STAFF REPORT
City of Lancaster
CC 10
6/24/2025
TN
Date:June 24, 2025
To: Mayor Parris and City Council Members
From:Trolis Niebla, City Manager
George N. Harris II, Senior Director/Treasurer – Admin Services Subject:Fiscal Year 2025-2026 Budgets and Five-Year Capital Improvement Program.
Recommendation:
City Council and City Council acting as Lancaster Housing Authority and Lancaster Power Authority Recommendations:
a. Adopt Resolution 25-XX, adopting the proposed City of Lancaster Fiscal Year 2025-2026 General Fund Operating Budget, Special Funds Budget and Capital Improvement Program Budget.
b. Adopt Resolution 25-XX, establishing the annual Appropriations Limit for Fiscal Year 2025- 2026.
c. Adopt Resolution 25-XX, approving terms and conditions of employment and a compensation schedule for represented and non-represented regular and probationary employees of the city. d. Approve Vendor Expenditure Authority List for FY 2025-2026
G.C. Section 84308: No
Fiscal Impact:
The City of Lancaster Proposed Fiscal Year 2025-2026 Budget and Five-Year CIP totals $303,529,586, including $3.4 million for the Capital Improvement Program (CIP).
Background:
City of Lancaster Budget
By July 1 of each year, the City is required to adopt a budget, which establishes appropriations and estimates revenue for the coming fiscal year. The proposed budget is a culmination of many months of work by the City Council and staff in reviewing priorities and evaluating programs, with a focus on maintaining responsive and relevant services for residents.
City Council’s priorities address:
2 0
9 5
· Sound fiscal foundation and resilience;
· Protect city infrastructure;
· Public safety;
· Measure LC appropriations;
· Economic development; and
· New facilities, programs, and services
All of which have been incorporated into the City’s Proposed FY 2025-2026 Budget.
The following table summarizes the proposed citywide budget:
CATEGORY FY26 PROPOSED
PERSONNEL COSTS $65,296,401
OPERATING EXPENDITURES 201,209,077
CAPITAL OUTLAY AND DEBT SERVICE 11,958,172
CAPITAL PROJECTS 3,430,516
TRANSFERS 21,635,688
Grand Total $303,529,586
Estimating revenues for the upcoming fiscal year and forecasting out-years is essential. By reviewing past years’ actual revenue receipts, new revenue sources, fee-based program and service projections, grant opportunities, and the State’s economic outlook, the City can best determine the revenues available for spending allocations. The City estimates FY 2025-2026 revenues (including transfers) of $335.6 million.
The City’s largest unrestricted funding source is the General Fund (Fund 101), totaling $139.2 million in revenues. General Fund resources include property tax, sales tax, fees, grants, and others. Sales and Use tax is the top General Fund source, which is projected at $70.5 million.
Included in that projection is Measure LC and Measure YM with $43.7 of Special District Transactions and Use taxes.
The proposed General Fund appropriations total $129.8 million, including $2.3 million for the Capital Improvement Program (CIP) and $7 million in transfers out.
The City of Lancaster desires to maintain a prudent level of financial resources to guard its residents against service disruption in the event of unexpected, temporary revenue shortfalls or unanticipated expenditures. Reserves accumulated during years when revenues exceeded expenditures cushion the City’s transition to a lower revenue base and allow the City to adjust spending in response to economic downturns, emergencies, State revenue takeaways, and/or investment opportunities. The Proposed FY 2025-2026 Budget significantly recognizes and strengthens the City Council’s fiscal prudence and discipline with reserves totaling approximately $44.8 million.
To continue transforming the City, we must continue focusing on the infrastructure in the City; we accomplish this through our Capital Improvement Program (CIP). We are persistent in our aggressive, proactive approach to allocating more capital improvement funding. The CIP for the Proposed FY 2025-2026 Budget totals $3.4 million.
2 0
9 5
The Proposed FY 2025-2026 Budget addresses community needs while maintaining healthy Reserves that will enable the City to continue providing the community with a full scope of high- quality municipal services, programs, and special events that enhance the quality of life of all Lancaster residents. It will also provide the required resources to construct significant capital improvement projects that will improve infrastructure and facilities and beautify the community.
Measure LC/YM
On November 3, 2020, and November 5, 2024, the voters of the City of Lancaster approved by the required majority vote the two Transaction and Use Tax measures, LC and YM. Measure LC began on April 1, 2021, and Measure YM began on April 1, 2025. The two tax measures are expected to generate approximately $43.7 million in General Fund revenue in the fiscal year 2025/26.
The Measure LC/YM committee identified that the priority for the use of Measure LC funds shall be as follows:
1. Life Safety;
2. Public Safety;
3. Quality of Life; and
4. Sound Fiscal Foundation/Support
The following list are programs funded by both the sales tax initiatives.
Attachment:
City of Lancaster Proposed Fiscal Year 2025-2026 Budget – available on the City’s website and on file in the City Clerk Department
Resolution 25-XX (a. Adopting City FY 25-26 Budget)
Resolution 25-XX (b. Appropriations Limit-FY26)
Resolution 25-XX (c. Adopting Terms and Conditions of Employment and Compensation Schedule)
Vendor Expenditure Authority List for FY 2025-2026