City of Santa Rosa Budget Adoption
Public Hearing FY 2026-27
LORI ANN FARRELL , CIT Y MANAGER | SCOTT WAGNER , CHIEF FINANCIAL OFFICER
City Manager’s Comments
PROPOSED BUDGET FY 2026 -27
Presentation Overview
3 ➢Calendar Review
➢Changes from Study Session
➢FY 2026-27 Proposed Budget All Funds
➢FY 2026-27 Proposed Budget General Fund
➢Year 2 Potential Impacts
➢Recommendation
➢Capital Improvement Program Budget FY 2026-27
FY 2026-27 Budget Process
Public Hearing on
Budget Priorities
January 27, 2026
City Manager
Review of
Department Budgets
March 2026
Budget Review with
LTFPA
April 9, 2026
City Council Study
Session
April 21, 2026
City Council Study
Session
May 5 & 6, 2026
Draft of Budget
Books available to
the public
June 2, 2026
Budget
Adoption
Public Hearing
June 16, 2026
4 Changes from Study Session
➢Updated official federal award amounts from Housing & Urban Development allocations increased Housing Authority revenue and expenditure budget +$64K
➢Added 1.0 FTE Fire Captain in Measure H Special Revenue Fund +$383K as discussed in May Study Session
➢Increased appropriations in Council approved capital projects from interest earned in the ARPA Special Revenue Fund reserves +$703K to ensure federal spending requirements are met by the deadline 5 Changes from Study Session
➢Added recommendation for City Council to address gap in General Fund Reserve Policy related to immediate critical facility needs ➢+$200K increase in FY 2026-27 General Fund proposed budget for Fire Management labor contract agreement through 6/30/2027
➢Fire Management was the only labor group scheduled to be out of contract 7/1/2026 6 T wo Year Budget Strategy
City Manager’s Proposed Budget
➢Through a multi-pronged approach, the City Manager’s proposed budget contains almost $10M in deficit reduction solutions as part of a two-year process ➢Year 1 (FY 2026-27):
➢Strategic Reserve Usage, adjusted staffing as grant funded programs expire, Vacancy Management, Innovative Financing, Targeted cost recovery improvements ➢Year 2 (FY 2027-28):
➢Structural deficit of ($9.8M) on 7/1/2027 remains, increased revenue or additional cuts will be needed to address deficit that is still growing
7 Citywide Budget Overview
PROPOSED BUDGET FY 2026 -27
FY 2026-27 Citywide
Revenues by Fund (in millions)
Fund Type
2025-26
Adopted
Budget
2026-27
Proposed
Budget
$
Change
%
Change
General Fund $215.0 $224.7 $9.6 4.5%
Enterprise Funds 200.0 207.8 7.8 3.9%
Special Revenue Funds 44.3 45.7 1.4 3.2%
Other Funds 0.5 0.5 - -
Housing Authority 54.0 54.3 0.4 0.7%
Successor Agency to RDA 3.0 3.0 - -
Total $516.9 $535.9 $19.0 3.7%
9 FY 2026-27 Citywide
Expenditures by Fund T ype (in millions)
Fund Type
2025-26
Adopted
Budget
2026-27
Proposed
Budget
$
Change
%
Change
General Fund $216.8 $231.1 14.3 6.6%
Enterprise (Operating) 171.8 177.7 5.9 3.4%
Enterprise (CIP) 45.2 44.2 (1.0) (2.2%)
Non-Enterprise (CIP) 30.8 32.4 1.6 5.2%
Special Revenue 28.6 29.1 0.5 1.7%
Other Funds 1.2 1.2 - -
Housing Authority 56.7 57.2 0.5 0.7%
Successor Agency to RDA 3.0 3.0 - -
Total $554.1 $575.9 $21.8 3.9%
10 FY 2026-27 Citywide Expenditures by Fund
11 General Fund Budget
Overview
PROPOSED BUDGET FY 2026 -27
FY 2026-27 General Fund Summary
