Item No. 2.
TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:OFFICE OF THE CITY MANAGER
BY:MARLON RAMIREZ, INTERIM ASSISTANT FINANCE DIRECTOR
DATE:JUNE 23, 2026
SUBJECT:ADOPTION OF THE PROPOSED BUDGET FOR THE 2026-2027 FISCAL YEAR
EXECUTIVE SUMMARY
The City Council will hold a public hearing and, after concluding the hearing, adopt the Fiscal Year (FY) 2026-2027 Annual Budget, GANN Limit, and personnel additions and changes as specified in the attached Resolution No. 26- 8362, and Exhibit A of the Resolution.
RECOMMENDATION
That the City Council:
1. Conduct a Public Hearing considering the adoption of the City’s Fiscal Year 2026-2027 Annual Budget and Appropriations Limit (GANN Limit); and,
2. Adopt Resolution No. 26-8362, adopting the Fiscal Year 2026-2027 Budget and Annual Appropriations Limit (GANN Limit).
BACKGROUND
The Charter of the City of Downey requires adoption of the annual budget on or before June 30 of each fiscal year.
In accordance with the annual budget cycle, the City’s budget process began in the beginning of the calendar year with the annual City Council goals-setting workshop. In keeping with the City Council five-overarching priorities and fiscal year budget goals, the process was continued with the development of the budget through budget meetings between department heads and executive leadership, City Council Budget Subcommittee, City Council Budget Workshop, and publishing of public notice of a hearing to adopt the budget for the upcoming fiscal year. The City Council Goal Setting Workshop was held on March 10, 2026, and provided valuable input to inform priorities for the upcoming budget preparation along with a review and status update of the Downey Forward - 2030 Strategic Plan.
The City conducted a budget study session on June 1, 2026. During the study session, the overall Citywide budget, General Fund budget, and the addition of 4 full-time positions, elimination of 2 full-time positions, and the reclassification of 3 positions were discussed. One of the new positions is funded by Measure R, one is funded by the Columbia Memorial Space Center fund, and two are funded by the General Fund. Additionally, each department presented details about their budget, their accomplishments, and their upcoming fiscal year ’s goals.
Additionally, the City Council asked staff to evaluate a few City Council budget items for the Council to consider at the Budget Hearing, which include funding for a Spay and Neuter Program, adding Wi-Fi in the Downtown, Funding for security cameras in all City parks, extending Library hours to include Sundays, adding lighting for City all City artwork, additional Janitorial service at City parks, and pursuing the All-America City award.
ANALYSIS
The total proposed annual operating budget is $335,022,076 and includes the cost of personnel, operations, materials, supplies, capital equipment, capital improvement projects, and transfers to other funds. This reflects an increase from the previously proposed amount of $327,100,599 presented at the City Council Budget Workshop on June 1, 2026, primarily due to the carryover of Capital Improvement Program (CIP) project budgets for which the associated expenditures did not occur in the current fiscal year and will instead be available in the next fiscal year.
The total also includes an additional $500,000 to Measure D to accommodate Council’s request to install security cameras at all City parks. These adjustments apply to the special revenue and capital project funds, while the General Fund portion of the budget remains unchanged. The proposed General Fund portion of the budget is $122,068,714 in operating expenditures and based upon estimated General Fund revenues of $122,141,977. The City’s basic services, including police, fire, public works, parks and recreation, library services, community development, and administrative services (such as executive leadership, human resources, and financial services), are all funded by the General Fund.
The City Council’s five strategic priorities and the Downey Forward – 2030 Strategic Plan were integral in the development of the annual budget goals and objectives. These goals and objectives became the foundation for the budgetary proposals. The attached budget transmittal letter provides a more detailed overview of the proposed FY 2026-2027 budget.
Consistent with the priorities of the City Council and the operating needs of the City, the proposed budget includes four new positions, two position eliminations, and three reclassifications, with two additional Information Technology positions having been eliminated earlier in the fiscal year. Taken together, these changes result in a net‑zero number of full‑time positions compared to Fiscal Year 2025–2026. The specifics of those personnel changes are listed within the attached resolution. The attached resolution also contains the GANN limit information required to adopt the City’s annual budget.
Economic factors that influenced the preparation of this year ’s budget Economic conditions for FY 2026–2027 reflect continued economic uncertainty at both the state and national levels. While inflationary pressures have eased compared to prior years, municipalities across California — including Downey — continue to experience elevated costs associated with labor, infrastructure, construction, utilities, insurance, technology, and public safety operations. These conditions are contributing to slower revenue growth, particularly as high interest rates temper development activity and borrowing costs. Sales tax revenues remain resilient and continue to outperform county and state trends, but consumer spending remains cautious given ongoing inflation and broader economic volatility. In response, Downey has adopted a fiscally conservative approach that prioritizes structural balance, protects reserves, and supports economic development and revenue diversification to maintain high-quality municipal services during this period of moderated economic growth.
The proposed budget
The City of Downey proposed FY 2026-2027 budget is structurally balanced for operations. The revenues and expenditures for all other services for which the City receives restricted use funding, as well as for the City’s utility operations, are also included in the proposed budget document.
The summary of estimated Revenues, Transfers, and Appropriations for all City fund is:
The General Fund Reserve is projected to be $33,472,965 at the conclusion of FY 2026-2027.
The attached Resolution adopts the City’s proposed annual budget and sets the City’s annual appropriations limit (GANN Limit) as required by the City Charter and by State law.
Additional City Council Requests
At the Budget workshop on June 1, 2026, the City Council inquired of staff about adding additional budget items to the Fiscal Year 2025-2026 Budget. To recap, these items include: funding for a Spay and Neuter Program, adding Wi-Fi in the Downtown, Funding for security cameras in all City parks, extending Library hours to include Sundays, adding lighting for City all City artwork, additional Janitorial service at City parks, and pursuing the All-America City award. Cost estimates for each of these items are included below. The projected General Fund surplus for Fiscal Year 2026-2027 is $73,264.
Item Cost (Low)Cost (High)Funding Source
Spay and Neuter Program $5,000 $10,000 General Fund
Wi-Fi in the Downtown $110,000 $230,000 General Fund
Install Cameras in all
Parks $500,000 $500,000 Measure D
Christmas Decorations
along Firestone
(Brookshire to Paramount)
$50,000 $100,000 General Fund
Library Services on
Sunday $26,997 $26,997 General Fund
Lighting for Art Work $15,000 $35,000 General Fund
Additional Park Janitorial
Services $121,541 $121,541 General Fund
All-America Award (2 Year
Process)$40,000 $40,000 General Fund
Grand Total $368,538 $563,538 General Fund
Grand Total $500,000 $500,000 Measure D
Staff would not recommend completely spending all the General Fund surplus. While the surplus is not large, it does allow for some uncertainty in the economy by providing a buffer against a slight downturn helping the City to live within its means for the year. There are available funds in Measure D for the park security camera installation.
However, it may still end up being a multiyear project depending on the availability of staff resources. Staff has been proposing each segment of the work based on staff availability to complete each segment each year. The benefit of allocating all the funds upfront though is that staff can move on to the next park when a segment is complete without needing to wait until approval of the work in the next budget process, which could reduce the project timeline and potentially accelerate the installation at all parks. The final budget includes an additional $500,000 for the security camera installation project. If the Council would like to include any other items, that direction can be provided at the Budget Hearing.
AB 2561: Local Public Employees - Vacant Positions
Effective January 1, 2025, AB 2561 amended the Meyers-Milias-Brown Act (‘MMBA’) by adding Government Code Section 3502.3, which creates a new obligation for public agencies to hold a public hearing and address the status of their job vacancies. Additionally, if the number of vacancies exceeds 20% of the total number of authorized full- time positions in a particular bargaining unit, the public agency is required to provide additional information as part of the public presentation. Currently, none of the City’s bargaining units have vacancy rates exceeding 20%, so this additional reporting is not required for this public hearing.
