STAFF REPORT
City of Lancaster
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2/24/2026
TN
Date:February 24, 2026
To: Mayor Parris and City Council Members
From:George N. Harris II, Senior Director/Treasurer – Administrative Services Subject:Amendment to the Adopted Budget and Capital Improvement Program for Fiscal Year 2025-2026
Recommendation:
1.Adopt Resolution No. 26-XX, authorizing an amendment to the adopted Budget and Capital Improvement Program for Fiscal Year 2025-2026.
2.Adopt Resolution No. 26-XX, approving terms and conditions of employment and compensation schedule for represented and non-represented regular and probationary employees of the City.
G.C. Section 84308: No
Fiscal Impact:
Approval of the amendment to the adopted Budget and Capital Improvement Program for Fiscal Year 2025-2026 totaling a net increase in revenues of $80,703,665.07.
Background:
The mid-year budget review provides an assessment of the City of Lancaster’s budget condition in the current fiscal year during the first six months of the fiscal year. It allows staff to review the projected expenditures and revenues appropriated in June of the previous year, and account for adjustments not anticipated or fully defined when the projections were proposed. It provides an opportunity to review the fund balances, adjust, and help shape the development for the next budget cycle. Based on data gathered and analyzed, the proposed FY 2025-2026 revised budget includes an increase in revenues and transfers-in of $87,779,788.73 and an increase in expenditures of $7,076,123.66.
Revenues
Revenues have been adjusted to reflect an increase in several City revenues, including Property 2 3
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Tax which is expected to increase the General Fund by $1.1M and Sales Tax by $964K through the end of the fiscal year. Special revenue funds have increased revenue by $72M, such as Measure H, Measure R-Highway and miscellaneous state grants, due to reimbursements owed to the City on various grant funded projects. Additionally, other City revenue projections were also increased including Parking Violation Fees, Planning Fees, and PARCS events revenue due to the increase in current years activity and trends.
Expenditures
Expenditure increases include a combination of unexpected increases due to vandalism/damage, various rate increases, shortfalls, transfers to other funds, and adjustments to programs that were originally cut from the proposed budget.
Additional budget was added to support the on-going Lancaster Police Department efforts including professional services and training expenditures.
A few major operational impacts on the General Fund include a $1.3M capital project for the Auto Mall Signs, and $454K capital project for PARCS Midtown Recreation Center roof replacement, and $600K capital project for City Hall chiller replacement.
The remaining increases are to support City operations through the fiscal year. The proposed increase aims to ensure adequate funding to address shortfalls without compromising essential services or planned projects.
The total adjustments recommended result in an overall increase in expenditures totaling $7,076,123.66.
The proposed adjustments in Attachment A are shown by fund, Attachment B includes account detail and proposed increase/(decrease).
City Reserves
The General Fund reserves for FY 2025-2026 are $54M, meeting the City’s 40% reserve policy.
This provides reassurance to the City Council that the City remains fiscally sound while providing flexibility to address unexpected financial needs. Staff believe reserves will remain sustained at the policy level at year end.
Attachment:
Resolution No. 26-XX, Amendment to the Adopted Budget and Capital Improvement Program for Fiscal Year 2025-2026
Attachment A
Attachment B
Resolution No. 26-XX Amendment to the Classification and Compensation Schedule for Represented and Non-Represented Full Time Employees