(in millions)
Proposed
General Fund Budget
Revenue $224.7
Transfers In $8.2
Total Revenues + Transfers In $232.9
Expenditures ($231.1)
Transfers Out ($9.5)
Total Expenditures + Transfers Out ($240.5)
Subtotal Deficit ($7.6)
Labor Contract Cost Impacts (Unit 9) ($0.2)
Strategic Use of Reserves $7.8
Total* -
13*Reflects 2-year strategy with $7.8M additional reductions (or additional revenue) required in FY 2027-28 General Fund Revenue Overview
➢Property tax maintains a 3- & 5-year average of over 5.5% growth +$2.3M ➢Sales tax increase of 1.5% per recent performance +$1.1M ➢Projected UUT increases in Gas & Electric, offset by decreases in Cable and Telephone +$700K
➢Other taxes contains Cannabis Tax, Transient Occupancy Tax, Franchise Fees, Real Property Transfer Tax, but is mainly grown by increase in Business Tax +$2.8M ➢Permits are trending at lower cost per permit, resulting in a slight decrease ($400K) ➢Recreation revenues reflect over 14% growth in enrollment and recent fee increases +$800K
➢Increase of $350K to fund EMS Fire Captain formerly in inRESPONSE 14 FY 2026-27 General Fund Revenues
by Category (in millions)
15 Category
2025-26
Adopted
Budget
2026-27
Proposed
Budget
$
Change
%
Change
Property Tax $41.5 $43.8 $2.3 5.5%
Sales Tax 70.4 71.5 1.1 1.5%
Utility Users Tax 14.4 15.1 0.7 5.1%
Vehicle License Fees 19.8 21.2 1.4 7.2%
Other Taxes 33.3 36.1 2.8 8.4%
Permits, Fines & Charges 14.1 13.7 (0.4) (3.0%)
Interfund Charges 12.4 12.4 - -
Recreation Revenues 3.3 4.1 0.8 24.5%
Intergov’t, Interest & Other 5.9 6.8 0.9 14.7%
Total $215.1 $224.7 $9.6 4.5%
General Fund Revenues by Category
16 51%
Sales Tax &
Property Tax
17 City Share of Property T ax & Sales T ax
Property Tax
Allocation
Sales Tax
Allocation
General
Fund
Transfers Out
Detail
(in millions)
18 Category
2025-26
Adopted
Budget
2026-27
Proposed
Budget
$
Change
%
Change
Special
Revenue Funds $2.3 $2.5 $0.2 0%
Special
Assessment
Funds
0.1 0.1 - -
Parking Fund 0.1 0.1 - -
Pension Funds - 5.6 5.6 n/a
Total $2.5 $8.2 $5.8 230%
General Fund
Transfers In Detail
(in millions)
• NEW- $5.6M transfer in from
pension fund (Fresh Start strategy)
General Fund Expenditures
PROPOSED BUDGET FY 2026 -27
General Fund Expenditure Highlights
Major Increases
➢Contractually agreed upon compensation adjustments for all bargaining units +$4.9M ➢Align overtime budget with actual costs for the Police Department +$1M and Fire Department +$2.5M to comply with 24/7 staffing
➢Fixed cost increases in Health Insurance and Retirement benefits +$1.3M ➢Professional Services grew +$1M for existing contractual increases and +$550K for election costs and +$450K for Animal Control and shelter contract ➢Uncontrollable increases in vehicle costs for gasoline, vehicle replacement and maintenance +$700K
➢Information Technology costs driven by licensing increases and staffing costs +$500K ➢Overall, $14.3M increase in expenditures equals a 6.6% YOY change 20 General Fund Solutions Highlights
Major Decreases
➢Savings of ($4.9M) in department budget reductions from eliminating vacancies and expired grant-funded positions, increasing revenue, department consolidations, use of technology, alignment of budget to actual spending, enhanced cost recovery and transferring of costs of eligible funds
