PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.D
Meeting Date: November 18, 2025
TITLE:
Fiscal Year 2026 First Quarter Financial Status Report
RECOMMENDATION:
No action recommended; for information only.
EXECUTIVE SUMMARY:
This report updates the City Council on the status of Fiscal Year (FY) 2025-26 ending on June 30, 2026, or FY 2026, financial status based on actual revenues and expenditures during the first three months of the fiscal year.
The City of Pismo Beach’s financial outlook remains stable, with fund balances projected to be sufficient. The General Fund’s unassigned ending balance for FY 2026 is estimated at $7.77 million, which represents a decrease of $4.12 million compared to FY 2025. This reduction is primarily driven by $3.48 million more in operating expenditures compared to operating revenues. This net operating deficit will draw from the beginning unassigned fund balance.
For most of the City’s other funds, revenues and expenditures are projected to be on budget and the ending fund balances are in line with the FY 2027 Adopted Budget beginning fund balances. In all the other funds except the Pier Enterprise Fund, there are sufficient fund balances and projected revenues to cover projected expenditures.
It should be noted that the FY 2025 actual revenues and expenditures are not yet final as staff continues to confirm those amounts in the process of completing the City’s FY 2025 financial statements. As such, the FY 2026 projected beginning fund balances in this report are not yet final and may change in future reports to reflect the final minor adjustments.
The following sections provide details of the General Fund financial picture, followed by a summary and highlights of the City’s other funds.
I. General Fund Budget Summary
In summary, based on early projections from the first three months of the fiscal year, the General Fund is projected to end FY 2026 with a $7.77 million unassigned fund balance.
The FY 2026 projected $7.77 million unassigned fund balance is $426 thousand less than the FY 2026 Revised Budget. This decrease is attributable to $426 thousand fewer projected operating revenues compared to the Revised Budget.
The unassigned fund balance is used to support operations and pay for future one-time investments included in the FY 2026 budget and in the 10-year Capital Improvement Plan.
Council Agenda 11-18-2025 9.D-1
In addition to the General Fund unassigned fund balance, the General Fund includes the Budget Stabilization Reserve set-aside of $2.00 million.
Table 1 is a summary of the FY 2025 preliminary actuals and the FY 2026 General Fund revised budget, projected actuals, and a variance comparing the budget to projected actuals.
Table 1: FY 2026 General Fund Budget Summary
II. General Fund Beginning Fund Balance
The General Fund beginning fund balance is comprised of two different components:
The unassigned fund balance, which are funds that are not committed for any specific purpose and could be used for various one-time projects, and The committed or carryforward fund balance, which are funds that are committed for a specific budgeted use.
As illustrated in Table 2, the FY 2026 Adopted Budget General Fund beginning fund balance was projected to be $10.67 million. Based on changes during FY 2025 and carrying forward fund balance to cover previously budgeted but not-yet-spent expenditures, the preliminary estimated fund balance is revised to $26.25 million. This includes $11.00 million of unassigned fund balance and $15.24 million of carryforward fund balances.
AB CD = C - B
($ thousands)
FY 2025
Preliminary
Actuals
FY 2026
Revised
Budget
FY 2026 Year-
End Projected
Actuals
Variance
(Actuals-
Budget)
Unassigned Fund Balance 9,619$ 11,005$ 11,005$ -$ Committed Fund Balance 15,020 15,244 15,244 -
a Beginning Fund Balance 24,639 26,249 26,249 -
b Operating Revenues 35,425 33,885 33,459 (426)
c Operating Expenditures 28,014 36,938 36,938 -
d = b - c Net Operating Surplus/(Deficit) 7,412 (3,053) (3,479) (426) e One-time Revenues 340 3,025 3,025 -
f One-time/Capital Expenditures 5,077 15,160 15,160 - g =
a+d+e-f Ending Fund Balance 27,314$ 11,061$ 10,635$ (426)$ Unassigned Fund Balance 11,892$ 8,193$ 7,768$ (426)$ Committed Fund Balance 15,244 - - -
Contribution to Reserves (1,822) 868 868 -
Budget Stabilization Set-Aside 2,000 2,000 2,000 - Council Agenda 11-18-2025 9.D-2
Table 2: FY 2026 General Fund, Beginning Fund Balance
(Preliminary Estimate)
III. General Fund Reserve
The City maintains various General Fund reserves totaling $9.12 million for emergency operations, building depreciation, and risk management. These reserves are crucial in order to avoid disrupting the City’s operations following unanticipated events. The reserves are shown in Table 3, followed by a summary of each reserve.
