CITY COUNCIL STAFF REPORT
DATE: MAY 27, 2026 BUSINESS & LEGISLATIVE
SUBJECT: GENERAL FUND, AIRPORT, AND CAPITAL 3 rd QUARTER OF 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 three quarters (July–March) of Fiscal Year 2025-26.
RECOMMENDATION:
Receive and File.
STAFF ANALYSIS:
GENERAL FUND:
General Fund Revenue Highlights
The General Fund ended the first three quarters of FY26 with total operating revenues (excluding transfers from other funds) of $106.4 million. This is up by $4.4 million or 4.3% from the three quarters of FY25. The top three tax revenues Transient Occupancy Tax (TOT), Property Tax, and Sales & Use Tax are up by 5% combined. Permits, Fines & Fees, Utility User Tax, Motor Vehicle Tax, Other Taxes, Misc. Income, Franchise Tax, Cannabis Tax and Interest Income are up as well by 3% combined.
Compared to the adopted budget for FY2025-26, the General Fund achieved in the first three quarters 61% of the annual total operating revenue budget. This achievement is one percent better than the first three quarters of FY25 (58%). The top three tax revenues achieved 59% of their total budget amounts in the three quarters of FY26, compared to 56% in the three quarters of FY25.
City Council Staff Report
May 27, 2026 -- Page 2
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast TABLE 1
Three quarters revenue highlights are presented below:
Transient Occupancy Tax (TOT) on cash basis is up $1.1 million or 4% from FY25 YTD. The reconciliation from cash basis to modified accrual for the first three quarters indicates TOT is up by 2.8% from FY25 YTD.
Property Tax is up $1.4 million or 6%, largely due to higher assessment values of homes and properties. The City receives another large distribution of property tax in the 4th quarter of the fiscal year.
Sales tax revenue is up $0.7 million or 4% from FY25 YTD. This represents the months July through January (sales tax collection is two months behind). Permits Fines and Fees are up by $0.8 million or 7%, largely due to the increase in the fee schedule and higher Building Permits (+$676k).
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Adopt.Budget %
Transient Occupancy Tax 3,582 10,845 14,59229,01927,913 1,106 4% 49,106 59% Property Taxes 68 13,355 9,63923,06221,677 1,385 6% 38,261 60% Sales and Use Taxes 2,201 6,825 8,44317,46916,791 678 4% 29,839 59% Permits, Fines, and Fees 3,157 4,193 4,75012,10011,266 834 7% 16,178 75% Utility Users Tax 1,888 3,006 2,6197,5147,776 (262) -3% 10,905 69% Motor Vehicle In-Lieu Tax 0 68 4,1284,1953,987 209 100% 8,061 52% Other Taxes 110 214 2,9493,2733,325 (52) -2% 6,998 47%
Miscellaneous Income 889 2,681 1,2104,7804,209 571 14% 4,521 106% Franchise Tax 395 607 5941,5971,270 327 26% 4,363 37%
Interest Income 964 813 8072,5842,891 (307) -11% 3,833 67% Cannabis Tax 141 260 377778909 (130) -14% 1,038 75%
Transfers from Other Funds 0 0 003,750 (3,750) -100% 0 0% Total Revenue 13,396 42,866 50,108 106,370 105,762 607 1% 173,103 61% Amounts in Thousand USD
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Adopt.Budget %
Admin & Econ. Develop. 1,727 2,898 1,9006,5255,887 638 11% 8,653 75% Development Services 3,435 3,681 3,74610,86210,755 107 1% 18,620 58% Fire Department 6,709 8,144 6,73621,58821,321 267 1% 29,362 74% General Government 4,495 5,971 4,45714,92314,507 415 3% 21,237 70% Library 712 922 7482,3822,404 (22) -1% 3,291 72%
Miscellaneous Expense 0 1,755 01,7551,976 (221) -11% 2,031 86% Parks and Recreation 2,128 3,891 3,0039,0225,954 3,068 52% 11,666 77% Police Department 9,970 11,788 10,52532,28433,017 (733) -2% 43,843 74% Public Works 1,686 3,005 2,9367,6279,856 (2,229) -23% 10,743 71% Tourism & Comm. Support 1,838 2,325 2,0046,1676,644 (477) -7% 8,148 76% Transfers to Other Funds 2,177 2,177 2,1776,53113,720 (7,188) -52% 8,709 75% Total Operating Expenses 34,877 46,557 38,232 119,667 126,041 (6,374) -5% 166,302 72% Operating Surplus/(Deficit) (21,482) (3,691) 11,876 (13,297) (20,279) 6,982 -34% 6,801 103% Amounts in Thousand USD
Revenues
Operating Expenses FY26 over
FY25
FY26 over
FY25 in %
FY26 over
FY25
FY26 over
FY25 in %
City Council Staff Report
May 27, 2026 -- Page 3
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Other Taxes are down by $52k or 2%, largely due to lower tax allocation from the County of Riverside for the Redevelopment Property Tax Trust Fund (RPTTF) that manages the property tax revenue dedicated to redevelopment agencies, which are dissolved in February 2012.
Misc. Income consists mostly of Administrative Service Charge and the Master Lease Rent (combined over 70% of misc. income) and is up $0.5 million or 14%, largely due to an increase in reimbursements (+$150k) for State mandated cost claims for Police Department from the State of California and from Tesla Energy for a performance guarantee on energy efficiency of solar panels for the General Fund (Convention Center: $66k & Animal Shelter: $28k) and Wastewater Fund ($470k).
General Fund Operating Expense Highlights
The General Fund ended the first three quarters of FY26 with total operating expenses of $119.7 million. This is down by $6.4 million or 5% from FY25 YTD. Main reasons are less transfers from the General Fund to other funds (-$7.2 million) and lower charges for facility service and fleet maintenance (-$3.5 million). These cost reductions are partially offset by higher expenses for salaries & benefits (+$1.9 million) and contractual services, insurance, utilities, and computer software (combined +$2.5 million).
Compared to the adopted budget for FY2025-26, the General Fund achieved in the first three quarters 72% of the annual total operating expense budget. This achievement is two percent points better than the first three quarters of FY25 (74%).
