DATE: October 21, 2026
TO: Honorable Mayor and City Council Members
FROM: Finance Department
2026-082
REQUEST FOR CITY COUNCIL ACTION
CORONA UTILITY AUTHORITY ACTION
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY ACTION
SUBJECT:
FISCAL YEAR 2026 QUARTER 4, YEAR END BUDGETARY ADJUSTMENTS EXECUTIVE SUMMARY:
This staff report asks the Council to approve budgetary adjustments for Fiscal Year 2026 based on the Quarter 4 results and staff recommendations for funding level changes.Staff recommends appropriating $2,189,007 and authorizing budget transfers as noted in Exhibit 1 - Appropriations and Transfers.
RECOMMENDED ACTION:
That the City Council:
a. Appropriate $2,189,007 across various funds and authorize $653,494 in budget transfers as noted in Exhibit 1 – Appropriations and Transfers. b. Authorize a continuing appropriation totaling $250,854 in the Fire Department’s operating budget within the General Fund 110 and Measure X Fund 120 to support outstanding FY 2026 obligations from various divisions of the Fire Department.
c. Authorize a continuing appropriation in the amount of $453,800 in the Information Technology Department’s operating budget within the Measure X Fund 120 for outstanding FY 2026 obligations supporting the Fire Department’s dispatch services with the City of Ontario.
d. Authorize a continuing appropriation totaling $108,000 for the Corona Public Library Community Room A/V equipment upgrade, consisting of $58,000 in the Information Technology Department’s operating budget within the Information Technology Fund 681, and $50,000 in the Community Services Department’s operating budget within General Fund 110.
e. Authorize a continuing appropriation in the amount of $153,020 in the City Manager’s Office operating budget within the Measure X Fund 120 to support the Mercy House Agreement.
i. Authorize the City Manager, or his designee, to prepare and execute a Third Amendment to the First Amended and Restated Agreement with Mercy House bringing the maximum compensation from $4,209,037.88 up to $4,249,037.88, to account for utility costs.
ii. Authorize the City Manager, or his designee, to approve non-substantive amendments, including term extensions and budget line-item changes so long as any such amendments will not cause the City to exceed the approved total maximum compensation in the Agreement.
f. Authorize a continuing appropriation in the amount of $137,864 in the City Manager’s Office operating budget within the Measure X Fund 120 for continued support in the City’s Brand Implementation.
g. Authorize a continuing appropriation in the amount of $6,600 in the Finance Department’s operating budget within General Fund 110 to support staff attendance at the Workday Rising Conference in October 2026. h. Authorize a continuing appropriation in the amount of $15,954 in the Planning & Development Department’s operating budget within the Measure X Fund 120 for the lobby refresh project.
i. Authorize a continuing appropriation in the amount of $22,693 in the Community Services Department’s operating budget within the General Fund 110 for the purchase and installation of minor equipment and furniture. j. Authorize a continuing appropriation in the amount of $60,000 for the Office of Economic Development’s operating budget within the Measure X Fund 120 for continued consulting services and the park sponsorship outreach program. k. Receive and file the FY 2026, Quarter 4 City Manager Purchases Report.
That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the related actions above.
BACKGROUND & HISTORY:
On a quarterly basis, the Finance Department provides a budget update to the City Council. As part of the quarterly process, departments provide operating and Capital Improvement Project (CIP) adjustments that need to be addressed in the fiscal year (FY).
The Finance Department then prepares a consolidated request for the City Council’s consideration.
ANALYSIS:
Item a - Appropriate $2,189,007 across various funds and authorize $653,494 in budget transfers as noted in Exhibit 1 – Appropriations and Transfers.
Appropriations
1. North Corona Mall Acquisition / Improvement, Operating, and Maintenance Project No. 78390.
An additional $734,738 is required to restore funds utilized for ongoing land acquisitions, legal services, relocation activities, hazardous materials testing, demolition, abatement monitoring, staff support, and furniture, fixtures, and equipment (FF&E) payments, all of which were necessary to support continued project progress.
Staff requests an appropriation of $509,023 from the General Fund 110 and $225,715 from the Measure X Fund 120, for a total appropriation of $734,738 to the North Corona Mall Acquisition / Improvement, Operating and Maintenance Project No. 78390.