➢($3.8M) in pension savings from Pension Stabilization Pathway adopted 6/2/2026 ➢Major Fire Apparatus leasing strategy savings of ($1M) ➢Property insurance decrease of ($600K) due to increase in prior year funding to build required reserves
21 Strategies Considered
22 Eliminate Vacant
Positions
Major Apparatus
Leasing
Use of Reserves
Pensions Savings
Strategy
Flex
Programming for
Expiring Grants
Department
Consolidation
Use of
Technology
Alignment of
Budget to Actual
Spending
Enhanced Cost
Recovery
Transfer of Costs
to Eligible Funds
Credit Card
Convenience
Fees
Reduction of
Minor Capital
Support
General Fund Solutions
23 Strategy Description Amount
Pension Savings Strategy 3,800,000
Flexing Staffing Levels Consistent With Grant Funding 3,600,000 Major Apparatus Leasing 1,000,000
Eliminate Vacant Positions 486,105
Increase Revenue 350,000
Credit Card Convenience Fees* 264,000
Reduction of Minor Capital Support 100,000
Alignment of Budget to Actual Spending 84,325
Enhanced Cost Recovery 70,000
Department Consolidations 49,343
Transfer of Costs to Eligible Special Revenue Funds 45,000 Use of Technology 21,000
Total $9,869,805
*Primarily PED plans and permits, excludes Recreation and Parking; program already in effect for Water Department 24 FY 2026-27 General Fund Expenditures
by Category (in millions)
Category 2025-26
Adopted Budget
2026-27
Proposed Budget
$
Change
%
Change
Salaries $91.6 $96.5 $4.9 5.3%
Overtime 7.1 10.7 3.6 50.1%
Benefits 67.0 70.0 3.0 4.5%
Professional Services 13.6 15.5 1.9 14.0%
Vehicle Expense 11.0 10.6 (0.4) (3.0%)
Operational Supplies 3.3 3.8 0.5 15.2%
Utilities 5.9 6.2 0.3 5.1%
Information Technology 6.7 7.2 0.5 7.5%
Liability/Property Insurance 5.7 5.1 (0.6) (10.5%)
Other Miscellaneous 2.6 3.0 0.4 15.4% O&M Projects 2.3 2.5 0.2 8.7%
Total $216.8 $231.1 $14.3 6.6%
General Fund Expenditures by Category
25 76%
Salaries
&
Benefits
26 FY 2026-27 General Fund Expenditures
by Department (in millions)
Dept
2025-26
Proposed
Budget
2026-27
Proposed
Budget
$
Change
%
Change
Admin $21.8 $23.3 $1.5 6.8%
Non Dep (9.9) (9.6) 0.3 3.2%
Fire 58.9 62.2 3.3 5.6%
PED 19.1 19.8 0.7 3.7%
Police 80.0 85.5 5.5 6.9%
Rec 18.4 11.2 (7.2) (39.1%)
TPW 27.7 37.9 10.2 36.8%
SR Water 0.7 0.8 0.1 14.3%
Total $216.8 $231.1 $14.4 6.6%
General Fund Expenditures by Department
27 64.5%
Public Safety
General
Fund
Transfers Out
Detail
(in millions)
28 Category
2025-26
Adopted
Budget
2026-27
Proposed
Budget
$
Change
%
Change
Bennett Valley
Golf Course $0.5 $0.5 - 0%
CIP 2.0 1.9 (0.1) (5.9%)
Parking Fund 1.6 1.9 0.3 18.4%
RPTT – Housing 1.1 1.1 - -
Homeless
Services –
General Fund
3.3 3.3 - -
Misc. 0.8 0.8 - -
Total $9.2 $9.5 $0.2 2.3%
General Fund
Transfers Out
Detail
(in millions)
➢ Final year for receipt of $662K
from Sonoma County for Roseland
Pavement Maintenance, per
annexation agreement
General
Fund
Baseline
Public
Safety and
Prevention
Tax
29 Police - 34.3% Fire - 23.7% Violence
Prevention - 0.4%
General Fund
Department
Budget
$85,535,331 $62,263,302 $1,118,945
Baseline
Calculation 79,293,978 54,800,040 965,522
Over (Under)
Baseline $6,241,353 $7,463,262 $153,423
