RESOLUTION NO. 2025-266
A RESOLUTION OF THE MAYOR AND CITY COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
APPROVING TASK ORDER NUMBER 002 WITH RICK
ENGINEERING COMPANY, INC,. IN THE AMOUNT OF
$58,550.00 FOR DESIGN SERVICES FOR PEPPER STREET
STORM DRAIN FROM LYNWOOD DRIVE SOUTH TO
PIEDMONT DRIVE (LYNWOOD DRIVE STORM DRAIN)
(PROJECT); AUTHORIZING DESIGN CONTINGENCIES,
PROJECT MANAGEMENT, AND ADMINISTRATIVE
COSTS IN THE AMOUNT OF $11,710.00; AND
AUTHORIZING THE DIRECTOR OF FINANCE AND
MANAGEMENT SERVICES TO AMEND THE FY 2024/25
CAPITAL IMPROVEMENT PLAN, AND RECORD A
SUPPLEMENTAL APPROPRIATION IN THE AMOUNT OF
$70,260.00 FROM THE STORM DRAIN UPGRADE
PROJECT FOR THE PEPPER STREET STORM DRAIN
FROM LYNWOOD DRIVE SOUTH TO PIEDMONT DRIVE
(LYNWOOD DRIVE STORM DRAIN) PROJECT;
AUTHORIZING THE CITY MANAGER OR DESIGNEE TO
EXECUTE ALL DOCUMENTS NECESSARY FOR THE
TASK ORDER WITH RICK ENGINEERING COMPANY;
AND AUTHORIZING THE CITY MANAGER OR
DESIGNEE TO EXPEND THE CONTINGENCY FUND, IF
NECESSARY, TO COMPLETE THE PROJECT.
WHEREAS, the City of San Bernardino (“City”) desires to design storm drain improvements at Pepper Street Storm Drain from Lynwood Drive South to Piedmont Drive (Lynwood Drive Storm Drain) to address drainage issues, improve water flow management, and enhance the area’s infrastructure (the “Project”); and
WHEREAS, on November 16, 2022, the Mayor, and City Council awarded five-year OnCall Professional Services Agreements with various engineering firms.
WHEREAS, the City desires to utilize Rick Engineering Company to perform engineering work for the Project; and
WHEREAS, Rick Engineering Company is on the approved on-call engineering consultants list; and
WHEREAS, on June 26, 2024 Mayor and City Council adopted Resolution No. 2024-142 approving and adopting the City of San Bernardino’s Operating Budget and Capital Improvement Plan for Fiscal Years 2024/25 and 2025/26.
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Resolution No. 2025-266
Resolution 2025-266
March 19, 2025
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The Mayor and City Council hereby authorize the City Manager to approve Task Order Number 002 with Consultants Rick Engineering Company, Inc. in the amount of $58,550.00 for Lynwood Drive Storm Drain (Project); and SECTION 3. The Mayor and City Council hereby authorize the project design contingencies, project management, and administrative costs in the total amount of $11,710.00 for design of the Project; and
SECTION 4. The Mayor and City Council hereby authorize the Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan, and record a supplemental appropriation in the amount of $70,260.00 from the Storm Drain Upgrades project for the Lynwood Drive Storm Drain project; and
SECTION 5. The Mayor and City Council hereby authorize the City Manager or designee to execute all documents necessary for the Task Order with Rick Engineering Group, Inc.; and
SECTION 6. The Mayor and City Council hereby authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the project.
SECTION 7. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
SECTION 8. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.
SECTION 9. Effective Date. This Resolution shall become effective immediately.
APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 19th day of March 2025.
Helen Tran, Mayor
City of San Bernardino
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Resolution No. 2025-266
Resolution 2025-266
March 19, 2025
Attest:
Genoveva Rocha, CMC, City Clerk
Approved as to form:
Sonia Carvalho, City Attorney
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Resolution No. 2025-266
Resolution 2025-266
March 19, 2025
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2025-266, adopted at a regular meeting held on the 19th day of March 2025 by the following vote:
Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
KNAUS _____ _____ _______ _______
FLORES _____ _____ _______ _______
ORTIZ _____ _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this ___ day of ________ 2025.
Genoveva Rocha, CMC, City Clerk
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 19, 2025
To: Honorable Mayor and City Council Members
From: Bill Gallardo, Interim City Manager
Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Approval of Task Order Number 003 with Rick
Engineering for Design Services for Baldridge Canyon
Drive Storm Improvements (Pleasant Hill Drive Storm
Drain) from Baldridge Canyon Drive to Drainage
Channel for a Total Amount Not to Exceed $126,060
(Ward 4)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution 2025-267:
1. Approving Task Order Number 003 with Rick Engineering Company, Inc,. in the amount of $57,300.00 for design services for Baldridge Canyon Drive Storm Improvements (Pleasant Hill Drive Storm Drain) from Baldridge Canyon Drive to Drainage Channel (Project); and
2. Authorizing design contingencies, project management, and administrative costs in the amount of $11,460.00; and
3. Authorizing the Interim Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan by re-allocating $68,760.00 from the Storm Drain Upgrade project to the Baldridge Canyon Drive Storm Improvements (Pleasant Hill Drive Storm Drain) from Baldridge Canyon Drive to Drainage Channel project; and
4. Authorizing the City Manager or designee to execute an all documents necessary for the Task Order with Rick Engineering Company; and
5. Authorizing the City Manager or designee to expend the contingency fund, if necessary, to complete the project.
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Executive Summary:
Approving the task order for design services for Pleasant Hill Drive Storm Drain will address drainage issues resulting from the erosion affecting the property at 3480 Pleasant Hill Drive. This task order aligns with the City’s commitment to maintaining and upgrading essential infrastructure, ensuring the safety and well-being of residents, and allowing the project to proceed on schedule as part of ongoing improvements to the City's stormwater management system. This Task Order is being issued through an existing pre-approved on-call list, and the design services will be funded by the Storm Drain Construction fund.
