PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #3.B
Meeting Date: May 13, 2025
TITLE:
Direction Regarding Proposed Budgets for Fiscal Years 2026 and 2027: July 1, 2025 through June 30, 2027
RECOMMENDATION:
Provide direction regarding the proposed budget, including proposed work plan budget requests for the budgets for Fiscal Years 2026 and 2027, effective July 1, 2025 through June 30, 2027 for the City of Pismo Beach.
BACKGROUND:
On April 3, 2025, the Pismo Beach City Council conducted a public workshop on the proposed budgets for Fiscal Year (FY) 2026 and FY 2027, including a review of the City’s fiscal policies, General Fund reserves, an overview of the proposed budget, current projects in progress, Council goals, department initiatives, position changes, and proposed vehicle purchases. At that meeting, the City Council affirmed the City’s fiscal policies, staff’s proposed appropriations for Council goals, position changes, department initiatives, and vehicle purchases. The City Manager, Administrative Services Director, and staff have prepared the FY 2026 and FY 2027 Proposed Budgets for the Council’s review and final direction on the proposed budget, including City goals and department initiatives, and any other items to be included in the Adopted Budgets for FY 2026 and FY 2027. After the Council provides direction, staff will return on June 3, 2025 with a resolution to adopt the FY 2026 and FY 2027 budgets. Finally, staff will continue to work on the final Adopted Budget document until it is complete and provide it to Council for its reference in early fall of 2025.
Budget Overview
The FY 2026 and FY 2027 proposed budgets present a balanced budget, with excess revenues and fund balance sufficient to cover recommended work plan and capital project budget expenditures. The base budget is a continuance of all current services and contracts without any changes to staffing levels, contract costs beyond normal cost increases, program enhancements, or capital projects. The proposed City goals and department initiatives are all expenditures over the base budget. These include several capital projects, technology master plan projects, and position changes.
Proposed Budget Summary
The FY 2026 proposed budget includes a total of $82.70 million in revenues and $81.53 million in operating and capital budget for a net $1.17 thousand more revenues than expenditures. The operating budget is balanced with a $8.50 million net operating surplus.
The one-time expenditures exceed one-time revenues by $7.32 million, which are for one- time capital projects that the City has been anticipating and saving for over time. Fund balances accumulated over time offset these one-time expenditures.
Council Agenda 5-13-2025 3.B-1
The FY 2027 proposed budget includes a total of $79.28 million in revenues and $81.43 million in operating and capital budget for a net $2.14 million more expenditures than revenues. The operating budget is balanced with a $9.22 million net operating surplus.
The one-time expenditures exceed one-time revenues by $11.36 million, which are for one-time capital projects that the City has been anticipating and saving for over time.
Fund balances accumulated over time offset these one-time expenditures.
Tables 1 through 3 reflect the FY 2026 and FY 2027 proposed budgets, including the total budget, the operating budget, and the one-time revenues and expenditures budgets, including transfers between funds.
Table 1: FY 2026 and FY 2027 All Funds Total Proposed Budgets Table 2: FY 2026 and FY 2027 All Funds Proposed Operating Budgets Table 3: FY 2026 and FY 2027 All Funds Proposed One-time Revenue & Expenditure Budgets, Net Supported by Fund Balance Proposed Work Plan Budget Requests
The FY 2026 and FY 2027 proposed budgets include three categories of items for Council review and approval. These include contributions to reserves, City goals and department initiatives, and non-profit agency funding.
