CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 25, 2026 BUSINESS & LEGISLATIVE
SUBJECT: GENERAL FUND, AIRPORT, AND CAPITAL MID-YEAR FISCAL YEAR 2025-26 BUDGET UPDATE AND FORECAST
FROM: Scott C. Stiles, City Manager
BY: Department Of Finance And Treasury
Department of Engineering
Department of Aviation
SUMMARY:
This item will provide City Council with an update on General Fund revenues and expenses, Airport Fund revenue and expenses, and Capital for the first half of the Fiscal Year 2025-26.
RECOMMENDATION:
Receive and File.
STAFF ANALYSIS:
GENERAL FUND:
General Fund Revenue Highlights
The General Fund ended the first half of FY26 with total operating revenues of $56.3 million. This is up by $3.8 million or 7.2% from the first half of FY25. While the top three tax revenues – Transient Occupancy Tax (TOT), Property Tax, and Sales & Use Tax – are up by 11.5% combined, Permits, Fines & Fees, Utility User Tax, Motor Vehicle Tax, Other Taxes, Misc. Income, Franchise Tax, Cannabis Tax and Interest Income are down by 0.5% combined.
Compared to the adopted budget for FY2025-26, the General Fund achieved in the first half 33% of the annual total operating revenue budget. This achievement is two percent points better than the first half of FY25 (31%). The top three tax revenues achieved 31% of their total budget amounts in the first half of FY26, compared to 28% in the first half of FY25.
City Council Staff Report
February 25, 2026 -- Page 2
2025-2026 Mid-Year Budget Update
2026 202620262025 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Revenues
Transient Occupancy Tax 3,582 10,84514,42711,908 2,519 21% 49,106 29% Property Taxes 68 13,35513,42312,643 779 6% 38,261 35%
Sales and Use Taxes 2,201 6,8259,0278,512 515 6% 29,839 30% Permits, Fines, and Fees 3,157 4,1937,3507,022 328 5% 16,178 45% Utility Users Tax 1,888 3,0064,8945,397 (503) -9% 10,905 45% Motor Vehicle In-Lieu Tax 0 68680 68 100% 8,061 1%
Other Taxes 110 214324347 (23) -7% 6,998 5%
Miscellaneous Income 889 2,6813,5703,416 154 5% 4,521 79% Franchise Tax 395 6071,002638 364 57% 4,363 23%
Interest Income 964 8131,7772,030 (253) -12% 3,833 46%
Cannabis Tax 141 260401557 (156) -28% 1,038 39%
Total Revenue 13,396 42,866 56,262 52,471 3,791 7% 173,103 33% Expenses
Admin & Economic Development 1,727 2,8984,6254,058 567 14% 8,653 53% Development Services 3,435 3,6817,1167,229 (113) -2% 18,620 38% Fire Department 6,709 8,14414,85314,442 410 3% 29,362 51% General Government 4,495 5,97110,4669,358 1,108 12% 21,237 49% Library 712 9221,6341,634 (0) 0% 3,291 50%
Miscellaneous Expense 0 1,7551,7551,976 (221) -11% 2,031 86% Parks and Recreation 2,128 3,8916,0194,058 1,961 48% 11,666 52% Police Department 9,970 11,78821,75822,347 (588) -3% 43,843 50% Public Works 1,686 3,0054,6916,547 (1,856) -28% 10,743 44% Tourism and Community Support 1,838 2,3254,1633,911 252 6% 8,148 51% Transfers to Other Funds 2,177 2,1774,35411,646 (7,292) -63% 8,709 50% Total Operating Expenses 34,877 46,557 81,435 87,207 (5,773) -7% 166,302 49% Operating Surplus/(Deficit) (21,482) (3,691) (25,173) (34,737) 9,564 -28% 6,801 Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
TABLE 1
Mid-Year revenue highlights are presented below:
Transient Occupancy Tax (TOT) on cash basis is up $2.5 million or 21% from FY25 YTD. The increase is a result of timing differences due to cash collections. The reconciliation from cash basis to modified accrual for the first half indicates TOT is flat to FY25 YTD (-0.2%).
Property Tax is up $0.8 million or 6%, largely due to higher assessment values of homes and properties. The City receives two more large distributions of property tax in the 3rd and 4th quarter of the fiscal year.
Sales tax revenue is up $0.5m or 6% from FY25 YTD. This represents the months July through October (sales tax collection is two months behind). Permits Fines and Fees are up by $0.3 million or 5% largely due to the increase in mutual aid overtime revenue and higher safety charge for Police and Fire to the airport in FY26.
City Council Staff Report
February 25, 2026 -- Page 3
2025-2026 Mid-Year Budget Update
Utility Users Tax (UUT) continues the slight downward trend and is down $0.5 million or 9% from FY25 YTD, largely due to lower payments from SoCal Edison and Desert Community Energy.
Motor Vehicle in Lieu Tax is usually received largely in February and June of each year from the County of Riverside for the Vehicle License Fee (VLF) - 0.65% of value of vehicle. The small payment of $67k in the first half of FY26 is from an “allocation of vehicle license fees collection in excess” from prior year. Other Taxes are down by $20k or 7%, largely due to lower revenue for new development tax in FY26. FY25 YTD includes large tax payment from West Coast Self Storage ($78k).
Misc. Income consists mostly of Administrative Service Charge and the Master Lease Rent (combined over 75% of misc. income) and is up $154k or 5%, largely due to an increase in restricted donations (+$200k) from a new contract with PS Resort for contributions for events, programs, and activities ($250k annually). Interest Income is down by $0.3 million or 12% due to portfolio cash balances down and lower rate of return.
Cannabis Tax is down $0.2 million or 28%, due to fewer dispensaries and lower sales impacted by the dominance of the illegal market.
General Fund Operating Expense Highlights
The General Fund ended the first half of FY26 with total operating expenses of $81.4 million. This is down by $5.8 million or 7% from FY25 YTD. Main reasons are less transfers from the General Fund to other funds (-$7.3 million) and lower charges for facility service and fleet maintenance (-$2.3 million). These cost reductions are offset by higher expenses for salaries & benefits (+$1.8 million) and contractual services, insurance, utilities, and computer software (combined +$2.2 million).
Compared to the adopted budget for FY2025-26, the General Fund achieved in the first half 49% of the annual total operating expense budget. This achievement is two percent points better than the first half of FY25 (51%).