Long-Range Financial Forecast
30 Revenues
Transfers In
Total Revenues & TI
Expenditures
Transfers Out
Total Expenditures & TO
Surplus (Deficit) ($13.8)
FY 30-31
$242.1
2.6 $244.8
257.6
9.6 $267.2
($22.4)
2.6 $245.1
249.4
9.4 $258.8
$242.4
($9.8)
$238.8
241.6
9.2 $250.8
($12.1)
$234.0
234.1
9.6 $243.7
($8.4)
FY 26-27
$224.7
8.2 $232.9
231.1
9.5 FY 25-26
$215.1
2.5 $217.6
216.8
$240.5
($7.6)
9.2 $226.0
$231.3
2.6 FY 28-29
$236.1
2.6 FY 27-28 FY 29-30
*Final FY 2026-27 Deficit will be ($7.8M) with adoption of labor contracts General Fund Reserves
General Fund Reserves Spend Down
32 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030
6/30/2025 Final Reserves 79,582,000$
FY 26/27 Budget Deficit (7,600,000)$
6/30/2026 Projected Reserves 71,982,000$
FY 27/28 Budget Deficit (9,800,000)$
6/30/2027 Projected Reserves 62,182,000$
FY 28/29 Budget Deficit (12,100,000)$
6/30/2028 Projected Reserves 50,082,000$
FY 29/30 Budget Deficit (13,800,000)$
6/30/2029 Projected Reserves 36,282,000$
FY 30/31 Budget Deficit (22,400,000)$
6/30/2030 Projected Reserves 13,882,000$
* Council Mandated Reserve was $39.2M in FY2025, expected to be $44.9M on June 30, 2027 Upcoming Budget Adoptions
General Fund Reserves
➢With almost $10 million in Year 1 solutions General Fund available reserves are projected to remain above City Council’s mandated policy of 15%-17% of operating expenditures through FY 2027-28 (two years)
➢The General Fund Reserve Policy was adopted in 2006 and requires 15%- 17% of operating expenditures be available to “alleviate short-term revenue or expenditure volatility; or address one-time high priority needs” ➢Does not include considerations for existing facilities, IT infrastructure or pension funding that are considered best practice for agencies like Santa Rosa 33 General Fund Reserves
➢Staff is proposing that City Council revisit the General Fund Reserve Policy during Fiscal Year 2026-27 to review and potentially modernize ➢Staff proposes that City Council Assign $4.5 million in General Fund Reserves to address facility conditions as of 6/30/2026 ➢Urgent Facility Needs or Property Exchange
➢Financial Impact
➢Critical stabilization and repairs must be funded directly from General Fund Reserves 34 General Fund Reserves
➢An assignment of reserves does NOT appropriate funds. Assigned reserves CANNOT be budgeted or spent without an action from City Council
➢An assignment of reserves does NOT add to the General Fund deficit ➢Staff will be returning early in Fiscal Year 2026-27 to review immediate critical needs with City Council and potential appropriation of funds 35 Staffing Summary
PROPOSED BUDGET FY 2026 -27
Authorized FTE Staff Summary
Dept. FY 25-26 FTE
Change FY 26-27
CAO 15.00 - 15.00
CMO 9.00 7.00 16.00
Comm’s & Intergovt Rel 7.00 -7.00 -
Finance 60.60 -28.00 32.60
Fire 180.00 -19.00 162.00
HCS 27.00 -2.00 25.00
HCS - Recreation - 34.55 34.55
Recreation & Parks 69.55 -69.55 -
37 Authorized FTE Staff Summary
38 Dept. FY 25-26 FTE Change FY 26-27
HR 20.00 - 20.00
IT 33.00 - 33.00
PED 75.00 28.00 103.00
Police 249.00 - 249.00
TPW 250.00 28.00 278.00
Water 282.00 - 282.00
Total FTEs 1277.15 -27.00 1250.15
General Fund FTE Count by Fiscal Year
39 40
Questions?
