as compared to Quarter 2 of FY 2025. When comparing to the prior fiscal year, there is a decrease in Transient Occupancy Taxes due to when payments were received in FY 2026 and an increase in Cannabis Taxes.
Other Taxes 04
The fifth largest General Fund revenue category at the end of Quarter 2 is Other Revenues. Activity in this revenue group includes Rental/Lease Income, Telecommunication Site Rentals, Sales of Surplus Property, and Billboard Revenues. At the end of Quarter 2, the total received is $4.7 million. Overall, the Other Revenues category is up by 0.3%, or $13,711 as compared to the same quarter in FY 2025.
Other Revenue 05
General Fund Inflows Top Five Revenues
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 General Fund Inflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 General Fund Inflows
Revenue + Transfers In
Quarter 2, FY 2025 to FY 2026
General Fund Inflows
Revenue + Transfers In
FY 2026, Mid-Year Estimate to Quarter 2 Actuals
With an increase of $7.7 million, Intergovernmental Revenues includes increases in fire mutual aid reimbursement and federal grant revenue (American Rescue Plan Act reimbursement funds).
Intergovernmental Revenues 01
The primary increases in this category are for Engineering & Inspection, AMR System Enhanced Fees, Fire Service Agreements, and After School Recreation Program Fees.
Current Services 02
Based on the current economic outlook, sales tax is projected to decrease by $2.0 million as compared to original estimates. Regular sales tax revenues are anticipated to decrease by $1.5 million, and Measure X is expected to decrease by $0.5 million.
Sales Tax 03
General Fund Mid-Year Changes
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 With the updated Mid-Year projections, the General Fund inflows are estimated to increase by 3.2%, or $7.7 million, from $242.4 million to $250.1 million.
General Fund Inflows
Revenue + Transfers In
Budget to Mid-Year Estimates FY 2026
The changes in Mid-Year estimates are based on three revenue categories:
The FY 2026 budget was adopted with $231.3 million in General Fund expenditures. With continuing appropriations of $39.9 million, encumbrances (committed purchase orders) of $22.3 million, and Transfers Out of $0.40 million, the beginning outflow budget was $293.9 million. Through Council Actions and other authorized adjustments, total outflows are currently $302.2 million.
Through Quarter 2, the City has spent $101.8 million, or 33.7% of the cumulative budget. At this point in the fiscal year, expenditures should be approximately 50% of budget. When comparing to the same quarter in FY 2025, outflows are down by 2.6%, or 2.7 million. The largest expenditure category for the General Fund is Personnel Services.
Personnel Services has an increase of $6.4 million as compared to the same quarter last fiscal year. The changes are primarily based on current Memorandum of Understanding (MOU) contracts that are good through December 2027, as well as new positions approved through the annual budget process.
Materials and Supplies is down by $11.9 million when compared to Quarter 2 of FY 2025. There are multiple increases and decreases in this category. The primary driver for change is property acquisitions in the prior fiscal year.
General Fund Expenditures Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 General Fund Outflows
Expenditures + Transfers Out
Quarter 2, FY 2025 to FY 2026
General Fund Outflows
Expenditures + Transfers Out
Budget to Actuals, Quarter 2, FY 2026
General Fund Expenditures By Department
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 This budget does not follow the normal trends as these are multi-year projects. Any unspent encumbrances (purchase orders) or remaining balance carries forward to the next fiscal year to continue the project activities.
CIP / O&M Projects (9.3%)
Current savings are primarily due to contractual services in the Homeless Solutions Program (payment timing differences).
City Manager’s Office (19.3%)
Quarter 2 is trending low due to the timing of debt service payments based on approved payment cycles.
Debt Service (19.7%)
Through December 31, 2025, approximately 50% of the fiscal year is complete. Departments with a variance of 10% or more are explained in the following section.
Economic Development (35.2%)
Current savings are primarily due to contractual services.
General Government (35.4%)
Current savings are primarily due to personnel (Retirement Health Insurance and Other Post Employment Benefits) and Materials and Supplies.
Information Technology (22.5%)
Current savings are primarily due to contractual services, specifically, Fire Dispatch Services with the City of Ontario (payment timing differences).
Enterprise Funds
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Utilities Inflows
The City operates three utility services through the Utilities Department: electric, water, and sewer. Through the collection of fees and charges, these funds should collect revenues sufficient to finance the costs associated with administration, operations, capital improvement projects (CIP), and debt service.