City Council Staff Report
February 25, 2026 -- Page 4
2025-2026 Mid-Year Budget Update
FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Expenses By Type
Salaries & Benefits 22,031 27,935 49,966 48,200 1,766 4% 98,340 51% Contractual Services 3,938 6,311 10,250 9,788 462 5% 23,254 44% Transfers to Other Funds 2,177 2,177 4,354 11,646 (7,292) -63% 8,709 50% Insurance Expense 1,443 1,439 2,882 2,373 509 21% 5,752 50% Maintenance Expense 1,330 1,239 2,569 4,520 (1,951) -43% 5,467 47% Fleet Maintenance 1,119 1,110 2,230 2,587 (357) -14% 4,442 50% Utilities Expense 558 1,437 1,995 1,456 539 37% 3,430 58% Special Programs 310 484 794 632 163 26% 2,846 28%
Loan Principal & Interest 162 0 162 0 162 100% 2,216 7% Computer Software 798 922 1,719 1,061 658 62% 2,125 81% Materials and Supplies 345 492 838 776 61 8% 1,762 48%
Improv., Furniture and Equip. 9 79 88 140 (52) -37% 1,599 5% Employee Develop. & Travel 170 265 435 424 11 3% 1,283 34% Other 486 2,666 3,151 3,603 (452) -13% 5,078 62%
Total Operating Expenses 34,877 46,557 81,435 87,207 (5,773) -7% 166,302 49% Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
TABLE 2
Mid-Year expenses by category highlights are presented below:
Salaries and Benefits are up by $1.8 million or 3.7% from FY25 YTD, due to scheduled salary increases with staff labor unions and higher premiums for workers’ compensation (+15%). Hiring of staff is limited to backfilling only key, business-critical positions.
Contractual Services are up $0.5 million or 4.7% from FY25 YTD, largely due to price adjustment clauses for multiple-year contracts.
Transfers to Other Funds are down by $7.3 million or 63% due to reduced transfers from General Fund to other funds per adopted budget (in FY26 only to Debt.
Service Fund; FY25 included Debt. Service Fund, Fleet Services, and Facility Maintenance Fund).
Insurance Expense is up $0.5 million or 21% from FY25 YTD, largely due to higher premiums for excess liability (+15%) and Property (+10%). Maintenance Expense is down $2.0 million or 43% from FY25 YTD, largely due to lower facility maintenance expense allocation to the General Fund, per adopted budget.
Fleet Maintenance is down $0.4 million or 14% from FY25 YTD, largely due to lower fleet expense allocation to the General Fund, per adopted budget. Utilities Expenses are up $0.5 million or 37% from FY25 YTD, largely due to higher expense allocation from the CoGen Facility (kw/h rate increase). Computer Software is up $0.7 million or 62% from FY25 YTD, largely due to the continued centralization of software purchases from the IT department. This centralized procurement of software is included in the adopted budget for FY26.
City Council Staff Report
February 25, 2026 -- Page 5
2025-2026 Mid-Year Budget Update
Materials and Supplies are up $61k or 8% from FY25 YTD, largely due to the fire department’s purchase of fire hoses to outfit two new engines. Improvement, Furniture and Equip. is down $52k or 37% from FY25 YTD, largely due to less purchases for IT equipment (30 Cisco Catalyst APS in FY25 YTD) and engineering equipment (OCE Plotwave Printer & 5 year maintenance).
Mid-Year expenses by department are presented below:
General Government is up $1.1 million or 12% over FY25 YTD, largely because of centralized software purchases through the IT department (+$0.7 million). Parks & Recreation is up by $2 million or 48%, largely due to the addition of Park Maintenance in May 2025.
Public Works is down $1.9 million or 28%, largely due to transfer of Park Maintenance to Park & Recs.
Transfer to Other Funds is down $7.3 million or 63%, due to the discontinued transfers from General Fund to Fleet Maintenance Fund and Facility Maintenance Fund in the adopted budget for FY26. Only the Debt Service Fund continues to receive transfers from the General Fund.
All departments close the first half of the fiscal year around 50% and therefore reasonably within budget. Notable deviations from this trend are:
Development Services shows year over year in the first half of the fiscal year lower activity (FY26 YTD 38%, FY25 YTD 44%), largely due to contractual services. The second half of the year carries higher activity in contractual services mainly in Building & Safety, Planning, Homeless Programs, and Rent Control.
Misc. Expense closes mid-year at 86% of budget and is caused by the annual payment to the Bureau of Indian Affair due in December each year for the ground lease.
General Fund Non-Operating Income and Expenses
The General Fund Non-Operating are income or expenses from sources not related to the typical activities of the City, are generally not recurring, and are therefore considered separately. The activity for non-operating income and expenses is shown in Table 3 on next page.
City Council Staff Report
February 25, 2026 -- Page 6
2025-2026 Mid-Year Budget Update
TABLE 3
Mid-Year Non-Operating highlights are presented below:
Grant Revenue is up $2.5 milllion from FY25 YTD, largely due to a payment for the construction of the Navigation Center HUD Grant ($2 million), the BSCC Organized Retail Theft Prevention Grant ($0.3 million), and the Cannabis Equity Grant ($0.3 million).
Grant Expense is up $1.4 million from FY25 YTD, largely due to expenses for the BSCC Retail Theft Prevention Grant ($0.8 million), expenses for the Encampment Resolution Funding ($0.3 million), and Cannabis Equity Grant ($0.3 million) Council Set Aside is down $1.8 million, largely due to upcoming end of the program.
The expenses accounted for in FY26 YTD are for the Rental Assistance Program ($484k), Utility Assistance Program ($27k), Neighborhood Partnership ($32k), and Housing Consulting Service ($39k).
As a reminder, the City Council approved approx. $24 million in set asides in the FY23 budget and unused set asides have been re-budgeted. The amount of set asides has been spent down to the remaining $2.9 million in the FY26 budget.
General Fund Full-Year FY26 Forecast
The City’s core revenues of Transient Occupancy Tax (TOT), Sales Tax, and Property Tax are forecasted to be at or exceeding budget. The entry points, or year to date actuals, into FY26 appear to be stronger than last year, but with a still uncertain economy City staff wants to be cognizant of that in our full year forecast. On the national economy, consumer spending has softened, with holiday season spending below expectations and current forecasts of retail spending into 2026 continuing to soften. Other leading indicators also predicting a slowing economy early in 2026. The UCLA Anderson forecast predicts California to outperform the nation, but this is largely due to Tech and AI. UCLA Anderson predicted Tourism and Hospitality to lag behind due to sluggish job growth and high costs.
Overall sentiment is a slowing economy in early 2026, but picking up strength later in the year.
Therefore, the General Fund is forecasted to close Fiscal Year 2025-26 with total operating revenues of $174.1 million. This is up by $1.0 million or 0.6% compared to the adopted budget FY26. Compared to FY25 this is down by $10.2 million or 6%.
FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Non-Operating Revenue / Expense
Grant Revenue 2,274 5562,830355 2,475 698% 11,819 24%
Grant Expense (1,000) (2,550)(3,550)(2,134) (1,417) 66% (11,819) 30% Council Set Aside Expense (503) (80)(583)(2,414) 1,831 -76% (2,900) 20% Total Non-Operating 770 (2,074) (1,304) (4,193) 2,889 -69% (2,900) 45% Total Surplus/(Deficit) (20,712) (5,765) (26,476) (38,929) 12,453 -32% 3,901 319% Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
City Council Staff Report
February 25, 2026 -- Page 7
2025-2026 Mid-Year Budget Update
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Revenues
Transient Occupancy Tax 3,582 10,845 14,269 20,68449,38049,106 101% 51,062 97% Property Taxes 68 13,355 9,124 16,04038,58638,261 101% 37,558 103% Sales and Use Taxes 2,201 6,825 8,004 13,32930,36029,839 102% 30,578 99% Permits, Fines, and Fees 3,157 4,193 4,371 4,89816,61916,178 103% 16,021 104% Utility Users Tax 1,888 3,006 2,157 3,13610,18810,905 93% 11,234 91% Motor Vehicle In-Lieu Tax 0 68 4,007 3,9378,0118,061 99% 7,904 101% Other Taxes 110 214 2,829 3,8216,9746,998 100% 7,346 95% Miscellaneous Income 889 2,681 793 1174,4804,521 99% 7,211 62% Franchise Tax 395 607 600 2,8964,4984,363 103% 4,318 104% Interest Income 964 813 732 1,5284,0363,833 105% 4,688 86% Cannabis Tax 141 260 253 3279811,038 94% 1,363 72%
Transfers From Other Funds 0 0 0 000 - 5,000 -100%
Total Revenue 13,396 42,866 47,139 70,711 174,112 173,103 101% 184,284 94% Expenses
Admin & Economic Development 1,727 2,898 1,896 2,1508,6718,653 100% 9,629 90% Development Services 3,435 3,681 5,189 5,14317,44818,620 94% 15,443 113% Fire Department 6,709 8,144 7,228 8,07730,15729,362 103% 29,491 102% General Government 4,495 5,971 5,271 5,49721,23421,237 100% 21,924 97% Library 712 922 770 8863,2913,291 100% 3,337 99%
Miscellaneous Expense 0 1,755 138 1382,0312,031 100% 1,976 103% Parks and Recreation 2,128 3,891 2,688 2,96011,66711,666 100% 8,577 136% Police Department 9,970 11,788 10,960 11,08543,80343,843 100% 47,806 92% Public Works 1,686 3,005 2,912 3,13610,74010,743 100% 13,773 78% Tourism and Community Support 1,838 2,325 1,907 2,0238,0928,148 99% 9,364 86% Transfers to Other Funds 2,177 2,177 2,177 2,1778,7098,709 100% 20,060 43% Total Operating Expenses 34,877 46,557 41,136 43,271 165,842 166,302 100% 181,381 91% Operating Surplus/(Deficit) (21,482) (3,691) 6,003 27,440 8,270 6,801 122% 2,904 285% 2026 2026 2026 2026FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Grant Revenue 2,274 556 5,394 3,59611,81911,819 100% 3,381 350% Grant Expense (1,000) (2,550) (4,961) (3,308)(11,819)(11,819) 100% (7,349) 161% Other (Debt Service) 0 0 0 000 3,615 0%
Council Set Aside Expense (503) (80) (110) (700)(1,393)(2,900) 48% (1,312) 106% CalPERS Payment Safety Plan 0 0 0 000 (27,979) 0%
Total Non-Operating 770 (2,074) 322 (412) (1,393) (2,900) 48% (29,644) 5% Total Surplus/(Deficit) (20,712) (5,765) 6,325 27,028 6,877 3,901 176% (26,740) -26% Amounts in Thousand USD
FY26 over
FY25 in %
FY26 over
FY25 in %
Total operating expenses of the General Fund are forecasted to close FY26 with $165.8 million. This is down by $0.5 million or 0.3% compared to adopted budget FY26. Compared to FY25 this is down by $15.5 milllion or 9%.
Accordingly, the forecasted operating surplus is projected to be up by $1.5 million or 22% of the adopted budget.
Table 4 below provides a summary of forecasted revenues and expenses of the General Fund:
TABLE 4
City Council Staff Report
February 25, 2026 -- Page 8
2025-2026 Mid-Year Budget Update
General Fund Forecast Highlights
Revenue
Transient Occupancy Tax is forecasted to be at $49.4 milion. This is up $0.3 million or 0.6% from the adopted budget. Compared to FY25 this is down $1.7 million or 3%.
Property Tax is forecasted to end FY26 just over $38.6 million. This is up $0.3 million or 1% from the adopted budget. Compared to FY25 this is up $1.0 million or 3%. FY is expected to continue to show increased tax revenue from growing assessment values of properties.
Sales Tax is forecasted to end at $30.4 million at the end of the fiscal year. This is up $0.5 million or 2% from the adopted budget. Compared to FY25 this is down by $0.2 million or 0.7%.
Utility User Tax is projected to end at just over $10 million. This is $0.7 million or 7% below adopted budget. Compared to FY25 this is down by $1 million or 9%.
Operating Expenses
All departments are expected to stay within the adopted budget for FY26. Salaries and Benefits are forecasted at $98.6 million. This is at budget and compared to FY25 this is up $0.5 million or 1% from FY25. The City is on track to meet or exceed the vacancy savings of $4.2 million in FY26. Tourism & Community Support is projected to close at $8 million. This is down $55k or 0.7% from adopted budget. Compared to FY25 this is down $1.2 million or 14%, largely due to reduced operating budget FY26 for Convention Center and Bureau of Tourism (combined $0.5 million) and convention center utility expense increase of $0.5 million from SoCal Edison in FY25 for prior years missed charges. Contractual Services is projected at $23.3 million. This is at budget for FY26 and is up $1.9 million or 9% compared to FY25.
City Council Staff Report
February 25, 2026 -- Page 9
2025-2026 Mid-Year Budget Update
TABLE 5
General Fund Non-Operating Revenue and Expenses Highlights Total Non-Operating is forecasted to close with a deficit of $1.4 million from the Council set aside program for the affordable housing project Desert Highland. Grant Revenue and Grant Expenses are expected to offset each other, if no timing differences occur.
Fund Balance Development and Reconciliation for the General Fund The total fund balance of the General Fund is projected at $126.1 million at the end of FY26. This is up by $6.9 million compared to the beginning balance, as a result of the expected total surplus.
The upper part of the Table 6 on the following page depicts the development of the fund balance and the lower part of the the table reconciles the assigned and unassigned fund balances for FY25 and FY26.
