Agenda Item: 2
CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL:
DATE: December 9, 2025
SUBJECT: FISCAL YEAR 2025-2026 MID-YEAR BUDGET AMENDMENTS DEPARTMENT: Administrative Services
PRESENTER: Brittany Houston
RECOMMENDED ACTION
City Council and the City Council acting as Successor Agency to the Former Redevelopment Agency of the City of Santa Clarita:
1. Adopt a resolution amending the budgets for Fiscal Year 2024-2025 and Fiscal Year 2025- 2026.
2. Adopt a resolution amending the classification plan and salary schedules and providing changes to benefit contributions for employees and retirees of the City of Santa Clarita.
3. Adopt a resolution amending the schedule of fees and charges for City services.
BACKGROUND
As the organization approaches the middle of the fiscal year (FY), City of Santa Clarita (City) staff evaluates the adopted budget, revenue projections, and economic conditions for the remainder of the fiscal year. It is standard procedure to perform a mid-year review of the City’s budgetary and financial position to ensure any deviations from the initial budget projections are proactively addressed. Staff also reviews requests for appropriations to address new priorities that are unfunded or under-funded.
Revenues
Recommended mid-year revenue budget amendments total $4,883,907. By fund, the revenue amendments are as follows:
General Fund 6,693,729$
Other Revenue Funds 1,987,536
Various Grant Funds 1,559,619
Impact Fees Fund 896,613
Gas Tax/SB1 RMRA Funds 318,559
Pension Liability Fund (2,000,000)
Transit & Transportation Funds (4,572,149)
Total Proposed Revenue Amendments 4,883,907$
In the General Fund, the recommended net revenue increase of $6,693,729 reflects several adjustments. It includes higher revenue estimates of $2.6 million for sales tax and $200,000 for property tax due to higher growth than anticipated; a $5.7 million interfund transfer from the Self Insurance Fund as a result of excess workers’ compensation reserves based on the most recent actuarial report; and an $89,430 transfer in from the Fire Facilities Fund for the City’s 5 percent share of fire district administrative fees. These increases are partially offset by decreases totaling $1.8 million in development revenues, due to factors such as slower than anticipated permit submittals for new construction and tract homes, largely driven by elevated interest rates and the shift in revenue activities from plan review to permit issuance; as well as a $100,000 reduction in Grading Inspection Permit revenue due to anticipated revenues being received in the prior fiscal year. Additional reductions include $80,000 in Child Development revenue following the implementation of Universal Pre-K classes for four-year-olds and school district adoption of Universal Dismissal; a $55,000 decrease in contract classes due to minimal enrollment resulting in cancellation of classes; as well as a $50,000 decrease in animal license revenue resulting from changes to the licensing timeline.
Recommended revenue adjustments in the Other Revenue Funds total $1,987,536 and include $1.7 million in Park Dedication revenue collected as part of the Sand Canyon Plaza development and $320,286 in transfers for Hart Park operations.
The recommended revenue increases of $1,559,619 in Various Grant Funds include $644,000 state grant funding for the Orchard Pedestrian and Bike project; $393,000 in federal Surface Transportation Block Grant funding for the 2024-25 Federal Overlay and Slurry Seal Program; $263,601 in CDBG prior year savings to support current operations; $186,503 in federal funding for the Canyon Country Class II Buffered Bike Lane project; and $72,515 in Prop C grant funds for the 2025-26 Overlay and Slurry Seal Project.
The recommended revenue increase of $896,613 in the Impact Fee Fund includes revenues collected in Eastside Bridge and Thoroughfare Fees for $333,060; $300,000 in Site Improvement Fees collected as part of the Hartwell project in Downtown Newhall to be used for future public parking at the south end of Main Street; $200,797 in Fire Facilities Fees; $33,390 in Transit Mitigation Fees; and $29,366 in Law Enforcement Fees.
The recommended revenue increase of $318,559 in the Gas Tax and SB1 Funds reflects updated state revenue estimates.
The recommended revenue decrease of $2.0 million in the Pension Liability Fund reflects
reduced transfers for payment toward the City’s Pension Unfunded Accrued Liability as a result of CalPERS returns exceeding the 6.8 percent discount rate for the last two fiscal years.
The recommended net revenue decrease of $4,572,149 in the Transit and Transportation Funds includes a $4,622,048 reduction in transfers from Proposition A Local Return for transit operations and an increase of $49,899 in Measure M ATP funding for the Saugus Phase I Bouquet Trail Project.
Expenditures
Recommended mid-year expenditure budget additions total $3,556,913. By fund, the expenditure amendments are as follows:
General Fund (869,667)$
Internal Service Funds 5,701,020
Transit & Transportation Funds 714,485
Impact Fees Fund 89,430
Various Grant Funds 72,515
Other Revenue Funds (19,453)
Special District Funds (131,417)
Pension Liability Fund (2,000,000)
Total Proposed Expenditures Amendments 3,556,913$
In the General Fund, the recommended net expenditure decrease of $869,667 includes a $2.0 million reduction in the transfer to the Pension Liability Fund as a result of CalPERS returns exceeding the 6.8 percent discount rate for the last two fiscal years; an $81,000 decrease in Building and Safety contractual services due to lower development revenues; and a $36,000 reduction in contract classes costs resulting from class cancellations caused by low enrollment.
