Budget Update and
Draft Work Programs
for Council Goals
and Priorities
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Kristin Eriksson, Assistant
City Manager
Nick Szamet, Administrative
Services Director
Budget Development
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• City budget is developed in a two-year cycle and FY 2026-27 is the second year of current cycle
• Second year of the cycle generally incremental in nature updating those funds originally budgeted in FY 2025-27 budget • As presented at mid-year, staff is planning for a balanced budget meeting 25% reserve requirement
• General Fund forecast indicated relatively positive position with break-even budget to meet operational and service needs • Reserves projected at or above policy level until FY 2030-31 General Fund Revenues
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• Property Tax
• Anticipated 5% growth in FY 2025-26 with additional revenue growth in FY 2026-27 given the completion of several new developments • $6.85 million anticipated
• Sales Tax
• For FY 2025-26, anticipated growth of 2.5% after bottoming out from prior year contractions
• In FY 2026-27, budgeting for additional 2.5% in growth • $6.2 million anticipated
General Fund Revenues
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• Transient Occupancy Tax
• Revenue will likely increase in FY 2025-26 but more slowly than previous projections
• In FY 2026-27, staff anticipates $1.1 million in revenue given opening of 950 El Camino hotel project though later than projected given construction delays • Cannabis Tax
• Flat revenues anticipated for FY 2025-26 and FY 2026-27 based on market conditions with $1.06 million anticipated
• Franchise Fees
• $965,000 projected with increases due to completion of transoceanic cables and rate increases for City franchises (Solid Waste)
General Fund Expenses
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• Staff will be presenting a balanced budget in alignment with Council Goals and Priorities
• Includes 3% for employee compensation cost of living adjustments as provided in labor agreements
• Approximately $300K for equipment reserve fund and CIP contributions • 3% cost increase for Five Cities Fire Authority
• Increases for insurance premiums (general liability and worker’s comp) Proposed Budget Augmentations
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• Limited number of augmentations recommended:
*Ongoing costs
Department BAR Name Amount
Public Works Facilities Operating Supplies 1,865
Public Works Steets Supplies 2,000
Police SLO Sheriff Data Access Costs 5,832
Total $9,697
Water and Wastewater Funds
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Water Fund
• No additional rate increases given expiration of 2021 rate structure • Significant cost exposure due to Lopez Lake litigation • Staff will return to Council about a new water rate study in 2027 following conclusion of water supply study
• Rate study would address water system needs and billing practices including multi-family metering
• New rate structure will be needed to ensure stability of Water Fund Water and Wastewater Funds
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Wastewater Fund
• Revised rate structure in effect since July 1, 2025
• $250,000 in additional revenue to pay for ongoing maintenance and expenses
• Enabled City to issue $4.8 million bond for sewer upgrade project • Wastewater Fund is healthy and providing for sufficient funding for operations, maintenance, and capital projects
FY 2025-27 Council Goals
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• March 3, 2025 Council workshop to discuss governance norms, long-term city vision, and priorities for FY 2025-27
• Consider public input (2024 survey and 2025 forum); City staff input; financial outlook and resource considerations
• Developed Council Goals and Priorities
• Broad multi-year goals
• FY 2025-27 Council Priorities
Getting to
Results
Vision, Mission, Values
Broad Multi-Year Goals
Biennial Council Priorities
City Manager’s Operational Plan
Departments' Work Plans
Council Goals
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Public Safety and
Community
Services
Provide a range of
services that foster
a sense of safety,
enjoyment and well
being for
community
members.
Economic
Development and
Housing
Support business
attraction and
retention,
revitalization of
commercial areas,
and development of
housing
opportunities.
Community
Infrastructure
Provide for long
range planning and
well-maintained
infrastructure,
including streets,
water and sewer,
sidewalks, City
facilities and parks.
Financial and
Organization
Sustainability
Ensure fiscal
responsibility,
operational viability
and promote a
culture of
innovation and
customer service.
Public Safety & Community Services
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Major Plans and Initiatives Lead Department
Public Safety and Community Services: Adopt a multi-year strategic plan for the Five Cities Fire Authority to ensure sufficient fire services response and address community risk reduction
Five Cities Fire Authority
Public Safety and Community Services: Continue focus on traffic issues by adding an additional motorcycle officer, conducting grantrelated enforcement, and reducing traffic collisions.
Police Department
Public Safety and Community Services: Begin work on a twoyear Police Department accreditation process through the California Police Chief’s Association
Police Department
Public Safety and Community Services: Continue
delivering current and new community events to enhance community quality of life
City Manager’s Office
Community Services
Division
Public Safety and Community Services: Expand
partnerships for recreation and community programming including a South County sports program with the SLO County YMCA.
City Manager’s Office
Community Services
Division
Economic Development & Housing
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Major Plans and Initiatives Lead Department
Economic Development and Housing: Initiate development of the 7th Cycle Housing Element (2028-2036) following release of the updated Regional Housing Needs Allocation (RHNA).
Community
Development
Department
Economic Development and Housing: Initiate an update to the City’s Economic Development Strategy to assess economic and real estate market conditions affecting the city and identify potential improvements and efforts for the City to focus on.
