PROPOSED
FISCAL YEAR 2026
-
27 OPERATING BUDGET &
CAPITAL IMPROVEMENT
JUNE 16, 2026
CITY COUNCIL MEETING
• The annual budget provides the financial mechanism to carry out the City’s work plan and provide services to residents
• Operating Budget
• Supports public services such as public safety, parks and recreation, planning and engineering, street maintenance, and water and wastewater • Capital Improvement Budget
• Allocates funding for projects that improve critical infrastructure such as parks, streets, sidewalks, drainage, water and sewer systems • Continues the City’s investment in and enhancement of public facilities and community amenities
Budget Overview
• Benefits being realized from key prior decisions:
• Pension obligation bonds
• Five-year agreement with SD County Sheriff’s Office
• History of responsible fiscal management
• Additional projects include:
• Updated to the City’s indirect cost allocation plan (CAP) - completed • Citywide fee study adoption - completed
• Water and wastewater cost of services study - completed • 10-Year General Fund Forecast - completed
• Mitigation, impact, and in-lieu fee study – in-progress • Budgetary impacts from:
• Continued inflation
• Potential tariff impacts
Budget Overview
Budget Overview
Expenditures (and other uses) by Fund (in millions)
Fiscal Year 2026-27
Operating Non-
Operating Total
General (Unrestricted) $72.7 ($0.5) $72.1
Water (Enterprise) 36.23 19.18 55.41
Wastewater (Enterprise) 10.34 2.63 12.97
Capital Replacement (Special Purpose)
3.81 0.27 4.08
Streets (Special Purpose) 2.54 5.93 8.47
Special Districts (Special Purpose) 3.51 0.07 3.58
Pension Reserve (Reserve) 2.05 0.00 2.05
Drainage (Special Purpose) 2.07 1.72 3.79
Debt Service/Other 0.22 (3.05) (2.83)
TOTAL (ALL FUNDS) $133.4 $26.2 $159.7
Budget Overview
General Fund
Proposed Budget Summary
Fiscal Year 2026-27
Operating Revenue $72,148,082
Transfers In 846,000
T otal Revenue $72,994,082
Operating Expenditures1 $72,664,988
Transfers Out/(In)1 (3,464,092)
Transfer Out to Capital Improvement Project Fund 6,700,000 Transfers Out to Reserve Funds 2,924,924
T otal Expenditures and Other Uses $78,825,820
Net Activity ($6,677,738)
1The expenditures in the General Fund appear in this updated presentment to be elevated compared to previous years; however, those costs are being recovered through a transfer after being fully recognized in the General Fund.
General Fund Revenues
General Fund Revenues
Fiscal Year 2026-27
$72.1 million
Property Taxes
$34.3m | 47%
$17.0 | 24%
Sales Taxes
$4.7m | 6%
Community Services
Fees
$2.0m | 3%
Development Services
Fees
Franchise Fees
$3.1m | 4%
Fire &
Ambulance Fees
$3.9m | 5%
$4.5m | 6%
Interest
Transfers In,
Other
$1.8m | 3%
$0.9m | 1%
TOT
General Fund Expenditures
General Fund Expenditures
Fiscal Year 2022-23
Fire Department
$18.8m | 26%
$16.7m | 23%
Law Enforcement
Community Services +
Parks Maintenance
$14.2m | 20%
$5.4m | 7%
General/Admin.
$6.2m | 9%
Development
Services & Housing
Non-operating (Debt,
Other Transfers)
$6.4m | 9%
Public Works
(less Parks
Maint.)
$4.4m | 6%
General Fund Expenditures
and Other Uses
Fiscal Year 2026-27
$72.1 million**
**One-time Capital
Improvement Transfer of
$6.7m not included
• Long-term fiscal stability = sound Council guidance + staff fiscal prudence
• Fully fund operations + robust Capital Improvement Program • Cash financed = no new debt service costs
• Meeting General Fund Reserve Policy requirements
• Sensible department requests = able to fund enhancements • Lowest sales tax rate in the County!