Background
The project is located within an existing easement situated between Baldridge Canyon Drive and a Flood Control channel to the west. It specifically addresses erosion concerns that have been impacting the property at 3480 Pleasant Hill Drive.
This initiative aims to mitigate erosion risks and improve the drainage capacity in the area to prevent further property damage. For consistency and clarity throughout this staff report, the project will be referred to as the "Pleasant Hill Drive Storm Drain" project.
The Storm Drain Upgrade is an ongoing initiative aimed at addressing various stormwater management needs throughout the city. The project fund is used to support the completion of storm drain improvements, upgrades, and maintenance, including efforts such as the Lynwood Drive Storm Drain project. As of the current period, the Storm Drain Upgrade project has an available balance of approximately $1,853,580.84. This fund is utilized to support projects like the one being proposed, ensuring the city's storm drain infrastructure is effectively managed and enhanced.
This project is funded with the use of Development Impact Fees (DIF). The fees are charged on new development projects to fund the necessary infrastructure and public services required by the growth. These fees are typically used for the construction and improvement of roads, parks, schools, and other essential facilities. However, DIF funds are restricted to being used only for the purposes for which they were collected, ensuring they directly benefit the development areas that generate them.
On November 16, 2022, the Mayor and City Council approved the award of fiveyear On-Call Services Agreements with various engineering firms to provide a broad range of professional services to the city. These agreements allow the City to streamline procurement processes and efficiently engage qualified firms as needed for specific projects. Rick Engineering is one of the approved on-call services providers.
On June 26, 2024, the Mayor and City Council adopted Resolution No. 2024-142, approving and adopting the City of San Bernardino’s Operating Budget and Capital Improvement Plan for Fiscal Years 2024/25 and 2025/26. This resolution sets the framework for the City’s strategic priorities, which include enhancing infrastructure and addressing critical needs within the community. The approval of the Capital Packet Page. 1003
Improvement Plan ensures that necessary projects, such as the storm drain improvements at Pleasant Hill Drive, receive the appropriate funding and resources to proceed in alignment with the City’s long-term planning goals.
Discussion
The Pleasant Hill Drive Storm Drain project aims to address the ongoing erosion and drainage issues within the easement between Baldridge Canyon Drive and the adjacent Flood Control channel. This area has been impacted by the flow of stormwater, which has caused significant erosion at the property located at 3480 Pleasant Hill Drive. The project involves replacing approximately 250 linear feet of deteriorated concrete and corrugated metal pipe storm drain and implementing a design solution to prevent further erosion damage. The design will include the installation of a new headwall, rip rap, and grading to repair the eroded slope within the City’s storm drain easement.
City staff sought proposals from pre-approved on-call engineering consultants to assess the current drainage system, perform the necessary hydrological analysis, and develop a comprehensive design solution. Proposals were evaluated based on the technical approach, the consultant's experience, and cost, to select the most suitable vendor to complete the project.
The City received three proposals included in the table below.
In the proposal request, vendors were asked to provide a detailed plan to address the erosion and drainage issue affecting the property at 3480 Pleasant Hill Drive, as well as the surrounding areas. The scope of work outlined in the proposal included all necessary engineering and design efforts to resolve the drainage problems caused by the erosion within the easement between Baldridge Canyon Drive and the Flood Control channel to the west. The proposals received were evaluated based on their technical approach, experience, and cost to ensure the selection of the best-suited vendor for the task. The expectation was that all relevant information for the project would be provided in the attached documentation, including detailed plans for mitigating the drainage concerns and preventing further damage to the affected property.
Staff has reviewed the proposals and recommend Rick Engineering Company of Riverside, California to complete the design for this project. The proposal demonstrated a clear understanding of the project needs and includes a competitive price of $57,300.00. Additional funds are recommended for design contingencies, project management, and administrative costs in the amount of $11,460.00 The total Proposals
Rick Engineering Riverside, CA
IMEG Pasadena, CA
Hernandez, Kroone & Associates San Bernardino, CA
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cost of design, design contingencies, project management, and administrative costs is $68,760.00.
At the close of the last fiscal year, the funding balance for the Storm Drain Upgrade project was $1,548,098.54. After allocating funds for the Hill & Acacia Storm Drain and 19th Street Storm Drain projects, the remaining balance for the Storm Drain Upgrade was $1,346,188.54. This fiscal year, the funding balance for the project has increased to $1,853,580.84, due to an additional budget allocation of $500,000.00 approved during the fiscal year budget adoption.
The Storm Drain Upgrade project typically funds similar drainage improvement projects, and creating a separate capital improvement project will streamline project management and administrative processes. This proposed allocation will not impact any other ongoing storm drain projects. The current balance of $1,853,580.84 reflects the increased budget, with $70,260.00 designated for the Lynwood Drive Storm Drain project and $68,760.00 allocated for the Pleasant Hill Storm Improvements project, leaving a total remaining balance of $1,714,560.84 in the Storm Drain Upgrade. Please note that this balance is pending approval by the Mayor and City Council (MCC) on March 19, 2025.
