Agenda Item No. 6
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: June 23, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: Adoption of FY 2025-26 and 2026-27 Budget and FY 2026-30 Capital Improvement Program
RECOMMENDATION
Adopt Resolutions to adopt the FY 2025-26 and 2026-27 budget and FY 2026-30 Capital Improvement Program; appropriate funds for the FY 2025-26 budget; set the FY 2025-26 Appropriations Limit from Tax Proceeds; and establish authorized positions in departments for FY 2025-26.
BACKGROUND
On June 9, 2025, staff presented the FY 2025-26 and 2026-27 Proposed Budget to the City Council for review and public comment. The total proposed citywide expenditure budget for FY 2025-26 is $42.4 million, including $21.7 million in the City’s General Fund, $10.8 million in Enterprise Funds including Water and Wastewater Funds, and $5.6 million in Special Revenue Funds, not including the Capital Improvement Program (CIP). In FY 2026-27, citywide expenditures are projected to be $30.6 million including $19.3 million in the General Fund, $6.1 million in Enterprise Funds, and $4.5 million in Special Revenue Funds. At the June 9th meeting, the Council directed staff to adjust the Proposed Budget to accelerate the repayment of the interfund advances made previously by the Wastewater Fund to the General Fund. The annual repayment amount from General Fund reserves has been increased from $187,500 to $368,252, which will provide for full repayment of the loans in FY 2026-27.
The five-year CIP includes $12.7 million in funding in FY 2025-26 for key capital projects and includes an additional $4.7 million for Wastewater Fund projects not originally included in the Proposed Budget after the Council adopted the new sewer rate structure at the June 9th meeting.
The CIP includes $4.1 million in funding in FY 2026-27 of which $320,000 is for sewer projects.
Staff would note that the CIP also identifies approximately $150 million in unfunded infrastructure needs for parks, facilities, streets, water, and storm water needs. This includes over $25 million in local and major street repair needs and of this amount, the Council has provided policy direction to prioritize the $4 million needed to fully fund the Measure K-14 street repair program for local streets as future funding becomes available.
Approved Budget Augmentation Requests in the amount of $340,478 in FY 2025-26 and $270,978 in FY 2026-27 can be found in Section 1.3 of the Proposed Budget. The Proposed Budget maintains existing services with targeted investments in addressing Council Goals as well as the Biennial Council Priorities of Water and Sewer Infrastructure and Related Resources and as Rebuilding Community Trust, Community Engagement, and Civility in Public Discourse.
Staff Report: FY 2025-26 Proposed Budget and FY 2026-30 Five Year CIP Page 2 June 23, 2025
The proposed General Fund budget assumes a revenue increase for property tax of 5% each year, as well as a slight sales tax increase of 1% per year. However, cannabis tax revenues are projected to remain flat at slightly above $1 million with no anticipated growth. Transient Occupancy Tax revenue is also projected to increase by 12% in FY 2025-26 with the anticipated opening of the SpringHill Suites hotel property at 950 El Camino Real.
Both FY 2025-26 and FY 2026-27 General Fund budgets are balanced with a surplus of approximately $61,000 and $47,000 respectively. The budget produces ending reserves of approximately 28% in FY 2025-26 and 25% in FY 2026-27 in compliance with the Council’s policy of maintaining a minimum General Fund reserve of 25% of operating expenses to provide sufficient reserves for emergencies or unforeseen events.
The Council is recommended to adopt the related Resolutions to approve the final budget and personnel allocation for FY 2025-26 and 2026-27 to begin on July 1, 2025. Staff will finalize the adopted budget document which will be provided to the Council Members and posted on the City’s website after the beginning of the new fiscal year. Staff will return to the Council with quarterly financial reports over the next fiscal year including the mid-year budget review and updated fiveyear financial forecast in early 2026.