Total Budget
FY 2026
Proposed Budget
FY 2027
Proposed Budget
Beginning Fund Balance 31,517,260$ 32,689,951$ Revenues 82,702,796$ 79,284,771$
Expenditures 81,530,105 81,426,361
Net (Revs - Exps)1,172,692$ (2,141,590)$
Ending Fund Balance 32,689,951$ 30,548,361$
Operating Budget
FY 2026
Proposed Budget
FY 2027
Proposed Budget
Revenues 67,151,696$ 68,074,771$
Expenditures 58,654,195 58,851,821
Net (Revs - Exps)8,497,502$ 9,222,950$
One-time
FY 2026
Proposed Budget
FY 2027
Proposed Budget
Revenues 15,551,100$ 11,210,000$
Expenditures 22,875,910 22,574,540
Net (Revs - Exps)(7,324,810)$ (11,364,540)$
Council Agenda 5-13-2025 3.B-2
Contributions to Reserves
The General Fund Reserve is maintained at 25% of General Fund budgeted operating expenditures. As such, the proposed budget includes an additional $515 thousand in FY 2026 and an additional $34 thousand in FY 2027 from the General Fund unassigned fund balance to contribute to the General Fund Reserve. The City’s Fiscal Policy to maintain a contingency reserve of 1% of budgeted General Fund operating expenditures to support unanticipated items that may occur during the budget years is fully funded. Due to several large capital projects that could experience cost overruns, the contingency budget in the proposed budget is increased to approximately 1.5% of budgeted General Fund operating expenditures in FY 2026 and in FY 2027, reflecting a total of $0.50 million each year. The Risk Management Reserve for unanticipated risk management costs is fully funded and maintained at $250 thousand.
The proposed budgets maintain the $500 thousand City Facility Reserve. The proposed budgets includes setting aside $2.00 million in FY 2026 and FY 2027 of the General Fund unassigned fund balance for a Budget Stabilization Set-Aside.
This set-aside allows the City to manage a potential economic downturn by drawing down from the set-aside.
City Goals and Department Initiatives
Staff has prepared a list of recommended items for Council’s review and approval, including the six City Goals and Department Initiatives (Attachment 1). The amounts of recommended items that are ongoing in nature and include enhancing service levels and address Council priorities, net of transfers, are $2,110,985 in FY 2026 and $2,539,464 in FY 2027. The amounts of recommended items that are one-time investments and include Capital Improvement Projects that address the City’s goals and critical infrastructure needs, net of transfers, total $16,119,890 in FY 2026 and $10,103,879 in FY 2027.
FY 2026 Non-profit Agencies Funding
The proposed budgets do not assume any contributions to outside non-profit agencies, except for the Five Cities Homeless Coalition, requests for which are heard by the Council each year, and the FY 2026 requests which will be heard as a component of this special meeting agenda. Should the Council approve any funding for these agencies, the fund balances in the respective funds would decrease. A separate staff report, provided as Item 3.C, will address the non-profit agency requests for City funding.
Conclusion and Recommendation
Staff recommends that the Council provide direction regarding the proposed budget, including proposed City goals and other initiatives for the budgets for FY 2026 and FY 2027, effective July 1, 2025 through June 30, 2027 for the City of Pismo Beach.
After the Council provides direction, staff will return to Council on June 3, 2025 with a Resolution to adopt the FY 2026 and FY 2027 budgets.
Council Agenda 5-13-2025 3.B-3
FISCAL IMPACT:
The fiscal impact of providing direction on the proposed budget would result in the following all funds total budget amounts by fiscal year, including transfers between funds, as shown in Table 4.
Table 4: FY 2026 and FY 2027 All Funds Total Proposed Budgets Net of transfers, total revenue budget across all funds as proposed is $69.74 million in FY 2026 and $62.22 million in FY 2027. Also net of transfers, total expenditure budget across all funds as proposed is $68.57 million in FY 2026 and $64.37 million in FY 2027.
Table 5 illustrates the fiscal impact across all funds of the total budget by fiscal year, net of transfers between funds.