Table 3: General Fund Reserves
Reserve Amount ($ thousands)
General Fund 25% Reserve $8,367
City Building Reserve 500
Risk Management Reserve 250
Total $9,117
General Fund 25% Reserve
The City has adopted a fiscal policy to fund a General Fund Reserve of 25% of General Fund budgeted annual operating expenditures for FY 2026. The General Fund reserve should be equal to $9.24 million, which is 25% of the total FY 2026 budgeted annual operating expenditures of $36.94 million. Currently, the General Fund Reserve is $8.37 million, of which $8.31 million is invested in various securities and $53 thousand is pending investment. This reserve allows the City to maintain its operations for a few months in the event that an emergency or disaster impacts the City’s finances, and can also be used for emerging opportunities. The City Treasurer will be investing an additional $868 thousand during FY 2026 to fully fund the General Fund Reserve.
City Building Reserve
The City Council created a City Building Reserve of $500 thousand, for the maintenance and upkeep of City facilities and buildings, particularly if funds are not available. This amount is equal to five years of annual depreciation on City-owned buildings.
Risk Management Reserve
The City Council established a Risk Management Reserve, contributing $50 thousand each year to the budget for unanticipated risk management costs. This reserve has a balance of $250 thousand, which is the maximum contribution level. ($ thousands)
Adopted
Budget
Budget
Revisions Actuals
Unassigned Fund Balance 10,674$ 331$ 11,005$
Capital Funds Carryforward 14,506 14,506
Purchase Orders Carryforward 637 637
Prepayment Carryforward 101 101
Total Fund Balance 10,674$ 15,575$ 26,249$
$15,244
Carryforward
Council Agenda 11-18-2025 9.D-3
IV. General Fund Revenues
The FY 2026 Revised Budget includes total revenues of $36.91 million, with actual revenues anticipated to reach $36.49 million—$426 thousand less than budgeted.
Compared to FY 2025, the FY 2026 projected actual revenues are expected to increase by $719 thousand, or 2.0%. This increase is primarily attributed to one-time transfers from the Lodging Business Improvement District Fund for various projections plus Local Coastal Plan grant revenues. This is offset by anticipated reductions in various revenue streams, including Other Revenues, Transient Occupancy Tax revenues, and Intergovernmental Revenues. Table 4 provides a summary of the General Fund revenue budget alongside the projected actual revenues for FY 2026. This is followed by a detailed review of the top three revenue sources for FY 2026, as well as a discussion on significant variances between FY 2026 projected revenues and FY 2025 actual figures.
Table 4: FY 2026 General Fund Revenue Budget and Projected Actuals
Transient Occupancy Tax (TOT) revenues are projected to fall $507 thousand short of the budget and $590 thousand, or 3.9%, below the previous year’s revenues. TOT revenues are collected from an 11% tax on rent charged by lodging businesses for stays of 30 consecutive days or less. The projected decline in TOT revenues reflects a few hotels that are currently undergoing renovations and are either fully or partially closed. So far, there is an average 3.2% decrease in the first two months of the fiscal year, and a projected 3.2% decline for the remainder of FY 2026 compared to FY 2025 based on the hotel closures. Chart 1 further illustrates FY 2026 TOT revenues collected in comparison to FY 2024.