FISCAL IMPACT
Adoption of the FY 2025-26 and 2026-27 budget appropriates a total of $42.3 million in FY 2025- 26 and $30.6 million in FY 2026-27 in all funds. General Fund expenditures are anticipated to be $21.4 million in FY 2025-26 and $19.4 million in FY 2026-27 with slight surpluses of $61,000 and $47,000 respectively.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Adopt Resolutions the FY 2025-26 and 2026-27 Budget as well as the FY 2026-30 Capital Improvement Program; appropriate funds for the FY 2025-26 budget; set the FY 2025-26 Appropriations Limit from Tax Proceeds; and establish authorized positions in departments for FY 2025-26; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Annual Appropriation Resolution
2. Gann Limit Resolution
3. Position Allocation Resolution
RESOLUTION NO. 25-_
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA APPROPRIATING THE FY 2025-26 AND 2026-27 BUDGET WHEREAS, all requisite public hearings relating to the budget have been duly held, and all necessary findings have been made.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL:
PART I
THAT the amounts set forth for the purposes named herein shall, upon the adoption of this Resolution, become the Budget for the City of Grover Beach for FY 2025-26 and 2026-27; and
PART II
THAT the general provisions governing this Resolution shall be as follows:
SECTION 1. APPROPRIATION OF THE FY 2025-26 AND 2026-27 BUDGET. Monies are hereby appropriated from each of the several funds of the City to each department of the City in the amounts set forth herein for employee services, supplies & services, minor capital, special activities, and capital improvements.
SECTION 2. TRANSFERS BETWEEN APPROPRIATIONS AND INCREASE IN APPROPRIATIONS.
a. Consistent with the Financial Policies of the City that are contained in Resolution No. 20-17 of the City Council, any adjustments in the amounts appropriated for the purposes indicated herein at the department/fund level shall be made only upon the motion to amend this Resolution adopted by the affirmative votes of a majority of a quorum of the City Council. Administrative changes within the department/fund level may be made without the approval of the City Council pursuant to Subsection (d) of this Section. b. For accounting and auditing convenience, accounts may be established to receive transfers of appropriations from department appropriations for capital improvements & special activities in two or more different funds for the same project.
c. Department appropriations in Intra-governmental Service Funds (ISF) may be administratively adjusted, provided no amendment to this Resolution would be required to adjust the appropriation in the department receiving the service from the ISF.
d. Any adjustments made pursuant to Subsections (a), (b) or (c) of this Section shall be made consistent with written guidelines established by the City Manager.
Attachment 1
Resolution No. 25-XX Page 2
FY 2025-26 & 2026-27 AAR
SECTION 3. TRANSFER WITHIN AN APPROPRIATION. The funds allocated to the respective accounting object classes comprising the total appropriation for each program or department are for purposes of budgeting consideration and convenience only and are not intended to constitute separate appropriations; provided, however, that funds allocated to an object class may be expended for the purposes of any other object class if such expenditures are within the written guidelines established by the City Manager.
SECTION 4. CONTRADICTORY PROVISIONS OF PREVIOUS RESOLUTIONS. Any other prior Resolution or provision thereof of the City Council respecting the appropriation and administration of the FY 2025-26 and Budget which is in contradiction with this Resolution is hereby superseded.
Notwithstanding any other provisions of this Resolution, no funds appropriated into the Reserves of the City shall be expended, transferred, obligated, used, encumbered or otherwise disposed of except as specifically authorized by previously approved bonded indebtedness or until the City Council reallocates such appropriations by amending this Resolution as provided in Subsection 2(a) of this Part.
SECTION 5. ADMINISTRATION. The City Manager or his/her designee shall maintain all changes to this Resolution and shall cause to be filed with the City Clerk and the Administrative Services Director a copy of, and subsequent amendments to, this Resolution following its adoption by the City Council.
SECTION 6. CLERICAL CORRECTIONS. The adoption of this Resolution implements the motions and actions of the City Council with respect to the proposed Budget, as amended by those motions and actions, if any, for the direction in drafting this Resolution. By adoption of this Resolution, the City Council hereby directs responsible City staff members to make necessary technical and clerical corrections to this Resolution to implement the intent of the City Council. Such corrections shall not alter, in any manner, the substance or intent of the City Council’s adoption of this Resolution.