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Expenses By Type
Salaries & Benefits 22,031 27,935 22,538 26,11498,61898,340 100% 98,083 101% Contractual Services 3,938 6,311 7,250 5,75223,25223,254 100% 21,367 109% Transfers to Other Funds 2,177 2,177 2,177 2,1778,7098,709 100% 20,060 43% Insurance Expense 1,443 1,439 1,441 1,4415,7655,752 100% 4,746 121% Maintenance Expense 1,330 1,239 1,282 1,2905,1415,467 94% 8,998 57% Fleet Maintenance 1,119 1,110 1,115 1,1154,4594,442 100% 5,174 86% Utilities Expense 558 1,437 885 9283,8083,430 111% 4,050 94% Special Programs 310 484 885 1,1812,8602,846 100% 1,943 147% Loan Principal & Interest 162 0 1,027 1,0272,2162,216 100% 4,324 51% Computer Software 798 922 203 2032,1252,125 100% 1,039 205% Materials and Supplies 345 492 441 4691,7481,762 99% 1,957 89% Improv., Furniture and Equip. 9 79 787 6471,5231,599 95% 502 303% Employee Develop. & Travel 170 265 336 2911,0631,283 83% 908 117% Other 486 2,666 770 6354,5565,078 90% 8,231 55%
Total Operating Expenses 34,877 46,557 41,136 43,271 165,842 166,302 100% 181,381 91% Amounts in Thousand USD
FY26 over
FY25 in %
City Council Staff Report
February 25, 2026 -- Page 10
2025-2026 Mid-Year Budget Update
TABLE 6
The unreserved portion of the fund balance is projected at the end of FY26 with $61.6 million. This is up $4 million of 7% and Table 7 depicts the details of this development.
TABLE 7
FY25FY26
ActualsFCST
Fund Balance - General Fund
Beginning Fund Balance 145,927 119,187
Total Revenues 184,284 174,112
Total Expenses 181,381 165,842
Total Non-Operating (29,644) (1,393)
Total Surplus/(Deficit) (26,740) 6,877
Ending Fund Balance 119,187 126,064
Fund Balance Reconciliation
Assigned Fund Balances
Affordable Housing 9,007 12,007
CalPERS 18,271 19,271
Aviation Fuel Tax 1,339 1,587
Cannabis Program 66 86
Total Assigned Fund Balance 28,682 32,950
Unassigned Fund Balance
Minimum Fund Balance (20% of OpEx) 32,934 31,519
Unreserved - Remaining 57,571 61,595
Total Unassigned Fund Balance 90,505 93,114
Total End of Year Fund Balance 119,187 126,064
Amounts in Thousand USD
FY26 FCST
Beginning Fund Balance Unreserved - Remaining 57,571
CalPERS Accrual FY26 (1,000)
Affordable Housing Accrual FY26 (3,000)
Change in Aviation Fuel Tax (248)
Net Change Cannabis Program (20)
Change in Min. Fund Balance 1,415
Total Surplus/(Deficit) 6,877
Beginning Fund Balance Unreserved - Remaining 61,595
Amounts in Thousand USD
City Council Staff Report
February 25, 2026 -- Page 11
2025-2026 Mid-Year Budget Update
Looking Ahead
Chick-fil-A – In the permitting process and planned opening in first half of 2027. In-N-Out Burger – In the entitlement process, planned opening at the end of 2027 or early 2028.
Warehouse/Fulfillment Center on Indian Canyon (North of I-10) – scheduled to open middle of 2028.
Warehouse/Fulfillment Center on Indian Canyon (North of I-10) – with two buildings (1.9m square-foot), through the entitlement process with planned opening in 2027.
College of the Desert – Palm Springs Campus plans to open in 2027. Convention Center Master Plan – Phase 1 Improvements expected to begin middle of 2026, Phase 2 Expansion and Connectivity to begin Spring of 2027.
Planned finish in 2028/2029.
Serena Park Housing Project – A 126-acre project includes plans for 286 residential lots and a private park open to the public. A Community Facilities District has been formed by the City to finance infrastructure improvements to be repaid through property tax assessments by the resident.
Red Tail Project – A 82 unit affordable housing development on 305 W. San Rafael Drive to start construction in early 2027 with a completion projected in early 2029. Pacific Properties Project – 115 unit affordable apartment project at the northwest corner of West San Rafael and McCarthy Road to start construction in early 2027 and expected completion in early 2029.
Desert Highland Scattered Site Single Family Homes – 6 units targeting home ownership. Construction to begin soon with completion expected early 2027.
PALM SPRINGS INTERNATIONAL AIRPORT
The City of Palm Springs operates Palm Springs International Airport (PSP) as a vital transportation hub and economic driver for the region. Managed as an enterprise fund, the Airport functions as a self-sustaining business entity, ensuring that its financial activities remain independent from the City’s general fund. PSP's financial structure is organized into four key categories: Customer Facility Charge, Passenger Facility Charge, Airport Fund – Operations & Maintenance, and Airport Capital Projects, each supporting various aspects of the Airport’s infrastructure, operations, and long-term development initiatives.
Customer Facility Charge Fund
The Customer Facility Charge (CFC) revenue is collected by the car rental concessionaires and remitted to the Airport according to state law to support the future consolidated rental car facility project. Effective March 1, 2022, in accordance with the State of California as required in Section 50474, the collection methodology changed from $10.00 per rental car transaction to $9.00 per rental day (up to a maximum of five days).
City Council Staff Report
February 25, 2026 -- Page 12
2025-2026 Mid-Year Budget Update
The CFC funds are restricted and cannot be used for other purposes than improvement of rental car facilities.
Customer Facility Charge Fund revenues and expenses are shown below in Table 8.
TABLE 8
Passenger Facility Charges Fund
The Passenger Facility Charge (PFC) revenue is comprised of a $4.50 charge (net $4.39 to the Airport after deduction of $0.11 for the airline-processing fee) paid by each ticketed passenger that boards an airplane at the Airport. Certain types of passengers, including military, are excluded from paying the Passenger Facility Charge.
The PFC funds are restricted and can only be used to fund FAA-approved projects that enhance safety, security, or capacity, reduce noise, or increase air carrier competition.
Passenger Facility Charge Fund revenues and expenses are shown in Table 9 below.
TABLE 9
Airport Fund - Operations and Maintenance
Airport Revenue Highlights
The Palm Springs International Airport (PSP) ended the first half of FY26 with a total revenue of $23.8 million. This is up by $3.2 million or 16% from FY25 YTD, largely due to higher airline revenue.
FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Customer Facility Charge (CFC) Fund
CFC Revenue 467 1,7782,2452,265 (21) -1% 8,267 27%
Other Revenue 568 5291,097800 298 37% 1,498 73%
Total Revenue 1,035 2,307 3,342 3,065 2779%9,76534%
Operating Expenses 268 2845510 551 100% 2,101 26%
Total Expenses 268 284 551 0 551 100% 2,10126%
Operating Surplus/(Deficit) 767 2,023 2,791 3,065 (274) -9% 7,664 36% Amounts in Thousand USD
FY26 over FY25
in %
FY26 over
FY25
2026 202620262025 2026 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Passenger Facility Charge (CFC) Fund
PFC Revenue 795 1,1921,9871,964 23 1% 6,129 32%
Other Revenue 204 205409370 39 10% 695 59%
Total Revenue 999 1,397 2,396 2,334 623%6,82435%
Operating Expenses 3 264267367 (100) 100% 2,618 10%
Total Expenses 3 264 267 367 (100) 100% 2,61810%
Operating Surplus/(Deficit) 996 1,133 2,129 1,968 161 8% 4,206 51% Amounts in Thousand USD
2026 vs
2025
City Council Staff Report
February 25, 2026 -- Page 13
2025-2026 Mid-Year Budget Update
Total Airline Revenues are up 27% from FY25 YTD, largely due to higher Terminal Airline Space Revenues, largely due to increases in the per-use, terminal rental and landing fee rates charged to the airlines as of August 1, 2025.