AB 2561 also requires that during the hearing, the agency must identify any necessary changes to policies, procedures, and recruitment activities that may lead to hiring obstacles. Staff have not identified any necessary changes to policies, procedures, or recruitment activities that may present obstacles in the hiring process.
However, the Human Resources Office has proactively made enhancements of its recruitment efforts.
In December 2024, the Human Resources Office launched NEOGOV ATTRACT, which is a candidate relationship management system. This will improve the quality of the applicant pool for critical roles and significantly boost recruitment efficiency by providing the City access to a network of 2.7 million job seekers. Additionally, the office has increased recruitment advertisement in several government job-related platform’s specializing in specific professions (i.e., utilities, engineering, etc.).
CITY COUNCIL PRIORITIES
Fiscal Responsibility
Public Engagement
FISCAL IMPACT
Approval of the adoption of today’s public hearing and resolution will satisfy Article 12, Section 1204 of the City Charter of the City of Downey which requires that on or before June 30, the City Council shall adopt the budget by majority vote.
Attachments
FY 26-27 CM Transmittal Letter.pdf
Attachment B_ Resolution No. 26- 8362 - Adopting the FY 2026-07 Budget and Annual Appropriations Limit.pdf
CITY MANAGER TRANSMITTAL LETTER
June 11, 2026
Dear Mayor Frometa and Members of the City Council:
In accordance with the City Charter, I am pleased to present a balanced Annual Operating Budget of $335 million and Capital Improvement Program (CIP) for Fiscal Year (FY) 2026–2027 for City Council’s consideration.
This budget reflects the City’s continued commitment to sound fiscal management while navigating economic uncertainty at both the state and national levels. Although inflationary pressures have moderated compared to prior years, municipalities throughout California continue facing elevated costs associated with labor, infrastructure, construction, utilities, insurance, technology, and public safety operations. Despite these economic headwinds, the Proposed Budget remains structurally balanced while continuing to support the high-quality municipal services our community expects and deserves.
This Proposed Budget reflects the City’s commitment to fiscal responsibility, adaptability, and the delivery of essential municipal services. Revenues are conservatively estimated, resources are prioritized, reserves are strategically managed, and expenditures are aligned with the City Council’s priorities. I am proud to acknowledge the exceptional dedication of our staff, whose thoughtful and tireless efforts have produced a budget that upholds the City’s high standards of service and reflects a steadfast commitment to enhancing the quality of life for all who live, work, and visit Downey.
The City of Downey enters FY 2026–2027 with cautious optimism amid a complex and evolving economic environment. While local revenues, particularly property tax and sales tax, continue demonstrating modest growth and relative stability, broader fiscal and economic conditions—including elevated interest rates, moderated consumer spending trends, inflationary pressures, and continued uncertainty surrounding Federal and State funding priorities—continue presenting potential challenges for local governments. Affordable housing concerns, infrastructure costs, labor market competition, and rising operational expenses also continue affecting local economic conditions and municipal service delivery.
In response, the City has adopted a conservative and strategic fiscal approach emphasizing operational sustainability, infrastructure investment, and long-term financial resiliency. The FY 2024–2025 Annual Comprehensive Financial Report (ACFR) further demonstrated the City’s continued financial stability through growth in Citywide net position, reductions in long-term liabilities, and continued strong reserve levels supported by disciplined financial planning and responsible stewardship of public resources.
Roger Bradley, City Manager
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 2 The General Fund Budget for FY 2026–2027 reflects prudent financial stewardship with a balanced budget of approximately $122.1 million, supporting essential programs, services, infrastructure, and operational priorities. The Proposed Budget establishes a framework to meet the needs of the community while continuing to support and enhance programs and services aligned with the City Council’s five overarching priorities of:
• Fiscal Responsibility
• Economic Vibrancy
• Efficiency and Adaptability
• Quality of Life, Safety, and Infrastructure
• Public Engagement
The City is dedicated to building strong community connections and supporting development that fits the community’s values and long-term plans. By maintaining important educational and operational programs, the City helps improve life for everyone in Downey. The initiatives outlined here aim to promote continued economic growth and lasting stability for the community.
Several objectives have been identified for each of the above priorities and were discussed with the City Council during its Goal Setting Workshop in March. These objectives are discussed in the section immediately below.
The remainder of this budget message provides a broader overview of the City’s financial program for the upcoming fiscal year, as well as the major priorities, investments, opportunities, and challenges that shaped the Proposed Budget.
CITY COUNCIL PRIORITIES, GOALS, AND PERFORMANCE INDICATORS
Fiscal Year 2025-2026 Budget Goal Successes
Fiscal Responsibility
For the 13th consecutive year - GFOA and CSMFO Budget Awards For the 14th consecutive year – Structurally Balanced Budget Annual Comprehensive Financial Report (ACFR) - Clear Audit for FY 2024-2025 Financial Reporting, Certificate of Achievement from GFOA for 26 consecutive years
Over $41 Million in Grants Secured - from various agencies including Cal Recycle, HUD, and FEMA Launched Enterprise Resources Planning (ERP) Systems Modernization Initiative – Roadmap to modernize City’s financial operations
Economic Vibrancy
Rancho Los Amigos South Campus - Council approval to form an Enhanced Infrastructure Financing District (EIFD) and approval from the Los Angeles County Board of Supervisors authorizing negotiations for an Exclusive Negotiating Agreement (ENA) with the City
Economic Development Strategic Plan – Developed and implemented a plan to address Economic Development opportunities, business attraction, and retention to support economic resiliency and sectors that contribute to high paying jobs
Economic Development Office - Launched Small Business Month campaign and Shop Local videos supporting small businesses
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 3 Back 20 - Continued to advance redevelopment of the Back 20 Round One at Stonewood Center – Plans are underway for a new family entertainment establishment, enhancing recreation and entertainment options in Downey
General Plan- Launched and made substantial progress on the City’s comprehensive General Plan 2045 update.
Efficiency & Adaptability
Downey LINK – Introduced new technology featuring real-time bus tracking and trip planner Downey Forward – 2030 Strategic Plan – Initiated year two of the Strategic Plan, including updates on a dedicated webpage with quarterly status updates
Agenda Management Software – Launched to streamline the agenda management process Downey Connect & Library Apps – Launched new apps enhancing resident engagement and service accessibility Fire Communication Center – Upgraded computer-aided dispatch (CAD) system, providing cutting edge technology to support operations
Quality of Life, Safety & Infrastructure
Columbia Memorial Space Center 2nd Building Expansion – Groundbreaking held in November 2025 to kick off construction and contract awarded to begin construction this summer 25 Miles of Roadway Paved - Since July 2025: 17 Miles of Residential Streets | 5 Miles of Arterial paving on Woodruff Avenue and Downey Avenue| 3 Miles of 38 Alley segments have been paved Completed CIP Projects - 25 projects completed with a total Investment of $31 Million in City assets, including New Traffic Signal at Suva/Guatemala | Completed the Firestone/Lakewood Intersection Improvements| Completed HVAC projects at Apollo Gym and Columbia Memorial Space Center | Began Water improvements on Bellflower Blvd | Completed sewer improvements Citywide | Paved parking lots – Wilderness Park, Barbara J. Riley Community and Senior Center, and Treasure Island Park
Streetlight Installation Program – Launched year one (1) of the Residential Streetlight Installation program STEP Program - Established an Interdepartmental Homelessness Management Team (STEP – Strategic Team for Engagement and Prevention) to improve service delivery and responsiveness Security Cameras - Installed security cameras at BJR, Apollo and Golden Parks Parks & Recreation: Enriching Community Life - Parks and Recreation hosted over 30 events last year, engaging thousands and fostering community unity
Home and Business Security Rebate Program – Launched new program providing up to a $250 rebate for security equipment
Public Engagement
Fire Technology Program - Collaborated with DUSD to develop and launch a high school Fire Technology Program City of STEM - Declared the Official Science Festival of Los Angeles County by the County Board of Supervisors , simultaneously winning the League of California Cities Helen Putnam Award for Excellence FIFA Official Fan Zone – Proposal to be considered for an official FIFA Fan Zone was submitted, and City was notified it had been selected as an official host in late 2025 with event to occur June 20, 2026 PIO Office- Continued to revamp the City’s social media strategy to align with agency goals and community preferences, boosting engagement and follower growth. Growth increases were: Instagram - 11.7% reaching 30,000 followers, Facebook - 3.0%
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 4 First-time City Events – Including the Vietnam Traveling Wall, Men’s Wellness Fair, and the LA Phil Neighborhood Concert
Keep Downey Beautiful - Ten events hosted since July 2025, promoting community pride and engagement Apollo Mascot – The City unveiled its official astronaut mascot (Apollo) to further engage the community and enhance the City’s brand.