2. Opioids Funding for FirstWatch Real-time Monitoring and Analytics Software, and Increased Personnel Costs.
FirstWatch will support the Fire Department's opioid response and support by providing advanced data analytics to monitor opioid-related incidents, identify overdose trends, guide targeted intervention efforts, and enhance collaboration with community partners. The project aligns with the allowable use of opioid settlement funds by strengthening harm reduction initiatives and improving the Department's ability to deploy resources and evaluate program outcomes.
Additional funding is also requested for the Fire Department’s Emergency Services Coordinator position given the position was budgeted at mid‑step when it wasvacant at the start of the fiscal year. The incumbent was hired at top step, resulting in a variance between budgeted and actual personnel expenditures.
Therefore, staff requests a total appropriation of $81,011 from the Opioids Fund 293 to the Fire Department’s operating budget for analytics software and personnel costs.
3. Special District Utility and Maintenance Costs.
Additional appropriations are requested for various Special Districts to address higherthan-anticipated utility consumption, increased service and material costs, and additional park and sports field maintenance needs. The additional funding will ensure sufficient resources are available to maintain safe, functional, and well-maintained public facilities and recreational amenities within the respective Special Districts.
Staff requests additional appropriations totaling $261,502 from various Community Facilities District and Landscape Maintenance District funds to address these increased costs and support ongoing operations and maintenance within the respective districts. Refer to Exhibit 1 – Appropriations and Transfers for a breakdown by fund.
4. Successor Agency Financial and Compliance Audit, and Increased Personnel Costs.
Staff requests an appropriation of $15,347 from the Successor Agency Fund 475 to the Finance Department’s operating budget to align the FY 2026 budget with actual expenditures associated with the administration of the Successor Agency, including financial and compliance audit costs, employee health allowance costs and annual leave buyback costs, ensuring the final budget accurately reflects program operational requirements.
5. Unforeseen Water Supply and Treatment Disruptions.
During FY 2026, the City experienced two separate operational disruptions that impacted its ability to meet water demand using raw water supplies. Metropolitan Water District (MWD) performed emergency repairs to the Lake Mathews Supply Tower Gate, temporarily interrupting raw water deliveries to the City. Separately, a failure of Filter No. 2 at the Lester Water Treatment Plant reduced the City's ability to treat raw water. Although these incidents occurred at different times during the fiscal year, both required Water Operations to supplement its water supply by purchasing additional treated water to maintain uninterrupted service and meet customer demand.
Since treated water is significantly more expensive than raw water, these unanticipated purchases resulted in treated water expenditures that substantially exceeding budget projections. Although the reduction of raw water purchases partially offset the additional costs for treated water, the higher cost contributed to the overall operating budget deficit and the need for the requested appropriation.
Staff requests an appropriation of $680,000 from the Water Utilities Fund 570 to the Utilities Department’s operating budget to offset the FY 2026 operating budget deficit, resulting primarily from unforeseen operational emergencies that disrupted the City's anticipated raw water supply and treatment capacity.
6. Fleet Fuel and Vehicle Parts Cost Increase.
Fleet fuel costs exceeded the adopted budget primarily due to higher‑than‑anticipated fuel prices during the fiscal year. While overall fleet activity and consumption levels remained consistent, actual per‑gallon fuel costs surpassed the assumptions used in developing the budget. Because fuel prices fluctuate throughout the year and are largely outside the City’s control, the increased cost of fuel resulted in expenditures exceeding the originally budgeted amount.
In addition to fuel increases, expenditures for parts and labor on City vehicles were also higher than projected. The fleet required more extensive repair and maintenance activity to sustain operational reliability, contributing further to the overall operating cost increase for the fiscal year.
Staff requests an appropriation of $259,000 from the Fleet Operations Fund 682 to the Public Works Department’s operating budget to address these increased fuel and parts costs for FY 2026.
7. Reallocation of Administrative Staff Support.
Staff requests an appropriation of $26,609 from the Reclaimed Water Utility Fund 567 to the Public Works Department’s operating budget to ensure the fund accurately reflects the personnel costs associated with supporting capital project activities.
Throughout the fiscal year, staff provided essential operational and administrative support to multiple capital projects, and this adjustment will align the operating budget with the level of services delivered, ensure the appropriate distribution of costs, and maintain the operating fund in good standing.