A B C D = C - B E = C - A F = C/A-1
($ thousands)
Revenue Category
FY 2025
Preliminary
Actuals
FY 2026
Revised
Budget
FY 2026
Projected
Actuals
Variance
(Projected
Actuals -
Revised
Bdgt)
Variance
(FY26 Proj
Act - FY25
Actuals)
% Variance
(FY26 Proj
Act v FY25
Actuals)
Proj
Actual
% of
Total
Transient Occupancy Tax 15,180$ 15,097$ 14,590$ (507)$ (590)$ -3.9% 40.0% Property-Related Taxes 7,740 7,655 7,770 115 30 0.4% 21.3% Sales and Use Tax 4,096 3,974 3,974 - (123) -3.0% 10.9% Other Revenues 3,930 2,776 2,776 - (1,155) -29.4% 7.6% Permits 1,184 1,756 1,720 (35) 537 45.3% 4.7% Transfers In 1,126 904 904 - (222) -19.7% 2.5% Franchise Taxes 828 849 828 (22) - 0.0% 2.3% Departmental Revenues 357 293 293 - (64) -17.9% 0.8% Business Tax 302 282 302 20 - 0.0% 0.8% Other Taxes 144 140 144 3 - 0.0% 0.4% Other Financing Sources 85 78 78 - (6) -7.5% 0.2% Intergovernmental Revenue 381 76 76 - (305) -80.1% 0.2% Grants 73 5 5 - (68) 0.0% 0.0% Total Operating Revenues 35,425$ 33,885$ 33,459$ (426)$ (1,966)$ -5.6% 91.7% One-time Revenues 340 3,025 3,025 - 2,685 789.3% 8.3% Total Revenues 35,766$ 36,910$ 36,485$ (426)$ 719$ 2.0% 100.0% Council Agenda 11-18-2025 9.D-4
Chart 1. TOT Revenues FY 2026 compared to FY 2025
According to data from Smith Travel Research Inc., a competitive benchmarking and research provider for the hotel industry, excluding the hotel closures due to renovations, there is an increase in the average daily room rate and in occupancy rates in the first two months of the fiscal year compared to the same period of time last fiscal year. Specifically, the average daily room rate increased by 1.4% and the occupancy rate increased by 2.7% in the first three months of FY 2026 compared to the same period in FY 2025.
Based on these trends, staff projects that TOT revenues will reach $14.59 million, representing a $507 thousand shortfall from the budgeted amount, and a 3.9% decrease, or $590 thousand decrease, from the previous year's TOT revenues.
Property-related tax revenues are projected to be $115 greater than budget and $30 thousand, or 0.4%, greater than previous year’s property-related tax revenues. There are two sources of property-related tax revenues:
o Property Tax Assessed Value revenues: equivalent to 1% of assessed values. o Property Tax In-Lieu of Vehicle License Fees: 1% tax on the market value of a registered vehicle.
Assessed value cannot increase by more than 2.0% per year per Section 2 of Article XIIIA of the California Constitution. The property tax projected actuals are based on San Luis Obispo County Auditor-Controller’s office certified assessed values for the current year.
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
TO
T
A
m
o
u
n
t
Transient Occupancy Tax (TOT), 11% of gross lodging rents FY 2025
FY 2026
Council Agenda 11-18-2025 9.D-5
Sales and Use Tax revenues are projected to be equal to budget and $123 thousand, or 3.0%, less than the prior year. Sales and use tax revenues are made up of two sources:
o Bradley-Burns uniform sales and use tax, which is a 1.0% tax on taxable sales within the City.
o Public safety tax, which is a 0.5% tax on taxable sales for specified public safety purposes.
Based on actual sales tax receipts to date, the Bradley-Burns Uniform Sales and Use Tax is projected to equal budget expectations, but fall short of the prior year’s revenues by $123 thousand. Using data from the City’s sales tax consultant and actual revenues collected so far, City staff estimates that Bradley-Burns sales and use tax revenues will total $3.85 million. Chart 2 illustrates sales tax revenues received in FY 2025 and FY 2026 by the month in which the sales tax was collected.
Chart 2. Bradley Burns Sales Tax Revenues FY 2026 compared to FY 2025
The public safety sales tax revenues are budgeted at $123 thousand in FY 2026 and are anticipated to be equal to budget. This FY 2026 projected amount is $911 greater than the FY 2025 public safety sales tax revenues.
In summary, sales and use tax revenues are projected to be equal to budget and $123 thousand, or 3.0%, less than the prior year.