FISCAL YEAR 2026-2027 KEY BUDGET GOALS
Performance Indicators
Aligned with the City Council’s five key priorities, the City has established a range of performance indicators to measure departmental efficiency and effectiveness. These indicators, included in each departmental section, present annual targets alongside actual results and projections for comparison.
ECONOMIC OUTLOOK
Economic conditions for FY 2026–2027 reflect modest national and regional growth tempered by persistent inflationary pressures, elevated interest rates, cautious consumer spending, and heightened global uncertainty.
For Downey, these factors continue affecting housing turnover and development activity, which may moderate growth in property tax revenues, while elevated borrowing costs and construction expenses continue to impact private investment. As of March 2026, the City’s unemployment rate was approximately 5.2%, with a labor force
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 5 of about 58,000, employment of about 55,000, and approximately 3,000 unemployed residents, generally consistent with Los Angeles County’s unemployment rate of 5.1% and California’s unemployment rate of 5.3%.
Sales tax performance remains relatively stable, supported by Downey’s retail and commercial base, but continues to face headwinds from cautious consumer spending, elevated household costs, and fuel price volatility. The conflict involving Iran has added additional uncertainty to the FY 2026–2027 outlook by contributing to higher oil and fuel prices, renewed inflationary pressure, and potential impacts on transportation, construction, consumer spending, and interest-rate expectations. Broader fiscal and economic conditions, including uncertainty surrounding future State and federal funding priorities, may also continue affecting local government programs and future grant opportunities.
In response, the City has adopted a conservative and strategic fiscal approach emphasizing prudent reserve management, economic development, infrastructure investment, operational sustainability, and diversification of revenues to help navigate evolving economic conditions while maintaining strong community programs and effective city operations.
Housing
The housing market in Downey continues reflecting broader Southern California trends influenced by elevated mortgage interest rates, housing affordability constraints, insurance market pressures, and limited housing inventory. While housing turnover has moderated compared to prior years, long-term property values throughout the region have generally remained stable, continuing to support assessed valuation growth under Proposition 13.
According to the California Association of REALTORS® (C.A.R.), California’s statewide median home price reached approximately $889,190 in March 2026, representing a modest 0.4% increase from March 2025 despite slowing sales activity and continued affordability challenges. Los Angeles County’s median home price was approximately $828,300, while Downey’s median home sale price remained relatively resilient at approximately $875,000, increasing by seven percent compared to last year, reflecting continued long-term demand and property value stability despite elevated borrowing costs and moderating market activity. C.A.R. also reported that only approximately 22% of California households could afford the purchase of a median-priced home during the first quarter of 2026, underscoring continued affordability challenges throughout the state.
Reduced housing turnover may continue moderating growth in property tax revenues, as properties are generally reassessed at market value only upon a change in ownership under Proposition 13. Existing properties, however, continue receiving annual inflationary adjustments, contributing to modest and stable long-term property tax growth for the City. Higher construction costs and elevated financing expenses may also continue affecting residential and commercial development activity during FY 2026–2027.
In response to housing demand and future growth needs, the City continues advancing planning efforts consistent with its certified Housing Element. The Comprehensive General Plan Update will help align land use policies, zoning designations, and development standards to better support responsible housing production, improve predictability in the development review process, and identify appropriate areas for future residential and mixed-use opportunities. This effort will also help ensure future housing growth is balanced with infrastructure capacity, neighborhood compatibility, mobility, and quality-of-life considerations.
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 6 Unemployment and Consumer Confidence
As of March 2026, the City of Downey reported an
unemployment rate of approximately 5.2%, generally consistent with broader regional and statewide labor market trends.
Downey’s labor force consisted of approximately 58,000
individuals, including approximately 55,000 employed residents, according to the California Employment Development
Department’s monthly city-level labor force data. The Los Angeles-Long Beach-Glendale metropolitan division reported an unemployment rate of approximately 5.1%, while California’s statewide unemployment rate was approximately 5.3% during the same period. Although unemployment levels remain relatively stable compared to historical trends, labor markets continue reflecting moderating job growth and evolving workforce conditions throughout the region.
Consumer confidence continues being impacted by persistent inflationary pressures, elevated housing costs, higher borrowing rates, and increased costs for everyday necessities such as food, utilities, fuel, and insurance.
Ongoing geopolitical instability and volatility in global energy markets have also contributed to renewed concerns regarding fuel prices, inflation, supply chain disruptions, and broader economic conditions entering FY 2026–2027.
These conditions may continue affecting discretionary consumer spending patterns, which directly influence local sales tax performance and portions of the retail economy. While several consumer-oriented sectors throughout Downey, particularly restaurants, grocery-related spending, and portions of general retail, continue demonstrating resiliency, cautious consumer spending patterns may continue creating headwinds during the upcoming fiscal year.
In response, the FY 2026–2027 Proposed Budget continues supporting economic development initiatives intended to strengthen business retention, encourage investment, diversify the City’s economic base, and support long-term workforce and economic resiliency throughout the community. In addition, the City recently developed an Economic Development Strategic Plan intended to guide long-term economic growth, support business attraction and retention efforts, encourage targeted redevelopment opportunities, and strengthen the City’s long-term economic sustainability.
BUDGET PROCESS
The City’s budget is developed within the following framework and timeline:
1) Focusing on the long-term fiscal health of the City. 2) Building a prudent reserve;
3) Developing long-term strategies to reduce unfunded liabilities; 4) Controlling labor costs while minimizing impacts to staff; 5) Allocating one-time revenue for one-time expenses;
6) Requiring enterprise and grant funds to balance revenues with expenses and new programs to pay for themselves; and
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 7 7) Any new expenditure requiring either additional revenue or expenditure reductions.
Basis of Budgeting
The budgeting (accounting and reporting) policies of the City conform to Generally Accepted Accounting Principles (GAAP) applicable to state and local governments. These principles include standards prescribed by the Governmental Accounting Standards Board (GASB), which includes the statements and interpretations of the National Council on Governmental Accounting and the principles prescribed by the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governments. The budget differs from the annual financial reports issued by the City in two ways: The budget does not show depreciation expense, and it does not show the value of employee leave balances, in keeping with traditional municipal budgetary conventions. These expenses are, however, reported in the Annual Comprehensive Financial Report (ACFR).