8. Interest Expense Sewer Capacity.
The 2025 Wastewater Revenue Bond was issued in October 2025 to finance wastewater system improvements and refinance the outstanding 2013 Wastewater Revenue Bonds. The bond issuance was not included in the initial budget development process, resulting in additional interest expense beyond the amount originally budgeted. Fund 440 initially budgeted approximately $95,000 for interest expense, which is insufficient to cover the additional costs.
Staff requests an appropriation of $130,800 from the Sewer Capacity Fund 440 to the Utilities Department’s operating budget to cover the additional interest expense associated with the new bond issuance.
Transfers
9. Budgetary transfer in the amount of $653,494 from the Fire Station #2 Rebuild, Capital Improvement Project No. FC-2022-20 to the Citywide Traffic Signal Optimization, Capital Improvement Project No. ST-2022-03 within American Rescue Plan Fund 413.
As part of the effort to spend down American Rescue Plan Act (ARPA) funding by the December 31, 2026 deadline, FY 2026 expenditures for the Traffic Signal Optimization Project will be reclassified from the General Fund 110 and Measure X Fund 120 to the ARPA Fund 413. The project currently has an ARPA budget of $2.5 million; however, total expenditure is anticipated to be approximately $3.1 million following the reclassification.
Staff requests a budgetary transfer in the amount of $653,494 from the Fire Station #2 Rebuild Capital Improvement Project No. FC-2022-20 to the Citywide Traffic Signal Optimization Capital Improvement Project No. ST-2022-03 within American Rescue Plan Fund 413.
Item b - Authorize continuing appropriations totaling $250,854 in the Fire Department’s operating budget within the General Fund 110 and Measure X Fund 120 to support various Fire Department divisions for outstanding FY 2026 obligations.
Staff requests a total of $250,854 due to unexpended appropriations to support ongoing concrete improvements at the Training Center, outstanding weed abatement, Personal Protective Equipment (PPE) and Fire Prevention training obligations, delayed equipment and PPE purchases, CAL FIRE billing adjustments, Fire Station #3 refurbishment purchases and other outstanding FY 2026 obligations. Several purchases remain pending due to supply chain delays, project sequencing, and vendor or agency billing timelines.
Item c - Authorize a continuing appropriation in the amount of $453,800 in the Information Technology Department’s operating budget within the Measure X Fund 120 for outstanding FY 2026 obligations supporting the Fire Department’s dispatch services with the City of Ontario.
Staff requests a total of $453,800 due to unexpended appropriations to continue the implementation of the Fire Dispatch and Emergency Communications Services Agreement between the Cities of Corona and Ontario, originally approved by City Council in FY 2022. This multi-year, multi-phase project includes hardware and software upgrades, system integration, communications infrastructure improvements, equipment purchases, testing, training, and other implementation activities as necessary to transition the Fire Department’s dispatch and emergency communications systems. Continuing the FY 2026 appropriation will support completion of outstanding project deliverables and related technology costs.
Item d - Authorize a continuing appropriation totaling $108,000 for the Corona Public Library Community Room A/V equipment upgrade, consisting of $58,0000 in the Information Technology Department’s operating budget within the Information Technology Fund 681, and $50,000 in the Community Services Department’s operating budget within General Fund 110.
Staff requests a total of $108,000 due to unexpended appropriations to fund the upgrade of audio and visual (A/V) equipment in the Corona Public Library community room.
Funding consists of $58,000 from the Information Technology Department’s operating budget within the Information Technology Fund 681, and $50,000 from the Community Services Department’s operating budget within the General Fund 110. The library community room serves as a primary public gathering space for community programming, educational events, and civic engagement activities. The existing A/V equipment requires modernization to continue meeting patron and community group needs. The funds will provide for the procurement and installation of updated audio and visual equipment in the library community room.
Item e - Authorize a continuing appropriation in the amount of $153,020 in the City Manager’s Office operating budget within the Measure X Fund 120 to support the Mercy House Agreement.
By leveraging grants, and through contract management strategies to connect clients with other resources in the Continuum of Care, Housing and Homeless Solutions was able to achieve cost savings and not spend 100% of FY 2026 Measure X funds allocated to Homeless Programs.
On July 1, 2026, City Council approved the FY 2027 Mercy House Second Amendment to the First Amended and Restated Agreement with a maximum compensation of $4,209,037.88. The $300,000 in Permanent Local Housing Allocation (PLHA) funds already budgeted in the agreement was an estimate. In the July 1, 2026 staff report for the Mercy House agreement, staff indicated they would return to the City Council with a supplemental budget appropriation request to address shelter operating gaps due to the timing of the State’s release of the PLHA Notice of Funding Availability (NOFA) for entitlement jurisdictions.