Table 5: FY 2026 and FY 2027 All Fund Proposed Budgets, Net of Transfers between Funds
ATTACHMENTS:
1. FY 2026 & FY 2027 Proposed Budget City Goals & Other Initiatives Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Total Budget
FY 2026
Proposed Budget
FY 2027
Proposed Budget
Beginning Fund Balance 31,517,260$ 32,689,951$ Revenues 82,702,796$ 79,284,771$
Expenditures 81,530,105 81,426,361
Net (Revs - Exps)1,172,692$ (2,141,590)$
Ending Fund Balance 32,689,951$ 30,548,361$
Total Budget
FY 2026
Proposed Budget
FY 2027
Proposed Budget
Beginning Fund Balance 31,517,260$ 32,689,951$ Revenues 69,738,042$ 62,223,436$
Expenditures 68,565,350 64,365,026
Net (Revs - Exps)1,172,692$ (2,141,590)$
Ending Fund Balance 32,689,951$ 30,548,361$
Council Agenda 5-13-2025 3.B-4
City Goals
Quality of Life
Goal statement: Build on community strengths to protect and enhance the city’s quality of life.
Priorities:
•Invest in neighborhoods
•Implement community beautification and cleanliness strategies •Complete Addie Street Bathroom expansion
•Complete new Ventana sports courts
•Expand use of existing facilities by considering evening use •Invest in coastal access and bluff repair
Description FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Cliff/Ocean Storm Drain $ 3,800,000.00
Sports Courts Lighting 60,000.00 $ 600,000.00
Butterfly Grove Enhanced Parking and Crosswalk
Construction
500,000.00
Price Street and Dolliver Street Parking Lot Lighting 130,000.00 300,000.00 Cliff/Ocean Utility Undergrounding 200,000.00
Pier Promenade Transformation 200,000.00
Pier Avenue Stair Removal 180,000.00
Beach Cleaning Equipment - purchase of equipment 100,000.00 Vista Del Mar Stairs Foundation Maintenance 100,000.00 Resurface softfall at Boosinger Park 75,000.00
Install trash cans at 17 bus stop locations
throughout the city
60,000.00
Trash pickup for 17 additional bus stop locations 29,000.00 29,870.00 Reroute Pismo Beach Vets Hall Heater 60,000.00
Resurface Shell Beach Sports Courts 60,000.00
Annual Beautification Fund 50,000.00 50,000.00
Pismo Beach Information Center 50,000.00 50,000.00
Resident/Business Engagement 50,000.00 50,000.00
Storm Damage 50,000.00 50,000.00
Replace outdated riding mower 30,000.00
City-wide Christmas Decorations 25,000.00 25,000.00
Dinosaur Caves Park Path Enhancements 20,000.00 20,000.00 Pismo Beach Stewardship Banner Program 20,000.00 20,000.00 Replace outdated walk behind mower 15,000.00
Sidewalk Cleaning & Pressure washing, 2 PT
Maintenance Workers
10,617.00 10,617.00
Professional Architectural-Council Chamber
Accessibility Analysis
10,000.00
Council Agenda 5-13-2025 3.B-5
Attachment 1
Description FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Paint Pier Restroom bi-yearly 10,000.00
Paint Wastewater Building 7,500.00
Replace round and rectangular tables for PB Vets
Hall
6,500.00 6,500.00
Paint Pier Plaza letters by-yearly 6,000.00
Dinosaur Caves sign electrical addition 4,000.00
Purchase stacking chairs for SB Vets’ hall 3,500.00 Junior Lifeguard Scholarship 3,000.00 3,000.00
Beach Cleaning Equipment - ongoing maintenance 2,500.00 Total $5,709,117.00 $1,433,487.00
Council Agenda 5-13-2025 3.B-6
Attachment 1
Streets and Infrastructure
Goal statement: Enhance, beautify, and maintain the City’s streets and infrastructure to ensure safety, accessibility, and long-term sustainability.