TABLE 2
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Adopt.Budget %
Expenses By Type
Salaries & Benefits 22,031 27,935 23,189 73,155 71,223 1,932 3% 98,340 74% Contractual Services 3,938 6,311 4,914 15,164 14,883 281 2% 23,254 65% Transfers to Other Funds 2,177 2,177 2,177 6,531 13,720 (7,188) -52% 8,709 75% Insurance Expense 1,443 1,439 1,440 4,323 3,560 763 21% 5,752 75% Maintenance Expense 1,330 1,239 1,248 3,817 6,749 (2,933) -43% 5,467 70% Fleet Maintenance 1,119 1,110 1,110 3,340 3,880 (540) -14% 4,442 75% Utilities Expense 558 1,437 1,171 3,166 2,406 761 32% 3,430 92% Special Programs 310 484 529 1,323 1,011 312 31% 2,846 46% Loan Principal & Interest 162 0 0 162 0 162 100% 2,216 7% Computer Software 798 922 336 2,055 1,362 693 51% 2,125 97% Materials and Supplies 345 492 341 1,179 1,166 13 1% 1,762 67% Improv., Furniture and Equip. 9 79 439 527 447 79 18% 1,599 33% Employee Develop. & Travel 170 265 297 732 668 65 10% 1,283 57% Other 486 2,666 1,041 4,192 4,967 (775) -16% 5,078 83%
Total Operating Expenses 34,877 46,557 38,232 119,667 126,041 (6,374) -5% 166,302 72% Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
City Council Staff Report
May 27, 2026 -- Page 4
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 3rd Quarter expenses by category highlights are presented below:
Salaries and Benefits are up by $1.9 million or 2.7% 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 $0.3 million or 1.9% from FY25 YTD, largely due to price adjustment clauses for multiple-year contracts.
Transfers to Other Funds are down by $7.2 million or 52% 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 $0.8 million or 21% from FY25 YTD, largely due to higher premiums for general and excess liability (+15%) and Property (+10%). Utilities Expenses are up $0.7 million or 32% from FY25 YTD, largely due to higher expense allocation from the CoGen Facility (kw/h rate increase) to Public Works and Parks & Recreation.
3rd Quarter expenses by department are presented below:
Admin & Economic Development is up $0.6 million or 11% from FY25 YTD, largely due to increased program activity (e.g. Love Local Program, Palm Springs International Film Society, College of the Desert Foundation) in Economic Development per FY26 budget and higher legal cost.
Parks & Recreation is up by $3.1 million or 52%, largely due to the addition of Park Maintenance in May 2025 and higher expenses in Recreation from increased cost for the CoGen electricity.
Public Works is down $2.2 million or 23%, largely due to transfer of Park Maintenance to Park & Recs.
Transfer to Other Funds is down $7.2 million or 52%, 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 75% 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 58%, FY25 YTD 65%), 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.
City Council Staff Report
May 27, 2026 -- Page 5
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 below in Table
3. TABLE 3
3rd Quarter Non-Operating highlights are presented below:
Grant Revenue is up $2.2 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 $0.3 million from FY25 YTD, largely due to expenses for the Encampment Resolution Funding ($1.2 million), and Cannabis Equity Grant ($0.3 million), offset by lower grant expenses for Navigation Center (-$0.6 million) and BSCC Organized Retail Theft Prevention (-$0.3 million)
Council Set Aside is down $2.3 million, largely due to upcoming end of the program. The expenses accounted for in FY26 YTD are for the Rental Assistance Program ($504k), Utility Assistance Program ($27k), Neighborhood Partnership ($32k), and Housing Consulting Service ($58k).
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 General Fund is forecasted to close Fiscal Year 2025-26 with total operating revenues of $176.4 million. This is up by $3.3 million or 2% compared to the revised budget FY26. Compared to FY25 this is down by $7.9 million or 4%, largerly due to discontinued transfers from other funds in FY26.
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Adopt.Budget %
Grant Revenue 2,274 556 1152,945750 2,195 293% 11,819 25% Grant Expense (1,000) (2,550) (1,493)(5,044)(4,729) (314) 7% (11,819) 43% Council Set Aside Expense (503) (80) (38)(621)(2,903) 2,282 -79% (2,900) 21% Total Non-Operating 770 (2,074) (1,417) (2,721) (6,883) 4,162 -60% (2,900) 94% Total Surplus/(Deficit) (20,712) (5,765) 10,459 (16,018) (30,912) 14,894 -48% 3,901 382% Amounts in Thousand USD
Non-Operating
Revenue / Expenses
FY26 over
FY25
FY26 over
FY25 in %
City Council Staff Report
May 27, 2026 -- Page 6
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Total operating expenses of the General Fund are forecasted to close FY26 with $165.5 million. This is down by $0.8 million or 0.5% compared to revised budget FY26. Compared to FY25 this is down by $15.9 milllion or 8.8%, largerly due to lower transfers to other funds (-$12.7 million).
Accordingly, the forecasted operating surplus is projected to be up by $4.1 million or 61% of the revised budget, for a total of $10.9 million. The incease is largely due to better than expected revenues.
Total surplus, after non-operating expenses, is projected to be up by $6.3 million, for a total of $10.2 million.
While the City is expecting a significant surplus in FY26, staff is aware of several upcoming expenses that will need to be added to future budgets:
1. Martha’s Village and Kitchen contract to operate the Navigation Center has largely been funded through state grants. The grant funds run out at the end of FY26 and in FY27, the City has added $4 million to the budget already to continue to fund the operations of the Center.
2. Salary and Benefits will increase $5 to $6 million each year through negotiated MOU’s and normal step increases.
3. The Risk Management fund currently has a negative fund balance and needs to be replenished. Typically, the City would like to have the fund balance near $4 - $5 million to fund any legal settlements.
4. The City discontinued funding deferred maintenance of facilities and departmental vehicle purchases due to large fund balances in those respective internal service funds. In the next two year budget, the City anticipates funding to resume by as much as $3 million per year in each fund.