• Long-term fiscal health one-time use of General Fund
unassigned fund balance
City Fiscal Health
• One-Time Capital Improvement Fund transfer of $6.7 million
• Fund high-priority, community facing projects with idle funds • Community Park Swim Center Pool Deck and Plaster replacement • Community Park Enhancements
• Poway Center for Performing Arts major maintenance projects • Old Poway Park parking lot paving
• Garden Road and Poway Oaks Neighborhood Park renovations • South Poway Pickleball Court construction funding
• Poway Financial Policy and Best practice = cannot and should not use to pay enterprise fund costs (water and sewer)
• “Enterprise funds will not be subsidized by the General Fund” One
-
Time CIP Transfer
• General Fund Long-Range Forecast update completed as part of FY 2026=27 Budget Process
• Forecast shows structural deficits, cost escalations, or revenue slowdowns long before they have the potential of becoming a crisis • Helps ensure newly recommended projects, programs, and expenditures can be accommodated
• Stronger recommendations made when the future impact is modeled with clarity
Long Range 10
-
Year Forecast
• Maintains current authorized staffing levels
• Add 6.0 Full Time Equivalent (FTE) positions (1.0 FTE temporary increase) • 1.0 Principal Planner (DSD)
• 2.0 Associate Civil Engineers – CIP and Storm Water (DSD) • 1.0 Parks Maintenance Worker (PW)
• 1.0 IT Manager for 6-months (FIN)
• 1.0 Principal Financial Analyst for 3-months (FIN)
• Total authorized staffing = 246.98 FTE positions
• Reclassifications
• 1.0 Recreation Coordinator to Recreation Supervisor – Community Park (CSD) • 1.0 Administrative Assistant III to Senior Administrative Assistant (CSD) • 1.0 Senior Civil Engineer to Principal Civil Engineer – Land Development (DSD) • 1.0 Customer Service Tech II to Sr. Customer Services Tech (FIN) Personnel Revisions
• Public Works:
• Utility Systems Operations and Maintenance New Vehicle Purchase • Water System Virtual Chemical Analysis Software
• As-Needed Sewer Lateral Cleanout Repair Services
• Sewer Lateral Camera
• Arc Flash Required Occupational Safety and Health Administration (OSHA) Program Update • Dirt Compactors (x2)
• Fire Department:
• Emergency Medical Services Training Mannequins
• Fire Station #2 Apparatus Storage Structure
• Fire Department Children’s Safety Trailer Rehabilitation • Other notable items include:
• Winter Festival Skating Rink Rental (vs own and store) • .Gov (from .Org) State Mandated City Website Migration New Programs / Expenditure Requests
• Reserve balances provide resources for future projects and unforeseen needs that may arise
• General Fund:
• Revenue Volatility Reserve Fund (10%) $ 6.4 million
• Expenditure Volatility Reserve Fund (5%) $ 3.2 million • Extreme Events Reserve Fund (30%) $ 19.1million
• Pension Reserve Fund $ 4.3 million
• Capital Improvement Fund $ 1.8 million
• Unassigned Fund Balance $17.7 million
• Capital Replacement Funds $20.2 million
General Reserves
• Water Utility Operating Fund
• FY 2026-27 total budgeted expenditures exceed the estimated revenues by $522 thousand
• 96% of City’s water supply is purchased from the San Diego County Water Authority (SDCWA)
• Annual cost increases for water purchased from SDCWA forecast to be suppressed • January 2027 cost increase is expected to be @3%
• FY 2026-27 budget shortfall can be covered with existing reserves (within the reserve policy) = forecast in 5-year rates adopted in January 2026 Water Utility Funds
• Major Accomplishments this year for the Finance Department • Water and Sewer Cost of Service Studies + 5-year rate development • Citywide Cost Allocation Plan completion + implementation • Citywide Fee study update + implementation
• Long-Range 10-year General Fund Forecast
• Annual Audits
• Lead FY2026-27 Proposed Budget Process and Compilation • Large Team Effort!