Since that time, the Housing and Homeless Solutions Division has worked with the Finance Department to complete a five-year PLHA expenditure-to-revenue reconciliation.
As a result, staff has identified $186,980.30 of unexpended PLHA funds that can be used to offset the original $300,000 PLHA estimate. This leaves a $113,019.70 shelter operating gap that may be filled with unspent FY 2026 Measure X funds, previously allocated to Homeless Programs.
Additionally, since the approval of the FY 2027 Mercy House contract, the Community Services Department and Utilities Department have been working with the Housing and Homeless Solutions Division to transition the Harrison Hope Center shelter and 5th Street housing project utility charges to the Mercy House contract. The auto-bill charges were being billed to the general fund accounts for other City facilities, as well as the Community Services Department budget for repair/maintenance of the shelter and housing units; therefore, the costs were not budgeted in the FY 2027 Mercy House agreement.
Furthermore, utility costs should not have been charged to the aforementioned City fund accounts given they were not budgeted to support these costs. Based upon historical review of the utility bills, it is estimated that the FY 2027 Mercy House contract budget should be increased by $40,000 to cover these utility costs for the future.
The combination of the shelter operating gap in the amount of $113,019.70 and the utiltity cost of $40,000 totals the continuing appropriate request of $153,020.
Item f - Authorize a continuing appropriation in the amount of $137,864 in the City Manager’s Office operating budget within the Measure X Fund 120 for continued support in the City’s Brand Implementation.
Creating a sense of place is a fundamental element of the City’s Strategic Goals. The City's brand has been reimagined, and brand implementation is well underway.
Significant progress has been made in updating many digital assets, print materials, and branded assets. However, there is additional work to be done. Staff requests continuing appropriation funds to continue the comprehensive implementation of the City’s brand, which includes updated Public Transit Vehicle Wraps, and other public-facing materials.
This continued effort is essential to instill a sense of pride in the community and to highlight the City’s unique identity.
Item g - Authorize a continuing appropriation in the amount of $6,600 in the Finance Department’s operating budget within General Fund 110 to support staff attendance at a conference.
Staff requests a total of $6,600 due to unexpended appropriations to support staff attendance at the October 2026 Workday Rising conference. The training strengths staff knowledge of the City's recently implemented system, and supports ongoing operations.
Unexpended FY 2026 conference, training, and travel appropriations are requested to be carried forward to cover the related expenses.
Item h - Authorize a continuing appropriation in the amount of $15,954 in the Planning & Development Department’s operating budget within the Measure X Fund 120 for the lobby refresh project. The final amount will be determined based on the fiscal year-end balance.
Staff requests a total of $15,954 due to unexpended appropriations to complete the lobby refresh project, originally approved as part of the FY 2024 budget. The remaining project component is a lobby mural, for which the Planning & Development Department is coordinating the design with the Communications Division.
Item i - Authorize a continuing appropriation in the amount of $22,693 in the Community Services Department’s operating budget within the General Fund 110 for the purchase and installation of minor equipment and furniture.
Due to the City's transition to Workday, the funds were unable to be encumbered during FY 2026. The requested FY 2027 carryover of $22,693 consists of both regularly budgeted funds and donated funds designated for this project. Continuing these funds into FY 2027 will allow the Library to complete the purchase and installation of the Adult Reference Desk, without interruption.
Item j - Authorize a continuing appropriation in the amount of $60,000 for the Office of Economic Development’s operating budget within the Measure X Fund 120 continued consulting services and the park sponsorship outreach program.
Staff requests a carryover amount of $40,000 for materials, marketing, outreach, and business development activities supporting the City Park Sponsorship Outreach Program. These efforts include developing and producing promotional materials, conducting outreach to prospective sponsors, and implementing other activities intended to increase awareness and secure sponsorship opportunities. The program began in FY 2026, however, additional time was needed for revisions and final approval, and the work was not completed before the end of the fiscal year. Therefore, the remaining funds are requested for carryover to the next fiscal year.
Staff also requests a carryover amount of $10,000 to fund consultant services supporting the development of the Economic Development's Strategic Plan. These services will provide professional expertise in strategic planning, stakeholder engagement, and the creation of an actionable roadmap to guide the Department's priorities and long-term economic development initiatives.