Total Non-Airline Revenues are up 10% from FY25 YTD, largely due to higher Aeronautical Ground Rental and On Airport Rental Car Revenues.
Airport Expense Highlights
The Airport Fund ended the first half of FY26 with total operating expenses of $27.8 million. This is up by $1.3 million or 5% from FY25 YTD, largely due to increased salaries & benefits and charges for the CoGen expenses for electricity and cooled water.
Airport salaries and benefits increased due to the addition of 16 positions; specifically including personnel in aviation security and landside operations departments, which were necessary to support operational growth, enhance regulatory compliance, and improve customer service.
Electricity and water cogeneration utilities (COGEN) expenses increased significantly in FY26 and are expected to remain elevated going forward.
Accordingly, the operating deficit for the first half of FY26 ended at $4.1 million. This is down by $1.8 million or 31%.
Table 10 on the following page depicts the summary of the FY26 YTD airport revenues and expenses.
City Council Staff Report
February 25, 2026 -- Page 14
2025-2026 Mid-Year Budget Update
TABLE 10
Passenger activity during Q2 of FY26 was affected by multiple factors occurring at the same time. The federal government shutdown from October 1 through November 12, 2025 created operational disruptions across the national aviation system, leading to schedule adjustments, short-notice cancellations, and lower passenger loads.
FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Revenues
Airline Revenues
Landing Fees 954 1,2512,2052,163 42 2% 6,995 32%
Terminal Airline Space /Joint Use 2,817 1,5494,3663,198 1,167 37% 6,851 64% Gate Per Use Fees 434 508943783 159 20% 2,266 42%
Passenger Loading Bridge Fees 124 167292161 131 82% 580 50% Baggage Handling System Fees 265 161426173 253 146% 574 74% Total Airline Revenues 4,594 3,6368,2316,478 1,753 27% 17,266 48% Non-Airline Revenues
General Aviation 38 89128123 4 4% 527 24%
Non-Aeronautical Ground Rental 200 106306265 41 15% 671 46% Aeronautical Ground Rental 550 223773658 114 17% 1,372 56% Parking 1,777 1,2883,0652,855 210 7% 6,333 48%
Airport Use Permits 12 506369 (7) -10% 120 52%
Non-Airline Terminal Rent Fee 464 236700526 173 33% 1,045 67% Non-Airline Terminal Rent F&B 165 303468454 14 3% 1,769 26% Non-Airline Terminal Rent Retail 254 345599557 42 8% 2,395 25% Non-Airline Terminal Concessions 4 266 (0) -6% 22 26%
Rental Car - Overflow Parking 8 22291 29 5691% 368 8%
Advertising 154 148302334 (33) -10% 904 33%
On Airport Rental Car 3,921 2,3586,2805,831 449 8% 14,666 43% Commercial Services Fees 173 252425382 43 11% 1,386 31% Ground Transportation Fees 229 461690485 204 42% 2,148 32% Customs 14 111124112 12 11% 448 28%
All Other Revenues 778 8001,5791,406 173 12% 3,099 51%
Total Non-Airline Revenues 8,740 6,79515,53414,065 1,469 10% 37,273 42% Total Revenue 13,334 10,431 23,765 20,543 3,222 16% 54,539 44% Expenses
Emergency Disaster 0 004 (4) -100% 0 0%
Airport Administration 1,964 1,8283,7923,346 445 13% 11,758 32% Airport Information Technology 426 162588416 171 41% 1,789 33% Airport Law Enforcement 1,099 7231,8221,856 (34) -2% 3,725 49% Aviation Security 292 417708253 455 180% 1,787 40%
Airside Operations 1,458 1,8563,3142,827 487 17% 3,167 105% Airport Rescue - Fire 1,703 1,2872,9902,580 411 16% 5,945 50% Landside Operations 692 8011,492989 503 51% 1,454 103%
Grounds Maintenance 145 164309244 65 27% 902 34%
Terminal Building Operations 1,531 4,1035,6343,634 2,000 55% 12,019 47% Passenger Boarding Bridges 17 234111 29 254% 89 46%
Baggage Handling System 80 346426222 204 92% 1,100 39%
Control Center Operations 1,284 8212,1052,599 (494) -19% 5,989 35% U.S. Customs 68 77146149 (3) -2% 516 28%
Planning & Projects 203 30951283 429 516% 1,726 30%
Budget Transfer Out 1,975 1,9753,9497,244 (3,295) -45% 7,898 50% Total Operating Expenses 12,936 14,893 27,829 26,459 1,370 5% 59,865 46% Operating Surplus/(Deficit) 398 (4,461) (4,064) (5,916) 1,852 -31% (5,326) 76% Amounts in Thousand USD
FY26 over FY25
in %
FY26 over
FY25
City Council Staff Report
February 25, 2026 -- Page 15
2025-2026 Mid-Year Budget Update
In addition to the shutdown, three airlines did not return for the seasonal service period, further reducing available seats in the market. Flair concluded service on April 6, 2025 and Avelo on June 7, 2025, and Frontier discontinued service on November 29, 2025.
The combined effect of reduced airline service and temporary nationwide operational constraints resulted in fewer available flights and lower passenger totals during the fall months, particularly in October, November and December compared to the prior year.
Table 11 below depicts the total passenger traffic for the first half of FY26 compared to FY25
TABLE 11
Airport Full-Year FY26 Forecast
Customer Facility Charge Fund
TABLE 12
Forecast Highlights
The Customer Facility Charges are forecasted to be at $9.2 million. This is up $0.9 million or 11% from the adopted budget. Compared to FY25, this is up $0.1 million or 1%.
Other Revenue is largely interest income and is forecasted to be $2.1 million, an increase of 28% from FY25 based on the trend of the first half of FY26. Operating expenses are forecasted to be $1.1 million to be used for consultant expense for the planning of the location of the future rental car facility.
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Customer Facility Charge (CFC) Fund
CFC Revenue 467 1,778 3,119 3,8439,2078,267 111% 9,109 101% Other Revenue 568 529 522 5182,1371,498 143% 1,664 128% Total Revenue1,035 2,307 3,641 4,36111,344 9,765116%10,773105% Operating Expenses 268 284 175 3251,0512,101 50% 761 138% Total Expenses268 284 175 3251,051 2,10150%761138%
Operating Surplus/(Deficit) 767 2,023 3,466 4,036 10,293 7,664 134% 10,012 97% Amounts in Thousand USD
FY26 over
FY25 in %
City Council Staff Report
February 25, 2026 -- Page 16
2025-2026 Mid-Year Budget Update
Passenger Facility Charges Fund
TABLE 13
Highlights
Passenger Facility Charges are forecasted to be at $6.4 million. This is up $0.2 million or 4% from the adopted budget. Compared to FY25, this is up 0.1 million or 1%.