Budget Controls
Supplemental appropriations can be approved through minute action or a resolution approved by a simple majority vote of the Council. With the exception of transfers between personnel costs and operations/services costs, the City Manager is authorized to transfer amounts between or within departments or programs within any fund. The Council must approve any transfer which alters the total appropriations on any fund.
Departments monitor reports that are issued on the 15th working day of each month for the preceding month to ensure expenditures are properly charged and to ensure there are appropriate funds for future expenditures. At any time during the fiscal year, Departments report to the City Manager and Finance Director on any significant budget variance that cannot be reconciled with the division/department responsible for incurring the variance. Additionally, upon review by the department directors, purchase orders are transmitted to the Finance Department for verification of budget compliance.
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 8
BUDGET HIGHLIGHTS
The proposed overall Citywide FY 2026-2027 Budget for all funds is $335.6 million. Overall, this budget is an increase of roughly $9.7 million or 3% compared to the Adjusted FY 2025-2026 Budget. This increase is primarily due to one-time Capital Improvement Program projects and expenditures supported by voter- approved Measure D.
The FY 2026-2027 General Fund expenditure budget of $122,068,714 is funded with FY 2026-2027 estimated revenues of $122,141,978.
Revenues and Projections Performance Expectations
Overall, FY 2026–2027 General Fund revenue is projected to be $122,141,978, approximately 2% higher than the FY 2025–2026 Amended Budget.
The two main revenue drivers for the City’s General Fund are Property taxes, 33% of the City’s General Fund revenue, and Sales Tax revenues, which accounts for 24% of the City’s revenue stream.
Property Tax
Property tax revenue continues representing the City’s largest and one of its most stable General Fund revenue sources, accounting for approximately 33% of total General Fund revenues, or approximately $40.5 million, in the FY 2026–2027 Proposed Budget. Property tax revenues are projected to remain relatively stable with modest growth supported primarily by annual assessed valuation increases as permitted under Proposition 13.
According to HdL Companies’ property tax analysis, assessed valuation growth throughout the region continues being driven primarily by annual inflationary adjustments rather than significant increases in property sales activity, as elevated mortgage interest rates and housing affordability challenges continue moderating housing turnover throughout Southern California. Despite moderating turnover, property tax revenues continue demonstrating resiliency due to the long-term protections and predictability provided under Proposition 13.
The City will continue closely monitoring assessed valuation trends, property tax allocations, economic conditions, and regional housing market activity to ensure prudent and conservative property tax revenue forecasting throughout FY 2026–2027, and it will make adjustments, if and as necessary, during the mid-year budget adjustment process.
Sales Tax
Sales and use tax revenue continues representing one of the City’s most significant General Fund revenue sources, accounting for approximately 24% of total General Fund revenues, or approximately $29.5 million, in the FY 2026–2027 Proposed Budget. Sales tax revenues are projected to increase approximately 1% compared to the FY 2025–2026 Adjusted Budget, reflecting relatively stable local economic activity despite moderating consumer spending patterns and broader economic uncertainty.
According to HdL Companies’ sales tax analysis, taxable sales activity throughout Los Angeles County and Southern California remained relatively stable during calendar year 2025 despite elevated interest rates,
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 9 inflationary pressures, and moderating consumer spending behavior. Several consumer-oriented sectors throughout Downey, including restaurants, grocery-related spending, and portions of general retail activity, continued demonstrating resiliency during the period, while portions of discretionary retail activity remained more sensitive to inflationary pressures and elevated borrowing costs.
Broader economic and geopolitical conditions, including volatility in energy markets, elevated fuel prices, global supply chain concerns, and uncertainty surrounding federal trade and tariff policies, may continue impacting retail activity and business operations during FY 2026–2027. Despite these challenges, the City’s diverse retail composition and regional commercial presence continue helping moderate volatility associated with broader economic fluctuations.
Accordingly, the FY 2026–2027 Proposed Budget reflects conservative sales tax forecasting assumptions designed to preserve fiscal flexibility amid evolving economic conditions. The City will continue closely monitoring consumer spending patterns, economic conditions, retail performance trends, and HdL sales tax forecasts to ensure prudent and conservative sales tax revenue projections throughout FY 2026–2027.
Expenditures and Projections
Proposed General Fund expenditures are $122,068,714, which is a 2% increase over the FY 2025-2026 General Fund adjusted budget.
In addition to the Goals mentioned earlier under “City Council Priorities, Goals, and Performance Indicators”, the budget proposes continued funding for several significant services and projects aimed at enhancing infrastructure, public safety, and community engagement.
Capital Improvement Program
The City of Downey's proposed Capital Improvement Program for FY 202 6-2027 encompasses a budget of $98,868,061 targeting key areas such as streets, public facilities, water improvements, and traffic safety. This investment aims to enhance infrastructure, improve quality of life, and bolster economic impact.
Capital improvements are required to maintain the City’s physical infrastructure. A percentage breakdown can be seen below. Capital improvement projects are funded by Measure S and D, Proposition C, Measure R, Measure M, 2017 Road Maintenance Rehabilitation Act (SB 1), and other revenue sources.
Key Budget Areas:
1. Roads
o Street Improvements: $21.7 million allocated for comprehensive projects including the Lakewood Boulevard Pavement Rehabilitation and Bellflower Boulevard Pavement Rehabilitation.
o Traffic Safety: $5.2 million allocated for projects including Safe Routes to School and Downey Bicycle Master Plan Implementation Phase 1, and Firestone Blvd Traffic Signal Updates.
2. Buildings and Facilities:
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 10 o Public Facilities: $20.3 million dedicated to projects like the Columbia Memorial Space Center New Second Building, Inspiration Shuttle Renovation, and Installation of Security Cameras at Parks.
3. Water and Sewer
o Water Improvements: $29.6 million including the design for the new Water Treatment Plant and system-wide water supply treatment improvement, and Bellflower Boulevard system upgrades. o Sewer & Storm Drain: $31.5 million for sewer and storm drain projects, including the Furman Park and Apollo Park Stormwater Capture and Infiltration Projects and the Independence Park Runoff Capture and Infiltration Project.
Employee Service Costs
Employee service costs—including salaries, wages, and benefits—continue representing the largest expenditure within the City of Downey’s General Fund. As the primary providers of public services, City employees play a critical role in maintaining public safety, infrastructure, operational efficiency, and quality of life throughout the community.
For FY 2026–2027, the City remains focused on maintaining efficient staffing levels within the limits of its fiscal constraints while continuing to evaluate operational needs and long-term organizational sustainability. The City’s workforce currently consists of approximately 470 budgeted positions compared to 481 positions in FY 2008–2009, reflecting relatively lean staffing levels despite continued growth in community needs, service demands, infrastructure responsibilities, technology requirements, and operational complexity over the same period.
The FY 2026–2027 Proposed Budget reflects a zero net increase in staffing levels. As part of a broader Information Technology restructuring effort following recent leadership transitions, the City froze two vacant positions while strategically utilizing outside expertise and professional services to support major technology and network modernization initiatives. These efforts include continued investment in Microsoft 365 solutions, cybersecurity, operational continuity, network infrastructure, and other technology improvements intended to enhance operational efficiency, strengthen security, and modernize service delivery Citywide.
The City also continues prioritizing workforce retention and recruitment in an increasingly competitive municipal labor market. During FY 2025–2026, the City successfully negotiated labor agreements with its bargaining groups that included compensation adjustments intended to support employee retention, recruitment, and long-term workforce stability. These efforts are designed to help the City remain competitive with neighboring agencies while continuing to attract and retain skilled employees who are capable of meeting community needs and supporting essential city operations.