Other Revenues are projected to come in equal to budget but $1.16 million, or 29.4%, lower than the previous year. This category includes fines and forfeitures, interest earnings, rents and leases, various service fees, and other miscellaneous revenue sources. The anticipated decline is due to a one-time $411 thousand legal settlement received in FY 2025, which will not be repeated in FY 2026; one-time $515 thousand gain comparing the original value of an investment compared to the fair market value $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Sa
l
e
s
T
a
x
A
m
o
u
n
t
Sales Tax 1.0% of taxable sales
FY 2025
FY 2026
Council Agenda 11-18-2025 9.D-6
that is reflected in FY 2025 and not in FY 2026; and projected interest earnings are expected to decrease by $407 thousand due to lower interest rates.
Intergovernmental Revenues are projected to be equal to budget and $305 thousand, or 80.1%, less than the prior year. This is largely due to the City of Pismo Beach drawing down $180 thousand from the City’s Other Post Employment Benefit account as it is currently over funded in FY 2025 and currently not budgeted to draw down that amount in FY 2026; receiving $75 thousand for a FEMA reimbursement for Fire services in FY 2025 but not expected in FY 2026; and receiving $42 thousand more in SB 90 unfunded mandate reimbursements from the State in FY 2025 compared to the FY 2026 budget.
Permits are projected to be $35 thousand less than budget and $537 thousand, or
45.3%, greater than the prior year. This additional $537 thousand compared to the FY 2025 anticipates the projected one-time developments, including Shell Beach Road at Beachcomber, the Gateway project on Price Street, and other commercial and multi-family developments.
V. General Fund Expenditures
The FY 2026 Revised Budget expenditures total $52.10 million and projected actual expenditures total the same amount.
Total operating expenditures for the first quarter total should be about 25% of the budget, assuming the timing of expenditures is consistent throughout the year. This year, about 22% of the operating budget has been spent in the first quarter, while only 1% of the one- time capital expenditure budget has been spent in the first quarter. These one-time costs are dependent on the timing of construction of these projects. Table 5 provides details of actuals as a percentage of budget by expenditure category, followed by explanations of the large variances from the 25% mark.
Council Agenda 11-18-2025 9.D-7
Table 5. FY 2026 General Fund Expenditure Budget and Projected Actuals
Some operating costs that do not reflect consistent monthly spending include:
Benefits, which includes retirement, health, and other benefits for employees. In order to take advantage of a 3% savings in CalPERS pension costs, the City prepaid the full year of its projected normal CalPERS pension costs. As such, the Benefits expenditure category reflects that 42% of the budget was spent in the first quarter. Professional Services, which reflects that 5% was spent in the first quarter. These costs are based on the timing of work performed and are not set amounts per month. Contract Services, which reflects that 38% was spent in the first quarter. These costs reflect the prepayment of insurance costs in the first quarter. Debt Service, which reflects that 0% was spent in the first quarter. Debt service payments are due in December and June each year and do not follow a consistent monthly draw.
Other Financing Uses, which includes a $500 thousand general contingency budget and reflects that only 16% of the budget has been spent in the first quarter. This budget is allocated over time based on unanticipated costs that come up throughout the year and are not a consistent allocation of expenditures.
Retiree Medical Insurance costs, which reflects that 0% of budget was spent in the first quarter. The monthly costs are payments to Retirees, but the majority of these payments are contributions to CalPERS for the actuarially determined contribution and are paid toward the end of the fiscal year.
AB CD = C/BE
($ thousands)
Expenditure Category
FY 2025
Preliminary
Actuals
FY 2026
Revised
Budget
FY 2026
First Quarter
Actuals
First Quarter
Actuals % of
Budget
FY 2026
Projected
Actuals
Proj
Actual
% of
Total
Salaries & Wages 9,606$ 10,861$ 2,437$ 22% 10,861$ 20.8% Benefits 4,585 6,583 2,749 42%6,583 12.6% Professional Services 3,995 5,669 306 5%5,669 10.9% Contract Services 3,330 3,934 1,490 38%3,934 7.6% Other Expenses 1,561 2,857 466 16%2,857 5.5% Debt Service 1,934 2,808 - 0%2,808 5.4% Operations & Maintenance 1,846 2,144 351 16%2,144 4.1% Transfers Out 740 1,114 243 22%1,114 2.1% Other Financing Uses 206 620 97 16%620 1.2% Retiree Medical Insurance 182 279 53 0%279 0.5% Capital Projects 31 67 - 0%67 0.1% Total Operating Expenditures 28,014$ 36,938$ 8,194$ 22% 36,938$ 70.9% One-time Capital Costs 5,077 15,160 177 1% 15,160 29.1% Total Expenditures 33,091$ 52,098$ 8,371$ 16% 52,098$ 100.0% Council Agenda 11-18-2025 9.D-8
VI. General Fund Contingency Budgets
General Contingency
The FY 2025 Adopted Budget included $500 thousand in the General Fund general contingency account that may be used for various one-time items that come up during the year. Of this amount, $71 thousand of this appropriation was allocated for the following purposes as outlined in Table 6, leaving $429 thousand remaining.