Finally, staff requests a carryover amount of $10,000 to pay for consultant services that supported efforts for the Downtown Business Improvement District. Work conducted by Spicer Consulting Group, LLC included budget development, baseline service analysis, assessment modeling, stakeholder outreach preparation, property owner meetings, governance discussions, and evaluation of formation alternatives.
Item k - Receive and file the FY 2026, Quarter 4 City Manager Purchases Report.
At the meeting of August 20, 2025, the City Council approved an ordinance making changes to the Corona Municipal Code (CMC) relative to the City's purchasing and procurement policies. Part of those changes included a provision to provide the City Council a quarterly report summarizing the instances during the preceding quarter wherein the City Manager exercised his purchasing authority. Specifically, section
3.08.040(M) of the CMC reads as follows: "Quarterly Reporting ($75,001 to $125,000 Purchases). No less often than quarterly, a written report shall be presented to the City Council which lists purchases, contracts or agreements authorized by the City Manager, or his or her designee, between $75,001 to $125,000. The report shall include the dollar amount, date, approving employee title, brief description of services or items purchased, and the vendor, contractor or other entity." The attached report includes this information for Fiscal Year 2026, quarter four.
FINANCIAL IMPACT:
Approval of recommended action a, requesting appropriations and transfers, will have financial impacts as noted below. There is sufficient fund balance or working capital available in each of the respective funds for approval of the recommended actions.
Fund # Fund Appropriations
110 General Fund (110) 509,023
120 Measure X Fund (120) 225,715
236 CFD 2018-1 Special Tax B (Bedford) Fund (236) 65,324 238 CFD 2017-2 Valencia Spec Tax B Fund (238) 600
239 CFD 2016-3 Zone 13 Corona Ind Park Fund (239) 220
246 CFD 2000-1 Park Maint Fund (246) 250
247 CFD 2002-2 Landscape Maint Fund (247) 7,205
248 CFD 97-1 Landscape Maint Fund (248) 82,211
251 CFD 2002-3 Landscape Maint Fund (251) 5,444
252 CFD/LMD 2003-1 Signal Operating Fund (252) 8,699
Fund # Fund Appropriations
253 CFD 2011-1 Landscape/Lighting Fund (253) 1,520
259 CFD 2016-3 Zone 4 515S Promenade Fund (259) 226
263 CFD 2016-3 Zone 17 Corona Med Ctr Fund (263) 222
266 CFD 2016-3 Zone 20 Bedford Mkt Pl Fund (266) 213
270 CFD 2016-3 Zone 24 West Coast Freeway Center Fund (270) 42 279 CFD 2016-3 Zone 31 Lat Business Fund (279) 347
280 CFD 2016-3 Zone 32 NH Sherborn Fund (280) 4,365
287 CFD 2016-3 Zone 15 North Point EVA Fund (287) 66
293 Opioids Settlement Fund (293) 81,011
440 Sewer Capacity Fund (440) 130,800
446 LMD 84-1 Street Lights (446) 14,675
455 LMD 84-2 Zone 2 Landscape Maint Fund (455) 5,564
458 LMD 84-2 Zone 7 Landscape Maint Fund (458) 9,627
460 LMD 84-2 Zone 10 Landscape Maint Fund (460) 27,849
463 LMD 84-2 Zone 17 Landscape Maint Fund (463) 222
464 LMD 84-2 Zone 18 Landscape Maint Fund (464) 4,537
470 LMD 84-2 Zone 20 Landscape Maint Fund (470) 21,534
471 LMD 84-2 Zone 1 Landscape Maint Fund (471) 540
475 Successor Agency Fund (475) 15,347
567 Reclaimed Water Utility Fund (567) 26,609
570 Water Utility Fund (570) 680,000
682 Fleet Operations Fund (682) 259,000
Total $2,189,007
Approval of recommended actions b – k will have no additional financial impact, given they consist of continuing appropriations.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the common sense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This action is to approve budgetary adjustments for Fiscal Year 2026, and there is no possibility that approval of the recommended actions will have a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: LUIS NAVARRO, BUDGET SUPERVISOR
REVIEWED BY: BRUCE FOLTZ, FINANCE DIRECTOR
ATTACHMENTS:
1. Exhibit 1 – Appropriations and Transfers
2. Exhibit 2 – FY 2026, Q4 City Manager Purchases Report