PART III
THAT the following amounts are appropriated to the various departments for the purpose or purposes indicated:
FY 2025-26 FY 2026-27
FUND 101 - GENERAL FUND
TO: CITY MANAGER'S OFFICE
Legislative, General Management, Human Resources,
Community Services
1,914,718 1,942,426
TO: ADMINISTRATIVE SERVICES DEPARTMENT
General Accounting, Information Technology
654,826 693,863
TO: COMMUNITY DEVELOPMENT DEPARTMENT
Planning, CDBG, Building, Code Enforcement
1,322,890 1,532,469
TO: PUBLIC WORKS DEPARTMENT
Facility Maintenance, Street Maintenance and Repair, City Shop/Corporation Yard
1,882,569 1,724,158
TO: POLICE DEPARTMENT
Police Support Services, Police Operations, Investigations, Cannabis Regulatory Unit
7,218,564 7,601,604
Resolution No. 25-XX Page 3
FY 2025-26 & 2026-27 AAR
FY 2025-26 FY 2026-27
TO: NON-DEPARTMENTAL
Transfers Out, Salaries and Benefits, Supplies and Services, Minor Capital, Debt Service
8,373,538 5,845,754
SUBTOTAL OPERATING AND CAPITAL 21,367,105 19,340,273
TO: NON-DEPARTMENTAL
General Reserve
3,205,066 2,901,041
TO: NON-DEPARTMENTAL
Emergency Reserve
2,136,711 1,934,027
SUBTOTAL RESERVES 5,341,776 4,835,068
TOTAL 26,708,882 24,175,342
FUND 105 - EQUIPMENT REPLACEMENT FUND (ERF)
TO: Administrative Services Department
Information Technology
25,000 25,000
TO: PUBLIC WORKS DEPARTMENT
Facility Maintenance, Street Maintenance and Repair, City Shop/Corporation Yard
90,737 106,545
TO: POLICE DEPARTMENT
Police Support Services, Police Operations, Investigations, Cannabis Regulatory Unit
271,466 289,928
TOTAL 387,203 421,473
FUND 201 - STREET CONSTRUCTION DESIGNATED FUND (K-14)
TO: PUBLIC WORKS DEPARTMENT
Street Maintenance and Repair
240,461 243,465
TO: CAPITAL IMPROVEMENT PROGRAM 3,370,000 3,530,000
TO: NON-DEPARTMENTAL 20,000 -
TOTAL 3,631,060 3,773,465
FUND 205 - GAS TAX FUND
TO: PUBLIC WORKS DEPARTMENT
Street Maintenance and Repair
296,490 305,538
TO: CAPITAL IMPROVEMENT PROGRAM 75,000 50,000
TOTAL 371,490 355,538
FUND 210 - ROAD MAINTENANCE AND REHABILITATION
ACCTOUNT
TO: TRANSFERS OUT 299,000 -
FUND 215 - LOCAL TRANSPORTATION FUND
TO: ADMINISTRATIVE SERVICES DEPARTMENT
General Accounting
4,635 -
TO: PUBLIC WORKS DEPARTMENT
Street Maintenance and Repair
82,400 84,872
TOTAL 87,035 84,872
FUND 230 - PUBLIC SAFETY GRANT FUND
TO: POLICE DEPARTEMENT
Police Support Services, Police Operations, Investigations, Cannabis Regulatory Unit
146,500 146,500
FUND 240 - PARKS CONSTRUCTION FUND
TO: TRANSFERS OUT 282,541 -
Resolution No. 25-XX Page 4
FY 2025-26 & 2026-27 AAR
FY 2025-26 FY 2026-27
FUND 256 - PARKS FACILITIES DEVELOPMENT IMPACT FEE FUND TO: TRANSFERS OUT 78,541 -
FUND 257 - RECREATION FACILITIES DEVELOPMENT IMPACT
FEE FUND
TO: TRANSFERS OUT 100,129 -
FUND 305 - CAPITAL PROJECTS FUND
TO: CAPITAL IMPROVEMENT PROGRAM 4,179,924 280,000
FUND 402 - TRUST AND AGENCY FUND
TO: TRANSFERS OUT 463,114 -
FUND 601 - WATER FUND
TO: ADMINISTRATIVE SERVICES DEPARTMENT
Utility Billing
413,858 469,833
TO: PUBLIC WORKS DEPARTMENT
Water
3,116,501 3,210,387
TO: CAPITAL IMPROVEMENT PROGRAM 400,000
TO: NON-DEPARTMENTAL
Transfers Out, Salaries and Benefits, Supplies and Services 699,845 490,000
TOTAL 4,630,204 4,170,221
FUND 602 - WATER CONSERVATION FUND
TO: PUBLIC WORKS DEPARTMENT
Water Conservation
6,171 6,208
FUND 603 - WASTEWATER
TO: ADMINISTRATIVE SERVICES DEPARTMENT
Utility Billing
413,139 458,374
TO: PUBLIC WORKS DEPARTMENT
Wastewater, Storm Water
881,967 663,687
TO: CAPITAL IMPROVEMENT PROGRAM 4,650,000 320,000
TO: NON-DEPARTMENTAL
Transfers Out, Salaries and Benefits, Supplies and Services 233,130 771,864
TOTAL 6,178,237 2,213,924
On motion by ______, seconded by _______, and on the following roll-call vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