Looking forward, CalPERS pension liabilities, rising healthcare premiums, inflationary pressures, and broader economic conditions continue placing pressure on employee-related costs. While revenue growth has remained relatively stable, the City continues balancing operational needs, long-term financial sustainability, and strategic workforce investments to maintain high-quality service delivery while exercising prudent fiscal management.
Strategic workforce planning will remain important to aligning staffing levels with service needs, operational priorities, and fiscal realities. The City remains committed to supporting and investing in its workforce while
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 11 responsibly managing long-term financial obligations and maintaining the ability to adapt and sustain essential operations in the future.
BUDGET CHALLENGES
The FY 2026–2027 Proposed Budget was developed amid a challenging and evolving fiscal environment. Like many California municipalities, the City continues facing pressures associated with retirement costs, inflation, healthcare expenditures, infrastructure needs, workforce challenges, risk management and litigation, and broader economic uncertainty. These factors require ongoing strategic planning, prudent fiscal management, and careful prioritization of limited resources.
Retirement Costs
The City contracts with the California Public Employees Retirement System (CalPERS), to provide retirement benefits to full-time employees. On January 1, 2013, the State adopted the California Public Employee’s Pension Reform Act (PEPRA) in an effort to control rising pension costs. Members who became CalPERS members on or after January 1, 2013, or have been separated from service for longer than six months, are considered “new” members”, and are required to pay half of the normal cost towards their pension contribution.
In recent years, CalPERS has made several actuarial and policy changes that continue to increase employer retirement costs. These changes include new amortization schedules and smoothing methodologies, adjustments to demographic and mortality assumptions, and a reduction in the assumed investment return (discount rate). Investment performance volatility and changes in actuarial assumptions can affect future employer contribution requirements when actual returns fall below CalPERS’ assumed rate of return.
To help mitigate long-term pension obligations, the City implemented a second-tier retirement plan in January 2012 and now enrolls all new employees under either the second-tier or PEPRA formulas. This structural change, while effective over the long term, is a gradual solution and will take 20 to 30 years to significantly reduce the City’s unfunded pension liability.
Additionally, the City took proactive steps in early 2021 to refinance a portion of its Unfunded Accrued Liability (UAL), which resulted in a projected gross savings of approximately $65 million.
Despite these reform efforts, retirement costs continue to climb. According to the June 30, 2024 actuarial valuations for FY 2026-2027, the City’s required UAL contributions are estimated at $3.938 million for the Miscellaneous Plan and $8.83 million for the Safety Plan. Additionally, the City must contribute normal costs of
10.41% and 20.37% of payroll, respectively, for these plans. The combined UAL for both plans exceeds $146 million, with a funded ratio of 81.3% (Miscellaneous) and 81.2% (Safety).
Nonetheless, retirement costs remain a significant and growing budgetary obligation. Continued monitoring, prudent financial planning, and evaluation of additional mitigation strategies will be essential to sustaining the City’s fiscal health as the City moves into the future.
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 12 Health Care Premiums
Healthcare costs for CalPERS-negotiated healthcare plans have increased over the prior year as projected. While the City has not received data from CalPERS regarding upcoming year costs at the writing of this transmittal, in the FY 2026-2027 Proposed Budget, the City of Downey anticipated an increase of approximately $450,634 or
5.2% in employee healthcare premiums, which aligns with the 4-6 % increase the City has experienced in previous years. This rise is attributed to broader economic factors such as escalating medical costs, inflation in pharmaceutical pricing, and increased utilization rates. These increases will directly impact the City’s General Fund and internal service fund expenditures, as the City maintains a commitment to competitive and comprehensive employee benefits.
For Downey, the projected premium increases will require careful balancing within department allocations, with an emphasis on long-term cost containment strategies such as plan design adjustments, wellness initiatives, and collaborative negotiations with labor groups.
Despite these rising costs, the City’s prudent fiscal planning and proactive forecasting have allowed for these increases to be accounted for in the FY 2026-2027 Proposed Budget, ensuring ongoing stability in operations and workforce support.
Inflation
Although inflationary pressures have moderated compared to recent peak levels, elevated costs continue to impact municipal operations, infrastructure projects, utilities, equipment, technology, insurance, and contracted services throughout FY 2026–2027. Construction and infrastructure-related costs also remain above historical levels due to labor shortages, material cost volatility, supply chain disruptions, and broader economic uncertainty. Higher fuel, electricity, maintenance, and operational costs continue to increase expenditures across multiple City departments and enterprise operations, while ongoing geopolitical instability and volatility in global energy markets may continue affecting fuel prices, transportation costs, and construction-related expenses during the upcoming fiscal year. Accordingly, the City continues to closely monitor inflation trends, project costs, and operational expenditures while maintaining conservative financial forecasting and strategically prioritizing resources to help mitigate future financial impacts.
Fiscal Sustainability and Reserve Management
While the FY 2026–2027 Proposed Budget remains structurally balanced, the City continues to face long-term fiscal pressures related to rising operational costs, infrastructure needs, pension obligations, and economic uncertainty.
In recent years, the City has strategically used available fund balance and one-time resources to support critical infrastructure, operational priorities, and community investments. Additionally, the City has experienced notable increases in claim settlements over the past couple of years; these are unanticipated costs not related to routine operations that have impacted reserves during this period. Moving forward, the City will continue emphasizing fiscal sustainability, prudent reserve management, and a strategic approach to rebuilding reserves toward the City’s 35% reserve policy target, while limiting the use of one-time resources for ongoing operational costs whenever feasible.
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 13 Staffing Levels
Maintaining sufficient staffing levels to meet the community’s expectations for exemplary city services will continue to remain a challenge in the coming years. Increasing operational complexity, evolving service demands, infrastructure responsibilities, technology needs, and competitive labor market conditions continue to place pressure on local governments throughout the region. Recruitment and retention challenges remain particularly significant for specialized, technical, and public safety positions, where competition among public agencies continues to intensify.
Although the FY 2026–2027 Proposed Budget reflects a zero net increase in staffing levels, the City continues to evaluate operational needs, service delivery expectations, and organizational sustainability. Staffing levels remain relatively lean compared to historical levels despite continued growth in community expectations and service demands. The City continues to balance operational needs with long-term fiscal sustainability while strategically evaluating opportunities to improve efficiency, modernize operations, and enhance service delivery. Personnel changes included in the FY 2026–2027 Proposed Budget primarily consist of organizational restructuring efforts and position reclassifications intended to better align staffing resources with evolving operational priorities, service delivery needs, technology modernization efforts, and organizational efficiencies.
In recent years, the City has made targeted investments in critical operational and public safety functions to support community needs. As part of a Police Department Operations Assessment, a total of 17 Police Department positions were added during FY 2024–2025 to strengthen policing efforts and support public safety operations. In addition, during FY 2025–2026, the City added two full-time Parking Enforcement Officers and one Regional Communications Operator to improve community livability, responsiveness to resident concerns, and neighborhood quality-of-life initiatives. These positions were funded through the voter-approved Measure D sales tax measure, helping align expanded service capacity with dedicated local funding sources in a fiscally responsible manner.
The City also continues evaluating long-term operational needs through departmental assessments and strategic planning efforts. During FY 2025–2026, the Fire Department initiated a Department Operations Assessment intended to help evaluate future staffing and operational needs necessary to support community service expectations and long-term public safety priorities.
Infrastructure Investment
Investing in infrastructure remains a cornerstone of the City of Downey’s long-term strategy to ensure public safety, economic resilience, and a high quality of life. The FY 2026-2027 Proposed Budget reflects this commitment by allocating over $92 million toward capital improvement projects, including street rehabilitation, water and sewer system upgrades, stormwater infrastructure, and facility improvements. However, significant challenges remain as aging infrastructure continues to demand greater investment than available recurring revenue can support.