Year 2 Potential Impacts
BUDGET PLANNING FY2027 -28
FOR FISCAL YEAR STARTING JULY 1, 2027
Year 2 Challenges (starting July 1, 2027)
➢Despite corrective action the General Fund remains in a structural deficit ➢ FY 2025-26: $15.2M in budget cuts and 54.0 FTEs in the General Fund ➢ FY 2026-27: $9.5M in budget cuts and 25.0 FTEs in the General Fund ➢General Fund staffing is now at the bottom of Great Recession levels representing a 20% reduction from the all-time high
➢Sales Tax Revenue Measure Q expires in FY 2030-31; $23.5M of ongoing revenue will be discontinued
➢The City is committed to transparency on services and program eliminations in Police, Fire, Recreation, Parks and Public Works that will impact the community without revenue enhancements
42 Year 2 Challenges (continued)
➢A ($9.8M) deficit is projected in FY 2027-28 and expected to grow to ($22.4M) in FY 2030-31 without additional revenue
➢As a result, General Fund departments were directed by the City Manager to develop cut scenarios to illustrate reductions required July 1, 2027, to balance future budgets
➢To address the FY 2027-28 deficit of ($9.8M), it is projected that a reduction of
41.5 FTEs is required, which would result in major impacts to core services ➢Deficit are projected to further increase in FY 2030-31 due to expiration of Measure Q in March of 2031
➢Current deferred maintenance to City infrastructure is growing with each year and will require significant financial resources
43 44
Structural Deficit Impacts
Overview
Department Reductions
45For illustration purposes only; not being recommended
General Fund FTE Count 10 Year History
46For illustration purposes only; not being recommended All time high
From 25-26
to 26-27 20%
decrease
47 Department Impacts
July 1, 2027
Year 2 Public Safety Impacts (FY 2027-28)
Police
➢Elimination or consolidation of Police special units
➢Impacts to Gangs, Narcotics, Traffic, Downtown Enforcement and SET teams ➢As of 7/1/2027 proposed 11.0 FTE reduction; equivalent of $3.1M ➢As of 7/1/2030 proposed 24.0 FTE reduction; equivalent of $7.1M ➢These reductions will have significant impacts to police response times to emergency calls for service.
➢Elimination of specialty teams will greatly impact our ability to recruit and retain police officers in a highly competitive hiring environment. 48For illustration purposes only; not being recommended
Year 2 Public Safety Impacts(FY 2027-28)
Police
➢The loss of specialty teams and minimum staffing levels in patrol will create an environment where police officers are just responding to crimes and do not have the ability to thoroughly investigate the offenses and bring justice to victims of violent crimes.
➢This inability to properly investigate crimes leads to increases in violent crimes and visible blight across the city.
➢The impacts of eliminating these police positions will have measurable impacts of the safety of our community.
