Budget Workshop
May 20, 2026
FISCAL YEAR 2026/27
MID-CYCLE OPERATING BUDGET
REVIEW
1 • Budget Process of Mid-cycle
• Economic Forecast
• Mid-cycle Adjusted Budget Summary
• Operating Budget Adjustments
• Revenue
• Operating Budget Expenditures
• Fund Balance
• Personnel
• Quality of Life and Reserves
AGENDA
2 Operating Budget CIP Budget
Funds the City’s daily
business, programs
and services, capital
outlays/equipment
- Personnel
- Programs/Services
- Capital
Outlays/Equipment
Financial plan for
long-term capital
improvements, &
facilities
- Capital Improvements
- Facilities
Improvements
Reviewed at CIP Budget
Workshop on 4/15/2026
Budget Components
3 2-Year Budget Cycle
Budget Timeline
4 CIP WORKSHOP
April 15, 2026
QUALITY OF LIFE
(MEASURE DD)
MEETING
May 7, 2026
FY 2026/27 MID-
CYCLE OPERATING
BUDGET WORKSHOP
May 20, 2026
FY 2026/27 MID-
CYCLE BUDGET
ADJUSTMENTS
COUNCIL
ADOPTION
June 3, 2026
Economic
Forecast
5 Persistent Inflationary
Pressure – Core inflation
continues to stay elevated
and drive up the cost of
everyday items
Capital Market Volatility –
Interest rate uncertainty is
impacting borrowing costs
Federal Uncertainty –
Shifting geopolitical and
policy landscape
Ongoing Structural Deficits -
Despite higher-than-
expected tax collections, the
state faces a projected
budget deficit of roughly $18
billion for the 2026/27 fiscal
year
Stagnant Labor Market -
California’s job growth is
lagging behind the national
average, with unemployment
projected at 5.6% (March
2026).
Industrial/Commercial
Projects - Several large
projects still in review,
although development
revenue has seen some
easing
Sales Tax/Quality of Life -
Revenue is showing a
leveling off and slowing
Property Tax, VLF,
Franchise Fees - Continue to
show strong growth
Economic Outlook
National
State &
Regional Local
6 Proposed FY 2026/27
Mid-cycle Operating
Budget Review
7 8EXPENDITURES
REVENUES Proposed FY
2026/27 Mid-cycle
Expenditure
Adjustments
Operating Requests
Fund
$989,403 General Fund
(1,700,000) Quality of Life Fund
($710,597) OPERATING TOTAL
Proposed FY
2026/27 Mid-cycle
Revenue
Adjustments
Revenue Requests
Fund
$402,335 General Fund
($1,700,000) Quality of Life Fund
($1,297,665) REVENUE TOTAL
INTENTIONAL USE
OF FUND BALANCE
SUMMARY FY 2026/27 MID-CYCLE OPERATING
APPROPRIATION REQUESTS: GENERAL FUND & QUALITY OF LIFE
Proposed Additional
Use of Fund Balance
FY 2026/27Source of Funds
$397,068Restricted Fund Balances: AMR Fees,
Technology Surcharges
190,000Assigned Fund Balance
$587,068Total General Fund Use of Fund
Balance
9 PROPOSED OPERATING BUDGET SUMMARY: GENERAL FUND & QUALITY OF LIFE FISCAL YEAR 2026/27 MID-CYCLE BUDGET
FY 2026/27