These decreases are offset by several expenditure increases, including $375,000 funding for the Valencia Glen Park multipurpose building and pool; a $320,286 transfer for Hart Park operations; and $207,753 in overtime salaries for Public Works inspectors required to work off- hours on major utility projects to ensure appropriate safety measures are maintained in the public right-of-way. Additional increases include $123,000 for higher industrial waste costs and $40,000 for the rental of vehicle barriers to enhance public safety at City special events.
The recommended expenditure increase of $5,701,020 in the Internal Service Funds includes a $5.7 million interfund transfer to the General Fund as a result of excess workers’ compensation reserves based on the most recent actuarial report.
The expenditure increases of $714,485 in the Transit and Transportation Funds include $687,000 in TDA Article 8 funding for Circulation Improvements at Copperhill Drive at West Hills and Bouquet Canyon Road at Central Park; $100,000 for upgrading commuter fleet wireless routers to maintain reliable GPS tracking for transit operations; and a net decrease of $72,515 reflecting funding adjustments for the 2024-25 and 2025-26 Overlay and Slurry Seal Programs.
The recommended increase in the Impact Fee Fund represents an $89,430 transfer to the General
Fund for the City’s five percent share of the Fire District administrative fee.
The recommended net increase of $72,515 in Various Grant Funds includes a funding adjustment, with a $704,957 increase for the 2025-26 Overlay and Slurry Seal Project and a $632,442 decrease for the 2024-25 Overlay and Slurry Seal Project to maximize Prop C Grant Funds approved by Metro.
The net expenditure decreases of $19,453 in Other Revenue Funds includes a funding adjustment, with a $3.7 million increase in the Park Dedication Fund and a corresponding $3.7 million decrease in the Facilities Fund for the construction of The Rink Sports Pavilion; a $196,000 increase for furniture, fixtures and equipment at The Rink Sports Pavilion; and $62,850 and $10,000 for Hart Park staff vehicle and internet and telephone utilities, respectively.
The recommended net expenditure decrease of $131,417 in the Special District Funds includes a $375,000 reduction in the Landscape Maintenance District Fund for repairs at the Valencia Glen Park multipurpose building and pool, an increase of $97,000 in the Areawide Fund for a gator, ball field groomer, and zero-turn mower for the anticipated opening of David March Park in Spring 2026; $84,000 in the Streetlights Maintenance District Fund for Circulation Improvements at Copperhill Drive at West Hills, and Bouquet Canyon Road at Central Park; and $60,000 in the Vista Canyon Wastewater Fund to repair both vertical turbine pumps installed in 2018.
The recommended decrease of $2.0 million in the Pension Liability Fund reflects a reduced contribution toward the City’s Pension Unfunded Accrued Liability as a result of CalPERS returns exceeding the 6.8 percent discount rate for the last two fiscal years.
Amendment to the FY 2024-2025 Budget
Upon review of the revenues and expenditures for the year ending June 30, 2025, and in anticipation of future facilities funding needs, it is staff’s recommendation to amend the FY 2024-2025 budget and transfer funds from the General Fund to the Facilities Fund in the amount of $16.6 million.
Changes to Fee Schedule
Since the Council’s adoption of the Fiscal Year 2025-26 Schedule of Fees and Charges for City Services, two necessary fee adjustments have been identified. Consistent with Resolution No. 25-23, a Resolution of the City Council establishing a Schedule of Fees and Charges for City Services, the City has established a policy of recovering the full costs reasonably borne of providing services. The fee schedule adopted by Resolution No. 25-23 had two clerical errors that misstated the adjusted fee amounts for those two fees. To recover the full cost of providing Precise Grading Inspections and Over Excavate Inspections, adjustments for the two fees are recommended based on the 3.42 percent December 2024 Consumer Price Index for the urban consumers of the Los Angeles-Long Beach-Anaheim area as shown in fee resolution Exhibit A.
Amend the Classification Plan and Salary Schedules, Provide Changes to Benefit Contributions for Employees and Retirees of the City
This resolution amends the City’s classification plan and salary schedule, provides changes to City-paid benefit contributions for active and retired employees effective January 2026.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
Approval of the Fiscal Year 2025-2026 mid-year budget amendments will increase estimated revenues for all funds by $4,883,907 and budgeted expenditures by $3,556,913. Additionally, the Fiscal Year 2024-2025 budget will be amended by $16,600,000.
ATTACHMENTS
Resolution Amending the Budgets for FY 2024-25 and FY 2025-26 Resolution Amending Classification Salary Schedule and Benefit Contributions Resolution Amending Schedule of Fees and Charges for City Services