➢Police Officer community engagement opportunities will be severely limited due to fewer officers available to respond to calls for service. 49For illustration purposes only; not being recommended Year 2 Service Impacts (FY 2027-28)
50For illustration purposes only; not being recommended Fire
➢Fire Station Closure(s)
➢Impacts to call response times, particularly EMS, and core fire suppression readiness
➢Reduction of wildfire prevention and wildfire response capabilities ➢Reduction of special operations capability (technical rescue, water rescue, etc.) ➢Resources available will be below Measure O (PSAP) implementation levels, circa 2007
➢Call volume increase of ~66% in this time frame
➢Impact on recruitment and retention of employees due to uncertainty of future Year 2 Service Impacts (FY 2027-28)
51For illustration purposes only; not being recommended Fire
➢Impact on recruitment and retention of employees due to uncertainty of future ➢Other options will be explored to reduce service delivery impact ➢Any reduction of this magnitude will have negative operational consequences. ➢As of 7/1/2027 proposed 8.0 FTE reduction the equivalent of $2.5M ➢As of 7/1/2030 proposed 18.0 FTE reduction the equivalent of $5.8M
Year 2 Service Impacts (FY 2027-28)
Recreation
➢As of 7/1/2027 proposed 2.0 FTE reduction the equivalent of $364K ➢As of 7/1/2030 proposed 5.0 FTE reduction the equivalent of $835K ➢Staffing reductions may lead to various program closures:
➢Adult Softball league
➢Tiny Tots program
➢Park Ambassador program
➢Youth sports
52 For illustration purposes only; not being recommended Year 2 Service Impacts (FY 2027-28)
Planning & Economic Development
➢Non-fee generated services and programs in jeopardy of substantial reduction or termination ➢Economic development initiatives, dedicated customer service channels, long range planning functions not associated with state mandated policies
➢Loss of community promotion support – removal of community promotions funding and Live at Julliard
➢Significant and unpredictable swings in fee generated services (permitting and inspection) ➢Published review timelines currently exceed community expectations ➢Standard 4 week for minor plan review timeline can exceed 20 weeks ➢Code Enforcement focus on only substandard housing and health life safety complaints ➢Staff retention and attraction issues
➢As of 7/1/2027 proposed 4.0 FTE reduction the equivalent of $817K ➢As of 7/1/2030 proposed 9.0 FTE reduction the equivalent of $1.9M 53For illustration purposes only; not being recommended Year 2 Service Impacts (FY 2027-28)
Additional Impacts
➢Critical reduction of cybersecurity
➢Human Resources requires longer time to fill public safety positions ➢Increased Worker’s Compensation injuries
➢Longer response time to critical legal issues
➢Increased vendor payment processing time
➢Delayed audits
54For illustration purposes only; not being recommended Year 2 Service Impacts (FY 2027-28)
Parks Maintenance
➢3 MW for NW Quadrant Parks (19 parks)
➢3 MW for SW Quadrant Parks (12 parks)
➢3 MW for NE Quadrant Parks (24 parks)
➢3 MW for SE Quadrant Parks (23 parks)
➢4 MW for Downtown Public Spaces (8 locations)
➢4 MW for Sports Fields (12 locations)
➢3 MW for Landscaping (7 locations)
55For illustration purposes only; not being recommended Public Works Reduction
➢7/1/2027: 8.0 FTE (~$1.5 M)
➢7/1/2030: 18.0 FTE (~$3.3M)
Year 2 Service Impacts (FY 2027-28)
Streets
➢Decrease in streets and road repair
➢35% of streets are Poor or Fair (1 in 3 streets)
➢42% of residential streets
➢Street maintenance budget already reduced by 50%