Table 6. FY 2026 General Fund Contingency Budget
Council Contingency
The FY 2026 Adopted Budget also includes a $5 thousand City Council contingency appropriation that may be used for various one-time items that come up during the year.
None of this contingency has been allocated in the first quarter of FY 2026.
VII. Next Level Budget
The FY 2026 Adopted Budget included $200 thousand in the General Fund non- department contract services account that may be used for various “next-level” contract services. This amount was transferred to support various Public Works Facilities Division contract services.
Beginning Balance July 1, 2025 500,000$
Appropriations
Happy Time Preschool donation (20,000)$
Pier Avenue Stairs (51,343)
Total Appropriations (71,343)
Ending Balance as of September 30, 2025 428,657$
Council Agenda 11-18-2025 9.D-9
VIII. Other Funds
Table 7 reflects fund balance, projected revenue, and projected expenditure activity in the City’s other funds. For most funds, revenues and expenditures are projected to be on budget and the ending fund balances are in line with the FY 2027 Adopted Budget beginning fund balances.
Table 7. Other Funds
A B C D = B - C E = A + D F G = E - F
Fund
Type Fund Fund Title
Beginning
Fund Balance
Projected
Actual Revenue
Projected Actual
Expenditure Net Rev - Exp
Projected
Ending Fund
Balance Carryforward
Unrestricted
Fund Balance
General Operating Funds
1001 General Fund 26,248,733 36,484,647 52,097,910 (15,613,263) 10,635,470 - 9,740,989 1002 Transaction Sales Tax Fund 6,213,697 4,063,717 6,706,786 (2,643,069) 3,570,628 - 3,570,628 Special Revenue Funds
2001 Gas Tax Fund 415,924 449,988 142,358 307,630 723,554 150,000 573,554 2002 Local Transportation 551,287 180,707 5,910 174,797 726,084 - 726,084 2003 PEG Fund 144,882 37,058 35,913 1,145 146,027 - 146,027 2004 Grants-NonCapital 159,648 150,086 290,943 (140,857) 18,791 - 18,791 2005 Housing In-Lieu Fee 624,286 4,762,144 4,838,179 (76,035) 548,251 - 548,251 2006 LBID Operations 594,006 1,350,351 1,744,400 (394,049) 199,957 - 199,957 2006 LBID Improvements 2,962,756 1,350,351 1,471,000 (120,649) 2,842,107 - 2,842,107 2007 Chapman Estate 5,782 56,015 56,274 (259) 5,523 - 5,523 Capital Project Funds
3001 Capital Projects 26,384,359 24,758,242 47,767,356 (23,009,114) 3,375,245 3,375,245 - 3002 Public Facilities Fund 957 - - - 957 - 957 3003 Park Development Fund 323,141 796 33,554 (32,758) 290,383 82,193 208,190 3101 Circulation Fees 621,728 1,548 156,203 (154,655) 467,072 - 467,072 3102 Impact Fees 314,716 12,246 1,281 10,965 325,681 - 325,681 3103 Developer Impact Fee 65,179 454 - 454 65,632 - 65,632 3201 Underground Utility Fnd 18,003 45 - 45 18,048 - 18,048 Debt Service Funds
4001 PFA Debt Service - - - - - - - 4002 PF Agency Debt 900 3,089,818 3,089,818 - 900 - 900 4101 Reass 92-1 Fwy Fthlls 833 - - - 833 - 833 4102 Spyglass 92-4 13,867 - - - 13,867 - 13,867 Enterprise Funds
6101 Water Enterprise 12,380,908 7,554,832 12,345,143 (4,790,311) 7,590,597 7,590,597 - 6102 Water Tax (Lopez/State) 668,445 2,825,143 3,097,202 (272,059) 396,386 396,386 - 6103 Water Construction Fund 1,824,652 5,650,172 5,689,132 (38,960) 1,785,693 1,785,693 - 6104 Water Expansion Fund 692,250 25,086 - 25,086 717,336 717,336 - 6105 Water Central Coast Blue 3,314 7,814 11,054 (3,240) 74 74 - Water Enterprise Funds 15,569,570 16,063,047 21,142,531 (5,079,484) 10,490,086 10,490,086 - 6201 Wastewater Treatment 6,228,768 