Enterprise Funds - Utilities
Revenues Compared, Quarter 2
FY 2024 – FY 2025 – FY 2026
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Electric Water Sewer
FY 2024
FY 2025
FY 2026
Millions
Emergency Contingency
1 2 3
GOAL $4,901,402
Electric Utility
$1,257,122
Water
Utility
Sewer
Utility
$4,074,328 $1,716,527
Utilities Funds Reserves
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 The Utilities Funds target reserve amount for each of the operating funds shall be set at ninety (90) days. To build the target reserve amount, the Utilities Department shall annually contribute ten percent (10%) of the difference between actual operating revenues and actual operating expenses for each of the Utilities Department Operating Funds at the beginning of each fiscal year until the target reserve is met. Depending on the fund, it will take time to hit the target reserve amount. If the reserve amount exceeds the target reserve amount, the additional funds shall remain in reserves. The reserve process occurs annually, once the audit and financials are finalized.
GOAL $23,726,374 GOAL $12,817,081
Water Sewer
Utilities Funds Inflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Comparing Quarter 2 FY 2026 revenues to FY 2025, there is a decrease of $1.4 million, or
14.4%. There were increases in categories: Current Services and Fees & Permits. There were decreases in categories: Current Services, Fines, Penalties & Forfeitures, Intergovernmental Revenues, Investment Earnings, Other Revenues, and Utility Services Charges. The change in the Investment Earnings category is due to how the City must report the unrealized gains/losses from investments. These are book entries and not actual cash.
Utilities Revenues - Through Quarter 2 FY 2026, revenues received have increased 138.6%, or $82.6 million, as compared to the same quarter in Fiscal Year 2025.
Through the second quarter of FY 2026, there is an increase of 154.8%, or $52.4 million, as compared to FY 2026. There is an increase of $13.2 million in Other Revenues, due to a Public Water Systems Settlement and an increase of $39.7 million in Proceeds from Long Term Obligations from the issuance of Water Revenue Bonds.
Through Quarter 2, there is an increase of 201.3%, or $31.6 million, when compared to FY 2025. There were increases in Utility Service Charges and decreases in Investment Earnings. The change in the Investment Earnings category is due to how the City must report the unrealized gains/losses from investments. These are book entries and not actual cash. The primary driver for the increase is related to Proceeds from Long Term Obligations in the amount of $31.7 million for the issuance of Wastewater Revenue Bonds.
Electric
Utilities Funds Inflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Utilities Funds Inflows
Revenue + Transfers In
Quarter 2, FY 2025 to FY 2026
Utilities Funds Inflows
Revenue + Transfers In
FY 2026, Mid-Year Estimates to Quarter 2 Actuals
Electric Utility revenues are anticipated to decrease by $0.3 million to $20.3 million. This represents a 1.3% decrease over the current budget amount of $20.6 million. The bulk of the decrease is related to investment earnings.
Electric 01
Water Utility revenues are estimated to increase by $38.2 million, as compared to the current budget amount of $90.6 million. The mid-year estimate of $128.8 million represents a 42.2% increase. There are both increases and decreases across all categories, but the primary driver of the increase is tied to proceeds of long-term obligations (issuance of water revenue bonds).
Water 02
Sewer Utility revenues are estimated to increase by $29.9 million, from $41.6 million to $71.5 million. This represents a 72.0% increase over the current budget. The primary reason for the increase is also due to proceeds of long-term obligations (issuance of wastewater revenue bonds).
Sewer 03
Utilities Mid-Year Changes
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 With the updated Mid-Year projections, the Utilities Funds inflows are estimated to increase by 44.4%, or $67.9 million, from $152.8 million to $220.7 million.
Utilities Funds Inflows
Revenue + Transfers In
Budget to Mid-Year Estimates FY 2026
Water Sewer
Utilities Funds Outflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Overall, the Electric utility expenditures through Quarter 2 are up by 1.4%, or $81,148, when compared to last fiscal year during the same period. There are increases in contractual and utilities and decreases in personnel services and materials and supplies.
At Quarter 2, the operating expenditures total 25.2% of the current FY 2026 operating budget.
When comparing the total of utility outflows, Quarter 2 of FY 2026 to FY 2025, outflows are higher by 8.6%, or $5.0 million.
Overall, the Water utility expenditures are up by 16.4% or $5.5 million when compared to Quarter 2 in FY 2025. There are increases in materials and supplies, personnel services, and utilities, but there is a decrease in the contractual category.
Through Quarter 2, the operating expenditures total 47.0% of the current FY 2026 operating budget.
The Sewer utility expenditures are down by 3.0%, or $0.6 million, when compared to Quarter 2 of FY 2025. There are increases in materials and supplies, personnel services, and utilities but there are decreases in the contractual category.
At the end of Quarter 2, the operating expenditures total 39.6% of the current FY 2026 operating budget.
Electric
Utilities Funds Outflows
Quarterly Budget Update | Quarter 2, FY 2026 | February 4, 2026 Utilities Funds Outflows
Expenditures + Transfers Out
Quarter 2, FY 2025 to FY 2026
Utilities Funds Outflows
Expenditures + Transfers Out
Budget to Actuals, Quarter 2, FY 2026
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