➢No General Fund support for re-paving
➢Street lighting and traffic poles
56For illustration purposes only; not being recommended Public Works Reduction
➢7/1/2027: 8.0 FTE (~$1.5 M)
➢7/1/2030: 18.0 FTE (~$3.3M)
Year 2 Service Impacts (FY 2027-28)
Streets Maintenance
➢10 MW for heavy paving, mill/fill, crack sealing
➢6 MW for potholes
➢5 MW for pavement markings
➢4 MW for debris removal
➢4 MW for sidewalk and utility trench patching
➢3 MW for street signs
➢2 MW for storm drain cleaning
➢1 MW for graffiti removal
57For illustration purposes only; not being recommended Public Works Reduction
➢7/1/2027: 8.0 FTE (~$1.5 M)
➢7/1/2030: 18.0 FTE (~$3.3M)
Other Annual T asks
➢ Creek cleaning
➢ Weed abatement
➢ Storm response
Year 2 Service Impacts (FY 2027-28)
Other Fixes
➢Re-direct CIP Funds
➢Re-visit Parks Measure M split:
➢50% for CIP
➢40% for Maintenance
➢10% for Recreation
➢Gas Taxes could pay for many streets maintenance tasks ➢Impacts to CIP
➢Fewer park improvements, but better maintained parks
➢Fewer streets paved, safety improvements, but maintain critical infrastructure functions ➢General Fund must support Facilities maintenance
58For illustration purposes only; not being recommended Public Works Reduction
➢7/1/2027: 8.0 FTE (~$1.5 M)
➢7/1/2030: 18.0 FTE (~$3.3M)
Current Network Condition
59 Residential with PCI below 25
◦ 44 centerline miles
◦ 809,898 square yards of surface area
◦ 3” mill and fill ($52/square yard)
◦ $42.1M construction
Delivery Model
60 Residential with PCI below 25
◦ $42.1M construction
◦ $4.2M contingency
◦ $6.2M staff time
◦ $7.5M inspection
◦ $60M total
◦ 3-4 $15 to $20M projects
To maintain sustainably: need $2.5-3M annually
in General Fund support
Unfunded Capital and Infrastructure Needs
61 ➢$7 Million annual need for residential streets maintenance ➢$4 million annual bond payment and $3 million is ongoing maintenance ➢$4.5 Million City Facilities
➢$2 Million technology funding gap
➢The City has no technology replacement reserve that is common with agencies of our size
➢Missing major software application like HRIS Program or Project Management Application
➢Need is expected to grow with technology advancements
Sales T ax Measure Q Expiration
➢Measure Q is a 0.5% sales tax that was approved by voters in November 2020 that is set to expire March 31, 2031
➢The City receives approximately $23.5 million of sales tax revenue annually
➢Without Measure Q revenue the FY 2026-27 deficit would reach $31.3 million
62 Year 2 Recommendation
63 ➢With the adoption of the Fiscal Year 2026-27 annual budget, $7.8 million of reserves will be expended to allow Council time to determine a path forward ➢This two-year strategy provides funding through June 30, 2027 ➢However, to maintain critical public safety and other services, additional revenue is needed to avoid drastic cuts to essential services
➢With previous reductions of over $25M and 79.0 FTEs the City can no longer reduce programs and staffing
➢As such, staff will be recommending a proposal in July 2026 on how to increase revenue to maintain existing services and addressing deteriorating infrastructure Recommendation
The City Manager and the Finance Department
recommend that Council:
➢Approve by five (5) resolutions to adopt the FY 2026-27 Operations & Maintenance Budget and Capital Improvement Program Budget ➢By resolution, amend the Public Safety and Prevention Transaction & Use Tax Implementation Plan for FY 2026-27 for all budgeted programs ➢Assign up to $4.5 million in a critical facilities reserve to address facility needs as of June 30, 2026
64 65
Questions?