Other Revenue is largely interest income and is forecasted to be $0.8 million, an increase of 7% from FY25 based on the trend of the first half of FY26. Operating Expenses are largely principal and interest expense for the 2019 Airport Passenger Facility Bonds (FCST and Budget include principal of $1.9 million).
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Passenger Facility Charge (CFC) Fund
PFC Revenue 795 1,192 1,982 2,4066,3756,129 104% 6,299 101% Other Revenue 204 205 202 201812695 117% 758 107%
Total Revenue999 1,397 2,184 2,6077,187 6,824105%7,058102% Operating Expenses 3 264 50 2,2512,5682,618 98% 460 558% Total Expenses3 264 50 2,2512,568 2,61898%460558%
Operating Surplus/(Deficit) 996 1,133 2,134 356 4,619 4,206 110% 6,597 70% Amounts in Thousand USD
FY26 over
FY25 in %
City Council Staff Report
February 25, 2026 -- Page 17
2025-2026 Mid-Year Budget Update
Airport Fund – Operations and Maintenance
TABLE 14
Airport Budgetary Highlights
The Airport expects the projected revenues to end FY26 at $60.4 million, which is an increase of 13% compared to FY25.
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Revenues
Airline Revenues
Landing Fees 954 1,251 2,467 2,9887,6606,995 110% 7,937 97% Terminal Airline Space /Joint Use 2,817 1,549 2,426 2,8309,6216,851 140% 6,975 138% Gate Per Use Fees 434 508 1,009 1,2543,2052,266 141% 2,654 121% Passenger Loading Bridge Fees 124 167 341 4231,056580 182% 560 189% Baggage Handling System Fees 265 161 269 3581,053574 184% 421 250% Total Airline Revenues 4,594 3,636 6,512 7,85322,59617,266 131% 18,547 122% Non-Airline Revenues
General Aviation 38 89 180 224532527 101% 445 120%
Non-Aeronautical Ground Rental 200 106 341 326972671 145% 795 122% Aeronautical Ground Rental 550 223 349 2331,3551,372 99% 1,206 112% Parking 1,777 1,288 2,319 1,9577,3426,333 116% 6,238 118% Airport Use Permits 12 50 30 20113120 94% 120 94%
Non-Airline Terminal Rent Fee 464 236 341 1971,2371,045 118% 1,808 68% Non-Airline Terminal Rent F&B 165 303 514 7301,7121,769 97% 1,282 134% Non-Airline Terminal Rent Retail 254 345 695 9882,2822,395 95% 1,561 146% Non-Airline Terminal Concessions 4 2 11 52222 99% 23 95% Rental Car - Overflow Parking 8 22 282 86397368 108% 284 140% Advertising 154 148 258 310870904 96% 899 97%
On Airport Rental Car 3,921 2,358 4,532 2,78013,59114,666 93% 11,763 116% Commercial Services Fees 173 252 535 5451,5041,386 109% 1,396 108% Ground Transportation Fees 229 461 593 8702,1522,148 100% 1,706 126% Customs 14 111 169 165459448 102% 440 104%
All Other Revenues 778 800 786 8683,2323,099 104% 5,062 64% Total Non-Airline Revenues 8,740 6,795 11,934 10,30237,77037,273 101% 35,028 108% Total Revenue 13,334 10,431 18,446 18,155 60,367 54,539 111% 53,574 113% Expenses
Emergency Disaster 0 0 0 000 0% 26 0%
Airport Administration 1,964 1,828 2,415 5,65011,85711,548 103% 13,480 88% Airport Information Technology 426 162 345 4901,4231,781 80% 846 168% Airport Law Enforcement 1,099 723 842 1,0013,6654,026 91% 2,856 128% Aviation Security 292 417 514 1,1092,3312,593 90% 848 275% Airside Operations 1,458 1,856 1,672 1,6196,6064,889 135% 5,476 121% Airport Rescue - Fire 1,703 1,287 1,446 2,0766,5127,158 91% 4,650 140% Landside Operations 692 801 1,103 1,0513,6472,713 134% 2,977 122% Grounds Maintenance 145 164 222 458988902 110% 552 179% Terminal Building Operations 1,531 4,103 3,417 4,37313,4248,438 159% 8,932 150% Passenger Boarding Bridges 17 23 8 378689 97% 36 240%
Baggage Handling System 80 346 232 4731,1311,100 103% 914 124% Control Center Operations 1,284 821 1,006 1,0704,1814,233 99% 4,175 100% U.S. Customs 68 77 81 67294516 57% 289 102%
Planning & Projects 203 309 210 2129341,980 47% 227 411% Budget Transfer Out 1,975 1,975 1,975 1,9757,8987,898 100% 10,866 73% Total Operating Expenses 12,936 14,893 15,488 21,661 64,978 59,865 109% 57,152 114% Operating Surplus/(Deficit) 398 (4,461) 2,958 (3,506) (4,611) (5,326) 87% (3,577) 129% Amounts in Thousand USD
FY26 over
FY25 in %
City Council Staff Report
February 25, 2026 -- Page 18
2025-2026 Mid-Year Budget Update
Revenue Highlights
Passenger traffic for the second half of FY26 is forecast to have an increase of 2.7% when compared to FY25. Enplaned passengers are the primary air traffic metric in the industry to measure airport "output" or "production," as many airport revenues, including parking, terminal concessions, and rental car privilege fees, are driven directly by passenger volume. Likewise, passenger volume is a primary driver of operating expenses.
In connection with the calculation of FY26 airline rates and charges, the Airport forecast enplaned passenger traffic of 1.683 million, or 1.8% higher than FY25 actuals. While actual fiscal-year-to-date enplaned passenger traffic through December (i.e., 6 months) was only
0.4% above the same period in FY25, schedule data published by the airlines for the second half of the year show that departing seats are scheduled to increase by 3.0%, reflecting increased service by United, Alaska, and American Applying historical load factors to the scheduled seat data indicates that the 1.683 million or 3.37 million total passengers forecast (Chart 1) is still appropriate at this time for planning purposes for FY26.
The Airport continuously monitors industry trends by reviewing changes in airline schedules on a weekly basis, in addition to reviewing leading revenue indicators such as PFC receipts.
The Airport is evaluating the changing industry outlook in connection with the preparation of its operating budget for FY26.
CHART 1
Expense Highlights
Airport Administration: The Airport now operates under a new Airport Use and Lease Agreement with the airlines, which stipulates that 50% of the net profits from the General Airport Operations Fund are shared between the Airport and the 50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
E nplaned P assengers at P S P
2024A 2025A 2026A 2026F
City Council Staff Report
February 25, 2026 -- Page 19
2025-2026 Mid-Year Budget Update
Signatory Airlines. Based on current projections, the airport anticipates a settlement of approximately $2.6 million with the Signatory Airlines at the end of FY26. Airport IT: The $343K favorable variance (80% of budget) can be explained by salaries forecast to come in slightly under budget, materials and supplies $148K under, and no office furniture purchases (versus $51K budgeted). Aviation Security: The $262K favorable variance (90% of budget) reflects $109K under budget in materials and repairs and $25K under in contractual services expenses, which more than offset unbudgeted salary costs. Landside Operations: The $945K unfavorable variance (135% of budget) can be explained largely by overages in contractual expenses.
