Agenda Item: 5
CITY OF SANTA CLARITA
AGENDA REPORT
UNFINISHED BUSINESS
CITY MANAGER APPROVAL:
DATE: June 9, 2026
SUBJECT: FISCAL YEAR 2026-27 ANNUAL OPERATING BUDGET AND
CAPITAL IMPROVEMENT PROGRAM
DEPARTMENT: City Manager's Office
PRESENTER: Brittany Houston
RECOMMENDED ACTION
City Council and City Council acting as Successor Agency to the former Redevelopment Agency of the City of Santa Clarita:
1. Adopt a resolution adopting the annual budget for Fiscal Year 2026-27, making appropriations for the amounts budgeted, and establishing policies for the administration of the adopted annual budget.
2. Adopt a resolution adopting the Fiscal Year 2026-27 Capital Improvement Program.
3. Adopt a resolution approving and adopting the annual appropriations limit for Fiscal Year 2026-27.
4. Adopt a resolution electing to receive all or a portion of the tax revenues pursuant to the Health and Safety Code (Community Redevelopment Law).
5. Adopt a resolution amending the City’s Classification Plan and Salary Schedule, providing for compensation of the employees of the City.
6. Adopt a resolution adopting an amendment to the Conflict of Interest Code.
BACKGROUND
The Fiscal Year (FY) 2026-27 budget process is a six-month effort that began in January. In addition to staff preparation, the City Council Budget Committee, which is comprised of Mayor Weste and Mayor Pro Tem Ayala, reviewed the proposed budget with the City Manager so that the City Manager can make a final recommendation to the entire City Council.
During the budget process, information about the City of Santa Clarita (City) budget is provided during multiple noticed, public meetings, all of which allowed for public comment. Meetings held during this year’s budget process are listed below:
1. City Council Budget Committee Meeting: January 27, 2026
2. Joint Budget Study Session: February 3, 2026
3. City Council Budget Committee Meeting: April 21, 2026
4. Joint Budget Study Session: May 5, 2026
5. City Council Meeting - Public Hearing: May 26, 2026
The proposed draft budget was distributed to the City Council and made available to the public on May 21, 2026. At the May 26, 2026, City Council meeting, a public hearing was conducted, the draft budget was presented, and the City Council found that the Draft FY 2026-27 Capital Improvement Program (CIP) is consistent with the City’s General Plan.
Total Appropriations
The FY 2026-27 budget totals $361.4 million. This includes funding for the CIP, the Redevelopment Successor Agency, operations and maintenance, personnel, and debt services.
When compared to the current adopted budget, the proposed FY 2026-27 budget represents a 4.9 percent increase, equivalent to $16.8 million.
Projected Revenues
A significant part of the budget process is estimating revenues for the upcoming fiscal year. This process is critical, as appropriations are based on these projections. Several factors are considered to ensure accuracy in our projections, including the state of the economy, historical trends, population projections/growth, and inflation. With this information, the City can best determine the revenue available for allocation.
For FY 2026-27, total revenue meets total expenditure appropriations.
General Fund Revenues
The City’s largest fund is the General Fund, representing $157.7 million in total revenue. Sales tax is typically the City’s leading General Fund revenue source and is projected to increase 6.3 percent from the current adopted budget to $50.4 million, but is flat compared to the Fiscal Year 2025-26 year-end estimate. General Fund revenues are anticipated to increase 3.3 percent collectively.
General Fund Expenditures
The FY 2026-27 General Fund expenditures total $157.4 million. General Fund expenditures for FY 2026-27 include funding for operating departments, debt services, contingency, and transfers
to other funds.
General Fund Operating Reserve
Reserves are a critical component of the budget because this is a funding source that can be counted on in case of an emergency or unforeseen opportunity. The operating reserve will remain at 20 percent of operating expenditures. For FY 2026-27, the City’s operating reserve will total $27.8 million.
Capital Improvement Program
The CIP is a key component of the budget and is of vital importance to the community as a whole as it includes prioritized projects such as parks, buildings, paseos, trails, and street enhancements that improve the quality of life for residents in our community. Comprised of a variety of multi-year and multi-funded capital projects, the CIP for FY 2026-27 totals $96.7 million.
Resolutions
The City Council is being asked to adopt six separate resolutions. Each resolution authorizes the City’s budget plan for general operations, CIP, and all personnel matters. Summaries of the resolutions are listed below:
The first resolution adopts the Annual Budget for FY 2026-27, makes appropriations for the amount budgeted, and establishes policies for the administration of the budget. It also includes the annual contracts list for FY 2026-27, along with budget amendments for FY 2025-26.
The second resolution adopts the CIP for FY 2026-27.
The third resolution adopts the Annual Appropriations Limit for FY 2026-27.
The fourth resolution allows the City to elect to receive all, or a portion of, the tax revenues pursuant to Health and Safety Code Sections 33676 and 33607.5 (Community Redevelopment Law) and is required in order for the Redevelopment Successor Agency to receive property taxes in amounts equal to that which would have been received under the former Redevelopment Agency.
The fifth resolution provides for the compensation of City employees and amends the Position Classification Plan. Included within this resolution is a 4.0 percent Cost of Living Adjustment for all unrepresented regular, SEIU-represented regular, and part-time, temporary, and seasonal employees.
The sixth resolution adopts an amendment to the Conflict of Interest Code.
ALTERNATIVE ACTION
Other action as determined by the City Council and the Successor Agency to the former Redevelopment Agency.
FISCAL IMPACT
The Fiscal Year 2026-27 budget totals $361.4 million, including $96.7 million for the Capital Improvement Program. The proposed budget is balanced.
ATTACHMENTS
Resolution - Annual Budget and Contract Worksheet
Resolution - Capital Improvement Program
Resolution - Appropriations Limit
Resolution - Tax Revenues
Resolution - Classification Plan and Salaries
Resolution - Conflict of Interest