The City faces a growing backlog of deferred maintenance across multiple systems that require phased replacement to avoid service disruptions and regulatory compliance issues.
Construction costs have increased significantly since 2020 and remain elevated, reducing the City’s purchasing power for capital investments. Recent construction cost indicators continue showing year-over-year increases in labor and material costs, including higher costs for steel, skilled labor, and common labor. As a result, the City must
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 14 continue carefully prioritizing capital projects, monitoring bid results, and pursuing available State, federal, and local funding sources to support infrastructure investment.
While the FY 2026-2027 Budget includes funding from Measure S, Measure D, Measure M, SB 1, and various grant sources, these are often earmarked for specific uses and cannot fully address citywide infrastructure needs. As such, the City must continue to pursue strategic planning, project prioritization, and alternative funding mechanisms, including bond financing, public-private partnerships, and phased implementation models to fund needed improvements.
To preserve public trust and fiscal stability, the City must continue investing in infrastructure in a disciplined yet proactive manner. Delaying needed projects only escalates long-term costs and risks, while timely investments safeguard essential services, attract economic development, and maintain Downey’s position as a well-managed, forward-looking community.
Community Aspirations
The City of Downey remains dedicated to improving quality of life by consistently investing in public safety, infrastructure, economic development, community engagement, and organizational sustainability. The FY 2026– 2027 Proposed Budget demonstrates the City Council’s commitment to sustaining effective municipal services while strategically responding to the changing needs of the community.
The City continues pursuing initiatives intended to improve neighborhood livability, modernize infrastructure, support local businesses, enhance parks and recreational amenities, and strengthen community partnerships.
Investments in technology modernization and operational efficiency also continue supporting improved customer service, accessibility, and responsiveness Citywide.
Public safety, infrastructure maintenance, and community quality-of-life initiatives remain central priorities within the Proposed Budget. Through voter-approved Measures S and D funding and other strategic investments, the City continues supporting police, fire, neighborhood services, and infrastructure-related improvements intended to maintain a safe, well-maintained, and economically vibrant community.
As the City continues navigating evolving economic and operational challenges, maintaining strong community partnerships, fiscal responsibility, and responsive municipal services will remain critical to supporting Downey’s long-term success and resiliency.
LOOKING BEYOND FISCAL YEAR 2026-2027
To ensure long-term fiscal sustainability and community resiliency, the City of Downey will continue implementing strategic financial policies and forward-looking investments that support high-quality service delivery, responsible growth, and long-term infrastructure planning. Building upon recent efforts related to compensation, retirement funding, healthcare cost management, revenue diversification, and capital planning, the City remains committed to proactive financial stewardship while
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 15 addressing infrastructure, housing, environmental, technology, and economic development needs.
In FY 2026–2027, the City will continue leveraging a diverse portfolio of funding sources—including Measures S and D, Measure M, SB 1, enterprise funds, grants, and other restricted revenues—to enhance public assets and community facilities. These investments support essential services in public safety, parks, libraries, utilities, transportation, and public infrastructure, while also helping preserve long-term fiscal and service delivery stability.
Recognizing the continued impact of inflation, construction cost escalation, and infrastructure needs, the City will continue taking a strategic approach to capital planning by prioritizing projects that protect public assets, improve service reliability, reduce future maintenance liabilities, and enhance quality of life for residents. The City’s five-year Capital Improvement Program serves as a financial and operational roadmap by identifying project costs, funding sources, implementation timelines, and long-term infrastructure priorities.
Capital and strategic planning will continue to work in tandem with long-range economic development efforts, including key regional and local opportunities such as:
• Rancho Los Amigos South Campus redevelopment, supporting job growth, and mixed-use as well as transit-oriented development;
• Columbia Memorial Space Center expansion, enhancing Downey’s STEM education, and regional attraction;
• Southeast Gateway Line station planning, which may improve regional mobility and support future investment opportunities;
• The ERP modernization initiative, a multi-year effort to replace the City’s outdated system with a modern, integrated platform that streamlines processes, improves data accuracy and reporting, strengthens internal controls, and supports long-term operational efficiency. • Continue to advance the redevelopment of the Back 20 to position the site for future economic investment and high-value development potential.
• Ongoing implementation of the City’s Economic Development Strategic Plan to support business attraction, retention, and targeted redevelopment.
In addition to infrastructure and economic development investments, the City will continue evaluating opportunities to strengthen its financial base and reduce reliance on economically sensitive revenues. These efforts include modernizing fee structures for cost recovery, pursuing grants and legislative advocacy, evaluating long-term revenue opportunities, and ensuring enterprise operations remain financially sustainable.
By combining disciplined financial planning, strategic infrastructure investment, economic development, and prudent reserve management, the City of Downey is building a resilient and adaptable fiscal foundation. This approach will help the City meet today’s service demands while preparing for the needs of future generations.
Additional Revenue Augmentation
As part of its long-term strategy to support fiscal sustainability, the City of Downey continues evaluating opportunities to strengthen, modernize, and diversify its revenue base beyond FY 2026–2027. As operational costs,
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 16 infrastructure needs, and service demands continue increasing, the City’s revenue strategy remains focused on preserving General Fund flexibility, aligning revenues with the cost of providing services, and ensuring that both operating and enterprise funds remain financially sustainable.
The City’s ongoing revenue efforts include modernizing revenue sources, periodically reviewing fees and charges for cost recovery, pursuing grants and outside funding, supporting economic development, and implementing recently approved water rate adjustments to support the long-term sustainability of the Water Fund.
Expanding and Modernizing the City’s Revenue Base
The City continues pursuing a balanced approach to revenue augmentation that does not rely on any single funding source. These efforts include supporting business retention and attraction, encouraging strategic economic development, pursuing grant funding and legislative advocacy opportunities, and evaluating revenue sources that align with growing service and infrastructure needs.
Modernizing the City’s revenue base is important to maintaining service capacity, supporting long-term infrastructure investment, and reducing reliance on economically sensitive revenues. Continued economic development, responsible growth, and periodic review of revenue assumptions will remain key components of the City’s long-term financial strategy.
Fee Schedule and Rate Adjustments
As part of the FY 2026–2027 budget process and ongoing financial planning efforts, the City continues evaluating fees and charges to ensure appropriate cost recovery and alignment with the cost of providing municipal services. The City previously implemented a 3% fee adjustment to reflect inflationary pressures and maintain alignment with the Consumer Price Index (CPI).
Moving forward, periodic fee reviews and rate adjustments will remain an important tool for ensuring that service-related costs are recovered appropriately, where legally permissible, while balancing affordability, community needs, and long-term fiscal sustainability. This approach helps ensure that General Fund resources remain available to support core services and broader community priorities.
Water and Utility Rate Study
Following completion of a comprehensive water rate study, the City Council approved updated water rates on January 13, 2026. The updated water rates are designed to help ensure the long-term financial sustainability of the Water Fund and the continued reliability of the City’s water system. The updated rates became effective January 14, 2026.
The water rate study evaluated long-term operational, maintenance, regulatory, and infrastructure investment needs associated with the City’s water system. The approved rates are intended to support:
• Ongoing water system operations and maintenance;
• Water supply reliability and infrastructure replacement needs; • Emergency backup power generation improvements at water well facilities;
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 17 • Future PFAS treatment and regulatory compliance requirements; • Long-term operational resiliency and financial sustainability of the Water Fund.
The City had not adjusted water rates since Fiscal Year 2015–2016. The approved rate adjustments are intended to help address increasing operational costs associated with labor, materials, electricity, regulatory compliance, and infrastructure maintenance while continuing to support reliable water service and long-term system sustainability for the community.
