PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.D
September 1, 2026
TITLE:
Fiscal Year 2026 Fourth Quarter Financial Status Report
RECOMMENDATION:
No action recommended; for information only.
EXECUTIVE SUMMARY:
This report updates the City Council on the City’s financial status for the fiscal year ending on June 30, 2026, based on preliminary actual revenues and expenditures during Fiscal Year (FY) 2026.
The City of Pismo Beach’s financial outlook remains stable, with fund balances at sufficient levels. The General Fund’s unassigned ending balance for FY 2026 is estimated at $11.30 million, a decrease of $0.59 million compared to FY 2025. This decline is largely due to the planned use of fund balance for capital projects, including the Public Safety Facility, as well as a $1.0 million discretionary payment to CalPERS to reduce the City’s unfunded pension liability, offset by a $3.67 million operating surplus.
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, there are sufficient fund balances and projected revenues to cover projected expenditures.
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 preliminary and projected actual revenues and expenditures during FY 2026, the General Fund is projected to end FY 2026 with an $11.30 million unassigned fund balance. The FY 2026 projected $11.30 million ending unassigned fund balance is $0.85 million greater than the FY 2026 Revised Budget. This increase is attributable to an additional $1.43 million in operating revenues and $2.22 million in net operating expenditures savings compared to the Revised Budget, offset by $2.81 million in fewer one-time revenues.
The unassigned fund balance is used to support operations and pay for future one-time investments included in the FY 2027 budget and in the 10-year Capital Improvement Plan.
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 actuals and the FY 2026 General Fund revised budget, projected actuals, and a variance comparing the budget to projected actuals.
Council Agenda 9-1-2026 9.D-1
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 fund balance is revised to $26.25 million. This includes $11.00 million of unassigned fund balance and $15.24 million of carryforward fund balances.
Table 2: FY 2026 General Fund, Beginning Fund Balance
($ thousands)
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 35,332 36,765 1,433 c Operating Expenditures 29,014 35,318 33,098 (2,220) d = b - c
e One-time Revenues 340 3,683 878 (2,805) f One-time/Capital Expenditures 4,077 17,244 2,577 (14,667) g = a+d+e-f
Committed Fund Balance 15,244 - 14,667 14,667 Contribution to Reserves (1,822) 245 245 - Budget Stabilization Set-Aside 2,000 2,000 2,000 - 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 9-1-2026 9.D-2
III. General Fund Reserve
The City maintains various General Fund reserves totaling $9.76 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
General Fund 25% Reserve $9,013
City Building Reserve 500
Risk Management Reserve 250
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 $8.83 million, which is 25% of the total FY 2026 budgeted annual operating expenditures of $35.32 million. Currently, the General Fund Reserve is $9.01 million, of which $8.77 million is invested in various securities and $239 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 $245 thousand during FY 2027 to fully fund the General Fund Reserve, to account for the FY 2027 operating budget.
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.
IV. General Fund Revenues
The FY 2026 Revised Budget includes total revenues of $39.02 million, with actual revenues anticipated to reach $37.64 million, which is $1.37 million less than budgeted.
Compared to FY 2025, the FY 2026 projected actual revenues are expected to increase by $1.88 million, or 5.2%. This year-over-year increase is primarily driven $1.09 million more permit revenues compared to the previous year and an additional one-time $1.00 million to reflect transferring this amount from the Payroll Clearing Fund surplus workers compensation balance to offset the $1.00 million one-time prepayment of the CalPERS Unfunded Accrued Liability payment, offset by decreases in Other Revenues ($314 thousand). Table 4 provides a summary of the General Fund revenue budget alongside Council Agenda 9-1-2026 9.D-3
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 $94 thousand short of the budget and $176 thousand, or 1.2%, below the previous year’s revenues. TOT revenues are collected from an 11% tax on rent charged by lodging businesses for stays of 30 consecutive days or less. The projected decrease in TOT revenues is primarily due to several hotels undergoing renovations that are either fully or partially closed, as well as the impact of rainy weather on travel in November 2025. Chart 1 further illustrates actual FY 2026 TOT revenues collected in comparison to FY 2025.