6,194,487 10,113,463 (3,918,975) 2,309,793 2,309,793 - 6202 Wastewater Capital Proj 2,070,776 3,824,679 4,243,373 (418,694) 1,652,082 1,652,082 - 6203 Wastewater Expansion 1,768,488 61,970 - 61,970 1,830,458 1,830,458 - 6204 Wastewater Central Coast B 6,730 16,059 22,785 (6,726) 4 4 - Wastewater Enterprise Fund 10,074,761 10,097,195 14,379,621 (4,282,426) 5,792,336 5,792,336 - 6401 Pier Enterprise - 88,582 110,096 (21,514) (21,514) (21,514) - 6501 Parking Enterprise 2,349,888 3,642,114 2,345,784 1,296,330 3,646,218 3,646,218 - Internal Service Funds
7101 Technology Service Fund 756,938 4,952,984 3,493,346 1,459,638 2,216,576 - 2,216,576 7201 Motor Vehicle Fund 4,617,476 2,441,142 2,421,065 20,076 4,637,553 - 4,637,553 Council Agenda 11-18-2025 9.D-10
Highlights of Other Funds
Transaction Sales Tax Fund (1002)
The Transaction Sales Tax Fund includes a 1.00% transaction sales and use tax that became effective April 1, 2025. This is the third local measure for a transaction sales and use tax, approved by the voters as part of Measure F-24 at the November 2024 election.
Measure F-24 includes a 12-year sunset clause and will expire on March 31, 2037. Prior to this local measure, the first local measure for a 0.50% transaction sales and use tax was effective October 1, 2008, that included a six-and-one-half-year sunset clause and expired on March 31, 2015. On November 4, 2014, the voters approved another Measure, Measure I, the 0.50% transactions sales and use tax to be effective April 1, 2015 and was set to sunset on March 31, 2026. The tax proceeds are used exclusively for infrastructure projects.
This fund started the year with a $6.21 million beginning fund balance (after including carryforward fund balances). Projected actual revenues are $4.06 million. Projected actual expenditures are $6.71 million. There is a $3.57 million projected ending fund balance in this fund. Table 8 lists the budgeted projects in this fund for FY 2026.
Table 8: Transaction Sales Tax Fund FY 2026 Budgeted Projects
Gas Tax Fund (2001)
The Gas Tax Fund is a Special Revenue Fund whose revenues include State gas tax funds based on the State’s apportionment formula. These funds are used for City street light costs, City traffic signal maintenance costs, and street repairs and/or capital improvements. This fund started the year with a $416 thousand beginning fund balance (after including carryforward fund balances). Projected actual revenues are $450 thousand and projected actual expenditures are $142 thousand for the streets and Projects
FY 2026
Budget
FY 2025 Paving Project $ 2,277,326
Ventana Sports Courts 1,000,000
Routine Street Maintenance 1,000,000
Signalize Bello/Price Canyn Rd 489,000
Ocean Blvd Improvements 435,860
Dino Caves/Cliff Ave Parking 400,000
Price/Ocean View Improvements 250,000
Cliff/Ocean Utility Undergrnd 200,000
ADA Transition Plan Update 132,600
Downtown Sidewalk Repair 123,000
Vista Del Mar Stair Foundation 100,000
Eldwayen Park Sidewlk Re-route 75,000
Boosinger Park Softfall 75,000
El Portal Outfall 60,000
Trash Cans at Bus Stops 60,000
Ongoing Trash pick up at 17 Bus stops 29,000 Total $ 6,706,786
Council Agenda 11-18-2025 9.D-11
overhead costs. Based on the projected revenues and expenditures for the current year, after accounting for a $150 thousand carryforward of the Signalize Bello/Price Canyon Road project, there is a $574 thousand projected ending fund balance in this fund.
