Office of the City Manager
FY 2027 Operating Budget
Continued Public Hearing
Item 25
June 8, 2026
Discussion Agenda
Part I – Revenue Opportunities
• Full Cost Recovery
• New Revenues Options
Part II – Enhancements
• Available Funding
• Enhancement Requests
Part III – Potential Reductions or Provide Services Differently • Options for Approach
2 Full Cost Recovery
• In progress:
> Video UUT on Over-the-Top (OTT) streaming services
> Fire inspection and planning fees. – Bldg & General
Fund
> Off street parking – Parking Fund
> PRCS programs and field usage – General Fund
> Merchant Fees – Various Funds
Not proposing to use any of these funds during the
budget adoption as approval and timing are uncertain.
3 Full Cost Recovery
• Planned:
> Planning & Construction related fees – Building and
General Fund
> Animal Licensing – Pasadena Humane
> PW Infrastructure/Street fees – General Fund
> PRCS cost of service study – General Fund
4 Local Funding Options
Local Fees Estimated Annual Revenue
Payment In Lieu of Taxes (PILOT) Negotiated through DA
Electronic Billboards along Freeways $250,000 per billboard Paid Parking in the Arroyo $400,000 to $1.2M
Use Tax (0.25%) $11M
Parcel Tax $20M+
Benefit Districts $1M to $20M
(requires assessment study)
Real Property Transfer Tax $1M to $4M
Parking Tax $1M to $5M
Business Tax $1M to $10M
Retail Vacancy Tax $1M to $5M
Development Impact Fee Varies on infrastructure identified and pace of development
5 Local Funding Options – Non-Tax
• Payment In Lieu of Taxes (PILOT)
> Typically done for tax-exempt developments through
a Developer Disposition Agreement (DDA)
• Electronic Billboards along Freeways
> Estimate of minimum $250k annual revenue per site
• Paid Parking in the Arroyo
> Could focus on certain areas/lots.
> Importance of not pushing cars into neighborhoods
and consideration of existing uses (RBAC & Kidspace)
> Could offer residential permits
6 Local Funding Options
• Use Tax like Measure I – general or special tax
> Current capacity of quarter-cent - $11m annually
> Capacity depends on County measure and AB 1768
• Parcel Tax – special tax
> Could fund priorities around Fire and/or Streets
> Can be assessed on a variety of factors: parcel size, parcel use type, developed square footage, etc.
• Benefit Assessment district – special tax
> Likely Fire specific
> Could be a district of all or part of the City
> Requires a benefit assessment study
7 Local Funding Options
• Real Property Transfer Tax – likely a special tax
> Tax on real estate sales transactions
> Expected statewide November ballot measure to
prohibit local transfer tax
> Revenue can be volatile based on economic climate
• Parking Tax – general or special tax
> Similar to TOT in terms of percentage tax charged on
parking rates
> Generally, applies to all paid parking
> Limited revenue growth over time
8 Local Funding Options
• Business Tax
> Shift to a model based on gross receipts rather than
employee count or square footage
• Retail Vacancy Tax
> EdTech to discuss potential opportunities.
> Ideally would focus on long-term vacant
properties/locations
• Development Impact Fee
> Public Safety: facilities, equipment, technology to
meet demands created by residential and
commercial growth
9 Local Funding Options
• November 2026 Election
> Would need to place an item by early August
> Expect a constitutional amendment on the statewide
ballot regarding voter-initiated measures and real
estate transfer taxes
Require all special taxes to receive 2/3 approval
Prohibit all existing and future local transfer taxes • Fiscal Emergency
> Can conduct a stand-alone election
• Benefit Districts
> Could follow various timelines not tied to a general
election
10 ENHANCEMENT REQUESTS
FY 2027 Operating Budget
11 Enhancements Funded
• Public Health
> PORT, including Firefighters and $227,000 in motel
vouchers has been funded using grant funds
through the Housing Department.
> Community Engagement – Promotores: Fully
funded $560,000 through PWP, DoT, and RSD work
in lieu of contracting out for community
engagement.
12 Enhancement Requests
• Recommendation to fund increased Health
Officer from 0.75 FTE to 1.0 FTE, and Comm.
Service Rep. III for Long-term Care Facility
support - $195,000
• Recommendation to fund Parking
Enforcement ramp-up costs of about
$600,000 across FY 2027–FY 2028 and
body-worn cameras for would require $90,000
ongoing.
13 Available General Fund Funding
• All available funding is one-time funding as the
ongoing forecast still projects deficits.