($ thousands)
Revenue Category
Transient Occupancy Tax 15,180$ 15,097$ 15,003$ (94)$ (176)$ -1.2% 39.9% Property-Related Taxes 7,740 7,655 8,023 368 283 3.7% 21.3% Sales and Use Tax 4,096 3,974 3,939 (34) (157) -3.8% 10.5% Other Revenues 4,015 2,863 3,701 837 (314) -7.8% 9.8% Transfers In 1,126 2,100 1,870 (230) 745 66.2% 5.0% Permits 1,184 1,811 2,271 460 1,087 91.9% 6.0% Other Taxes 1,274 1,271 1,312 41 39 3.0% 3.5% Departmental Revenues 357 293 308 15 (49) -13.7% 0.8% Fees, Grants, Intergovernmenta 454 267 337 70 (118) -25.9% 0.9% Total Operating Revenues 35,425$ 35,332$ 36,765$ 1,433$ 1,339$ 3.8% 97.7% One-time Revenues 340 3,683 878 (2,805) 538 158.1% 2.3% Total Revenues 35,766$ 39,015$ 37,642$ (1,372)$ 1,877$ 5.2% 100.0% Council Agenda 9-1-2026 9.D-4
Chart 1. TOT Revenues FY 2026 compared to FY 2025
According to data from Smith Travel Research Inc., which provides competitive benchmarking for the hotel industry, occupancy rates increased slightly by 1.5% and average daily room rates increased by 2.5% in FY 2026 compared to FY 2025.
However, there were a few lodging properties that were closed for renovations, offsetting these increases.
• Property-related tax revenues are projected to be $368 thousand greater than budget and $283 thousand, or 3.7%, 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.
• Sales and Use Tax revenues are projected to be $34 thousand less than budget and $157 thousand, or 3.8%, 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.
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$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
TO
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o
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FY 2025
FY 2026
Council Agenda 9-1-2026 9.D-5
Based on actual sales tax receipts to date, the Bradley-Burns Uniform Sales and Use Tax is projected to be $38 thousand less than budget expectations, and fall short of the prior year’s revenues by $161 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 $3.81 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 $3 thousand greater than budget. This FY 2026 projected amount is $4 thousand greater than the FY 2025 public safety sales tax revenues.
In summary, sales and use tax revenues are projected to be $34 thousand less than budget and $157 thousand, or 3.8%, less than the prior year.
• Other Revenues are projected to come in $837 thousand greater than budget but $314 thousand, or 7.8%, 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 year-over-year decrease is primarily attributable to several one-time items recorded in FY 2025 that will not recur in FY 2026, including a $411 thousand legal settlement and a $515 thousand investment valuation gain reflecting the difference between original cost and fair market value. These decreases are partially offset by a projected $268 thousand increase in charges to other funds and $153 thousand more interest earnings in FY 2026 compared to FY 2025.
• Permits are projected to be $460 thousand greater than budget and $1.09 million, or
91.9%, greater than the prior year. This additional $1.09 million compared to FY 2025 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Sa
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s
T
a
x
A
m
o
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t
FY 2025
FY 2026
Council Agenda 9-1-2026 9.D-6
includes numerous one-time developments, including Shell Beach Road at Beachcomber, the Gateway project on Price Street, hotels, and other commercial and multi-family developments.
• Transfers In from other funds are projected to be $230 thousand less than budget and $1.09 million, or 66.2%, greater than the prior year. The year-over-year increase is primarily due to an additional $1.00 million to reflect transferring this amount from the Payroll Clearing Fund surplus workers compensation balance to offset the $1.00 million one-time prepayment of the CalPERS Unfunded Accrued Liability payment.
V. General Fund Expenditures
The FY 2026 Revised Budget expenditures total $52.56 million and projected actual expenditures total $35.68 million. Operating expenditures are projected to be $2.21 million less than the Revised Budget for FY 2026. One-time capital costs are projected to be $14.67 million less than budget largely attributable to the timing of cash flow for the Public Safety Facility project and the Ventana Sports Courts project that are anticipated to continue beyond FY 2027. These savings will be carried forward to next fiscal year and do not contribute to an increase in fund balance. Table 5 provides a summary of the General Fund expenditure budget alongside the projected actual expenditures for FY 2026.
Table 5. FY 2026 General Fund Expenditure Budget and Projected Actuals
($ thousands)
Expenditure Category
Salaries & Wages 9,606$ 10,916$ 10,400$ 516$ 29.2% Benefits 5,585 6,582 6,447 135 18.1% Professional Services 3,995 5,294 4,819 474 13.5% Contract Services 3,330 4,005 3,382 624 9.5% Debt Service 1,934 2,808 2,802 5 7.9% Operations & Maintenance 1,846 2,170 1,755 414 4.9% Other Expenses 1,561 1,854 1,883 (29) 5.3% Transfers Out 740 1,157 1,159 (2) 3.2% Retiree Medical Insurance 182 279 206 74 0.6% Other Financing Uses 206 187 190 (3) 0.5% Capital Projects 31 67 56 12 0.2% Total Operating Expenditures 29,014$ 35,318$ 33,098$ 2,208$ 92.8% One-time Capital Costs 4,077 17,244 2,577 14,667 7.2% Total Expenditures 33,091$ 52,562$ 35,675$ 16,875$ 100.0% Council Agenda 9-1-2026 9.D-7
VI. General Fund Contingency Budgets
General Contingency
The FY 2026 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, $108 thousand of this appropriation was allocated for the following purposes and the remaining $392 thousand was de-appropriated as outlined in Table 6, leaving $0 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 was allocated in 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.