Local Transportation Fund (2002)
The Local Transportation Fund is a Special Revenue Fund whose funds are used for construction and maintenance of streets, bluff protection, and beach access. Revenues for this fund consist of State Transportation Development Act funds, which remain after funds are allocated for regional transit, local transit, and Ride-on services. Projected actual revenues are $181 thousand and projected actual expenditures are $6 thousand.
Based on the projected revenues and expenditures for the current year, there is $726 thousand projected ending fund balance for this fund.
Public Education Government Fund (2003)
The Public, Educational, and Governmental (PEG) Access Fee Fund includes revenues from a PEG Access Fee collected from cable television providers (i.e. Charter Communications) with franchise operations within city limits. Expenditures include capital costs related to governmental cable broadcasting and equipment. Based on projected revenues of $37 thousand and projected expenditures of $36 thousand, the PEG Fund is expected to end the year with a $146 thousand fund balance.
Housing In-Lieu Fund (2005)
The Housing In-Lieu Fund is a Special Revenue Fund with revenues from a development impact fee paid to the City as an alternative to the production of affordable housing (housing in-lieu fee). These funds are used for the acquisition, construction, or rehabilitation of affordable housing. The fund is projected to have $548 thousand of funds available by the end of the year for this purpose.
Lodging Business Improvement District Fund (2006) Operations The Pismo Beach Lodging Business Improvement District (LBID) Fund for operations reflects a 1% assessment on transient rents at transient lodging providers as revenues and budgeted expenditures to promote Pismo Beach lodging businesses. The LBID Fund started the year with a $1.28 million beginning fund balance. City staff projects that LBID assessment revenues and interest earnings will be $1.35 million. Operating expenditures are projected at $1.74 million. The fund is expected to end the year with a $199 thousand unrestricted fund balance.
LBID Fund (2006) Improvements
The LBID Fund for improvements includes a 1% assessment for physical improvements, in particular the Pier Plaza project. The LBID Fund started the year with a $2.96 million beginning fund balance. City staff projects that LBID assessment revenues and interest earnings will be $1.35 million. Expenditures include $1.47 million for various projects, including the Addie Street Restroom Improvements, Butterfly Grove Parking Crosswalk, Butterfly Grove Trail Signage, Downtown Strategic Plan Update, Sports Courts Lighting, Beautification, Beach Cleaner, and other projects. The fund is expected to end the year with a $2.84 million unrestricted fund balance. This amount, plus FY 2026 projected Council Agenda 11-18-2025 9.D-12
assessment revenues are anticipated to support future visitor-serving physical improvements.
Park Development Fund (3003)
The Park Development Fund is a Capital Project Fund with Quimby Act (park development in-lieu) fees and Impact Fees as funding sources to support construction costs of new parks and park lands, and the enhancement of existing parks to serve new development. The fund started the year with $323 thousand and is projected to receive $796 in impact fee and permit revenues. Projected actual expenditures total $34 thousand and include the projects shown in Table 9. The table lists the budgeted projects in this fund for FY 2026.
Table 9: Park Development Fund FY 2026 Budgeted Projects
After accounting for carryforward budgets to next fiscal year, the fund is expected to end the year with a $208 thousand ending fund balance.
Water Enterprise Fund (6101)
The Water Enterprise Fund is an Enterprise Fund consisting of revenues from water billings and expenditures for: contract meter reading; direct water services and supplies; on-going inspection, repair, and maintenance of the City’s wells, tanks, booster stations, hydro-pneumatic system, and water distribution system components; water conservation efforts; and ensuring that a safe, drinkable supply of water is provided to Pismo Beach.
Water revenues are projected to be $7.55 million and expenditures are projected to be $12.35 million.
The projected ending fund balance for the Water Enterprise Fund is $7.59 million, which is allocated for future water system capital costs, including the Central Coast Blue project.
Note that the Water Enterprise Fund also includes the Water Tax, Water Construction, Water Expansion, and the Central Coast Blue Regional Recycled Water Authority Water Funds and the ending fund balance across all these funds is $10.49 million.