Citywide Capital Improvement
Program
PROPOSED BUDGET FY 2026 -27
CIP FY 2026-27 Funding Sources
67 City-Wide Total
$76,558,048
Regional- Bond Funded
$30,000,000
Wastewater
$12,730,000
Regional
$8,000,000
TPW- Special Funds
$16,693,771
TPW- Parks
$4,875,957
Water
$16,000,000
Local
$14,700,000
Subregional
$13,000,000
Fire
$607,836
Parks
$8,714,027
PED
$500,000
General Fund
$1,862,000
TPW-Special Funds
$19,463,109
Stormwater
$1,711,076
Fire Department Proposed CIP Budget
68 Fire Department CIP Budget Proposed Budget
New Fire Station – Kawana Springs – Capital Facilities Fees $272,668 Permanent Fire Station 11 Build – Capital Facilities Fees 272,668 Permanent Fire Station 11 Build – PSAP Tax 62,500
Total Fire Department Capital Projects $607,836
Water Department Proposed CIP Budget
69 Water Department CIP Budget Proposed Budget
Water Annual CIP $16,000,000
Wastewater Annual CIP 14,700,000
Regional Annual CIP 13,000,000
Storm Water & Creeks CIP 626,076
Total Water Department Capital Projects $44,326,076
Additional Storm Water & Creeks Gas Tax 675,000
Additional Storm Water & Creeks Enterprise & CFF 410,000 Water Proposed CIP Budget
70 Reservoirs
$4,000,000
Current FY26-27 Proposed
Master Plans and Studies $5,625,862 $2,247,000
New Projects - $500,000
In Design, Not Fully Funded $13,481,279 $1,363,000
In Design, Fully Funded $22,955,726 $11,890,000
Projects in Construction $4,433,730 -
TOTAL $46,496,597 $16,000,000
Wastewater Proposed CIP Budget
71 Sewer
Trunks
$6,910,000
Sewer Mains &
Services
$5,795,000
Current FY26-27 Proposed
Master Plans and Studies $2,165,530 $1,499,000
New Projects - $845,000
In Design, Not Fully Funded $2,859,126 $4,765,000
In Design, Fully Funded $9,808,068 $7,541,000
Projects in Construction $16,144,731 $50,000
TOTAL $30,977,455 $14,700,000
Regional Proposed CIP Budget
72 Plant Infrastructure-
Bond Funded
$30,000,000
Plant Infrastructure-
$5,500,000
Current FY26-27 Proposed
Master Plans and Studies $6,495,928 $1,550,000
New Projects - $500,000
In Design, Not Fully Funded $2,950,646 $5,375,000
In Design, Fully Funded $2,815,717 $5,575,000
Projects in Construction $5,028,219 -
TOTAL $17,290,510 $13,000,000
Storm Water & Creeks Proposed CIP Budget
73 Funding Sources:
• $495,000 Storm Water/Creek Enterprise
• $541,076 CFF – Storm Drainage/Sewer
• $675,000 Gas Tax – TPW
Current FY26-27 Proposed
Master Plans and Studies $689,758 $875,000
New Projects -- -
In Design, Not Fully Funded $380,495 -
In Design, Fully Funded $3,818,528 $836,076
Projects in Construction $1,560,452 -
TOTAL $6,449,233 $1,711,076
Park Development Impact Fee Zones
74 SW (Zone 2)
$2,720,842
NW (Zone 1)
$1,717,569
NE (Zone 3)
$1,436,493
SE (Zone 4)
$813,973
DT (Zone 3)
$343,140
DT (Zone 1)
$128,336
75 Parks Proposed CIP Budget
Dutch Flohr Park Grand Opening – Feb 2026
Project Description Proposed Budget
MLK Park Design/Build $4,381,058
Kawana Springs Community Park 2,275,000
Rincon Valley Park 1,336,493
Natural Play Area Renovation - Bayer 100,000
Fountaingrove Roadway Irrigation 100,000
South Davis Park 50,000
Downtown Parks Zone 1 128,336
Downtown Parks Zone 3 343,140
Total Parks Capital Projects $8,714,027
Kawana Springs Community Park
Transportation & Public Works
Funding Sources
76 Parks and Park
Amenities
$4,875,957
Funding Source Proposed Budget
Gas Taxes $8,945,070
Utility Impact Fee 4,188,616
Impact/Development Fees 3,426,149
Measure M/DD – Streets 2,903,274
General Fund 1,862,000
Total $21,325,109
Excludes $675,000 for Storm Water/Creeks
Excludes Parks Capital Projects
TPW FY 2026-27 CIP Appropriations
77 Total
$21,325,109 Pavement Maint.
$12,794,495BPOC
$3,400,000
Jennings Crossing
$2,850,000
ADA
$1,200,000
Pedestrian
$325,614
Misc.
$265,000
Bridge Repairs
$250,000 Bicycles
$240,000
Excludes $675,000 for Storm Water/Creeks
Excludes Parks Capital Projects
Pavement Maintenance
78 Pavement Maintenance
79 80
Questions?