Council Agenda 9-1-2026 9.D-8
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 37,642,395 35,675,024 1,967,371 28,216,103 14,667,147 13,303,810 1002 Transaction Sales Tax Fund 6,213,697 4,179,041 1,262,267 2,916,774 9,130,471 5,906,143 3,224,328 Special Revenue Funds
2001 Gas Tax Fund 415,924 454,214 142,364 311,850 727,774 149,994 577,780 2002 Local Transportation 551,287 105,544 5,915 99,629 650,916 - 650,916 2003 PEG Fund 144,882 35,259 8,139 27,120 172,003 27,774 144,229 2004 Grants-NonCapital 159,648 206,634 290,948 (84,314) 75,334 - 75,334 2005 Housing In-Lieu Fee 624,286 4,766,839 4,573,104 193,735 818,021 - 818,021 2006 LBID Operations 594,006 1,445,555 1,529,225 (83,670) 510,336 - 510,336 2006 LBID Improvements 2,962,756 1,445,555 202,434 1,243,121 4,205,877 2,395,397 1,810,480 2007 Chapman Estate 5,781 28,058 31,962 (3,904) 1,877 - 1,877 Capital Project Funds
3001 Capital Projects 26,384,359 3,616,333 29,018,784 (25,402,451) 981,908 981,908 - 3002 Public Facilities Fund 957 31 - 31 987 - 987 3003 Park Development Fund 319,803 29,191 33,551 (4,360) 315,444 82,196 233,248 3101 Circulation Fees 621,728 90,493 12,786 77,707 699,435 - 699,435 3102 Impact Fees 314,716 110,649 936 109,713 424,429 166,523 257,906 3103 Developer Impact Fee 65,179 5,882 - 5,882 71,061 - 71,061 3201 Underground Utility Fnd 18,003 582 - 582 18,584 - 18,584 Debt Service Funds
4001 PFA Debt Service - - - - - - - 4002 PF Agency Debt 900 3,923,429 2,879,653 1,043,776 1,044,676 - 1,044,676 4101 Reass 92-1 Fwy Fthlls 833 27 - 27 860 - 860 4102 Spyglass 92-4 13,867 448 - 448 14,315 - 14,315 Enterprise Funds
6101 Water Enterprise 12,380,908 6,746,795 7,065,535 (318,740) 12,062,168 12,062,168 - 6102 Water Tax (Lopez/State)668,445 2,727,099 1,675,258 1,051,841 1,720,286 1,720,286 - 6103 Water Construction Fund 1,824,652 452,443 187,517 264,926 2,089,578 2,089,578 - 6104 Water Expansion Fund 692,250 105,718 - 105,718 797,969 797,969 - 6105 Water Central Coast Blue 3,313.57 7,505 10,818 (3,314) - - Water Enterprise Funds 15,569,570 10,039,559 8,939,128 1,100,432 16,670,001 16,670,001 - 6201 Wastewater Treatment 6,228,768 6,654,270 6,802,177 (147,907) 6,080,861 6,080,861 - 6202 Wastewater Capital Proj 2,070,776 1,597,115 1,498,435 98,680 2,169,456 2,169,456 - 6203 Wastewater Expansion 1,736,936 207,759 - 207,759 1,944,695 1,944,695 - 6204 Wastewater Central Coast 6,729.86 15,240 21,970 (6,730) - - Wastewater Enterprise Fun 10,043,210 8,474,384 8,322,583 151,801 10,195,011 10,195,011 - 6401 Pier Enterprise - 74,676 74,337 338 338 338 - 6501 Parking Enterprise 2,349,888 3,694,320 1,923,047 1,771,272 4,121,160 4,121,160 - Internal Service Funds
7101 Technology Service Fund 756,938 2,513,259 1,858,197 655,062 1,412,000 - 1,412,000 7201 Motor Vehicle Fund 4,617,476 2,240,745 1,205,902 1,034,843 5,652,319 642,499 5,009,821 Council Agenda 9-1-2026 9.D-9
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% transaction 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 $4.18 million. Projected actual expenditures are $1.26 million. After carrying forward $5.91 million to FY 2027, there is a $3.22 million projected ending fund balance in this fund. Table 8 lists the budgeted projects and projected actuals in this fund for FY 2026.