City Council Staff Report
May 27, 2026 -- Page 7
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Table 4 below provides a summary of forecasted revenues and expenses of the General Fund:
TABLE 4
General Fund Forecast Highlights
Revenue
Transient Occupancy Tax is forecasted to be at $50.6 milion. This is up $1.5 million or 3% from the revised budget. Compared to FY25 this is down $0.5 million or 1%. Property Tax is forecasted to end FY26 to be at $38.8 million. This is up $0.5 million FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Transient Occupancy Tax 3,582 10,845 14,592 21,56450,58349,106 103% 51,062 99% Property Taxes 68 13,355 9,639 15,69838,76038,261 101% 37,558 103% Sales and Use Taxes 2,201 6,825 8,443 13,44430,91329,839 104% 30,578 101% Permits, Fines, and Fees 3,157 4,193 4,750 4,29816,39816,178 101% 16,021 102% Utility Users Tax 1,888 3,006 2,619 3,32010,83410,905 99% 11,234 96% Motor Vehicle In-Lieu Tax 0 68 4,128 3,9378,1328,061 101% 7,904 103% Other Taxes 110 214 2,949 3,9597,2316,998 103% 7,346 98% Miscellaneous Income (803) 2,681 1,210 1,4094,4974,521 99% 7,211 62% Franchise Tax 395 607 594 2,8654,4624,363 102% 4,318 103% Interest Income 964 813 807 1,0283,6113,833 94% 4,688 77% Cannabis Tax 141 260 377 2059831,038 95% 1,363 72%
Transfers From Other Funds 0 0 0 000 - 5,000 -100%
Total Revenue 11,704 42,866 50,108 71,726 176,404 173,103 102% 184,284 96% FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Admin & Economic Development 1,727 2,898 1,900 2,6329,1578,653 106% 9,629 95% Development Services 3,435 3,681 3,746 6,98517,84718,620 96% 15,443 116% Fire Department 6,709 8,144 6,736 8,47430,06229,362 102% 29,491 102% General Government 4,495 5,971 4,457 6,32521,24821,237 100% 21,924 97% Library 712 922 748 9083,2903,291 100% 3,337 99%
Miscellaneous Expense 0 1,755 0 2762,0312,031 100% 1,976 103% Parks and Recreation 2,128 3,891 3,003 2,74911,77211,666 101% 8,577 137% Police Department 9,970 11,788 10,525 11,55043,83443,843 100% 47,806 92% Public Works 1,686 3,005 2,936 3,11110,73810,743 100% 13,773 78% Tourism and Community Support 1,838 2,325 2,004 1,9788,1458,148 100% 9,364 87% Transfers to Other Funds 2,177 2,177 2,177 8297,3618,709 85% 20,060 37% Total Operating Expenses 34,877 46,557 38,232 45,817 165,484 166,302 100% 181,381 91% Operating Surplus/(Deficit) (23,173) (3,691) 11,876 25,908 10,920 6,801 161% 2,904 376% 2026 2026 FY26 2026FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Grant Revenue 2,274 556 115 8,87511,81911,819 100% 3,381 350% Grant Expense (1,000) (2,550) (1,493) (6,775)(11,819)(11,819) 100% (7,349) 161% Other (Debt Service) 0 0 0 000 3,615 0%
Council Set Aside Expense (503) (80) (38) (67)(688)(2,900) 24% (1,312) 52% CalPERS Payment Safety Plan 0 0 0 000 (27,979) 0%
Total Non-Operating 770 (2,074) (1,417) 2,032 (688) (2,900) 24% (29,644) 2% Total Surplus/(Deficit) (22,403) (5,765) 10,459 27,940 10,231 3,901 262% (26,740) -38% Amounts in Thousand USD
FY26 over
FY25 in %
FY26 over
FY25 in %
Revenues
Operating Expenses
FY26 over
FY25 in %
Non-Operating Revenue /
Expenses
City Council Staff Report
May 27, 2026 -- Page 8
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast or 1% from the revised budget. Compared to FY25 this is up $1.2 million or 3%. FY26 is expected to continue to show increased tax revenue from growing assessment values of properties.
Sales Tax is forecasted to end at $30.9 million at the end of the fiscal year. This is up $1 million or 4% from the revised budget. Compared to FY25 this is up by $0.3 million or 1%.
Utility User Tax is projected to end at just over $10.8 million. This is $0.1 million or 1% below revised budget. Compared to FY25 this is down by $0.4 million or 4%.
Operating Expenses
All departments are expected to stay reasonably within the budget for FY26. Salaries and Benefits are forecasted at $99.6 million. This is over by $1.3 million or 1% of budget and compared to FY25 this is up $1.6 million or 1.5% from FY25. The CalPERS expense for Police and Fire is forecasted to be over budget. The Police Department can offset this overspend with savings in overtime. 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 budget with $8.1 million.
Compared to FY25 this is down $1.2 million or 13%, 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 $23.8 million. This is over budget for FY26 by $0.5 million or 2% and is up $2.4 million or 11% compared to FY25. Increased legal expenses are causing the overspend.
TABLE 5
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Salaries & Benefits 22,031 27,935 23,189 26,48599,64098,340 101% 98,083 102% Contractual Services 3,938 6,311 4,914 8,61723,78123,254 102% 21,367 111% Transfers to Other Funds 2,177 2,177 2,177 8297,3618,709 85% 20,060 37% Insurance Expense 1,443 1,439 1,440 1,4415,7645,752 100% 4,746 121% Maintenance Expense 1,330 1,239 1,248 1,5095,3265,467 97% 8,998 59% Fleet Maintenance 1,119 1,110 1,110 1,1134,4534,442 100% 5,174 86% Utilities Expense 558 1,437 1,171 3193,4863,430 102% 4,050 86% Special Programs 310 484 529 1,5662,8892,846 102% 1,943 149% Loan Principal & Interest 162 0 0 2,0542,2162,216 100% 4,324 51% Computer Software 798 922 336 702,1252,125 100% 1,039 205% Materials and Supplies 345 492 341 5701,7491,762 99% 1,957 89% Improv., Furniture and Equip. 9 79 439 1,0691,5961,599 100% 502 318% Employee Develop. & Travel 170 265 297 2519831,283 77% 908 108% Other 486 2,666 1,041 (76)4,1165,078 81% 8,231 50%
Total Operating Expenses 34,877 46,557 38,232 45,817 165,484 166,302 100% 181,381 91% Amounts in Thousand USD
Operating Expenses
FY26 over
FY25 in %
City Council Staff Report
May 27, 2026 -- Page 9
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast General Fund Non-Operating Revenue and Expenses Highlights Total Non-Operating is forecasted to close with expenses of $0.7 million from the council set aside program for Rental Assistance Program, Utility Assistance Program, Neighborhood Partnership, and Housing Consulting Service. It includes also one payment for Desert Highland. The anticipated four reimbursement payments to the developer are 2 months behind schedule and are therefore not included in the FY26 forecast. 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 $129.4 million at the end of FY26. This is up by $10.2 million compared to the beginning balance, as a result of the expected total surplus.