Terminal Building Operations: The $5,176K unfavorable variance (163% of budget) can be explained largely by COGEN expenses coming in significantly over budget, which more than offset contractual services under budget, and materials & supplies under budget.
Budget Transfer Out: The Airport intends to transfer out approximately $7.9 million from the General Airport Operations account to the Airport Capital Projects Fund at the end of the fiscal year.
CAPITAL UPDATE
The City’s Capital funds facilitate the funding of critical projects that both increase the quality of life for the residents and ensure for the critical safety of City infrastructure as well as ensuring the public can carry out their day-to-day functions throughout.
The City is fortunate to have several special revenue funds which raise funds to be used on capital projects for a variety of purposes. The deployment of these resources has assisted City Staff in making great strides in improving the parks as well as the roadways throughout the City and will continue to do so for the foreseeable future.
There are seven (7) funds that make up the main funding sources for the 5-year capital improvement project plan managed by the City Engineering Department. A description of each fund is below, as well as for the Airport Capital Projects Fund.
Capital Fund – This fund is used for many different capital projects with a focus on streets and bridges. The revenue received is largely from Caltrans as it funds almost 90% of all major road and bridge projects. Additional revenue is federal revenue that supports the Highway Safety Improvement Program (HSIP) and the various cycles. HSIP funds are used for prevention of traffic fatalities and serious injuries focusing on safety improvements, such as improved intersections, pedestrian crossings, and traffic signal upgrades.
Measure J – Measure J is a 1% local sales tax that generates approximately $22 million annually. The tax is a general tax and can be used for anything, however, the focus of the Measure J Commission has been to use these funds largely for infrastructure capital City Council Staff Report
February 25, 2026 -- Page 20
2025-2026 Mid-Year Budget Update
projects within the City. The Commission for Measure J is made up of 9 voting members and 2 alternates. The Commission will recommend projects for the dollars to be used in the bi-annual budget that is ultimately approved by the City Council.
Road Maintenance and Rehabilitation Fund (RMRA) – This special revenue fund accounts for revenue received through the SB1 RMRA known as the new Gas Tax. It is apportioned to eligible cities and counties by formula to be used for road maintenance, rehabilitation, and critical safety projects.
Gas Tax – The funds received are also restricted to street construction and improvements. The revenue comes from the annually escalating tax on every gallon of gas, which is deposited in the state’s Highway Users Tax, and distributed monthly to cities and counties.
Measure A – The local measure was initiated by Riverside County in 1988 and renewed in 2009. The renewal in 2009 extended the measure to sunset in 2039. This measure is a 0.5% sales tax restricted for transportation projects. Revenue received from this tax is approximately $5.5 million annually. Measure A is also the recipient of funds received by the Coachella Valley Association of Governments (CVAG). CVAG will contribute 7.5% of the project cost for approved road and bridge projects.
Drainage Fund – The revenue from this fund is used to support improvements to the underground storm drain lines such as levees, surface retention basins and open channels. This will provide flood control for the City. The City adopted a schedule of drainage fees that are collected as an impact fee on new development whenever vacant land will be improved, and thus generating increased stormwater run-off. Annual revenue varies depending on new development.
Quimby Fund – This special revenue fund is a result of the City adopting the Quimby Fee in accordance with the Quimby Act approved by the State of California. The fee is collected on all residential development in-lieu of dedicated parks and recreation land within the development. Revenue is collected as building permits are issued and will vary based on development.
Airport Capital Projects Fund – This fund is for the Airport’s various capital projects. for critical improvements that address federal security requirements, airfield safety, environmental remediation, terminal upgrades, and development.
Several notable projects funded by these resources are shown on the following four pages. These listed projects show the total budget allocated and the actual amount spent as of December 2026 for each project (Project To Date Spend).
City Council Staff Report
February 25, 2026 -- Page 21
2025-2026 Mid-Year Budget Update
TABLE 15
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
21-16 Demuth Dog Park 3,213,131 5,045,828 8,258,959 37,519 0% Measure J, Quimby & Capital
18-06 Victoria Rthhrdy Restrooms 1,562,345 - 1,562,345 - 0% Measure J 22-24 Pickleball Courts 5,605,000 - 5,605,000 782,899 14% Measure J & Quimby
22-26 San Rafael Drive Turf Conversion 137,820 242,600 380,420 39,198 10% Measure J 15-07 Downtown Park Project - Splash Pad 714,925 - 714,925 440,883 62% Measure J New Convention Center Design - 4,455,000 4,455,000 - 0% Measure J New Fire Station #1 Design - 3,000,000 3,000,000 - 0% Measure J Mizell Center Solar Canopies 500,000 - 500,000 - 0% Measure J New Palm Springs Stadium Deferred
Maintenance 841,000 - 841,000 - 0% Measure J
Palm Canyon Theatre Maintenance Repairs 270,365 80,316 350,681 - 0% Measure J Total 12,844,586 12,823,744 25,668,330 1,300,499 5%
Status
Project out to bid, expected
completion late 2027
Approved Plans/Out to bid soon
Under Construction - Award
$5,015,219
100% design to be complete by Jan.
1st
Awaiting components, work to
continue into February
Architect Contract Awarded - Kick
off meeting in January
RFP being worked for site location
Had meeting - executing agreement
Scope Review and preliminary
discussion in January
Door and Window replacement and
repair, pending order.