• Finance Department Team – Stephanie Baker, Brad Rosen, Mehrnoush Jamshidi, Liabel Menguita, Elsie Koyama and Lindsy Staley (among others) • Department Heads
• Staff across the City
• Budget Review Committee
Acknowledgements
FY 2026
-
27 Capital Improvement Program
June 16, 2026
Jonathan Schauble, PE
Principal Civil Engineer
FY 2026
-
27 Capital Improvement Program
June 16, 2026
Jonathan Schauble, PE
Principal Civil Engineer
Purpose:
The purpose of the Capital Improvement Program
(CIP) is to plan and implement the Capital
Improvements that the City Council determines
to be most important for maintaining the City’s
infrastructure and long-term quality of life for the
community of Poway.
FY 2026
-
27 Capital Improvement Program
R-4 and R-7 Water Reservoir Rehabilitation (WT034)
City Hall Chiller Replacement (MN041)
Annual Water Valve Replacement (WT002)
Community Pool Pump Replacement (MN046)
Pool Filter Media and Rehabilitation (MN077)
Annual FY26 Citywide Striping Project (ST033)
ADA Barrier Removal Buckley Street Phase I (PK030)
Annual Overlay Project – Zone 8 (ST031)
Annual Street Maintenance Program - Zone 8 (ST032)
Neighborhood Sidewalk Project (ST014) - Garden Road
Annual CMP Storm Drain Repair (DR001)
PCPA HVAC Controls Replacement (MN064)
Midland Road Fence Replacement (MN069)
Completed Projects
R-4 & R-7 Reservoir Rehabilitation
Before
During Construction
City Hall Chiller Replacement
Community Pool Pump Replacement Annual Water Valve Replacement Pool Filter Media Replacement
Pedestrian Improvements – Buckley Street
Before
After
Street Maintenance
–
Zone 8
/ I
Annual Citywide Striping Program
Neighborhood Sidewalk Project
–
Garden Road
Before After
Storm Drain Inlet Failure
–
Taunt Road
Before
After
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–
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Midland Road Fence Replacement
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FY 2026
-
27 Capital Improvement Program
• 42 Total Projects/Programs
• $32.3 million
Breakdown
• 20 New Projects
• 10 Annual Projects/Programs
• 12 Projects with Additional Funds
FY 2026-27 CIP Project Funding
Streets $5,690,696 Drainage $1,500,000 Public Facilities: $9,979,535 Water $13,820,000 Sewer $1,317,500
Total FY 2026-27 CIP Funding: $32,307,731
FY 2026-27 Proposed Project Funding:
FY 27 Street Maintenance $2,349,441
FY 27 Citywide Striping $515,000
FY 27 Street Overlay $2,517,835
Traffic Signal Intersection Upgrades $300,000
Transparity Maintenance $8,420
Total FY 26/27 Funding: $5,690,696
Streets
Current Projects with No Additional Funding Requested in FY27:
FY 26 Street Overlay – Zone 1
ATMS Study and Corridor Improvement Program for Arterials ATMS Study and Improvement for Local Streets
Streets
Street Maintenance Zones
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FY 26/27 Proposed Project Funding:
Annual Storm Pipe Repair/Replacement $300,000 Drainage Master Plan & Impact Fee Update $400,000
Community Park Concrete Ribbon Drain $500,000
Annual Concrete Channel Repairs $300,000
Total FY 26/27 Funding: $1,500,000
Drainage
Annual Channel Rehabilitation Project
Annual Channel Rehabilitation Project
Community Park Ribbon Drain Project
Rattlesnake Creek concrete ribbon drain
• 550 linear feet
• constructed in the late 1970s
• deteriorated beyond repair
FY 2026-27 Proposed Project Funding:
Community Park Enhancements with Inclusive Playground Design $800,000 Swim Center - Pool Deck and Plaster $1,165,000 Swim Center - Pool Heater Replacement $350,000
Old Poway Park Bridge Repair $715,043
Old Poway Park Parking Lot Improvements $836,700 Garden Road Park Playground Renovation $725,000
Poway Oaks Neighborhood Park Playground Renovation $96,135 Lake Poway Softball Field Shade Sail Structure $300,000 Community Park Signage $105,000