The upper part of Table 6 below 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.
TABLE 6
FY25 FY26
Actuals FCST
Fund Balance - General Fund
Beginning Fund Balance 145,927 119,187
Total Revenues 184,284 176,404
Total Expenses 181,381 165,484
Total Non-Operating (29,644) (688)
Total Surplus/(Deficit) (26,740) 10,231
Ending Fund Balance 119,187 129,418
Amounts in Thousand USD
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 Balance28,682 32,950
Unassigned Fund Balance
Minimum Fund Balance 32,934 31,519
Unreserved - Remaining 57,571 64,949
Total Unassigned Fund Balance90,505 96,468
Total End of Year Fund Balance 119,187 129,418
Amounts in Thousand USD
City Council Staff Report
May 27, 2026 -- Page 10
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast The unreserved portion of the fund balance is projected at the end of FY26 with $64.9 million. This is up $7.4 million or 13% and Table 7 depicts the details of this development.
TABLE 7
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).
The CFC funds are restricted and cannot be used for other purposes than improvement of rental car facilities.
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) 10,231
Ending Fund Balance Unreserved - Remaining 64,949
Amounts in Thousand USD
City Council Staff Report
May 27, 2026 -- Page 11
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 below in Table 9.
TABLE 9
Airport Fund - Operations and Maintenance
Airport Revenue Highlights
The Palm Springs International Airport (PSP) ended the first three quarters of FY26 with a total revenue of $41.9 million. This is up by $5.2 million or 14% from FY25 YTD, largely due to higher airline revenue.
Total Airline Revenues are up 26% from FY25 YTD, due to higher Terminal Airline Space Revenues, largely due to increases in the per-use, terminal rental, and higher Gate Per Use Fees charged to the airline as of August 1, 2025.
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Rev. Budget %
Customer Facility Charge (CFC) Fund
CFC Revenue 467 1,778 2,7905,0354,557 478 10% 8,267 61% Other Revenue 568 529 6491,7461,233 513 42% 1,498 117%
Total Revenue 1,035 2,307 3,439 6,780 5,790 99017%9,76569% Operating Expenses 268 284 (457)950 95 100% 2,101 5%
Total Expenses 268 284 (457) 95 0 95 100% 2,1015%
Operating Surplus/(Deficit) 767 2,023 3,895 6,686 5,790 895 15% 7,664 87% Amounts in Thousand USD
FY26 over
FY25
FY26 over FY25
in %
2026 2026 FY2620262025 2026 Achieved
Q1 Q2 Q3Total YTDTotal YTD Rev. Budget %
Passenger Facility Charge (CFC) Fund
PFC Revenue 795 1,192 2,6304,6174,074 543 13% 6,129 75% Other Revenue 204 205 204612554 59 11% 695 88%
Total Revenue 999 1,397 2,834 5,230 4,627 60213%6,82477% Operating Expenses 3 264 0267306 (39) 100% 2,618 10%
Total Expenses 3 264 0 267 306 (39) 100% 2,61810%
Operating Surplus/(Deficit) 996 1,133 2,834 4,963 4,321 642 15% 4,206 118% Amounts in Thousand USD
2026 vs
2025
FY26 over FY25
in %
City Council Staff Report
May 27, 2026 -- Page 12
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Total Non-Airline Revenues are up 8% 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 three quarters of FY26 with total operating expenses of $34.9 million. This is up by $4.3 million or 14% 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 higher revenues compensate for the increased expenses and the total operating surplus for the first three quarters of FY26 ended at $7.0 million. This is up by $0.9 million or 14%.
City Council Staff Report
May 27, 2026 -- Page 13
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Table 10 depicts the airport’s revenues and expenses for the first three quarters of FY26.
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 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Rev. Budget %
Landing Fees 954 1,251 2,6994,9044,812 93 2% 6,995 70%
Terminal Airline Space /Joint Use 2,817 1,549 2,5166,8825,056 1,825 36% 6,851 100% Gate Per Use Fees 434 508 1,0972,0401,615 425 26% 2,266 90% Passenger Loading Bridge Fees 124 167 387679340 339 100% 580 117% Baggage Handling System Fees 265 161 285711283 428 151% 574 124% Total Airline Revenues4,594 3,636 6,98415,21512,105 3,110 26% 17,266 88% Amounts in Thousand USD
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Rev. Budget %
General Aviation 38 89 217344267 78 29% 527 65%
Non-Aeronautical Ground Rental 200 106 110416536 (120) -22% 671 62% Aeronautical Ground Rental 550 223 3341,107987 120 12% 1,372 81% Parking 1,777 1,288 2,1295,1954,682 513 11% 6,333 82%
Airport Use Permits 12 50 66129100 29 29% 120 107%
Non-Airline Terminal Rent Fee 464 236 3551,055856 199 23% 1,045 101% Non-Airline Terminal Rent F&B 165 303 6621,130948 182 19% 1,769 64% Non-Airline Terminal Rent Retail 254 345 7161,3161,112 204 18% 2,395 55% Non-Airline Terminal Concessions 4 2 91418 (3) -19% 22 65% Rental Car - Overflow Parking 8 22 114143218 (75) -34% 368 39% Advertising 154 148 224526591 (65) -11% 904 58%
On Airport Rental Car 3,921 2,358 4,01110,2909,481 809 9% 14,666 70% Commercial Services Fees 173 252 511936884 52 6% 1,386 68% Ground Transportation Fees 229 461 4391,129984 145 15% 2,148 53% Customs 14 111 213337278 59 21% 448 75%
All Other Revenues 778 800 1,0272,6062,661 (55) -2% 3,099 84% Total Non-Airline Revenues8,740 6,795 11,13826,67324,602 2,071 8% 37,273 72% Total Revenue 13,334 10,431 18,123 41,888 36,707 5,181 14% 54,539 77% Amounts in Thousand USD
FY26 FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2 Q3Total YTDTotal YTD Rev. Budget %
Emergency Disaster 0 0 0022 (22) -100% 0 0%
Airport Administration 1,964 1,828 1,9735,7655,405 360 7% 12,355 47% Airport Information Technology 426 162 226813735 78 11% 1,837 44% Airport Law Enforcement 1,099 723 7882,6112,659 (48) -2% 3,939 66% Aviation Security 292 417 4941,202498 704 141% 2,558 47% Airside Operations 1,458 1,856 1,1814,4954,793 (298) -6% 6,679 67% Airport Rescue - Fire 1,703 1,287 1,1534,1443,706 438 12% 6,003 69% Landside Operations 692 801 8672,3592,038 321 16% 2,701 87% Grounds Maintenance 145 164 150459354 106 30% 1,009 46% Terminal Building Operations 1,531 4,103 2,6698,3035,861 2,442 42% 10,114 82% Passenger Boarding Bridges 17 23 64716 30 187% 100 47%
Baggage Handling System 80 346 281707451 257 57% 1,110 64% Control Center Operations 1,284 821 9223,0273,652 (624) -17% 4,674 65% U.S. Customs 68 77 102248230 18 8% 516 48%
Planning & Projects 203 309 221733163 570 350% 2,002 37% Total Operating Expenses 10,962 12,918 11,034 34,914 30,583 4,331 14% 55,597 63% Operating Surplus/(Deficit) 2,372 (2,487) 7,088 6,974 6,124 850 14% (1,058) -659% Budget Transfer Out 1,975 1,975 1,9755,92410,866 (4,942) -45% 7,898 75% Total Surplus/(Deficit) 398 (4,461) 5,114 1,050 (4,742) 5,792 -122% (8,956) -12% Amounts in Thousand USD
Airline Revenues
Non-Airline Revenues FY26 over
FY25
FY26 over FY25
in %
Operating Expenses FY26 over
FY25
FY26 over FY25
in %
FY26 over
FY25
FY26 over FY25
in %
City Council Staff Report
May 27, 2026 -- Page 14
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 three quarters 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 $8.7 million. This is up $0.5 million or 6% from the revised budget. Compared to FY25, this is down $0.4 million or 4%.