The table below shows the project balance after both storm drain projects are adopted:
2021-2025 Strategic Targets and Goals
This project is consistent with Key Strategic Target and Goal No. 1: Improved Operational & Financial Capacity – Minimize risk and litigation exposure. Approval of this design services will result in public improvements being constructed that minimize property damage and health risks through upgrading the existing drainage system.
Fiscal Impact
There is no General Fund impact associated with this action. The fiscal impact for this item is $68,760.00. Fiscal Year 2024/25 CIP Budget will be amended to reallocate $68,760.00 from the Storm Drain Upgrade project to the Pleasant Hill Drive Storm Drain project.
Design Cost
Design Fee $57,300.00
Contingency $11,460.00
Total Design Cost $68,760.00
Project Balance
Storm Drain Upgrade $1,853,580.84
Lynwood Drive Storm Drain $70,260.00
Pleasant Hill Storm Improvements $68,760.00
Remaining Budget for Storm Drain Upgrade $1,714,560.84
*Pending March 19, 2025 MCC Approval
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Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution 2025-267:
1. Approving Task Order Number 003 with Rick Engineering Company, Inc,. in the amount of $57,300.00 for design services for Baldridge Canyon Drive Storm Improvements (Pleasant Hill Drive Storm Drain) from Baldridge Canyon Drive to Drainage Channel (Project); and
2. Authorizing design contingencies, project management, and administrative costs in the amount of $11,460.00; and
3. Authorizing the Interim Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan by re-allocating $68,760.00 from the Storm Drain Upgrade project to the Baldridge Canyon Drive Storm Improvements (Pleasant Hill Drive Storm Drain) from Baldridge Canyon Drive to Drainage Channel project; and
4. Authorizing the City Manager or designee to execute all documents necessary for the Task Order with Rick Engineering Company; and
5. Authorizing the City Manager or designee to expend the contingency fund, if necessary, to complete the project.
Attachments
Attachment 1 Resolution 2025-267
Attachment 2 Task Order Number 003 – Rick Engineering Company Attachment 3 Location Map
Ward:
Fourth Ward
Synopsis of Previous Council Actions:
June 26, 2024 Mayor and City Council adopted Resolution No. 2024-142 approving and adopting the City of San Bernardino’s Operating Budget and Capital Improvement Plan for Fisal Years 2024/25 and 2025/26.
November 16, 2022 Mayor and City Council approved award of a five-year On-Call Services Agreements with various engineering firms.
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Resolution No. 2025-267
Resolution 2025-267
March 19, 2025
RESOLUTION NO. 2025-267
A RESOLUTION OF THE MAYOR AND CITY COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
APPROVING TASK ORDER NUMBER 003 WITH RICK
ENGINEERING COMPANY, INC,. IN THE AMOUNT OF
$57,300.00 FOR DESIGN SERVICES FOR BALDRIDGE
CANYON DRIVE STORM IMPROVEMENTS (PLEASANT
HILL DRIVE STORM DRAIN) FROM BALDRIDGE
CANYON DRIVE TO DRAINAGE CHANNEL (PROJECT);
AUTHORIZING DESIGN CONTINGENCIES, PROJECT
MANAGEMENT, AND ADMINISTRATIVE COSTS IN THE
AMOUNT OF $11,460.00; AUTHORIZING THE INTERIM
DIRECTOR OF FINANCE AND MANAGEMENT SERVICES
TO AMEND THE FY 2024/25 CAPITAL IMPROVEMENT
PLAN, AND RECORD AN APPROPRIATION IN THE
AMOUNT OF $68,760.00 FROM THE STORM DRAIN
UPGRADE PROJECT FOR THE BALDRIDGE CANYON
DRIVE STORM IMPROVEMENTS (PLEASANT HILL
DRIVE STORM DRAIN) FROM BALDRIDGE CANYON
DRIVE TO DRAINAGE CHANNEL PROJECT;
AUTHORIZING THE CITY MANAGER OR DESIGNEE TO
EXECUTE ALL DOCUMENTS NECESSARY FOR THE
TASK ORDER WITH RICK ENGINEERING COMPANY;
AND AUTHORIZING THE CITY MANAGER OR
DESIGNEE TO EXPEND THE CONTINGENCY FUND, IF
NECESSARY, TO COMPLETE THE PROJECT.
WHEREAS, the City of San Bernardino (“City”) desires to design storm drain improvements at Baldridge Canyon Drive Storm Improvements (Pleasant Hill Drive Storm Drain) from Baldridge Canyon Drive to Drainage Channel to address drainage issues the ongoing erosion and drainage issues within the easement between Baldridge Canyon Drive and the adjacent Flood Control channel (the “Project”); and
WHEREAS, on November 16, 2022, the Mayor, and City Council awarded five-year OnCall Professional Services Agreements with various engineering firms.
WHEREAS, the City desires to utilize Rick Engineering Company to perform engineering work for the Project; and
WHEREAS, Rick Engineering Company is on the approved on-call engineering consultants list; and
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Resolution No. 2025-267
Resolution 2025-267
March 19, 2025
WHEREAS, on June 26, 2024 Mayor and City Council adopted Resolution No. 2024-142 approving and adopting the City of San Bernardino’s Operating Budget and Capital Improvement Plan for Fiscal Years 2024/25 and 2025/26.
BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The Mayor and City Council hereby authorize the City Manager to approve Task Order Number 003 with Consultants Rick Engineering Company, Inc. in the amount of $57,300.00 for Pleasant Hill Drive Storm Drain (Project); and SECTION 3. The Mayor and City Council hereby authorize the project design contingencies, project management, and administrative costs in the total amount of $11,460.00 for design of the Project; and
SECTION 4. The Mayor and City Council hereby authorize the Interim Director of Finance and Management Services to amend the FY 2024/25 Capital Improvement Plan, and record an appropriation in the amount of $68,760.00 from the Storm Drain Upgrades project for the Pleasant Hill Drive Storm Drain project; and
SECTION 5. The Mayor and City Council hereby authorize the City Manager or designee to execute all documents necessary for the Task Order with Rick Engineering Group, Inc.; and
SECTION 6. The Mayor and City Council hereby authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the project.
SECTION 7. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
SECTION 8. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.
SECTION 9. Effective Date. This Resolution shall become effective immediately.
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Resolution No. 2025-267
Resolution 2025-267
March 19, 2025
APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 19th day of March 2025.
Helen Tran, Mayor
City of San Bernardino
Attest:
Genoveva Rocha, CMC, City Clerk
Approved as to form:
Sonia Carvalho, City Attorney
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Resolution No. 2025-267
Resolution 2025-267
March 19, 2025
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2025-267, adopted at a regular meeting held on the 19th day of March 2025 by the following vote:
Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
KNAUS _____ _____ _______ _______
FLORES _____ _____ _______ _______
ORTIZ _____ _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this ___ day of ________ 2025.
Genoveva Rocha, CMC, City Clerk
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DISCUSSION
City of San Bernardino
Request for Council Action
Date: March 19, 2025
To: Honorable Mayor and City Council Members
From: Bill Gallardo, Interim City Manager
C. Jeannie Fortune, Interim Director of Finance & Management Services
Zuyva Ruiz, Budget Division Manager
Department: Finance & Management Services
Subject: Fiscal Year 2024/25 Mid-Year Financial Update (All Wards) Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California receive and file the Fiscal Year 2024/25 Mid-Year Financial Update.
Executive Summary
The Fiscal Year (FY) 2024/25 Mid-Year Financial Update provides a clear and accessible overview of the City's financial position and economic conditions at the national, state, and county levels that influence the City’s fiscal health. The City is adjusting its revenue and expenditure projections based on economic trends to maintain long-term fiscal stability. Projected year-end revenues are now estimated at $222.6 million, compared to the originally adopted budget of $236.6 million, due to shifts in sales tax revenue, business activity, and permit fees. For expenditures, costsaving measures were implemented to reduce year-end projections to $224.3 million, down from the originally budgeted $237.5 million. By aligning expenditures with realistic revenue expectations, the City remains in a healthy financial position while ensuring that essential services and capital improvement projects continue without disruption. These adjustments reflect responsible financial management, ensuring that the City can navigate shifting economic conditions while preserving the integrity of its fund balance.
Background
On January 15, 2025, the Mayor and City Council received the unaudited FY 2023/24 year-end General Fund financial update. The Mid-Year Financial Report allows the Budget Division to assess revenues and expenditures, ensuring that financial allocations align with the City's needs while maintaining long-term fiscal stability. This Packet Page. 1019
update provides insights into how national, state, and county-level economic conditions are impacting the City's finances. It also outlines necessary adjustments to ensure the City remains on track for responsible financial planning.
National Economic and Financial Trends
Broader economic trends influence local revenue streams, including sales and property taxes, development activity, and municipal investments. While the U.S. economy experienced moderate growth in the 3rd and 4th quarters of 2024, there are concerns about long-term stability. The following national trends are particularly relevant to the City’s financial planning:
➢ Real Growth Domestic Product (GDP) Growth: Real GDP trends are important to the City because it directly impacts the local economy by influencing job creation, business investment, and overall economic activity within the City. The U.S. real GDP grew at an annualized rate of 3.1% in Q3 2024 and 2.3% in Q4 2024. The difference in Q3 2024 vs. Q3 2023 reflects the slowdown from the post-pandemic economic surge. This slowdown is likely to reduce consumer spending and impact sales tax revenue in San Bernardino. ➢ Interest Rates and Debt: The Federal Reserve has kept interest rates elevated at 5.25-5.50 %, which has tempered borrowing and reduced investment in real estate and business expansion, impacting the City’s development-related fees. ➢ Labor Market: According to the U.S. Bureau of Labor Statistics, the national unemployment rate fluctuated between 3.8% and 4.1%, indicating that the labor market is cooling slightly. However, jobless claims remain well below recessionary thresholds.
➢ Consumer Confidence and Spending: Consumer spending remains strong at the national level, with inflation-adjusted retail sales at a record high in Q4 2024.
However, the U.S. Census Bureau announced that advance estimates of U.S. retail and food services for January 2025 are down 0.9% from the previous month. This means that after accounting for holidays, trading days, and other seasonal factors, consumer spending seems to be gradually decreasing, affecting sales tax collections.
California Economic Trends
Economic trends in California shape local revenue streams, employment levels, and Packet Page. 1020
housing markets. The state is currently facing budget deficits, labor market shifts, housing shortages, and trade policy changes, resulting in cities needing to proactively adapt to this changing economic landscape while remaining fiscally sustainable and minimizing service disruption. Key statewide trends include:
➢ State Budget Deficit: According to the report released in November 2024 from the Legislative Analyst’s Office, the projected deficit for California’s FY 2025/26 budget is estimated to be $2 billion, meaning that the budget is considered roughly balanced given the large scale and unpredictability of state finances.