Priorities:
•Invest in road, sidewalk, and park improvements
•Update the Pavement Management Plan
•Create a pavement maintenance strategy
•Complete a City facility condition assessment and address deferred maintenance Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Sunset Palisades Lift Station Rehab and Relocation of
Force Main in Searidge
$ 2,000,000.00
Routine Street Maintenance 1,000,000.00 $ 1,700,000.00 Paving and Drainage Project 3,000,000.00
Pismo Oaks Lift Station Rehab 600,000.00
Toucan Terrace Pipe Relining 250,000.00
Asset Management Program 200,000.00
City Hall Elevator Modernization 200,000.00
ADA Transition Plan Update 156,100.00
Addie Street Wet Well Improvements 150,000.00
Stratford and Wadsworth lining 140,000.00
Eldwayen Park Sidewalk Re-route 75,000.00
Manhole Rehabilitation city wide 60,000.00 60,000.00 Oxidation Reduction 60,000.00
Shell Beach Sports Courts Landscaping 50,000.00
Asset Management Program 50,000.00
Air-vac replacements, 2 per year, useful life 50 years 20,000.00 20,000.00 Citywide Public Improvements Review 15,000.00
DacTrak Software licensing 2,000.00
Total $ 3,976,100.00 $ 5,832,000.00
Council Agenda 5-13-2025 3.B-7
Attachment 1
Public Safety
Goal statement: Prioritize the safety and well-being of the community.
Priorities:
•Complete Public Safety Facility
•Reduce wildfire risk and promote fire hardening for the community •Create a lifeguard facility in the downtown
•Focus on retention of Police personnel
•Support technology investments that enhance public safety Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Cal Fire Proposed Agreement $ 316,590.00 279,179.00 PPE for Firefighters - removed from CalFire agreement
to reduce 12.5% State admin fee
17,000.00 17,000.00
Travel for CalFire - removed from CalFire agreement to
reduce 12.5% State admin fee
12,000.00 12,000.00
Backup Dispatch Connection to Bello Tower 250,000.00 Backup Dispatch Connection to Bello Tower 12,000.00 12,000.00 Backup Dispatch Connection to Hillcrest 25,000.00
Backup Dispatch Connection to Hillcrest 12,000.00 12,000.00 CST Ford Ranger 54,000.00
CST Ford Ranger 1,500.00
Community Risk Reduction Public Education mailers 40,000.00 Public Safety Video Camera Replacement 40,000.00
Taser Replacement 31,000.00 31,000.00
Radio Encryption 30,000.00
Professional Communication Services - Enhanced
Communications Plan 24,000.00
Stokes Litter Wheel 4,700.00
Total $ 828,290.00 $ 404,679.00
Council Agenda 5-13-2025 3.B-8
Attachment 1
Water Resources
Goal statement: Ensure the sustainability of the City’s existing water supply and storage, identifying new sources, promoting conservation, and engaging the community.
Priorities:
•Implement Central Coast Blue
•Pursue outside funding
•Complete construction of Charles Street Reservoir and plan for replacement of one groundwater production well
•Evaluate additional water supplies
•Enhance water conservation measures and rebate programs •Conduct public outreach and education
Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
New Production Well $ 4,020,000.00
Pismo Oaks and Pac Estates, Well 5 VFD $ 165,000.00 Valve Turning Machine 30,000.00
Central Coast Blue Communication Plan 25,000.00 75,000.00 Total $ 220,000.00 $ 4,095,000.00
Council Agenda 5-13-2025 3.B-9
Attachment 1
Parking and Circulation
Goal statement: Enhance parking infrastructure, expand inventory, and improve traffic circulation.
Priorities:
•Update the Downtown Study
•Continue to work on downtown parking solutions, including acquiring additional parking assets, and adopt strategies outlined in the Parking Management Plan •Incorporate parking modifications in the General Plan
•Complete and implement the Bicycle and Pedestrian Master Plan •Complete the acquisition of Dolliver Street from the state and make circulation improvements in accordance with the General Plan Circulation Element Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Downtown Strategic Plan Update $ 500,000.00
Dinosaur Caves/Cliff Ave Parking 400,000.00
Price/Ocean View Improvements 250,000.00
330 and 320 Main Street Parking Lot 150,000.00
Replace Parking Meters on Hinds and Cypress based on a 7 year useful life 48,000.00 $ 48,000.00
Speed Survey Update 14,000.00
Total $ 1,348,000.00 $ 62,000.00
Council Agenda 5-13-2025 3.B-10
Attachment 1
Development and Housing Access
Goal statement: Foster sustainable community development while supporting efforts to address housing needs and homelessness.