Other Revenue is largely interest income and is forecasted to be $2.2 million, an increase of 35% from FY25 based on the trend of the first three quarters of FY26.
FY26 FY25 % Change
July 125,080 112,705 11.0%
August 122,167 118,083 3.5%
September 152,773 142,688 7.1%
October 257,985 258,652 -0.3%
November 305,185 307,519 -0.8%
December 313,483 338,505 -7.4%
January 330,661 354,786 -6.8%
February 391,601 386,997 1.2%
March 485,098 493,450 -1.7%
Total 2,484,033 2,513,385 -1.2%
TOTAL PASSENGERS
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
CFC Revenue 467 1,778 2,790 3,7028,7368,267 106% 9,109 96% Other Revenue 568 529 649 5052,2511,498 150% 1,664 135% Total Revenue1,035 2,307 3,439 4,20710,987 9,765113%10,773102% Operating Expenses 268 284 (457) 3274222,101 20% 761 55% Total Expenses268 284 (457) 327422 2,10120%76155%
Operating Surplus/(Deficit) 767 2,023 3,895 3,880 10,565 7,664 138% 10,012 95% Amounts in Thousand USD
FY26 over FY25 in
%Customer Facility Charge (CFC) Fund
City Council Staff Report
May 27, 2026 -- Page 15
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Operating expenses are forecasted to be $0.4 million to be used for consultants’ expense for the planning of the location of the future rental car facility.
Passenger Facility Charges Fund
TABLE 13
Highlights
Passenger Facility Charges are forecasted to be at $6.0 million. This is down $0.1 million or 1% from the revised budget. Compared to FY25, this is down 0.3 million or 4%.
Other Revenue is largely interest income and is forecasted to be $0.8 million, an increase of 8% from FY25 based on the trend of the first three quarters of FY26. Operating Expenses are largely principal and interest expense for the 2019 Airport Passenger Facility Bonds (Budget includes principal of $1.9 million).
Airport Fund – Operations and Maintenance
Table 14 on the next page depicts the airport revenues and expenses forecast for FY26.
This forecast table shows the airline revenue settlement now as a contra revenue account as part of the airline revenue section. The budget FY26 and actuals FY25 are updated accordingly.
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
PFC Revenue 795 1,192 2,630 1,4246,0426,129 99% 6,299 96% Other Revenue 204 205 204 203815695 117% 758 108%
Total Revenue999 1,397 2,834 1,6276,857 6,824100%7,05897% Operating Expenses 3 264 0 3205872,618 22% 460 128%
Total Expenses3 264 0 320587 2,61822%460128%
Operating Surplus/(Deficit) 996 1,133 2,834 1,307 6,269 4,206 149% 6,597 95% Amounts in Thousand USD
FY26 over FY25 in
%Passenger Facility Charge (PFC) Fund
City Council Staff Report
May 27, 2026 -- Page 16
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast TABLE 14
Airport Budgetary Highlights
The Airport expects the projected revenues to end FY26 at $58 million, which is an increase of 14% compared to FY25. Compared to budget, total revenue is up $6 million or 12%.