Though the immediate budget is relatively balanced, the concern is that California faces significant long-term budget challenges in the future. The annual operating deficits are expected to grow from $20 billion to $30 billion in the coming years due to higher-than-expected spending growth outpacing revenue growth. To address this proactively, the state may implement spending reductions and revenue increases or solicit policy adjustments to address future fiscal imbalances, a reality that most cities must begin preparing for now. ➢ Labor Market: The U.S. Bureau of Labor Statistics reported that the state’s unemployment rate remained at 5.4% as of December 2024. This rate remains above the national average, and the ratio of unemployed workers to available job openings has doubled over the past two years, impacting local business activity and sales tax revenue.
➢ Housing Market: California’s median house prices are projected to rise 4.6% in 2025, meaning that the moderate rise in property values allows for additional revenue in property taxes. However, this does not directly boost the City’s General Fund since property tax in San Bernardino comes largely from Vehicle License Fee (VLF) revenue.
➢ Trade and Tariffs: Proposed tariffs on imports from China and Mexico may increase costs for goods and services, affecting local businesses and consumers. This could lead to higher retail prices, reducing disposable income and, in turn, impacting sales tax revenue for the City. ➢ Consumer Price Index (CPI): The Department of Industrial Relations reported that California’s CPI annual average decreased from 3.9% in 2023 to 3.1% in 2024. This indicates moderating inflationary pressures and suggests that price increases for goods and services are stabilizing, which eases financial pressures on households. Housing, transportation, and food costs may still be high, but a slower inflation rate means that costs are rising at a more manageable rate.
County Economic Trends
San Bernardino County’s current economic landscape reflects both statewide pressures and regional strengths. The County continues to experience strong job growth and steady retail activity. However, challenges like housing affordability and limited new construction could shape the City of San Bernardino’s future revenue and service demands. Key countywide trends in consideration of the FY 2024/25 Mid-Year Report include:
➢ Job Market Resilience: The Inland Empire, including San Bernardino County, has some of the strongest job growth in California at 3% year-over-year, Packet Page. 1021
outpacing Los Angeles and Orange County.
➢ Housing Affordability: The Riverside-San Bernardino-Ontario metropolitan area is among the most overvalued housing markets in the U.S., with mortgage payments consuming approximately 67.8% of the per capita income. This significant burden highlights the challenge of housing affordability for residents and the limited disposable income for non-housing expenditures. ➢ Consumer Price Index (CPI): The Inland Empire saw a CPI decline from 4.7% to 2.6%, meaning inflation is cooling, but costs for essential goods and services remain high. This directly affects City expenses, particularly for infrastructure projects and public service contracts.
Discussion
City of San Bernardino’s Financial Condition
With the broader economic landscape in mind—spanning national, state, and county trends—it's crucial to assess how these factors impact the City of San Bernardino’s financial standing. At the midpoint of the fiscal year, a thorough review of the City's revenues, expenditures, and overall financial health provides valuable insight into the City’s ability to maintain fiscal sustainability while delivering essential services. Key City trends observed at the midpoint of the FY 2024/25 include:
➢ Rising Unemployment and Business Closures: California’s 5.4% unemployment rate and business closures in the region are driving down license Packet Page. 1022
and permit revenues, reducing the economic activity and City revenue streams. ➢ Development and Investment Slowdown: Rising interest rates and inflation are slowing development, reducing building permits, impact fees, and investment in the City’s growth.
➢ Federal and Trade Policy Uncertainty: Federal policy shifts could increase costs. The proposed 25% import tariffs may increase prices for businesses and residents, while potential EV credit cuts could hinder energy and transportation projects.
➢ CPI: Increased costs for goods, utilities, and services could increase the demand for City support programs.
➢ Rising Labor Costs and Fiscal Sustainability: To remain competitive with surrounding jurisdictions, the City has made some wage and compensation adjustment considerations as the City embarks on a Classification and Compensation study and prepares for labor negotiations with all bargaining units. However, rising labor costs present ongoing financial obligations that must be carefully managed. The City added over 100 full-time positions in FY 2023/24, contributing to increased personnel expenditures. While these additions were made during improved financial conditions, it is imperative to recognize that fund balance should be reserved for one-time expenditures, not ongoing costs such as personnel. The long-term sustainability of these positions must be evaluated as financial conditions evolve and an economic landscape of reduced resources presents itself.
General Fund Revenues
Year-end projections show that the City’s General Fund revenues are declining and will likely fall short of the budgeted amounts. While revenue grew by 3% in early FY 2024/25, growth is estimated to slow down to 2% throughout the remainder of the fiscal year. Current revenues are $4.9 million lower compared to the same period last year, signaling the need for a cautious financial approach.
