Attachment 1
FY 2026-27 General Fund Budget Assumptions
Revenue Assumptions
Revenue Description FY 2026-27
Budget Assumption
Explanatory Comments
Secured Property Tax
3.17% growth
Based on January 1 valuation (Tax Lien
Date) established by the County Assessor
and adjusted to reflect the outcome of any
assessment appeals.
Property Tax
Property Tax in-lieu of
Vehicle License Fee (VLF)
3.17% growth; includes
$7.1 million shortfall and
no receipt of FY 24-25
$6.9 million shortfall.
VLF revenues face short and long-term
uncertainty. VLF shortfall is projected to
worsen over the next 5-7 years as more
school districts switch from non-basic-aid
to basis-aid status. Without State backfill,
the City will face significant revenue loss.
Given the current state of VLF, receipt of
$0 in shortfall is budgeted in FY 26-27.
Sales Tax 2% growth Based on recent economic development, the latest sales tax data, and long-term
forecast from the City’s sales tax
consultant (HdL).
Measure S revenue assumed to follow the
same trend.
Real Property Transfer Tax
(RPTT)
$8.4 million baseline and
$.6 million from
Measure CC revenue
RPTT is highly volatile and difficult to
forecast. The base tax rate is 0.5% of
property sales value. Measure CC imposes
a 1.5% rate on sales or transfer of any
property valued at $10 million or more.
Transient Occupancy Tax
(TOT)
3% growth Anticipated some growth from new
baseline of $4 million.
Other Taxes 0 – 2% growth Other taxes include franchise tax and business tax. Franchise tax is projected to
stay flat. Business tax is expected to
increase with minor growth to $8.3
million.
Charges for Services,
and Fees Revenues
2%-3% growth Based on CPI.
Attachment 1
Expenditure Assumptions
Expenditure Description Explanatory Comments
Personnel Costs Salaries & Wages:
Reflect current labor contracts, including cost of living (COLA), merit step increases, and equity adjustments.
Benefits:
Health care costs are projected to increase 6.0% for 2027; Pension costs reflects normal cost and unfunded actuarial pension (UAL) payments based on the latest report from CalPERS; Other benefits are projected to grow by 3% annually.
Non-Personnel Operating Exp. A 3% growth rate is assumed based on CPI for most expenses except for utilities which have increases between 15%-18%.
General liability insurance premiums were increased by over 20% based on the latest estimates from the insurance pool plan.
Indirect Costs 3% growth based on inflation and adjustments to internal service charges.
Transfers In (Out) $2.25 million from General Fund to CIP; $.7 million from Measure S to CIP;
1.25 million from Measure CC to CIP;
$3 million to Debt Service Funds; and
$410,000 to the Equipment Replacement Fund for building maintenance set-aside.