CONCLUSION
As economic conditions remain uncertain at the regional, national, and global levels, the City has prioritized financial resilience through a combination of prudent reserve management, conservative financial forecasting, infrastructure investment, and sustainable operational planning. By aligning operational decisions with long-range capital planning and the City Council’s strategic priorities, the City continues ensuring resources are used effectively and responsibly to meet the evolving needs of residents and businesses.
This budget also lays the groundwork for future planning efforts, including continued infrastructure investment, technology modernization, strategic economic development initiatives, and ongoing evaluation of additional revenue opportunities to support a balanced and stable fiscal outlook. These efforts will help Downey remain adaptable to future challenges while preserving its identity as a full-service city known for quality, responsiveness, and innovation.
I would like to extend sincere appreciation to the City Council for its ongoing leadership and vision, and to our dedicated City staff for their professionalism, diligence, and commitment in developing this comprehensive budget. With the collective efforts of our elected leaders, employees, and engaged community members, the City of Downey remains well-positioned to maintain financial stability, deliver high-quality municipal services, and support a strong, resilient, and vibrant future for the community.
Respectfully Submitted,
CITY OF DOWNEY
Roger Bradley
City Manager
City of Downey | FY 2026-2027 Proposed Annual Operating Budget | 18 GENERAL FUND FISCAL YEAR 2026-2027 EXECUTIVE SUMMARY
RESOLUTION NO. 26-8362
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
ADOPTING THE FISCAL YEAR 2026-2027 BUDGET AND THE ANNUAL
APPROPRIATIONS LIMIT
WHEREAS, the City Council has considered the proposed budget recommended by the City Manager for the Fiscal Year 2026-2027; and
WHEREAS, the addition of a Plan Checker/Inspector was included in the Fire Department; and
WHEREAS, the addition of a Administrative Assistant was included in the Columbia Memorial Space Center; and
WHEREAS, the addition of a Senior Civil Engineer was included in the Public Works Department; and
WHEREAS, the addition of a Maintenance Lead Work was included in the Public Works Department; and
WHEREAS, the reclassification of Recreation Mangager to Deputy Director of Parks and Recreation to be more reflective of the scope of duties and responsibilities was included; and
WHEREAS, the reclassification of Executive Secretary to Administrative Aide to be more reflective of the scope of duties and responsibilities was included; and
WHEREAS, the reclassification of Secretary to Executive Secretary to be more reflective of the scope of duties and responsibilities was included; and
WHEREAS, the elimination of Associate Civil Engineer and Keep Downey Beautiful Coordinator, to be more reflective of the scope of duties and responsibilities was included; and
WHEREAS, the newly established classification of Senior Civil Engineer, is exempt Middle Management at-will classifications; and
WHEREAS, the newly established classifications of Administrative Aide, Plan Checker/Inspector and Maintenance Lead Worker, are non-exempt classifications and determined to be appropriately represented by the Downey City Employees’ Association – Miscellaneous Unit.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The budget for the City of Downey for fiscal year 2026-2027 is hereby adopted as set forth in the statement of Summary of Resources and Requirements by Fund. The City Manager is hereby authorized to expend, in accordance with the laws of the State of California, the Charter of the City of Downey, and its ordinances, on behalf of the City Council, an amount of $335,022,766 for City operations as detailed in Exhibit “A”.
SECTION 2. City staff is directed to prepare and publish a final budget document incorporating those changes approved by Council.
RESOLUTION NO. 26-8362
PAGE 2
SECTION 3. In accordance with Article XIIIB of the State Constitution, and using data furnished by the State Department of Finance and the Los Angeles County Assessor, the appropriations limit for Fiscal Year 2026-2027 has been calculated.
The calculations indicated below, are computed by adjusting the appropriations limit for Fiscal Year 2025-2026 for the percentage change in either California’s per capita personal income (4.95%) or the City’s total assessed valuation due to new non-residential construction (7.25%); and the percentage change in population of either the County of Los Angeles (-0.64%) or the City (-0.14%). Since the percentage change in the assessed valuation due to non-residential new construction and the percentage change in Downey population will provide greater benefit to the City, these factors have been selected to compute the fiscal year 2026-27 appropriations limit.
Using these factors, the appropriations limit for 2026-27 is $350,970,208, which basically means that certain aspects of the budget cannot exceed this amount. The proposed budget, currently under consideration, has appropriations subject to this limit of $105,841,373.
SECTION 4. The appropriations specified herein shall constitute the maximum amounts authorized for each department in each fund. The City Manager is hereby authorized to make budgetary transfers between departments in a fund if, in his opinion, such transfers are necessary and proper to the effective operation of the City; provided, however, that:
(a) Appropriations for personnel costs cannot be transferred to supply and service accounts.
(b) Any non-budgeted equipment, new or replacement, which costs $75,000 or more requires prior City Council approval.
(c) The City Manager will inform the City Council of the purchase of non-budgeted equipment, new or replacement that costs less than $75,000.
(d) Authorized manpower levels as specified in the Budget document are neither increased nor transferred without prior approval of the City Council. However, the City Manager may exceed authorized manpower levels on a temporary basis to provide for the effective training and orientation of new employees.
SECTION 5. For the fiscal year ending June 30, 2026, the amount of unassigned Fund Balance shall be deposited into Assigned General Fund balance accounts to (1) ensure the Emergency Reserve and the Stability Reserve are appropriately funded and (2) provide future resources for other significant City projects or needs.
SECTION 6. The number and classification of employees as specified in the Budget and any amendments or revisions authorized by the City Council are hereby authorized for the fiscal year.
SECTION 7. The following pay ranges shall take effect to coincide with the pay period that includes July 1, 2026 as follows:
Classification Title Grade Pay Range Per Month
Deputy Director of Parks and Recreation TBD $10,588.23 to $12,917.66
SECTION 8. The City Manager, or designee, is hereby authorized to make all classification specification revisions in accordance with the FY 2026-2027 Budget.
SECTION 9. The City Clerk shall certify to the adoption of this Resolution.
RESOLUTION NO. 26-8362
PAGE 3
APPROVED AND ADOPTED this 23rd day of June, 2026.