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Landing Fees 954 1,251 2,699 2,9887,8926,995 113% 7,937 99% Terminal Airline Space /Joint Use 2,817 1,549 2,516 2,8309,7126,851 142% 6,975 139% Gate Per Use Fees 434 508 1,097 1,2543,2932,266 145% 2,654 124% Passenger Loading Bridge Fees 124 167 387 4231,102580 190% 560 197% Baggage Handling System Fees 265 161 285 3581,069574 186% 421 254% Airline Settlement - Revenue Sharing 0 0 0 (2,159)(2,159)(2,572) 84% (4,559) 47% Total Airline Revenues 4,594 3,636 6,984 5,69420,90914,693 142% 13,987 149% Amounts in Thousand USD
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
General Aviation 38 89 217 230575527 109% 445 129%
Non-Aeronautical Ground Rental 200 106 110 201617671 92% 795 78% Aeronautical Ground Rental 550 223 334 2461,3531,372 99% 1,206 112% Parking 1,777 1,288 2,129 1,9577,1526,333 113% 6,238 115% Airport Use Permits 12 50 66 26155120 129% 120 129%
Non-Airline Terminal Rent Fee 464 236 355 7411,7961,045 172% 1,808 99% Non-Airline Terminal Rent F&B 165 303 662 3961,5261,769 86% 1,282 119% Non-Airline Terminal Rent Retail 254 345 716 9052,2212,395 93% 1,561 142% Non-Airline Terminal Concessions 4 2 9 41822 84% 23 81% Rental Car - Overflow Parking 8 22 114 43186368 51% 284 66% Advertising 154 148 224 310836904 92% 899 93%
On Airport Rental Car 3,921 2,358 4,011 2,78013,07014,666 89% 11,763 111% Commercial Services Fees 173 252 511 5421,4781,386 107% 1,396 106% Ground Transportation Fees 229 461 439 8701,9982,148 93% 1,706 117% Customs 14 111 213 197534448 119% 440 121%
All Other Revenues 778 800 1,027 1,0153,6213,099 117% 5,062 72% Total Non-Airline Revenues 8,740 6,795 11,138 10,46337,13537,273 100% 35,028 106% Total Revenue 13,334 10,431 18,123 16,157 58,044 51,967 112% 49,015 118% Amounts in Thousand USD
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3 Q4FFCST Rev. Budget % Actuals
Emergency Disaster 0 0 0 000 0% 26 0%
Airport Administration 1,964 1,828 1,973 3,1718,9369,783 91% 8,921 100% Airport Information Technology 426 162 226 6591,4721,837 80% 846 174% Airport Law Enforcement 1,099 723 788 1,0733,6833,939 94% 2,856 129% Aviation Security 292 417 494 1,1182,3212,558 91% 848 274% Airside Operations 1,458 1,856 1,181 2,6337,1286,679 107% 5,476 130% Airport Rescue - Fire 1,703 1,287 1,153 2,1126,2566,003 104% 4,650 135% Landside Operations 692 801 867 1,1543,5142,701 130% 2,977 118% Grounds Maintenance 145 164 150 5339921,009 98% 552 180% Terminal Building Operations 1,531 4,103 2,669 2,11810,42110,114 103% 8,932 117% Passenger Boarding Bridges 17 23 6 3986100 86% 36 240%
Baggage Handling System 80 346 281 3741,0811,110 97% 914 118% Control Center Operations 1,284 821 922 1,0934,1214,674 88% 4,175 99% U.S. Customs 68 77 102 73321516 62% 289 111%
Planning & Projects 203 309 221 1849172,002 46% 227 403% Total Operating Expenses 10,962 12,918 11,034 16,335 51,249 53,025 97% 41,726 123% Operating Surplus/(Deficit) 2,372 (2,487) 7,088 (178) 6,796 (1,058) -642% 7,289 93% Budget Transfer Out 1,975 1,975 1,975 1,9757,8987,898 100% 10,866 73% Total Surplus/(Deficit) 398 (4,461) 5,114 (2,153) (1,103) (8,956) 12% (3,577) 31% Amounts in Thousand USD
FY26 over FY25 in
%Airline Revenues
Non-Airline Revenues
FY26 over FY25 in
%
Operating Expenses
FY26 over FY25 in
%
City Council Staff Report
May 27, 2026 -- Page 17
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Revenue Highlights
Airline Revenue Forecast is up 49% from FY25, due to higher Terminal Airline Space Revenues, largely due to increases in the per-use, terminal rental, and higher Gate per Use Fees to the airline as of August 1, 2025.
Non-Airline Revenue Forecast is up 6% from FY25 YTD, largely due to higher Parking Revenue (max daily rate from $20 to $26) and On Airport Rental Car Revenues.
The Airport 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 Signatory Airlines. Based on current projections, the airport anticipates a settlement of approximately $2.2 million with the Signatory Airlines at the end of FY26.
Expense Highlights
Airport Administration is projected to close at $8.9 million. This is down $0.8 million or 9% from budget.
Airside Operations is projected to close at $7.1 million. This is up $0.5 million or 7% from revised budget largely due to higher expenses for rubber removal and crack sealing on parking aprons and main runway.
Landside Operations is projected to close at $3.5 million. This is up $0.8 million or 30% from revised budget, largely due to higher expenses for parking management from ABM Aviation Inc. and higher credit card fees from airport parking.
Terminal Building Operations is projected to close at $10.4 million. This is up $0.3 million or 3% from revised budget, largely due to COGEN expenses for electricity and cooled water. These higher charges cannot be offset entirely by contractual services underspend due to lower-than-expected escalator and elevator repair & general building maintenance, as well as the underspend of materials and supplies.
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 City Council Staff Report
May 27, 2026 -- Page 18
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 Commissions has been to use these funds largely for infrastructure capital 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, 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 City Council Staff Report
May 27, 2026 -- Page 19
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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).
Project Description
Measure J
21-16 Demuth Dog Park
Upgrades: Construction of a new, permanent large & small dog park (including ADA parking and shade structures, paved parking lot, new restroom building, new lighting, concession buildings, drinking fountains, outdoor bleachers, playground, railings, tables and benches)
18-06 Victoria Restrooms
Construction of a new restroom that includes mechanical, electrical, plumbing, and general trades, as well as utility connections, landscaping, hardscaping, demolition of the old restroom, commissioning, and maintenance period.
22-26 San Rafael Drive Turf Conversion
Community Initiated Project applications: remove turf and convert to desert landscape to encourage the conservation of water resources.
15-07 Downtown Park Project - Splash Pad
Splash pad renovation, including mechanical work.
Palm Springs Convention Center Design
Remodeling: Expansion & Urban Connectors.
New Fire Station #1 Design
Construct Fire Station including Administrative Offices, Emergency Operations Center and Training Tower - Fire Station # 1, located on Indian Canyon Drive, was built in 1957.
The fire station does not meet safety standards implemented in construction of new fire stations. The station cannot accommodate gender separation for sleeping and restroom accommodations. The station infrastructure is failing and will be very expensive to repair.
Mizell Center Solar Canopies
Solar solutions project to reduce the carbon footprint of its swim center, which might be the city’s largest consumer of fossil fuels for heating.
City Council Staff Report
May 27, 2026 -- Page 20
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast New Palm Springs Stadium Deferred Maintenance
Critical upgrades to the historic venue, including in-field resurfacing, updated sprinkler installation, new outfield wall installation, sound system replacement, and batting cage enclosure.
Palm Canyon Theatre Maintenance Repairs
Engineering
01-11 Indian Union Pacific RR Bridge
Aims to solve the frequent road closures that have plagued the City for decades, widening of the bridge over the Union Pacific Railroad tracks will correspond with the 6-lane roadway constructed from Garnet Avenue to Interstate-10 with a railed pedestrian sidewalk to improve safety and accessibility.