As of January 2025, the 7-month cumulative General Fund revenue is down from last year by $4.9 million. Staff believes this downward trend will continue to total revenues Revenue Category FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adopted
FY 2024-25
YTD Actuals
as of 1/31/25
FY 2024-25
Projected
Year-End Total
% Change
from
Adopted
Charges for Services $9,107,888 $6,829,807 $10,319,801 $3,175,537 $6,275,538 -39% Fines & Forefeitures $1,082,037 $766,079 $1,593,262 $476,142 $876,142 -45% Franchise Tax $12,692,337 $14,328,378 $14,939,265 $3,956,639 $14,402,938 -4% Intergovernmental $2,225,143 $6,708,044 $2,949,651 $2,449,830 $5,506,961 87% Investment Income $963,828 $3,373,049 $999,900 $635,949 $2,635,949 164% Licenses & Permits $15,740,360 $16,059,891 $16,989,168 $7,783,412 $14,083,412 -17% Measure S Sales Tax $52,124,592 $51,259,760 $53,550,000 $20,357,375 $50,159,000 -6% Miscellaneous $3,304,140 $7,737,244 $4,238,229 $835,144 $5,335,144 26% Other Taxes $11,173,774 $12,414,954 $15,060,480 $4,859,440 $11,259,440 -25% Property Taxes in Lieu if VLF $21,312,883 $23,604,046 $25,806,000 $12,730,179 $24,180,179 -6% Sales & Use Tax $55,651,769 $55,612,168 $58,623,667 $22,172,986 $52,796,986 -10% Use of Money & Property $3,158,026 $5,273,844 $2,640,627 $2,727,459 $4,887,459 85% Utility User Tax $31,208,992 $28,671,310 $28,893,750 $16,133,179 $30,229,505 5% General Fund Revenue Total $219,745,769 $232,638,574 $236,603,800 $98,293,269 $222,628,654 -6% Packet Page. 1023
for FY 2024/25 at $222.6 million versus FY 2023/24 revenues at $232.6 million (a reduction of approximately $10.0 million in actuals).
Sales & Use Tax and Measure S Sales Tax
Sales & Use Tax is the City’s largest revenue source, accounting for 47% of total revenues when combined with Measure S. The City contracts with HdL Companies to advise and project Sales and Use Tax and Measure S Sales Tax. Based on HdL’s updated forecasts, the City is revising Measure S revenue projections downward by 6% and Sales & Use Tax projections downward by 10%. These adjustments align with realistic revenue expectations and ensure the City maintains a conservative approach to budgeting while carefully reassessing expenditures to match anticipated revenues.
HdL’s latest projections indicate that Sales and Use Tax is expected to total $52.8 million by the end of the year and Measure S is expected to total $50.2 million resulting in a $4.6 million decline from the last fiscal year. HdL reports that major decreases for Sales & Use Tax are seen in General Consumer Goods (-7.3%), Autos & Transportation (-5.6%), and Business & Industry (-1.6%), with minor offsets from Restaurant & Hotels (+2.0%) and State & County Pools (+2.5%). Measure S Sales Tax is also reported to decrease and those can be seen in Autos & Transportation (-8.9%) and Building & Construction (-6.2%), with small gains in Business & Industry (+2.1%) and Restaurant & Hotels (+1.3%).
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Charges for Services
The City of San Bernardino’s charges for services revenue category is projected to end the year 39% below the adopted budget, with a decrease totaling $554k in FY 2024/25 compared to FY 2023/24 actuals. This decline is driven by key revenue sources such as plan check fees, cannabis permit fees, and enforcement-related charges. Plan check fees are a major revenue source tied to development activity. The decrease signals a slowdown in new construction and permitting, which reflect the higher borrowing cost trends seen at the national and state level, economic uncertainty, or delays in large-scale projects. Fewer plan check fees impact the City's General Fund, as these fees help cover staffing and operational costs for processing permits. Overall, development-related revenue in this category is down by $283k as of January 2025.
The Cannabis Permit Regulatory Fee is also currently down by $55k in FY 2024/25 as compared to prior year. This may suggest fewer businesses applying for or renewing permits, indicating market saturation, regulatory shifts, or operational challenges for cannabis businesses. Another notable revenue source, the NPDES Storm Drain Utility Fee, is down by $11k as of January 2025. This decline is also tied to reduced development activity at the county and state levels, further reinforcing the broader slowdown in construction and permitting.
Intergovernmental
The City has revised its year-end projections for intergovernmental revenues upward by 87% from the FY 2024/25 adopted budget, incorporating updated forecasts and necessary revenue classification adjustments. Despite this positive revision, intergovernmental revenues will still fall short of FY 2023/24 actuals by approximately $1.2 million. This variance is primarily due to timing differences in revenue collection, accounting adjustments, and temporary delays in finalizing renewed cost-recovery agreements. While some reductions reflect structural changes, key cost-recovery agreements—including those with San Manuel, Dignity Health, and special event Packet Page. 1025
reimbursements—are expected to be fully collected by year-end, aligning with projections.
Investment Income & Use of Money and Property
The City’s higher-than-expected investment income and revenues from use of money & property reflect broader economic trends at the national, state, and county levels.
While these revenue sources provide a short-term financial boost, they remain highly volatile and dependent on external economic conditions, reinforcing the importance of prudent fiscal planning. The Federal Reserve’s elevated interest rates have contributed to higher investment earnings and increased interest income on the City’s idle cash.
However, as the Federal Reserve considers future adjustments, potential declines in interest earnings must be factored into future revenue projections. Staff will continue to monitor Federal Reserve actions closely to anticipate financial impacts and adjust projections accordingly.