___________________________________
CLAUDIA M. FROMETA, Mayor
ATTEST:
MARIA ALICIA DUARTE, CMC
City Clerk
APPROVED AS TO FORM:
______________________________
JOHN M. FUNK
City Attorney
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a Regular meeting held on the 23rd day of June, 2026, by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ABSTAIN: Council Members:
MARIA ALICIA DUARTE, CMC
City Clerk
RESOLUTION NO. 26-8362
PAGE 4
EXHIBIT A
Fund No.Fund
Projected
Beginning
Balance
July 1, 2026
Estimated
Revenues
Transfers
from Other Funds
Use of Prior Year
Resources
Total
Resources
Available
Operating
Expenditures Equipment Capital
Projects
Transfers to
Other Funds
Total
Requirements
T
a
s
Projected Ending
Fund Balance
June 30, 2027
10 General Fund 43,115,519 118,442,978 3,699,000 1,256,257 165,257,497 110,211,325 168,832 - 11,688,557 122,068,714 41,932,526 Sub Total 43,115,519 118,442,978 3,699,000 1,256,257 165,257,497 110,211,325 168,832 - 11,688,557 122,068,714 41,932,526 15 Special Project Fund 10,205,833 - - - 10,205,833 - - - 10,205,833 10,205,833 - 65 Civic Center (84,344) 2,372,937 - - 2,288,593 2,275,176 - - - 2,275,176 13,417 73 Special Deposit Fund ( Refundable Deposits) 64,894 - 64,894 - - - - - 64,894 76 Liability Insurance (404,093) 5,457,809 - - 5,053,716 5,047,559 - - - 5,047,559 6,157 Sub Total 9,782,290 7,830,746 - - 17,613,036 7,322,735 - - 10,205,833 17,528,568 84,468 Total 52,897,809 126,273,724 3,699,000 1,256,257 182,870,533 117,534,060 168,832 - 21,894,390 139,597,282 42,016,994 11 Federal Police Grant2 (3,124) 360,681 - 357,557 360,681 360,681 (3,124) 12 Measure D Operating 6,120,839 6,522,919 - 12,643,759 5,961,577 481,729 1,644,716 8,088,023 4,555,736 13 Fire Dept. Haz Material (158,150) 243,279 - 85,129 253,431 253,431 (168,302) 14 Federal Fire Grant2 168,329 244,500 - 412,829 77,500 77,500 335,329 17 Measure S Operating 2,868,718 13,234,532 - 16,103,250 7,561,902 - 6,376,753 13,938,656 2,164,594 19 Emergency Disaster 48,191 9,705 - 57,896 - 57,896 20 Waste Reduction (395,411) 474,600 - 79,189 237,549 237,549 (158,359) 22 Air Quality 276,019 158,247 - 434,266 47,113 449,000 496,113 (61,847) 23 Street Lighting 2,299,057 3,387,675 - 5,686,732 2,948,573 610,000 3,558,573 2,128,159 24 Columbia Memorial Space Center2 (242,462) 381,427 1,926,000 - 2,064,965 2,716,309 2,716,309 (651,344) 25 TDA Article III2 20,364 94,045 - 114,409 - 212,389 212,389 (97,980) 27 Grants-In-Aid2 1,105,424 438,000 - 1,543,424 576,759 576,759 966,666 28 CDBG 1,248,273 830,000 - 2,078,273 826,046 826,046 1,252,227 29 Federal Home Program 120,067 1,848,806 - 1,968,873 1,848,806 1,848,806 120,067 30 Gas Tax 83,341 3,287,517 - 3,370,858 - 2,799,000 2,799,000 571,858 31 LSTA Fund 425 - - 425 - 425 32 State - SB1 4,006,041 3,263,479 - 7,269,520 5,023,002 5,023,002 2,246,518 39 Theatre (153,436) 905,500 2,214,047 - 2,966,111 2,966,021 2,966,021 90 47 Art In Public Places 778,559 250,000 - 1,028,559 - 395,496 395,496 633,063 50 Storm Drain Fund 18,070,432 12,790,422 - 30,860,854 526,434 78,750 29,710,458 30,315,642 545,212 54 Transit - "PROP. C"4,803,041 2,535,778 - - 7,338,818 5,649,202 1,000,000 6,649,202 689,616 55 Transit - "PROP. A"7,944,871 3,281,001 1,000,000 - 12,225,871 4,890,478 4,890,478 7,335,394 56 Transit - "MEAS. R"1,626,392 1,874,070 - 3,500,462 1,427,176 1,844,634 - 3,271,811 228,651 57 Transit - "MEAS. M"749,302 2,110,795 - 2,860,097 1,173,431 891,004 - 2,064,435 795,662 67 Police Confiscation 264 264 - 527 - 527 74 State Asset Forfeiture 172,180 4,901 - 177,082 - 177,082 77 Public Access 1,484,346 100,000 - 1,584,346 - 1,584,346 78 Asset Forfeiture 43,060 16,323 - 59,384 - 59,384 84 Downey Housing Authority 4,753,039 199,795 - 4,952,834 5,134 5,134 4,947,700 Sub Total 57,837,991 58,848,261 5,140,047 - 121,826,299 34,404,921 560,479 44,785,185 11,820,469 91,571,054 30,255,245
SUMMARY OF RESOURCES AND REQUIREMENTS BY FUNDS
General Fund
Special Revenue Funds
Fund No.Fund
Projected
Beginning
Balance
July 1, 2026
Estimated
Revenues
Transfers
from Other Funds
Use of Prior Year
Resources
Total
Resources
Available
Operating
Expenditures Equipment Capital
Projects
Transfers to
Other Funds
Total
Requirements
T
a
s
Projected Ending
Fund Balance
June 30, 2027
2 In Financial Statements (ACFR) these funds are grouped as Grants Fund 26 Grants - 18,415,106 - 18,415,106 18,415,106 18,415,106 (0) 33 Measure S Capital - 33,227 1,192,025 - 1,225,252 63,952 1,000,000 161,300 1,225,252 0 34 NASA Infrastructure3 280,970 7,929 - 288,899 - 288,899 36 Capital Project Firestone 3 91,255 - 91,255 - 7,287 7,287 83,968 38 Vehicle Impact3 5,986,100 2,275,000 - 8,261,100 - 3,250,000 3,250,000 5,011,100 40 Capital Projects3 6,471,302 - 10,243,333 - 16,714,635 - 8,117,549 126,000 8,243,549 8,471,086 42 Measure D Capital Fund - - 1,644,716 - 1,644,716 - 1,644,716 1,644,716 - Sub Total 12,829,627 20,731,262 13,080,074 - 46,640,963 63,952 1,000,000 31,595,958 126,000 32,785,910 13,855,053 3 In Financial Statements (ACFR) these funds are grouped as City Capital Project Fund 18 Pension Obligation Bonds 837,594 240,161 7,932,126 - 9,009,881 7,932,127 - 7,932,127 1,077,754 35 Measure S Debt Service - 2,907 5,184,728 - 5,187,635 4,616,605 571,030 - 5,187,635 0 58 Measure M Bond 2021A 587,526 83 - - 587,609 - 589,918 - 589,918 (2,309) 59 Measure R Bond 2021B (2,331) 7 - - (2,324) - - - - (2,324) Sub Total 1,422,789 243,158 13,116,854 - 14,782,801 12,548,732 571,030 589,918 - 13,709,680 1,073,121 51 Water Fund1 15,258,676 27,256,540 - - 42,515,216 17,563,149 419,026 20,597,000 1,102,164 39,681,340 2,833,877 52 Golf Course Fund1 7,478,365 5,549,288 - - 13,027,652 5,162,730 - - - 5,162,730 7,864,923 72 Sewer Fund1 7,047,635 1,863,483 - - 8,911,118 1,582,079 566,000 1,800,000 56,804 4,004,883 4,906,235 Sub Total 29,784,675 34,669,311 - - 64,453,987 24,307,958 985,026 22,397,000 1,158,968 48,848,952 15,605,034 1 Only Unrestricted Net Position (Available Resources) are presented 91 Red. Oblig. Retirement - - - - - - - - - - - 93 CRA Debt Service - - - - - - - - - - - - - - - - - - - - - - 154,772,891 240,765,716 35,035,976 1,256,257 430,574,582 188,859,622 3,285,367 99,368,061 34,999,827 326,512,879 102,805,447 1 Only Unrestricted Net Position (Available Resources) are presented 61 Employee Benefit Fund 5,366,636 6,118,104 - - 11,484,740 4,821,446 - - - 4,821,446 6,663,294 62 Equipment Fund 1,012,189 2,823,368 - - 3,835,557 2,984,027 668,267 - 36,148 3,688,442 147,115 6,378,825 8,941,472 - - 15,320,297 7,805,473 668,267 - 36,148 8,509,888 6,810,409 GRAND TOTAL 161,151,716 249,707,188 35,035,976 1,256,257 445,894,880 196,665,096 3,953,634 99,368,061 35,035,975 335,022,766 109,615,856
Successor Agency Funds- Custodial Funds- Do not Bu
Total Successor Agency Funds
Internal Service Funds
Total Internal Service Funds
Enterprise Funds
TOTAL CITY BUDGET
Capital Project Funds
Debt Service Funds