FY 2025-26
Mid Year Review &
General Fund
Financial Forecast
GROVERBEACH.ORG
Nick Szamet
Administrative Services Director
GF Summary – FY 2025-26
GROVERBEACH.ORG
• Projecting more revenues
than budgeted.
• Higher than anticipated costs
estimated primarily due to
costs outside of the City’s
direct control
General Fund Summary Budget Estimated
Beginning Reserves 6,822,667 6,822,667
Revenues/Transfers In 21,428,114 21,729,473
Expenditures/Transfers Out 21,201,506 21,701,118
Surplus/(Deficit) 226,608 28,355
CIP Carryover (1,171,000) (1,171,000)
Wastewater Fund Repayment (368,252) (368,252)
Ending Reserves 5,574,877 5,311,770
Percent of Operating Expenses 31% 28%
GF Revenue – Top 5
GROVERBEACH.ORG
Budget Estimated Over/(Under)
Percent of
Budget
1 Property Tax 6,459,000 6,524,000 65,000 101%
2 Sales Tax 5,863,000 6,028,025 165,025 103%
3 Cannabis Tax 1,070,000 1,125,965 55,965 105%
4 Transient Occupancy
Tax 1,331,000 1,331,000 - 100%
5 Franchise Fees 965,000 965,000 - 100%
41%
38%
7%
8%
6%
Estimated
General Fund Expenditures
GROVERBEACH.ORG
Budget Estimated
Salaries and Benefits 9,921,855 10,229,000
Supplies and Services 8,117,533 8,310,000
Minor Capital 87,500 87,500
Debt Service 25,618 25,618
CIP/ERF Transfers Out 3,049,000 3,049,000
8,000,000
8,500,000
9,000,000
9,500,000
10,000,000
10,500,000
Salaries and Benefits Supplies and
Services
Budget Estimated
• UAL, Medical Insurance Premiums, Worker’s Comp. insurance • Engineering consultant, electrical utility costs
Water Fund - 601
GROVERBEACH.ORG
Revenues
• Current rate structure adopted in 2021 and
expires after this year
• Bonds require net revenues
Expenditures
• Lopez litigation costs beginning to impact fund
• Hastening the decline of the cash position
Bottom Line
• Reserves are diminishing
• Could be as much as $1 million over budgeted
amount (28% decline)
Budget Estimated
Revenue 4,484,800 4,459,800
Expense 4,670,204 5,656,113
Under/(Over) Budget -185,404 -1,196,313
Beginning Balance 3,815,123 3,815,123
Estimated Ending Balance 3,629,719 2,618,810
Wastewater Fund - 603
GROVERBEACH.ORG
Revenues
• Rate increase has been approved and implemented on
July 1, 2025.
• $4.8 Million financing for sewer project secured and
work is underway
Expenditures
• Aligned with expectations with unspent bond proceeds
to be used in FY 2026-27
Bottom Line
• Current rate structure will sustain the fund and maintain fiscal solvency as well as ensure the fund is prepared
for an emergency.
Budget Estimated
Revenue 6,447,191 6,447,191
Expense 6,476,387 4,864,654
Under/(Over) Budget - 1,582,537
Beginning Balance 3,513,761 3,513,761
Estimated Ending Balance 3,513,761 5,096,298
Midyear appropriations requests
GROVERBEACH.ORG
• Midyear are for Police Department
activities.
• All are offset by revenues from grants or
other law-enforcement funding.
• Additional detail can be found in
Attachment #1.
Description Amount
1 DUI/traffic enforcement. 36,286
2 Funding for cannabis-related overtime
patrols. 16,716
3 Grant funded Team-building workshop. 17,000
Total 70,002
Five Year GF Forecast - Benefits
GROVERBEACH.ORG
• Building a
financially
resilient
government
Planning
• Creates and
transparency
encourages
involvement
Communication
• Informs goalsetting and
the budget
process
Context
• Improves
long-term
financial
sustainability
Outcome
Forecast Drivers
GROVERBEACH.ORG
Economic Trends
and Outlook
• National, State, and Local
conditions.
City Top 5 Revenues
• Taxes and Fees
CalPERS Investment
Yield
• Unfunded Accrued Liability
• Workforce
Debt
Service/Repayments
• Debt Service requirements
Capital Improvement
Program
• Investments in our
community
Inflation and Interest Rates
GROVERBEACH.ORG
• Inflation has moderated in the
last 3 years from a high of 8%
in 2022 and moderating to 3%
in 2025.
• Interest rates have lowered
but they have not reduced
costs to borrow for mortgages
given high levels of federal
debt.
0.0 1.0
2.0 3.0
4.0 5.0
6.0 7.0
8.0 2017 2018 2019 2020 2021 2022 2023 2024 2025
Annualized Inflation LA/LB/Anaheim
U.S. Unemployment Rate
GROVERBEACH.ORG
• U.S. unemployment rate
has risen by three basis
points since last year at
4.4%.
• SLO County rate is 4.5%
as of Nov. 2025.
0 1
2 3
4 5
6 7
8 2018 2019 2020 2021 2022 2023 2024 2025
US Unemployment Rate (December)
Housing Market
GROVERBEACH.ORG
• SLO County has
decrease in listing price
compared with prior yearover-year gains
• The median sales price
for homes countywide
was $854K in 2025
• Median sale price in
Grover Beach is $704K $0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Millions
Average List Price SLO County Homes
Latest Sales Tax Forecast
GROVERBEACH.ORG
Sales tax end of Q3 2025
• Statewide – up 2.1%
• Central Coast – up 6.3%
• Grover Beach – up 1.2%
Business Activity
• Construction – down .5%
• Retail – down 1.4%
• Overall – down 1.5%
Sales tax projection
• Average 2.5% increase in FY2025-26
• Subsequent 2% annual growth from 2025-31
Five Year GF Forecast Summary
GROVERBEACH.ORG
Financial Summary
GROVERBEACH.ORG
• City expects a balanced budget over the next five years with small deficits and surpluses projected through 2031 which can be managed • Moderate revenue growth from new developments with expenditures keeping pace without much capacity to meet new and emerging needs • Healthy reserves for unforeseen events and uncertainties and consistent with reserves policy
• Future considerations will include labor costs, capital spending, and impact fee revenue from developments
Council Goals and Priorities Review
GROVERBEACH.ORG
• Receive the FY 2025-26 Mid-Year Budget Review including the updated General Fund Financial Forecast; approve mid-year budget augmentations
• Timeline for Future Budget Items
COUNCIL MILESTONES
February 10 Midyear review and forecast presentation to Council February 23 Goal Review
March 23 Draft CIP review by Council
May 11 FY 2025-27 Budget Update to Council & HR Vacancies Meeting June 8 Budget hearing
June 22 Budget adoption
Questions and
Comments
GROVERBEACH.ORG