Other Taxes
The City of San Bernardino’s Other Taxes revenue category is projected to end FY 2024/25 approximately 25% below the adopted budget and $1.1 million lower than FY 2023/24 actuals. This decline is attributed to weaker consumer spending, slowing real estate transactions, and industry-specific challenges in sectors such as hospitality and cannabis. As of January 2025, as compared to FY 2023/24 during the same period, Transient Occupancy Tax (TOT) is down by $648k, possibly indicating reduced business travel; Property Transfer Tax is down by $100k, possibly reflecting a slowdown in property transactions; and Cannabis Tax is down by $277k, indicating that the overall cannabis industry is falling below expectations.
General Fund Expenditures
With General Fund revenues now projected to come in $14 million below the adopted budget, the City is proactively adjusting expenditure projections to reflect current economic conditions. While FY 2024/25 expenditures are currently $17.4 million higher than the previous year, the year-end projections remain 6.9% below the adopted budget. The addition of the 100 full-time positions in FY 2023/24, although the Human Resources Department is continuously recruiting to fill these approved positions and other vacancies that may occur, has taken time.
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Looking ahead, the City will continue to closely monitor economic trends, refine forecasts, and make informed financial decisions that prioritize community needs while preserving the City's fiscal health. This approach ensures that residents continue to receive quality services, even in times of economic uncertainty.
Department FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adopted
FY 2024-25
YTD Actuals
as of 1/31/25
FY 2024-25
Projected
Year-End
Total
% Change
from
Adopted
Mayor $306,227 $279,481 $298,025 $177,726 $298,025 0.0% City Council $1,015,993 $1,061,509 $1,156,448 $730,210 $1,156,448 0.0% City Clerk $1,300,833 $1,391,383 $1,942,869 $798,606 $1,571,500 -19.1% City Attorney $4,559,283 $4,795,033 $5,181,587 $1,637,565 $5,181,587 0.0% General Government $32,886,990 $19,370,893 $17,967,471 $4,873,298 $18,227,743 1.4% City Manager $2,103,300 $3,424,979 $5,156,385 $1,726,588 $3,635,811 -29.5% Human Resource & Risk Management $2,055,421 $2,390,082 $2,784,522 $1,411,816 $2,772,510 -0.4% Finance & Management Services $5,163,873 $5,044,637 $6,612,496 $3,507,801 $5,947,838 -10.1% Economic Development $0 $237,278 $1,785,363 $967,317 $1,814,730 1.6% Special Assessment District $115,996 $114,321 $150,000 $0 $120,000 -20.0% Capital Improvement Projects $89,235 $320,505 $0 $0 $3,715 0.0% Community Development & Housing $9,040,721 $9,341,981 $15,004,584 $6,067,124 $10,721,947 -28.5% Police $103,840,116 $114,176,196 $132,847,479 $84,800,743 $124,951,642 -5.9% Parks, Recreation & Community $4,132,108 $5,109,685 $6,000,401 $2,808,982 $5,936,896 -1.1% Public Works $21,764,427 $26,606,218 $35,591,030 $18,591,892 $29,008,952 -18.5% Library $2,610,050 $2,601,058 $4,975,030 $3,333,843 $4,221,603 -15.1% General Operating Expenditures $190,984,572 $196,265,240 $237,453,690 $131,433,512 $215,570,946 -9.2% Capital Improvement Projects $11,803,164 $7,314,997 $3,565,500 $4,421,262 $6,062,651 70.0% Parks, Recreation & Community $3,000 $0 $0 $0 $0 0.0%
MCC Fund Balance Use - Street Segment Imp. $0 $0 $0 $0 $2,650,000 0.0% Measure S Expenditures $11,806,164 $7,314,997 $3,565,500 $4,421,262 $8,712,651 GENERAL FUND TOTAL EXPENDITURES $202,790,736 $203,580,237 $241,019,190 $135,854,774 $224,283,597 -6.9% Packet Page. 1027
Library Department
The Library Department received a significant increase in funding for operations and staffing in the FY 2024/25 budget to address long-overdue maintenance needs and enhance customer service across all library branches. The department has used 67% of its budget due to necessary upfront investments in network and hardware upgrades following a cybersecurity breach. With these critical improvements now in place, spending has stabilized, and the department is on track to close the fiscal year 15.1% ($753K) under budget.
Police Department
As of January 2025, the Police Department accounts for 64% of the total year-to-date General Fund expenditures. The department has maintained strong financial management and cost-recovery efforts. Through reimbursement agreements with partners such as San Manuel, Dignity Health, SBIAA, COPs grants, and other reimbursable overtime arrangements, the department is projected to end the fiscal year
5.9% ($7.9 million) under budget.
Community Development & Housing Department
The Community Development & Housing Department has utilized 40% of its budget and is projected to close the year 28.5% ($4.2 million) under budget due to ongoing staffing vacancies. Many of these vacancies are tied to positions added as part of the Strategic Initiatives in October 2023, and despite multiple recruitment efforts, these roles have yet to be successfully filled. The department continues to prioritize hiring and remains focused on securing qualified candidates to support its long-term objectives.
Public Works Department
The Public Works Department has utilized 52% of its budget and is projected to close the fiscal year 18.5% ($6.6 million) under budget due to ongoing staffing vacancies.
Many of these vacancies are tied to positions added as part of the Strategic Initiatives in October 2023. Despite multiple recruitment efforts, these positions have not yet been successfully filled. The department remains focused on attracting and retaining qualified talent to support its operational and infrastructure needs.