Table 8: Transaction Sales Tax Fund FY 2026 Budgeted Projects and Projected Actuals
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 Projects FY 2026 Budget
FY 2026 Projected
Actuals
Total $ 7,168,410 $ 1,262,267
Council Agenda 9-1-2026 9.D-10
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 $454 thousand and projected actual expenditures are $142 thousand for the streets and 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 $578 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 $106 thousand and projected actual expenditures are $6 thousand.
Based on the projected revenues and expenditures for the current year, there is a $651 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 $35 thousand and projected expenditures of $8 thousand, the PEG Fund is expected to end the year with a $144 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 $818 thousand 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 $594 thousand beginning fund balance. City staff projects that LBID assessment revenues and interest earnings will be $1.45 million. Operating expenditures are projected at $1.53 million. The fund is expected to end the year with a $510 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 $1.45 million. Expenditures include $202 thousand for various projects, Council Agenda 9-1-2026 9.D-11
including sponsorships of events, Holiday decorations, and the Butterfly Grove Trail Signage project. The fund is expected to end the year with a $1.81 million unrestricted fund balance, after carrying forward $2.40 million committed to projects. This amount, plus FY 2026 projected assessment revenues are anticipated to support future visitor- serving physical improvements. Table 9 lists the various visitor-serving projects supported by this fund.
Table 9: LBID2 Fund FY 2026 Budgeted Projects
Several LBID-funded improvement projects are experiencing delays. The Addie Street Restroom Improvements Project is on hold pending required State approvals. The Butterfly Grove crosswalk and trail signage improvements are awaiting Caltrans’ relinquishment of Highway 1; however, staff have begun design work. For the Butterfly Grove Trail Signage project, staff is awaiting delivery of the infographic signs before installing the remaining signs and medallions.
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 $320 thousand and is projected to receive $29 thousand in impact fee and permit revenues. Projected actual expenditures total $34 thousand. After accounting for carryforward budgets to next fiscal year, the fund is expected to end the year with a $233 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, LBID2 Improvements
FY 2026
Budget
FY 2026
Projected
Actuals
Total $ 2,667,835 $ 150,222
Council Agenda 9-1-2026 9.D-12
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 residents and visitors. Water revenues are projected to be $6.75 million and expenditures are projected to be $7.07 million.
The projected ending fund balance for the Water Enterprise Fund is $12.06 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 $16.67 million.
There is litigation over Lopez Lake/Lopez Dam, which 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 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 $6.65 million and expenditures are projected to be $6.80 million. The estimated ending fund balance is $6.08 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 $10.20 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 $75 thousand, from revenues from the Pier Airstream and a transfer from the General Fund. Projected expenditures include $74 thousand for Pier and Pier Plaza operating costs. The Pier Enterprise Fund is expected to end the year with a $0 ending fund balance.
Parking Enterprise Fund (6501)
The Parking Enterprise Fund is an enterprise fund supported by revenues from parking kiosks, citations, and permits. These revenues fund staffing, including a Parking Supervisor and Parking Enforcement Officer, and support implementation of the Pismo Beach Parking Management Plan. The Fund is used to improve the efficiency of existing parking operations, enhance enforcement and management, expand downtown parking Council Agenda 9-1-2026 9.D-13
availability, provide beautification of the paid parking area, and build reserves for future parking infrastructure, including potential parking structures. Revenues are projected to reach $3.69 million and operating expenditures are projected to be $1.92 million. As shown in Table 10, in addition to operating expenditures, the budget includes $657 thousand for one-time projects. Of these projects, staff projects that $328 thousand will be spent in FY 2026. The FY 2026 projected ending fund balance is $4.12 million.
Table 10: Parking Enterprise Fund FY 2026 Budgeted Projects and Projected Actuals 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 $5.01 million, which are accumulated funds necessary to fund future replacements.
Conclusion and Recommendation
Staff recommends that Council receive this report as information only.
FISCAL IMPACT:
There is no fiscal impact from receiving this report as it is information only.
ATTACHMENTS:
None
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Projects
FY 2026
Budget
FY 2026 Projected
Actuals
Total 656,637$ 328,081$
Council Agenda 9-1-2026 9.D-14