PROPOSED
ADJUSTED
FY 2026/27 MID-
CYCLE
ADJUSTMENTS
FY 2026/27
ADOPTED
Revenues
$82,217,697 $402,335 $81,815,362 General Fund
20,197,597(1,700,000)21,897,597Quality of Life
$102,415,294 ($1,297,665) $103,712,959 TOTAL REVENUES
Expenditures
$49,113,127 ($350,886) $49,464,013Personnel
43,013,494 (359,711)43,373,205Operating Expenses
190,000 -190,000One-Time Studies
25,000 -25,000Capital Outlays
10,808,612 -10,808,612Transfers & Allocations (ISFs)
$103,150,233 ($710,597) $103,860,830 TOTAL EXPENDITURES Use of Fund Balance
$734,939 $587,068 $147,871 General Fund
$734,939 $587,068 $147,871 USE OF FUND BALANCE
10 SALES TAX REVENUE
BUILDING/PLANNING/
ENGINEERING REVENUE
PROPERTY TAX
VLF REVENUE
FRANCHISE FEES
INTEREST REVENUES
PROPOSED FY 2026/27
REVENUE ADJUSTMENTS
GENERAL FUND & QUALITY OF LIFE
SALES TAX & QUALITY OF LIFE:
(-7.0%, $2.5 MILLION FROM FY 2026/27 ADOPTED BUDGET)
PROPERTY TAX:
(+2.9%, $750K FROM FY 2026/27 ADOPTED BUDGET)
VEHICLE IN LIEU TAX (VLF) REVENUE:
(+0.1%, $21K FROM FY 2026/27 ADOPTED BUDGET)
DEVELOPMENT REVENUE:
(-8.2%, $1.1 MILLION FROM FY 2026/27 ADOPTED BUDGET)
FRANCHISE FEES:
(0%, NO CHANGE FROM FY 2026/27 ADOPTED BUDGET)
INTEREST (INVESTMENT) REVENUE:
(+32.8%, $1.0 MILLION FROM FY 2026/27 ADOPTED BUDGET)
OTHER REVENUE:
(+6.7%, $472K FROM FY 2026/27 ADOPTED BUDGET)
11 Proposed FY 2026/27
Mid-cycle Revenue
Adjustments
Citywide Revenue Requests
Fund Category
$402,335 General Fund
(1,700,000) Quality of Life (QoL) Fund
($1,297,665) General Fund/QoL TOTAL:
140,000 Internal Service Funds (ISF)
2,426,951 All Other Special Revenue Funds
$1,269,286 CITYWIDE TOTAL
FY 2026/27 REVENUE ADJUSTMENT SUMMARY
12 FY 2026/27 Mid-cycle
Adjustments
Recommended Fund Type
$989,403 General Fund
(1,700,000) Quality of Life (QoL)
($710,597) General Fund/QoL TOTAL:
$177,072 Internal Service Funds (ISFs)
396,566 All Other Special Revenue Funds
($136,959) All Funds Total:
FY 2026/27 EXPENDITURE REQUESTS (OPERATING BUDGET)
SUMMARY BY BUDGET CATEGORY
(ALL FUNDS)
Operating/Maintenance: $29,327
Personnel: ($296,286)
Capital Outlays/1x Studies: $130,000
General Fund/Quality of Life: ($359,711)
General Fund/Quality of Life: ($350,886)
General Fund/Quality of Life: $0
Other Operational Adjustments (No Additional
Appropriations)
- Staff has made every effort to use budget transfers to repurpose funds within departments to align each
department appropriately in lieu of additional requests.
13 Notes
Proposed
Additional
Use
FY
2026/27Source of Funds
Use of funds to cover the Emergency
Services Coordinator (EMD contract).$195,000Restricted Fund Balance: AMR Fees Additional coverage of IT salaries
overseeing software and tickets
(60%+).