Fund Balance
As the City proactively adjusts its year-end revenue and expenditure projections to reflect current economic conditions, it remains in a strong financial position with a healthy fund balance. The FY 2024/25 ending fund balance is estimated at $200.9 million, a slight decrease from $202.5 million in FY 2023/24. This modest reduction is primarily attributed to the City’s approved use of $2.65 million for street segment repairs, which has been partially offset by a $995K surplus being restored to fund balance due to existing staffing vacancies. For FY 2024/25, the City’s General Fund fund balance will remain in a healthy financial position and continue to preserve its emergency reserves, with:
➢ $33.2 million in the 15% Emergency Reserve
➢ $22.1 million in the 10% Economic Contingency Reserve ➢ $91.3 million in Measure S Capital Project Funding
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In addition, staff is attaching a chart that provides a synopsis of the City’s revenue, expense, and fund balance activities for the last 20 years. All data was derived from the City’s audited Annual Comprehensive Financial Reports (ACFR) from Fiscal Years 2005/06 through 2023/24, with projections for FY 2024/25.
Summary
As the City moves forward with preparing its FY 2025/26 Proposed Budget, the City will be taking into consideration the following:
➢ The City’s current year-end revenue projections show an overall decrease of approximately $10m from prior year actuals;
➢ The decreases in revenue will most likely continue for the next few months; ➢ The State’s economy is showing resilience despite the decline in local and sales tax receipts during the 1st quarter of the 2024/25 fiscal year; ➢ A modest growth is projected for FY 2025/26 with the following economic drivers:
1. Autos/Transportation is expected to increase by 3.5%, but the recovery is likely to be gradual;
2. Building/Construction is expected to increase by 2.6% due to lumber and roofing supply holding steady;
3. Business/Industry is expected to increase by 1.8% E-commerce Category
FY 2021/22
Actuals
(audited)
FY 2022/23
Actuals
(audited)
FY 2023/24
Actuals
(unaudited)
FY 2024/25
Estimated
Beginning Fund Balance, as of June 30th $ 110,742,632 $ 156,449,095 $ 173,462,555 $ 202,520,892 Revenues $ 208,775,374 $ 221,320,505 $ 232,638,574 $ 222,628,653 Expenditures (includes CIP Expenditures) $ (163,068,911) $ (204,307,045) $ (203,580,237) $ (221,633,597) Net Surplus/Deficit - Use of Fund Balance) $ 45,706,463 $ 17,013,460 $ 29,058,337 $ 995,057 Approved Use of Fund Balance - Street Segment Repair $ (2,650,000) Ending Fund Balance $ 156,449,095 $ 173,462,555 $ 202,520,892 $ 200,865,949 ACFR 2021-22 ACFR 2022-23
Category
FUND BALANCE
06-30-2022
FUND BALANCE
06-30-2023
FUND BALANCE
06-30-2024
(unaudited)
FUND BALANCE
06-30-2025
(estimated)
Nonspendable 40,204,687 41,421,536 40,806,497 41,000,000 Restricted 2,107,208 2,086,366 2,099,574 2,100,000
Committed
Animal Services - 68,387 - -
General Plan Update 100,000 142,877 551,312 600,000
Measure S - Capital Projects 63,342,854 81,762,949 86,330,036 91,293,692 15% Emergency Reserve 24,460,337 28,788,264 35,618,054 33,245,039 10% Economic Contingency Reserve 16,306,891 19,192,176 23,745,369 22,163,360 Assigned 6,669,342 - 13,370,050 10,463,858
Unassigned 3,257,776 - - -
TOTAL FUND BALANCE 156,449,095 173,462,555 202,520,892 200,865,949
CALCULATION OF FUND BALANCE
FUND BALANCE DESIGNATION
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continues to rule; the convenience of shopping online is slowly being embraced by consumers;
4. Fuel/Service Stations anticipate a slow recovery in 2025/26 with mild growth of 3.7%;
5. General Consumer Goods is expected to remain flat with little growth of
1.4% as brick-and-mortar stores compete with online shopping;
6. Restaurants/Hotels is experiencing moderate growth, a 3.7% increase; the outlook for room rates and occupancy in the coming year is positive. ➢ To maintain the City’s fund balance integrity, while still providing essential services to the community, City staff will be proposing alternatives, solutions, and may consider reductions in operating expenditures for the City’s proposed FY 2025/26 budget that will align with the overall decrease in revenues and mild growth for the upcoming fiscal year.
2021-2025 Strategic Targets and Goals
Receiving and Filing the FY 2024/25 Mid-Year Financial Update Report aligns with Key Target No. 1: Improved Operational & Financial Capacity. Updated revenue and expenditure projections provide the Mayor and City Council with important information and analysis needed to make financial decisions impacting the City.
Fiscal Impact
There is no fiscal impact with receiving and filing this report. This report serves as a financial update.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California receive and file the Fiscal Year 2024/25 Mid-Year Financial Update.
Attachments
Attachment 1 - City’s 20-year Revenue, Expense and Fund Balance History Ward:
All Wards
Synopsis of Previous Council Actions:
June 26, 2024 The Mayor and City Council adopted Resolution No. 2024- 142 approving the City of San Bernardino’s Operating Budget and Capital Improvement Program (CIP) for Fiscal Year
2024/25.
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ITEM TO BE CONSIDERED FOR A FUTURE MEETING
City of San Bernardino
Request for Council Action
Date: March 19, 2025
To: Honorable Mayor and City Council Members
From: Dr. Treasure Ortiz, Council Member, 7th Ward
Department: Council Office
Subject: Establishing a Homelessness Initiatives Community Committee (All Wards)
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