08-25 Ramon Road Bridge
Widen 4-lane bridge to 6-lane bridge, necessary seismic retrofit (secure foundation) and scour countermeasures (armoring).
12-02 S Palm Canyon Tahquitz Creek Bridge
Replace four-lane bridge with a new, wider four-lane bridge and sidewalks for pedestrians and bicyclists.
12-04 EPC Palm Canyon Wash Bridge
Bridge rehabilitation project, to widen four-lane bridge to add shoulders and sidewalks. 16-08 Main Library Renovations
The Palm Springs Public Library, at 300 S. Sunrise Way, opened in 1975. In need of upgrades, the City applied for and was awarded $6.5 million in matching grant funds by the California State Library Grant Program for the Palm Springs Public Library Renovation Project. The grant funds and matching Measure J funding will provide maintenance and infrastructure updates to the aging building.
25-06 New Swim Center
Aims to solve major accessibility issues by improving ADA-access throughout the facility while adding desperately needed shade structures over locker rooms and bathroom facilities and creation of two new all-gender restrooms/changing rooms. 18-14 Gene Autry Wind Wall
Designed to curb blowing sand, improve visibility and minimize road closures on North Gene Autry Trail.
22-24 Pickleball Courts
12 new Pickleball Courts requested through Measure J community initiated projects outreach.
City Council Staff Report
May 27, 2026 -- Page 21
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 25-09 New WWTP Scada Improvements
The present Supervisory Control & Data Acquisition (SCADA) system programming needs to be updated, an evaluation of the current SCADA system at the Wastewater Treatment Plant (WWTP) is set to be prepared to provide the City the next steps to improve the existing system.
25-10 New WWTP Upgrade Lift Stations
As part of the City’s Sewer Master Plan Update the electrical, structural, SCADA, meter and flow upgrades are needed at various (4) existing lift stations. 25-11 New WWTP Digester No. 1 Replacement
Demolish existing Digester No. 1 and replace it with a new covered concrete structure that is compliant with current seismic and building codes (ex. electrical and piping upgrades). It will connect to the new membrane gas holder located at WWTP 4375 E.
Mesquite Ave, Palm Springs, CA 92264.
Deferred Maintenance
PW26-03 City Hall Large Conference Room Upgrade
Renovation of the Conference Room.
PW26-06 Muni Plant - Upgrade Switch Gear
Upgrading of Switchgear to increase efficiency, safety, and allow for automatic transferring.
PW26-13 Police Department Lobby Ballistic Doors
Replacement of failing ballistic doors in the PD lobby.
PW26-23 City Hall Lobby Renovation
Renovation and reconfiguring of the City Hall lobby, to include the Finance and Clerk's areas to improve safety, flow, and aesthetics.
PW26-08 Pavilion Restrooms & Ceiling Remediation Repair Renovation of the Pavilion to include new ceiling, walls, lighting, HVAC, I.T. upgrades, all new windows & doors, restroom updates, and refinishing of wood floor. Exterior walkway repairs, updated signage, and tree plantings in the area.
PW26-05 Playground Equipment Replacement (Desert Highland Park) Themed playground replacement - the playground will include slides, swings, musical equipment, interactive panels and features for children with special needs, including transfer stations for wheelchair users and communication panels for nonverbal children.
The structure will also feature custom palm tree toppers created specifically for Palm Springs.
City Council Staff Report
May 27, 2026 -- Page 22
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast PW26-09 CVEP Roof Replacement
Replaced old failing roof.
PW26-44 Firearms Training Facility
Full Renovation of old Firing Range and installation of new equipment.
PW26-57 Belardo/Baristo Parking Structure Safety Study
Safety and aesthetic improvements of Baristo & Belardo parking structures.
PW26-10 Realtime Crime Center Buildout Prep
Construction and Installation of 3 old Police Department office areas, converting to a fully functional Real Time Crime Center.
PWF26-1 Fire Pumper Apparatus – Pierce
Ordered two new Fire Pumper Apparatus.
Airport
Baggage Handling In-Line System
Project is intended to replace the existing outbound baggage handling system with a new system to improve capacity, enhance baggage tracking through additional technology, reduce or eliminate single points of failure.
Runway 31L Repair Alternatives Analysis
This project will identify potential solutions to the airport's main runway 13R-31L against operational, financial, safety, constructability, and engineering criteria. The final project outcome will be a consensus-driven recommendation for addressing overloading of the runway.
Escalator In-Truss Modification
Project will replace escalators leading to the Sonny Bono concourse to reduce noise and improve operational uptime.
Renovate Terminal Restrooms – Design
Project is to design Bono Concourse and the courtyard restrooms to meet the growing passenger capacity and utilizing sustainable, latest technology design elements.
Construct Taxi & TNC Shade Structures - Preliminary Design Studies Project is to install new shade structure at the TNC waiting area and staging areas.
Funded by Measure J funds.
City Council Staff Report
May 27, 2026 -- Page 23
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Parking Access & Revenue Control System
Project to implement an integrated prebooking/reservation platform, scope includes installation of a new PARCS utilizing a license plate recognition system at the entrances and exits of the airport parking.
Integrated Design Standards & Guidelines
Design standards and guidelines aim to establish a cohesive framework and provide strategic principles and practical standards to all design interventions at the airport.
Procure (8) Eight Battery Electric Pick-up Trucks
Purchase of 8 EV trucks to replace existing gas operated airport vehicles. This project is funded by FAA ZEV grant.
Lot-B (80) Electric Chargers Installation
Project to install 80 Level I-II EV charging stations at the airport. This project is in partnership with SCE's Charge Ready program.
Hangar 18 Outfall Repair
Project to repair damaged stormwater outfalls and damaged pavement due to Hurricane Hillary.