the foregoing Resolution was PASSED, APPROVED, AND ADOPTED at the Regular Meeting of the City Council of the City of Grover Beach, California, this 23th day of June 2025. _______________________________
KASSI DEE, MAYOR
ATTEST:
______________________________
WENDI SIMS, CITY CLERK
RESOLUTION NO. 25-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, SETTING THE FY 2025-26 APPROPRIATIONS LIMIT FROM TAX
PROCEEDS
WHEREAS, in accordance with Article XIIIB of the State Constitution, local governments are required to establish certain spending levels that cannot be exceeded; and WHEREAS, cities are required to adopt an annual appropriations limit in conjunction with the adoption of the City’s annual budget; and
WHEREAS, the City of Grover Beach has established in accordance with these requirements its FY 2025-26 appropriations as its base year; and WHEREAS, in accordance with these requirements, cities may annually increase their previous base year appropriations by the per capita income change of their City’s or County’s population increase; and
WHEREAS, the assessed value for real property change from FY 2023-24 to FY 2024-25 has been set at 5.04%, and the City of Grover Beach, certified population change has been set - .9965%; and
WHEREAS, the FY 2024-25 appropriation (spending) limit for Grover Beach was $14,054,362 and, when multiplied by the allowed assessed property value change increase and the certified population change increase, sets the FY 2025-26 appropriation limit from tax proceeds at $14,760,837.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Grover Beach does hereby establish $14,760,199 as its FY 2025-26 appropriation limit from tax proceeds.
On motion by ___, seconded by ____, and on the following roll-call vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at the Regular Meeting of the City Council of the City of Grover Beach, California this 23th day of June 2025. ___________________________________
KASSI DEE, MAYOR
Attest:
_______________________________
WENDI SIMS, CITY CLERK
Attachment 2
RESOLUTION NO. 25-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,
CALIFORNIA ESTABLISHING THE NUMBER OF AUTHORIZED POSITIONS IN THE VARIOUS DEPARTMENTS OF THE CITY FOR THE FY 2025-26 BUDGET AND ESTABLISH THE 2025-26 SALARY SCHEDULE
WHEREAS, all requisite public hearings relating to the budget have been duly held, and all necessary findings have been made.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL:
PART I
THAT the number of permanent full-time positions in which persons may be employed by the City during FY 2025-26 is hereby establish as set forth in Part IV of this Resolution; and
PART II
THAT a change in the total number of permanent full-time positions authorized in a department in any Section of Part IV or part-time positions authorized in a department in any Section of Part V shall only be accomplished by Resolution of the City Council; and THAT except as provided in Part III Section 3, the number of persons employed in permanent full-time positions shall not exceed the total number of authorized positions in a department in any Section of Part IV; and
PART III
THAT the number of permanent positions allocated by class to department is for budgeting consideration and convenience only, and is not intended to constitute separate authorization of permanent positions by class except as provided below:
SECTION 1. The number of permanent full-time positions allocated to any department may be adjusted, provided that the number of permanent full-time positions authorized in any Section of Part IV is not exceeded and that there are sufficient unspent appropriations available to fund the adjustment.
