City Council/Public Finance and Economic Development Authority/Parking Authority
June 16, 2025

6/11/2025
1 FY 2025/26 BudgetGeneral Fund ReserveCity Budget OverviewGeneral FundMeasure CMeasure Y Other DepartmentsErrata 1 What is a General Fund Reserve?The general fund reserve, or fund balance of the general fund, is a measure of the financial resources available. Mitigate financial risks Provide a back-up for revenue shortfalls Sustain existing levels of service to residents Demonstrates continued prudent fiscal management and creditworthiness21 2 6/11/2025
2 Risk Analysis: What is our risk?Predictability of revenues and volatility of expenditures (less predictability and more volatility necessitate higher reserve levels) –HIGHPerceived exposure to significant one-time outlays (disaster, immediate capital needs and state budget cuts)-MID to HIGHPotential drain upon General Fund resources from other funds or availability of resources in other funds (deficits in other funds may require a higher level of unrestricted general fund balance) –MIDLiquidity (having cash available to cover liabilities)-LOWSCORE RECOMMENDS 26-35% RESERVE3 Reserve OptionsAmounts$67,612,196FY 25-26 Proposed GF Operating Budget$676,1221% Operating Budget$3,380,6105% Operating Fund$11,268,699GFOA Rec Minimum (approx.16%)$13,522,43920% Operating Budget$16,903,04925% Operating Budget$20,283,65930% Operating Budget$23,664,26935% Operating Budget$27,044,87840% Operating Budget4SCORE RECOMMENDS 26-35% RESERVE 3 4
6/11/2025
3 Funding Options40%35%30%25%20%$18,364,854$18,364,854$18,364,854$18,364,854$18,364,854Current Set Aside23,664,26920,283,65916,903,04913,522,43910,141,82925% Set Aside3,380,6103,380,6103,380,6103,380,6103,380,6105% Contingency$27,044,878$23,664,269$20,283,659$16,903,049$13,522,439Total Reserve($5,299,415)($1,918,805)$1,461,805$4,842,415$8,223,025Amount (short) or over Requirement5 Proposed General Fund Reserve Policy6Revising General Fund Reserve Policy from 35% to 30% $20,283,6595% Contingency $3,380,61025% Set Aside $16,903,049Current Set Aside Balance $18,364,854Overfunded $1,461,805Needed to Balance the General Fund $494,460Overfunded Remaining Amount $967,345 5 6
6/11/2025
4 Overview7Labor Negotiation Increases included 4%Maintenance, Supplies, and Services <0%-2% increaseMaintenance and One-Time Acquisitions included in General Fund, Measure Y, Measure C, and CFDParks and Community Services – Sustainable Budget an ongoing challengePC and Fleet Replacement•Not included in the General Fund•Included in Enterprise Funds and other Special Revenue FundsIncludes Council Direction from 6/2/25 Public Hearing FY 2025-26 Budget OverviewTotal City Budget $439.9 million$68.6 $198.4 $53.5 $21.8 $97.6 General FundEnterprise FundsInternal Service FundsMeasure FundsOther Operating Funds87 8 6/11/2025
5 Recommended Staffing9
UnfundedTotalDeleteAdd Functional Area559FY 24-25 Staffing(1)(2)(2)City Manager11Finance-Fire-(1)1Police-(1)1Development Services-Parks & Community Services(1)(1)PW-Parks11PW-Facilities(1)(1)Human Resources-(2)2Information Technology(1)(4)(8)6Subtotal11PW-Streets4(2)6PW-Enterprise561562FY 25-26 Staffing FY 2025/26 General Fund$0$11,776,222$11,776,222Estimated Beginning Balance – July 1, 2025$494,460$67,117,736$67,612,196Budgeted Revenue$0$65,464,947$65,464,947Operating Expenses$65,085$2,082,164$2,147,249Operating Transfers$65,085$67,547,111$67,612,196Total Operating Expenditures$429,375($429,375)$0Revenue over/under Expense $105,000$442,313$547,313Below the Line (Non-operating)($1,899,280)$5,274,280$3,375,000Future Planning$0$476,409$476,409Prior Year Projects$2,223,655$5,153,845$7,377,500Recommended Ending Balance – June 30, 2026$3,254$3,377,356$3,380,610Less Committed Funds-5% Contingency Reserve$2,220,401$1,776,489$3,996,890Total Available Funds – June 30, 2026109 10 6/11/2025
6 General Fund Transfers