Fire Station 2 Gym Structure $258,000
MCCC Convection Ovens & Exhaust Hood $40,000
Poway Monument Signs $150,000
Midland Road Outdoor Dining $120,000
South Poway Pickleball Courts $1,300,000 Subtotal FY 26/27 Funding for Public Facilities: $6,470,835 Public Facilities
Swim Center Pool Improvements
Old Poway Park Pedestrian Bridge Repair
Old Poway Park Parking Lot Improvements
Poway Monument Sign
Midland Road Outdoor Dining
South Poway Pickleball Courts
FY 2026-27 Proposed Project Funding:
FY27 Facilities Renovation - HVAC $100,000
FY27 Facilities Renovation - Concrete $100,000 FY27 Facilities Renovation - Flooring $152,000 FY27 Facilities Renovation - Painting $609,000 FY27 Facilities Renovation - Roofing $220,000 FY27 Facilities Renovation - Wood Repairs $207,500
FY27 Facilities Renovation - General Maintenance $520,200 FY27 PCPA Maintenance Projects $1,600,000 Subtotal FY 2026-27 Funding for Public Facilities Renovations: $3,508,700 TOTAL FY 2026-27 Funding – Public Facilities Projects $9,979,535 Public Facilities - Renovations
Current Projects with No Additional Funding Requested in FY27:
Community Park Restroom
PCPA Lift Replacement
PCPA Sewer Replacement
Lake Poway Concessions Door Replacement
Zero Emission Vehicle Charging Infrastructure
Workplace Safety Facility Improvements
Fire Station 2 Overhead Flashing Beacons
PCPA ADA Improvements
Bike Park Pump Track Study
Old Poway Park Boardwalk Replacement
Public Facilities
Community Park Restroom Project
Old Poway Park Boardwalk Replacement
FY 2026-27 Proposed Project Funding:
R-12 Reservoir Rehabilitation $150,000
Crocker Easement Pipeline Realignment Preliminary Design $ 50,000 Meter Vault Lid Replacement $100,000
Treated Water Connection & Redundant Pipeline $11,000,000 Emergency Interconnection #1 (Avenida La Valencia) $620,000 Water Treatment Plan Groundwater Investigation $150,000 Water Treatment Plant Filters Rehabilitation $950,000 Water Treatment Plant Chemical Tank Rehabilitation $600,000 Pump Station Motor Control Center Upgrades (No. 9 – 12) $700,000
Total FY 26/27 Funding: $13,820,000 Water
Current Projects with No Additional Funding Requested in FY27:
Emergency Interconnection #2 (Poway Road)
Pump Station Motor Control Center Upgrades (No. 13)
Water Master Plan Update and Implementation
Stone Canyon Steel Water Main Replacement
Clearwell Replacement Project
Water
Poway Water Infrastructure Improvement Program
Three-Phase Program
Phase 1 Clearwell
Bypass – In Operation
Phase 2 Clearwell
Replacement – Near
Completion
Phase 3 Treated Water
Facilities – In Design
Phase 3 - Treated Water Facilities
• Provides Poway with a source of treated
w
ater (redundant supply)
• Provides operational flexibility and
enhanc
es ability to sell water to Ramona
• Enables future WTP maintenance and
r
ehabilitation
• Currently in design phase.
• Construction contract award - ear ly 2027.
Water Infrastructure Improvement Program
FIGURE A
PROPOSED SDCWA POW-6
FCF & POWAY TREATED
WATER FACILITIES
FY 2026-27 Proposed Project Funding:
Annual Sewer Manhole Rehabilitation $950,000
Annual Sewer Line Repair/Replacement $367,500
Total FY 26/27 Funding: $1,317,500
Sewer
Current Projects with No Additional Funding Requested in FY27:
Butterfield Trail Sewer Upsize
Camino Del Valle Lift Station Upgrades
Camino Del Valle Lift Station (LS3) MCC Rebuild
Powers Road Sewer Replacement Design
Sewer Master Plan Update and Implementation
Sewer
Streets $5,690,696 Drainage $1,500,000 Public Facilities: $9,979,535 Water $13,820,000 Sewer $1,317,500
Total FY 2026-27 CIP Funding: $32,307,731 FY 2026-27 CIP Project Funding
Recognition and thanks
Public Comment and
City Council Discussion