City Council Staff Report
May 27, 2026 -- Page 24
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 78,838 1% Measure J, Quimby & Capital
18-06 Victoria Rthhrdy Restrooms 1,562,345 - 1,562,345 - 0% Measure J 22-26 San Rafael Drive Turf Conversion 137,820 242,600 380,420 44,036 12% Measure J 15-07 Downtown Park Project - Splash Pad 714,925 - 714,925 521,913 73% Measure J New Convention Center Design - 4,455,000 4,455,000 42,888 1% Measure J New Fire Station #1 Design - 3,000,000 3,000,000 - 0% Measure J Mizell Center Solar Canopies 500,000 - 500,000 125,000 25% Measure J 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 7,239,586 12,823,744 20,063,330 812,675 4%
EXECUTIVE SUMMARY
Measure J
Capital Projects - FY 25-26 YTD March
(Unaudited numbers and subject to change)
Status
Under Construction - Award $8.2M
RFP Issued
100% design to be complete by Jan 1st
Completed
Architect Contract Awarded - Kick off
meeting in January
Looking for the best Site Location
Agreement signed - 1st check issued
Scope review and preliminary discussion in
January
Door, window replacement and repair,
pending order
10,536
4,455
1,692
3,000
380 601
43 125 - 44
-
2,000
4,000
6,000
8,000
10,000
12,000
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
May 27, 2026 -- Page 25
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 27,074,836 45% Capital/Measure A/WWTP
08-25 Ramon Road Bridge 33,348,036 10,500,000 43,848,036 1,786,337 4% Capital/Measure A 12-02 S Palm Canyon Tahquitz Creek Bridge 14,888,386 200,000 15,088,386 6,323,060 42% Capital/Measure A 12-04 EPC Palm Canyon Wash Bridge 9,813,936 2,150,000 11,963,936 532,868 4% Capital/Measure A 16-08 Main Library Renovations 15,120,100 27,479,685 42,599,785 9,316,226 22% Capital/Measure J/Bond
25-06 New Swim Center - 7,000,000 7,000,000 206,361 3% Measure J/Bond 18-14 Gene Autry Wind Wall 2,680,694 600,000 3,280,694 1,955,952 60% Capital/Measure A 22-24 Pickleball Courts 6,050,000 - 6,050,000 2,498,602 41% 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 49,694,241 24% Completed - below estimated cost
Contract awarded, under construction, exp.
completion 2027
Under design 2026, expected construction
to begin 2027
Completing Right of Way Phase, expect bid
mid 2026
Under Construction, expected completion
early 2027
Right of way Design 2026, construction in
early 2027
Under design 2026, expected construction
to begin 2027
Under design 2026, expected construction
to begin 2027
EXECUTIVE SUMMARY
Engineering Projects
Capital Projects - FY 25-26 YTD March
(Unaudited numbers and subject to change)
Contract awarded, under construction,
completion late 2027
In Design until early 2027, construction to
begin 2027 for 18 months.
Status
Under Construction, expected completion
late 2027
131,185
49,600
3,281 6,050
17,400
35,717
9,523
1,956 2,499 -
-
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
May 27, 2026 -- Page 26
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast 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 7,743 4% 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 65,055 46% Meas ure J / Def.Maint.
PW26-23 City Hall Lobby Renovation - 80,000 80,000 - 0% Not started 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% 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 13,883 1% Deferred Maintenance PW26-10 Realtime Crime Center Buildout Prep - 230,000 230,000 234,015 102% Deferred Maintenance PWF26-1 Fire Pumper Apparatus - Pierce - 2,134,054 2,134,054 2,134,054 100% Meas ure J / CFD Total 210,613 8,991,054 9,201,668 2,970,736 32%
Status
Contract awarded
Purchase Order Issued, lead time TBD
Phase 1 complete; additional work
scheduled for spring
Completed
Scheduled to begin in January
EXECUTIVE SUMMARY
Deferred Maintenance
Completed
(Unaudited numbers and subject to change)
Repair recommendation in process
w/Structural Engineer
Completed
Completed
Capital Projects - FY 25-26 YTD March
Agreement in process, design phase
2,748
950
3,370
2,134
538
-
299
2,134
-
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
May 27, 2026 -- Page 27
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend
%
Complete Status Fund Sources
93,569,359 - 93,569,359 3,148,936 3%
Construction/Mobilization has
started, General Contractor is
performing site/utilities
investigations
Grants: BHS $12m,
AIG $21m, AIP $8m,
TSA $25m
476,000 - 476,000 247,222 52%
On-Call Engineering firm is in
process of submitting a draft
analysis report to the airport
staff
CIP
4,918,000 - 4,918,000 - 0% Project on-going, the escalators are in production phase. CIP
2,020,000 - 2,020,000 1,167,591 58%
Project in progress, the 90%
design is complete and project
documents are in permit phase.
CIP
755,000 - 755,000 21,745 3%
Project on going, HSPB approved
concept design with
recommendations and the
project is in final design review
process.
Measure J
700,000 500,000 1,200,000 - 0%
Procurement for contractor is
complete, contract approval and
execution in process.
Improvement other
than Buildings
659,650 - 659,650 643,857 98% Final draft of the Design Standards is complete Contractual Services
559,125 500,000 1,059,125 474,776 45%
Trucks are delivered and
outfitted with radios and other
make-ready equipment
ZEV Grant $559,125
300,000 - 300,000 - 0%
Project in progress, The General
Contracor has been selected and
charger installation is expected
to begin mid-May 2026.
SCE will provide an
estimated rebate
$232,000 +
$199,102.92 Capital
Fund Balance
500,000 - 500,000 - 0%
Contract has been awarded for
outfall repair; currently in
process of relocating utlities at
the project site.
CIP
Total 104,457,134 1,000,000 105,457,134 5,704,127 5%
EXECUTIVE SUMMARY
Lot-B (80) Electric Chargers Installation
Hangar 18 Outfall Repair
Airport Projects
Capital Projects - FY 25-26 YTD March
(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
Runway 31L Repair Alternatives Analysis
Procure (8) Eight Battery Electric Pick-up Trucks
Baggage Handling In-Line System
93,569
476
4,918 2,020 1,059 3,415 3,149 247 - 1,168 475 666
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
BHS Runway Escalator Restroom Electric Vehicles Other Projects Airport Project by Category
(in $ thousands)
Total Budget Project to Date Spend
City Council Staff Report
May 27, 2026 -- Page 28
3rd Quarter of Fiscal Year 2025-26 Budget Update and Forecast ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with City Council Strategic Plan Foundation of Financial and Organizational Well-Being.
FISCAL IMPACT:
This is an update item only.
REVIEWED BY:
Director of Finance: Kristopher J. Mooney
City Engineer: Joel Montalvo
Interim Executive Director of Aviation: Victoria Carpenter City Manager: Scott Stiles
ATTACHMENTS:
None.