SECTION 2. The City Manager or his/her designee may, upon the recommendation of the Administrative Services Director, adjust the number of permanent full-time positions allocated by class within any Section of Part IV, provided that the total number of permanent positions authorized in any Section of Part IV does not change and that there are sufficient unspent appropriations as verified by the Administrative Services Department available to fund the adjustment.
SECTION 3. The number of part-time positions allocated to any department may be adjusted, provided that the number of part-time positions or their full-time equivalents (hereinafter “FTE”) authorized in any Section of Part V is not exceeded and that there are sufficient unspent appropriations available to fund the adjustment.
Attachment 3
Resolution No. 25-XX Page 2
FY 2025-26 PAR
SECTION 4. The City Manager or his/her designee may, upon the recommendation of the Administrative Services Director, adjust the number of part-time positions allocated by class within any Section of Part V, provided that the total number of part-time positions or their FTE authorized in any Section of Part V does not change and that there are sufficient unspent appropriations as verified by the Administrative Services Department available to fund the adjustment.
SECTION 5. The City Manager may, at his/her discretion, extend for a period of up to two months positions scheduled to be eliminated to ensure a smooth transition due to bumping, demotions, and other personnel adjustments required by attempting to accommodate employees affected by layoffs, provided that funds have been budgeted for the transition period.
SECTION 6. Any adjustment made pursuant to Sections 1 through 5 of Part III shall only be made within the guidelines established by the City Manager.
SECTION 7. By adoption of this Resolution, the City Council hereby directs responsible City staff to make necessary technical and clerical corrections to this Resolution to implement the intent of the City Council. Such corrections shall not alter, in any manner, the substance or intent of the City Council in adopting the Budget Resolution.
PART IV
THAT permanent full-time positions are authorized in the various departments as listed by Section as follows:
Number of
Months Positions
Authorized Authorized
SECTION 1. CITY MANAGEMENT DEPARTMENT Full Year 8
Legislative, General Management,
Human Resources, Community Services
SECTION 2. ADMINISTRATIVE SERVICES Full Year 9
DEPARTMENT
General Accounting, Utility Billing, Risk Management
SECTION 3. COMMUNITY DEVELOPMENT Full Year 5.25
DEPARTMENT
Planning, Building Inspection
SECTION 4. PUBLIC WORKS AND UTILITIES Full Year 14.75
Facility Maintenance, Street Repair, City Shop/
Corp Yard, Wastewater, Water, Storm Water
SECTION 5. POLICE DEPARTMENT Full Year 29
Police Support Services, Police Operations
Investigations, Communications & Records
TOTAL PERMANENT FULL-TIME POSITIONS 68
Resolution No. 25-XX Page 3
FY 2025-26 PAR
PART V
THAT part-time positions are authorized in the various departments as listed by Section as follows:
Number of
Months FTEs
Authorized Authorized
SECTION 1. CITY MANAGEMENT DEPARTMENT Full Year 0.00
Legislative, General Management,
Human Resources,
SECTION 2. ADMINISTRATIVE SERVICES Full Year 0.00
DEPARTMENT
General Accounting, Utility Billing
SECTION 3. COMMUNITY DEVELOPMENT Full Year 0.00
DEPARTMENT
Planning, Building Inspection
SECTION 4. PUBLIC WORKS AND UTILITIES Full Year 0.00
Facility Maintenance, Street Repair, City Shop/
Corp Yard, Wastewater, Water, Storm Water
SECTION 5. POLICE DEPARTMENT Full Year 1.10
Police Support Services, Police Operations
Investigations, Communications & Records
TOTAL PART-TIME POSITIONS 1.10
Part VI
THAT the attached salary schedule (Exhibit A) is hereby adopted beginning July 1, 2025.
On motion by ___, seconded by ____, and on the following roll-call vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Resolution No. 25-XX Page 4
FY 2025-26 PAR
the foregoing Resolution was PASSED, APPROVED, AND ADOPTED at the Regular Meeting by the City Council of the City of Grover Beach, California this 23rd day of June 2025. _________________________________
KASSI DEE, MAYOR
ATTEST:
_______________________________
WENDI SIMS, CITY CLERK