$’s in Millions1107/08A 08/09A 09/10A 10/11A 11/12A 12/13A 13/14A 14/15A 15/16A 16/17A 17/18A 18/19A 19/20A 20/21A 21/22A 22/23A 23/24A 24/25B 25/26BAirport$0.08 $0.20 $0.07 $0.10 $0.06 $0.02 $0.06 $0.05 $0.04 $0.08 $0.00 $0.04 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.37Development Services$0.00 $0.00 $0.57 $0.70 $0.50 $0.30 $0.96 $0.46 $0.25 $0.54 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Parks and Recreation$2.43 $1.80 $1.27 $1.10 $0.85 $0.50 $0.67 $0.75 $0.76 $1.00 $1.02 $1.32 $1.34 $1.13 $1.34 $1.21 $1.33 $1.62 $1.70$0.00$0.50$1.00$1.50$2.00$2.50$3.00Parks and RecreationDevelopment ServicesAirport $2.00$1.91 $1.90$1.41$0.82$1.69$1.05$1.62$1.02$1.36$1.34$1.13$1.21$1.33$1.34$1.62$2.07$1.26 Below the Line Expenses (Non-Operating)12Community Funding $ 30,000Arts Projects $ 75,000Enterprise Resource Planning (ERP) System $ 147,352City Clerk Remodel $ 100,000Community Park 42 Maintenance $ 129,961Civic Center Skylight Replacement $ 15,000Civic Center Exhaust Replacement $ 50,000Subtotal $547,313 Economic Development Opportunity Fund $ 675,000Affordable Housing Fund $1,012,500Trust 115-Pension $1,687,500 General Fund Reserve – 25% set aside $ 0Total $3,922,313 11 12
6/11/2025
7 Set-Aside Balances
$’s in Millions13$7.38$17.87$9.66$0.95$1.05 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20General Fund GF Reserve Trust 115 Pension Ec Dev Op Fund Affordable Housing FundFY 25/26 Balance$16.9 Requirement$1.7$3.4 Contingency$1.01$0.67 Measure C14TotalFund 2031-Roads Fund 2030-Public SafetyFund 2001-Old Measure C$5,607,057$445,666$1,090,852$4,070,539Beginning Balance 7/1/259,135,000457,0008,678,0000Sales and Use Tax 320,8081,070104,898214,840Other Revenue9,455,808458,0708,782,898214,840Total Budgeted Revenue158,2290577157,652Transfers9,430,71632,1028,412,005986,609Operating Expenses912,933300,000412,933200,000Acquisitions1,812,386001,812,386Capital Improvements12,314,264332,1028,825,5153,156,647Total Budgeted Expense$2,748,601$571,634$1,048,235$1,128,732Ending Balance 6/30/26*Meets GFOA Recommended Minimum $1,579,572 13 14
6/11/2025
8 Measure Y15TotalDiscretionary–40%Parks & Rec-20%Fire-20%Police-20%$657,079$0$66,890$449,693$140,496Beginning Balance 7/1/251,686,500674,600337,300337,300337,300Estimated Tax Revenue36,12012,95044016,2206,510Estimated Other Revenue0(311,155)311,155Estimated Transfers-In722,946337,300385,646Estimated Transfers-Out1,449,8830310,972698,067440,844Estimated Expenses$206,870$39,095$19,167$105,146$43,462Ending Balance 6/30/26 Parks & Community ServicesBalancing the Operating BudgetMeasure Y 20% Parks and Recreation $337,300Measure Y 50% of 40% Discretionary $337,300General Fund Transfer$87,735 5.4% annual increase$1,707,088 Total GF TransferNew CP42 Maintenance $83,440Extra Help $15,840Utilities $47,000Paint, tools, etc. $9,600Turf Tank $11,00016Program ImpactsBoys & Girls Club Lease-reduce $25kOther Community Center leases-reduce $5kDelete Full Time Zookeeper (added back per Council direction)Eliminated Summer CampEliminated Stick to Fitness Sports ClinicsEliminated Block Party Trailer for Community ReservationsMCSD Contributions for Youth Sports $80k 15 16
6/11/2025
9 Parks & CSPublic Facilities Financing Plan (impact fees)Community Park 42 $200kFence and Water InfrastructureMove Parks and Community Service Administration to Senior Center $114k$28K (24.6%) PFFP$86k CY Operating Savings 17 Police 18General Fund Deleting Lead Dispatcher (added back-MC)Deleting Parking Enforcement Officer/Adding CSOUnfunded additional Police Officer (total of 4) (added back MC)Unfunded one Dispatcher (added back MC)Total Funded Positions =109.30 (67.3 sworn/42 non-sworn)Measure CTotal Positions = 23.49 (20.49 sworn/3 non-sworn)Operating Budget –GF $76kCFDTotal Positions = 10.21 sworn8 Replacement Vehicles $500kMeasure YOperating Budget – GF $124kReserve Officer Program -$80kTemp Dispatcher $32kTemp Sergeant $58KFleet Repairs (unanticipated) $76K 17 18
6/11/2025