Priorities:
•Complete updates to the Local Coastal Plan, General Plan, and Zoning Code •Identify affordable housing and workforce housing opportunities •Implement measures to streamline the development process •Support and participate in regional efforts in a collaborative manner •Invest in housing and homelessness assistance where feasible Description
FY 2026 Proposed
Budget
FY 2027
Proposed Budget
Seahaven Apartment affordable housing renovation (grant funded) $4,750,000.00
Safety Element & Access Element Update (grant funded) 350,000.00 350,000.00 Housing Element Update - 7th Cycle 150,000.00
5 Cities Homeless Coalition 100,000.00
Planning consultant help for various planning initiatives 25,000.00 25,000.00 Docusign & Laserfiche integration 15,000.00
Website Customer Service and ADA improvements 7,900.00 8,295.00 Phoenix administrative citation service 6,000.00 6,000.00 Total $5,253,900.00 $539,295.00
Council Agenda 5-13-2025 3.B-11
Attachment 1
Department Initiatives
Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
IT Allocation of various ongoing costs (Goals & Dept
Initiatives)
$ 494,900.00 107,295.00
City Hall Primary Storage Server Replacement 80,000.00 SCADA Redundancy 75,000.00
Corp Yard Perimeter fence repairs 70,000.00
Replace Dump Truck Bed on Water Truck (WT122) 52,000.00 Special Event Seed Funding - LBID II 50,000.00 50,000.00 Add second vehicle lift/rack for additional repairs 40,000.00 Public Works Director Vehicle 40,000.00
Wireless AP Replacement 15,000.00
Lighting in Mechanic Shop 10,000.00
Transition to .gov Domain Name 10,000.00
Replace outdated paint trailer 7,200.00
Laptop and OWL conference room camera for Corp
Yard 3,000.00
Public Works Director Vehicle maintenance 1,500.00
Total $ 862,900.00 $ 242,995.00
Positions
Description
FY 2026 Proposed
Budget
FY 2027 Proposed
Budget
Position Reclassification: Lead WW Worker to
Wastewater Systems Supervisor $ 9,842.00 $ 10,334.00 Position Reclassification: Finance Senior Admin Analyst to Accounting Supervisor 6,190.00 6,190.00
Position Reclassification: Lead Water Systems Oper to
Water Systems Supervisor 5,970.00 6,268.00
Position Reclassification: Lead Maintenance Worker to
Parks Maintenance Supervisor 5,509.00 5,785.00
Position Reclassification: Lead Maintenance Worker to
Street Maintenance Supervisor 5,057.00 5,310.00
Total $ 32,568.00 $ 33,887.00
Council Agenda 5-13-2025 3.B-12
Attachment 1
Vehicles
FY 2026
Vehicle
No. Vehicle Description Year Make Model Color
Fiscal Year
Purchased
Replacement
Cost
BAURER BAUER COMPRESSOR 1992 1992 63,000
FD172 Polaris 2017 POLARIS RAZOR 800 Gray 2018 56,000
FDEX1 Fire Extrication 2018 2018 60,000
PWNEW Toyota Rav 4 Hybrid 40,000
PDNEW CST Ford Ranger 54,000
PKNEW Beach Cleaning Equipment 100,000
373,000$
FY 2027
Vehicle
No. Vehicle Description Year Make Model Color
Fiscal Year
Purchased
Replacement
Cost
FD171 Fire 2017 FORD F250 4X4 Red 2017 82,400$
PD151 Private Passenger 2015 FORD F250 4X4 Black 2017 78,280 ST111 Light Truck 2011 FORD F250 White 2012 87,550
WT122 Dump Truck Bed 2013 52,000
TR-5 Streets Paint Trailer 2004 PACAM Trailer White 2012 7,200 307,430$
Council Agenda 5-13-2025 3.B-13
Attachment 1