Community
Development
Department
City Manager’s Office
Economic Development and Housing: Expand tourism and visitor opportunities in Grover Beach through hotel development, shortterm rental permitting changes, Visit Grover Beach marketing efforts, and collaboration with Visit SLO CAL.
City Manager’s Office
Community
Development
Department
Community Infrastructure
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Major Plans and Initiatives Lead Department
Community Infrastructure: Complete the Circulation
Element Update to guide the planning, design, and improvement of the City’s transportation to keep pace with development activity and community needs.
Community
Development
Department
Public
Works Department
Community Infrastructure: Continue to work on potential locations and funding plans for new or renovated City facilities with a priority on the Police Station and Corporation Yard.
Public Works
Department
Financial & Organizational Stability
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Major Plans and Initiatives Lead Department
Financial and Organizational Stability: Develop FY 2027-29 twoyear budget to address community and organizational needs within available resources including update of the Council Goals and Priorities.
Administrative Services
Department
Financial and Organizational Stability: Work with City employee bargaining and unrepresented groups on new memoranda of understanding and resolutions affecting employee compensation, work conditions, and other factors.
City Manager’s Office
Financial and Organizational Stability: Conduct Cost Allocation study to better assess and allocate City costs and charges for services and across funds.
Administrative Services
Department
FY 2026-27 Priorities
16 Vision
Goals
Priorities
Water and Sewer Infrastructure & Needed Resources
• Plan for the future
• Ensure appropriate funding levels
• Address aging infrastructure
• Educate the community
Community Engagement, Rebuilding Community Trust and
Civility in Public Discourse
• Provide education to the community
• Use various methods of communication
• Proactively initiate communication
• Broaden the audience for City communications
Street Improvements & Maintenance
• Continue work toward completion of residential street improvements funded by Measure K-14
• Maintain improved streets
Water & Sewer Infrastructure & Needed
Resources
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Major Plans and Initiatives Lead Department Key Milestones for FY 2026-27
Budget Allocation
Complete water supply study and present results to Council City Manager’s Office/Public
Works
•Continue work to complete a water supply study,
with regular public input opportunities •Present preliminary results to the Council in summer/fall 2026
•Present final results to the Council in late 2026 and
seek policy direction on next steps
$300,000 from Water
Fund
Develop water rate study for updated rate structure, given the expiration of the existing rate structure on June 30, 2026 Administrative
Services
Department
•Execute consultant contract for rate study
following completion of water supply study •Initiate rate study process and conduct community engagement on water rate structure
•Conduct Proposition 218
Hearing on new water rate structure
$40,000 from Water
Fund
Implement
sewer improvement project CIP
5003
Public
Works Department
•Design and construct Front Street Lift Station
project
$270,000 from
Wastewater Fund
Implement
sewer improvement project CIP 5005
Public
Works Department
•Design and construct Oak Park Lift Station project $240,000 from Wastewater Fund
Rebuilding Community Trust, Community
Engagement and Civility in Public Discourse
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Major Plans and Initiatives Lead
Department Key Milestones for
FY 2026-27
Budget Allocation
Conduct Circulation Element
Update public engagement Community
Development
Department
•Conduct public outreach related to proposed policies
and programs in the Circulation Element update
Staff Resources
Develop “Grover Beach 101”
community outreach sessions
with initial focus on planning and building
City Manager’s
Office/
Community
Development
Department
•Develop session framework and potential schedule
•Implement initial sessions and review results for future iterations
Staff Resources
Continue regular community
engagement events
City Manager’s
Office
•Host periodic “Coffee with Council” events
•Conduct outreach for the water rate study, including an online survey, informational webpage, mailer,
informational sessions
Staff Resources
Continue business outreach
efforts in conjunction with the
South County Chambers of
Commerce
City Manager’s
Office
•Hold scheduled business outreach roundtable meetings
in partnership with the Chamber
•Conduct issue- or topic-specific business outreach
Staff Resources
Street Improvements and Maintenance
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Major Plans and Initiatives Lead Department Key Milestones for FY 2026-27
Budget Allocation
Implement street
repair project CIP 2295-17
Public
Works Department •Begin and complete construction for CIP 2295- 17 (N. 9th Street and portions of Brighton Avenue, N.
11th and N. 12th Streets and Ramona Avenue)
$2.9M in Measure K- 14 Funds
Implement street repair
project CIP 2295-19
Public
Works Department •Start construction for CIP 2295-19 (Portions of Ramona Avenue, Brighton Avenue, N. 7th Street,
N. 6th Street, N. 2nd Street, and N.5th Street)
$600,000 in Measure K- 14 Funds
Implement street repair
project CIP 2285
Public
Works Department •Finalize the design for CIP 2285 (N. 4th Street from West Grand Avenue to Ocean View Avenue)
$100,000 in SB-1 Gas
Tax Funds
Develop plan to fund remaining Measure K-14 street repair project
Public Works
Department •Develop funding plan to fund street repair project CIP 2295-22 anticipated for construction in 2030 •Present plan to Council in early 2027 for review and direction.
Staff Resources
Questions
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