202,068Restricted Fund Balance: Technology
Surcharge
One-time studies190,000Assigned Fund Balance
$587,068Total General Fund Use of Fund
Balance
FY 2026/27 MID-CYCLE USE OF FUND
BALANCE ADJUSTMENTS (GENERAL FUND)
14 PERSONNEL ADJUSTMENTS
FUNDING
SOURCE FTE
SALARY &
BENEFITS POSITION TITLE DEPARTMENT
General
Fund N/A $15,599 City Traffic Engineer
(reclassification of Principal Engineer)
Public Works
General
Fund N/A 14,856 Sr. Management Analyst
(reclassification of Management Analyst II)
Human
Resources
General
Fund N/A 12,861 Management Analyst II
(reclassification of Management Analyst I)
Community
Development
General
Fund N/A 21,518 Building Inspector II
(3 positions)
(reclassification of Building Inspector I)
Community
Development
General
Fund 1.5 18,000 Community Services Specialist
(2 positions at ¾ time)
(reclassification of PT staff to PT with Benefits)
Community
Services
General
Fund (1.5) (18,000) Part Time Leader II
(reclassification of PT staff to PT with Benefits)
Community
Services
$ 64,834TOTAL
PERSONNEL
Mid-cycle
FY 2026/27
Adopted
FY 2026/27
304.0 304.0 Full-Time
32.5 32.5 Part-Time
336.5 336.5 TOTAL
FY 2026/27 Mid-cycle Requests:
-8 existing personnel adjustments
-P A R T - T I M E PERSONNEL
budget/compensation adjustments
- PERSONNEL RECLASSIFICATIONS
based on operational needs and assessment of
existing functions
QUALITY OF LIFE
(MEASURE DD)
PROPOSED BUDGET
ADJUSTMENTS
FISCAL YEAR 2026/27
15 Proposed
FY2026/27
Revised Budget
Proposed
Adjustments
Adopted
FY2026/27
BudgetCategory
$19,547,597
($1,800,000)$21,347,597Measure DD Sales Tax
650,000
100,000550,000Interest
$20,197,597
($1,700,000)$21,897,597FY 2026/2027 Revenue
$1,565,000
$1,440,000$125,000CIP Projects
472,825
-472,825Code Enforcement
8,824,565
-8,824,565Menifee PD
10,900,207
(1,700,000)12,600,207CalFire
$21,762,597
($260,000)$22,022,597FY 2026/2027
Expenditures
1,565,000
1,440,000125,000
Total Difference
(Intentional Use of Fund
Balance)
The Quality of Life (Measure DD)
Committee met May 7, 2026, and
reviewed the proposed FY 2026/27
Mid-cycle budget. Following review,
the Committee made a motion to
recommend the budget
appropriations as presented for
Council consideration.
16 Public Facilities
$26.3 Million
Capital Outlays/
Replacements
(Fleet & Fire)
$3.3 Million
Operating Costs
Stabilization
(SIR, Unfunded Pension,
OPEB, Fire Services)
$12.3 Million
Fund Balance
Reserves (Rainy Day & Cash Flow
)
Fund Balance 7/1/2025*: $93,738,876 (General Fund) / $5,468,734 (Quality of Life) * Re
Ƌects Projected Fund Balance(s) 6/30/2025 + GASB 31 reversal entry Operating Stabilization/
Emergency (15%)
$15.4 Million
Economic Uncertainty
Reserve (15%)
$15.4 Million
Unassigned Fund Balance
(10%)
$10.3 Million
40% Reserve Requirement
($41.2 Million)
Non -
Discretionary
(Restricted)
Nova CBA
(McCall Blvd.
Improvements)
$5.5 Million
Restricted Use
(General Plan, Tech
Surcharges, AMR)
$2.7 Million
Existing Carryovers &
Other Commitments
(Contracts, POs, CIP, other)
$6.3 Million
FUND BALANCE ADJUSTMENTS
GENERAL FUND:
$190K requested out of the assigned fund
balance for OPEB (
Assigned)
$397K requested to be used out of
restricted use funds (
Non-Discretionary)
QUALITY OF LIFE:
$1.4 Million remaining unassigned fund
balance requested for use in PMP as part
of the FY 2026/27 Mid-cycle budget.
$97 .8
Million
EXISTING RESERVES
Effective 7/1/2026
Savings
(Money
Jar)
The City of Menifee's primary financial
objective is to maintain the fiscal stability of the
organization. It is essential that the City maintain
adequate levels of unrestricted fund balance to
mitigate financial risk.
(Policy CC-07)
Recommended Action:
• Review the presentation and provide input on
the proposed Fiscal Year 2026/27 Mid-cycle
Operating Budget.
17 Thank you!
Any questions?