There is litigation over Lopez Lake/Lopez Dam centers on a lawsuit filed in August 2024 by several environmental groups alleging that San Luis Obispo County has operated the dam in violation of the Endangered Species Act—in particular by not releasing sufficient flows to support spawning of endangered coastal steelhead in Arroyo Grande Creek. As a result of this litigation, the County has passed on the majority of these costs to the participants in the Flood Control Zone 3, including Pismo Beach. As a result, there is an Projects
FY 2026
Budget
FY 2026
Projected
Actuals
Ventana Sports Courts 26,975$ 26,975$
Price Historic Park/ Meherin House 82,193 -
Overhead costs 6,579 6,579
Total 115,747$ 33,554$
Council Agenda 11-18-2025 9.D-13
unknown amount of litigation costs that will be impacting the City’s Water Enterprise Funds and that amount is currently unknown pending the outcome of the legal fees.
Wastewater Treatment Fund (6201)
The Wastewater Treatment Fund is an Enterprise Fund consisting of revenues from wastewater billings and expenditures for direct services and supplies; operation and maintenance of the City’s wastewater treatment plant and the wastewater collection facilities including pumps and pipelines; and ensuring the City’s treatment and collection system operations meet City, federal, and state laws and requirements. Wastewater revenues are projected to be $6.19 million and expenditures are projected to be $10.11 million. The estimated ending fund balance is $2.31 million which is already allocated for other wastewater capital projects. Note that the Wastewater Treatment Funds also include the Wastewater Capital Fund, the Wastewater Expansion Fund, and the Central Coast Blue Regional Recycled Water Authority Wastewater Fund. The total combined ending fund balance across all these funds is $5.79 million.
Pier Enterprise Fund (6401)
The Pier Enterprise Fund includes revenues from a concession lease on the Pier and expenditures for repair and maintenance of the Pier, Promenade, and nearby facilities.
Projected revenues are $89 thousand, from revenues from the Pier Airstream. Projected expenditures include $110 thousand for Pier and Pier Plaza operating costs. The Pier Enterprise Fund is expected to end the year with a shortfall of a $22 thousand ending fund balance. Staff will come to Council at the Mid-Year Budget in December to appropriate additional General Fund support for these operations.
Parking Enterprise Fund (6501)
The Parking Enterprise Fund is an Enterprise Fund consisting of revenues from parking kiosks, parking citations, and parking permits to support a Parking Supervisor and Parking Enforcement Officer, implement the goals of the Pismo Beach Parking Management Plan, to administer existing parking more efficiently, provide more downtown parking, improve enforcement and parking management, and provide funds for future parking structures.
Revenues are projected to reach $3.64 million and operating expenditures are projected to be $1.91 million. As shown in Table 10, in addition to operating expenditures, the budget includes $653 thousand for one-time projects. Of these projects, staff projects the full $653 thousand will be spent in FY 2026. The FY 2026 projected ending fund balance is $3.65 million.
Council Agenda 11-18-2025 9.D-14
Table 10: Parking Enterprise Fund FY 2026 Budgeted Projects Motor Vehicle Replacement Fund (7201)
The Motor Vehicle Replacement (MVR) Fund is an Internal Service Fund that funds the City’s motor vehicle operations and maintenance and motor vehicle replacements for various City departments. These costs are funded by accumulated fund balance, transfers from other funds, and motor vehicle rental charges to other funds. The MVR Fund started the year with a $4.62 million beginning fund balance. The FY 2026 projected ending fund balance is $4.64 million, which are accumulated funds necessary to fund future replacements.
Conclusion and Recommendation
Staff recommends that Council receive this report as information only.
FISCAL IMPACT:
There is no fiscal impact from receiving this report as it is information only.
ATTACHMENTS:
None
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Projects
FY 2026
Budget
Public Safety Facility 300,000$
320/330 Main St Parking Lot 150,000
Price/Dolliver Parking Lot Lighting 130,000
Addie St Parking & Access Impr 55,817
Parking Kiosk Machines 11,965
Radio System Reliability Upgrade 4,000
Other projects 1,546
Total 653,328$
Council Agenda 11-18-2025 9.D-15