EXECUTIVE SUMMARY
Measure J
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
16,141
4,455
1,692
3,000
380
1,261
- - - 39
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Parks & Recreation Citywide & Cogen Community Initiated Projects Fire Station Roads, Maintenance & Traffic Measure J Project by Category
(in $ thousands)
Budget to Date Project to Date Spend
City Council Staff Report
February 25, 2026 -- Page 22
2025-2026 Mid-Year Budget Update
TABLE 16
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
01-11 Indian Union Pacific RR Bridge 59,784,356 500,000 60,284,356 26,383,266 44% Capital/Measure A/WWTP
08-25 Ramon Road Bridge 33,348,036 10,500,000 43,848,036 4,295,254 10% Capital/Measure A 12-02 S Palm Canyon Tahquitz Creek Bridge 14,888,386 200,000 15,088,386 5,279,629 35% Capital/Measure A 12-04 EPC Palm Canyon Wash Bridge 9,813,936 2,150,000 11,963,936 1,088,855 9% Capital/Measure A 16-08 Main Library Renovations 15,120,100 27,479,685 42,599,785 3,995,873 9% Capital/Measure J /Bond
25-06 New Swim Center - 7,000,000 7,000,000 - 0% Measure J/Bond 18-14 Gene Autry Wind Wall 2,680,694 600,000 3,280,694 1,596,620 49% Capital/Measure A 22-24 Pickleball Courts 6,050,000 - 6,050,000 977,374 16% Quimby, Measure J 25-09 New WWTP Scada Improvements - 4,350,000 4,350,000 - 0% Wastewater Treatment Plant
25-10 New WWTP Upgrade Lift Stations - 5,800,000 5,800,000 - 0% Wastewater Treatment Plant
25-11 New WWTP Digester No. 1 Replacement - 7,250,000 7,250,000 - 0% Wastewater Treatment Plant
Total 141,685,509 65,829,685 207,515,194 43,616,871 21% Contract awarded, under
construction, exp. completion 2027
Construction to begin 2026,
completion late 2027
EXECUTIVE SUMMARY
Engineering Projects
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
Status
Under Construction, expected
completion late 2027
Completing Right of Way Phase,
expect bid mid 2026
Under Construction, expected
completion late 2027
Right of way Design 2026,
construction early 2027
Under design 2026, expected
construction to begin 2027
Under design 2026, expected
construction to begin 2027
Under Construction, completion
late 2026
Contract awarded, under
construction, exp. completion 2027
Under design 2026, expected
construction to begin 2027
131,185
49,600
3,281 6,050
17,400
37,047
3,996 1,597 977 -
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Roads & Bridges Library & Swim Center Flood, Wind & Storm Control Parks & Recreation Wastewater Engineering Project by Category
(in $ thousands)
Budget to Date Project to Date Spend
City Council Staff Report
February 25, 2026 -- Page 23
2025-2026 Mid-Year Budget Update
TABLE 17
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
PW26-03 City Hall Large Conference Room Upgrade 210,613 9,000 219,613 219,613 100% Meas ure J / Def.Maint.
PW26-06 Muni Plant - Upgrade Switch Gear - 1,000,000 1,000,000 285,986 29% Meas ure J / Def.Maint.
PW26-13 Police Department Lobby Ballistic Doors - 140,000 140,000 - 0% Meas ure J / Def.Maint.
PW26-23 City Hall Lobby Renovation - 80,000 80,000 - 0% Design Phase Meas ure J / Def.Maint.
PW26-08 Pavilion Restrooms & Ceiling Remediation
Repair - 150,000 150,000 - 0% Meas ure J / Def.Maint.
PW26-05 Playground Equipment Replacement
(Desert Highland Park) - 800,000 800,000 - 0% Meas ure J / Def.Maint.
PW26-09 CVEP Roof Replacement - 230,000 230,000 230,000 100% Project Complete Meas ure J / Def.Maint.
PW26-44 Firearms Training Facility - 3,000,000 3,000,000 - 0% Meas ure J / Def.Maint.
PW26-57 Belardo/Baristo Parking Structure Safety
Study - 1,218,000 1,218,000 - 0% Deferred Maintenance
PW26-10 Realtime Crime Center Buildout Prep - 230,000 230,000 227,629 99% Project Complete Deferred Maintenance PWF26-1 Fire Pumper Apparatus - Pierce - 2,134,054 2,134,054 1,707,244 80% Meas ure J / Def.Maint.
Total 210,613 8,991,054 9,201,668 2,670,472 29%
Status
Approved by City Council on 12/10/25
and preparing for groundbreaking in the
coming months
Submittal approval in progress;
installation expected in May
Phase 1 complete; Phase 2
scheduled for March
Project Complete
Build-back underway; project
scheduled for completion in May
EXECUTIVE SUMMARY
Deferred Maintenance
Capital Projects - FY 25-26 YTD December
Design Phase in progress;
construction anticipated to begin
late summer
Apparatus arrived; outfitting in
process
(Unaudited numbers and subject to change)
Recommendation plans approx.
60% complete
2,748
950
3,370
2,134
736
-
228
1,707
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Citywide & Cogen Parks & Recreation Police Vehicle
Deferred Maintenance Project by Category
(in $ thousands)
Budget to Date Actual Spend to Date
City Council Staff Report
February 25, 2026 -- Page 24
2025-2026 Mid-Year Budget Update
TABLE 18
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend
%
Complete Status Fund Sources
93,569,359 - 93,569,359 2,433,202 3%
General contractor
Swinerton has been
mobilized, Pre-
construction meeting has
been scheduled for late-
January
BHS $12m, AIG
$21m, AIP $8m, TSA
$25m
3,600,000 - 3,600,000 - 0% Design complete;
awaiting egress analysis CIP
2,500,000 - 2,500,000 14,090 1%
Vendor selection is
complete, taking
contract ratification to
City Council in February.
CIP
1,300,000 - 1,300,000 947,451 73%
Project is in progress,
90% construction set
documents have been
submitted for airport and
city review
CIP
1,000,000 - 1,000,000 21,745 2%
Project in initial shade
structure study phase; 2
proposals received for
further evaluation and
selection
Measure J
700,000 500,000 1,200,000 - 0%
Bidding process is
complete mid-
December; evaluation in
process
Improvement other
than Buildings
659,650 - 659,650 640,932 97%
Final presentation
submitted to PSP staff,
Project in final stages of
completing the design
standards
Contractual
Services
559,125 500,000 1,059,125 - 0% Trucks delivery expected by late-January 2026 ZEV Grant $559,125
536,000 - 536,000 575,820 107% Project completed Other Equipment 500,000 - 500,000 - 0%
Notice to Proceed in
process; project
mobilization expected
February 2026
CIP
Total 104,924,134 1,000,000 105,924,134 4,633,240 4%
Procure (8) Eight Battery Electric Pick-up Trucks
Repair Airport Elevators
Hangar 18 Outfall Repair
Airport Projects
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
Escalator In-Truss Modification
Renovate Terminal Restrooms - Design
Construct Taxi & TNC Shade Structures - Preliminary Design Studies Parking Access & Revenue Control System
Integrated Design Standards & Guidelines
Description
Baggage Handling In-Line System
Replace Breach Gate Revolving Door System
EXECUTIVE SUMMARY
93,569
3,600 2,500 1,300 1,059 3,896 2,433 - 14 947 - 1,238
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
BHS Breach Gate Escalator Restroom Electric Vehicles Other Projects Airport Project by Category
(in $ thousands)
Total Budget Project to Date Spend
City Council Staff Report
February 25, 2026 -- Page 25
2025-2026 Mid-Year Budget Update
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Foundation: Financial and Organizational Well-Being.
FISCAL IMPACT:
This is an update item only, so there is no fiscal impact at this time.
REVIEWED BY:
Director of Finance and Treasurer: Kristopher J. Mooney City Engineer: Joel Montalvo
Assistant Airport Director: Victoria A. Carpenter
Executive Director of Aviation: Harry Barrett Jr., A.A.E.
City Manager: Scott Stiles
ATTACHMENTS:
None.