> $1.2m presented at the opening of the budget.
> Additional $1.78m use of surplus debt service reserves for FY 27 debt service payments.
> Balance of $2.0m after funding PPHD & DoT.
• Recommend to reserve the balance of $2m for
the Year-Round shelter.
• Exploring an additional debt service reserve use
that may reduce debt service payments in FY 27
by $3m.
14 Year-Round Shelter – Work Plan FY 2027
15 Determine Shelter Details
> Population served (e.g., single adult vs. families)
> Number of beds (tied to the site selection but also economies of scale and site management) > Congregate vs. non-congregate (e.g., separate rooms or a tiny homes village) > Services provided on-site (e.g., Will walk up services be available for non-shelter residents? Will we be co-locating other services such as mental health services?) Complete Site Evaluations
> Review of potential locations (including Rose Palace) > Proximity to transit and/or in a high resource area
> What would be needed to ready the site
> Some sites might provide for faster stand up vs. balancing overall goals for the shelter Conduct Cost Evaluations
> Assessment of capital costs and on-going operational costs > Identify what studies might be needed to determine costs > Review of potential funding sources
Establish Timing
> Target date for opening of shelter
Enhancement Requests
16 Department Amount Description
Fire $96,000 Fire Inspector Trainee to improve inspection rate.
Cost increase to $157k over time. May be offset
by fee increases.
Transportation $240,000 Fund local match of CicLAvia grant for two events; one-time expense.
Housing $345,000 Buildout costs to develop satellite office at Heritage Square. Could consider office in Public
Health bldg. as alternative.
Police $360,000 Annual lease and start-up costs for two Drone as a First Responder program. Ongoing costs of
$260,000 would increase projected deficit.
Police $300,000 Software platform to centralize data from CAD, RMS, and other PD databases. Ongoing costs of
$200,000 would increase projected deficit.
Enhancement Requests
17 Department Amount Description
Police $250,000 Real time intelligence platform. Ongoing costs of $150,0000 would increase projected deficit.*
PRCS TBD Re-establish the Youth Council. Brought up
during PRCS Budget presentation.
Risk Mgmt/CAO $2.5m Additional funding for outside legal Housing TBD Set aside funds for initial work to establish a year- round homeless shelter.
Public Works TBD Use funds to additional street resurfacing or sidewalk repairs.
Fire TBD Use funds for additional station repairs.
Various TBD Set-aside funds for LA 28 events.
• PD willing to evaluate vacant non-sworn FTE’s to offset costs for requests.
REDUCTION OPTIONS
FY 2027 Operating Budget
18 Approach to Reductions
• Use Fund Balances to reduce General Fund
transfers temporarily
> Library fund
> 311/City Service Center Fund
> Computing & Communications Fund
> Postpone vehicle replacement schedules
• Consider reductions to events or programs
> Turkey Tussle, AmericaFest, one-off sponsorships.
> Re-imagine communications funding and strategy
> Evaluate long-term leases and should we consider
selling certain properties?
19 Approach to Reductions
• Operational changes to reduce overhead
> Eliminate or hold vacant FTEs
> Reduce meetings (internal & external) and trainings
> Implement hoteling/shared-desk model for
appropriate positions, requiring increased remote work
> Alternate work schedule model such as 4/10 and
closing every Friday
> Mandate centralized print management, eliminate all
personal printers
> Require each department to present reduction
options of a certain % less fixed costs.
20 What are other agencies doing?
• Reduce or eliminate after-school program
duplication between PAL, PRCS, district and
NGOs
• Reduce some ambulance service to 12-hour
shifts
• Dissolving commissions including youth, parks,
arts and culture
• Reduced hours of services including city hall,
libraries and community centers
• Reduced areas of free parking for recreation
21 Funding Approaches for Top Priorities
• Modernize fire department facilities & Enhanced Fire Prevention ($200M)
> Current Approach: Pursue new revenue sources.
• Improve roadways & implement pedestrian/bike safety strategies ($125M+)
> Current Approach: Pursue new revenue sources, re-evaluate all relevant CIP to prioritize achieving this goal.
• Invest in year-round shelter & transitional housing
($10M+ capital; $2-$4M annually)
> Current Approach: Leverage grants, County partnerships, and use of City-owned property for a future shelter.
> Evaluate prior funding submissions and alignment with current goals. • Implement Economic Development Strategic Plan with placemaking focus ($25M+)
> Current Approach: Pursue grants, consider EIFD, align with ongoing development activity. 22