10 Fire 19General Fund Unfunded 1 Firefighter (added back MC)SAFER Grant Positions -24FEMA WaiverPublic Safety Hiring FreezeTotal Non-SAFER Funded Positions =52.18 (47.18 sworn/5 non-sworn)Measure CTotal Positions = 11.3 swornType 6 Engine 50%-$200kOperating Budget –GF $75kCFDTotal Positions = 5.52 swornMeasure YOperating Budget – GF $50kThermal Imaging Cameras -$21kSelf-Contained Breathing Apparatus Bottles-$18kType 6 Engine 50%-$200k AdministrationCity ManagerUnfund 2 (.5) Peer Support SpecialistsDelete 2 Peer Support Specialist Recreation Coordinator (Prop64)CalVIP Grant Expires 06/30/25City ClerkCity Clerk Safety Improvements $100kFinanceAdd Assistant Buyer80% Admin Cost Recovery Reduce Extra Help Net $6,000 additional GF costs 2019
20 6/11/2025
11 Administration21
Human ResourcesDelete HR Technician-vacantInfo TechnologyDelete GIS Coordinator/Add IT ManagerNet increase $9,000Delete GIS Technician/Add Systems Technician I/II/IIINo cost differenceData Center Floor Replacement $135kMicrosoft Software Licenses $461k (15% increase)ERP Allocation $272kGF Allocation $147kOther$1 million RDA Residual revenueNo allocation of Community FundingNo allocation for Arts Projects Development Services/HousingRemove Deputy Development Services Director for Planning ManagerUse of Fund Balance $1.3 millionFee Study in progressHousing DeficitCurrent Year FY 24/25 ($292,000)Revise Affordable Housing Policy Federal Budget Proposed CutsCDBG $1-$2.6MHOME $447k-$2.8M 2221
22 6/11/2025
12 Downtown/Economic Dev/AirportProperty Based Improvement District (PBID)Tourism Based Improvement District (TBID)Small Business GrantAirport DeficitFAA-Cares Act Grant ExpiredLanding Fees increase $60kGF Transfer $367kOther Opportunities to increase revenue 23 Public Works-Staffing24
Delete 1 Park Worker Add 2 Maintenance Worker I/II-Streets and RefuseDelete Sewer/Storm Drain Worker and add Lead-Sewer/Storm DrainDelete Instrumentation Control/Electrician Tech and add Lead-WWTP MaintenanceAdd 1 Lead Instrumentation Control/Electrician Tech (water)Add 1 Water Distribution Quality Assurance TechAdd 1 Tree TrimmerAdd 1 Custodian I/II 23 24
6/11/2025
13 Public WorksAdmin & Corp Yard Building Repairs $166kFleet Building Improvements $80kCivic Center Skylight Replacement $15kCivic Center Exhaust Replacement $50k 25 Public WorksRoad Grinder $300k (M.C.)Vehicle AcquisitionsStreets-1 Truck $75kFacilities-1 Van $43kWater-3 Trucks $270kRefuse-1 Rear Loader for Organics $225k 2625
26 6/11/2025
14 PW Parks-Measure Y DiscretionaryTree Trimming $100,000Bike Path Maintenance $60,000Park ImprovementsPark Maintenance $50,000Zoo Roof Repair $6,000Joe Herb Upper $25,000Park Restroom partitions, security latches, and handle replacements city-wide $69,000 27 Capital Projects28
Streets Replace School Flashing Beacons-add $120kAPS Polara-Push Buttons @ Schools-add $100kControllers 2070 Replacement-add $48kDowntown Concrete Light Poles-new $40kEngineeringMcKee Road Rehabilitation $1.2 million 27 28
6/11/2025
15 Errata List29Net AmountDescription$30,000Add Community Funding$75,000Add Arts Projects$65,085Add back unfunded Zookeeper $3,254General Fund Reserve-5% Contingency increases based on increasing operating expenses($1,899,280)Reduce General Fund Reserve to 30%-25% Set Aside decreases$494,460Add Transfer from General Fund Reserve to General Fund to cover the deficit.$143,140Add back unfunded Firefighter to Measure C$623,488Add back 4 unfunded Police Officers to Measure C$219,981Add back 1 unfunded Dispatcher and 1deleted Lead Dispatcher$32,846Revise CDBG HUD Allocation($3,053)Revise HOME HUD Allocation ($443)Net decrease in several Maintenance District operating expenses to align with Public Hearing report.

Next Steps30
Re-open the Public Hearing
Take Public Comment
Adopt a Motion Approving the FY 2025/26 Budget
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6/11/2025
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Questions
Questions31