Proposed
Operating
Budget
FY 2026-27
City Council Meeting
June 10, 2026
1 Budget Workshop
Overview of the Proposed FY 2026-27 General Fund
Operating Budget
• Key Revenues
• Key Expenditures impacting current/future budgets
• Budget highlights by Department
Other Funds
2 Budget Adoption
June 24, 2026
Adoption of the FY 2026-27 Operating Budget
3 3
FY 2026-27 Proposed Budget Overview
• Balanced Budget
• Reserve balance 22.44%
• Available amount over 22% Reserve Policy, $295,336
• Continue modest growth in Property Tax and Sales Tax
• Economic Uncertainties:
• Persistent inflation
• Steady but modest revenue growth
• High mortgage rates resulting in cooling buyer demand • Consumer confidence continues to be a concern
4 FY 2026-27 Proposed Budget Overview
• CalPERS
• Total costs, $8.4 million, $494,871 increase
• Unfunded Liability $5.6 million - $465,220 increase
• Better than expected investment returns at 6/30/2024 of 9.3%, higher than the assumed rate of return (discount rate) of 6.8%
• Relief in FY 2027-28?
• 6/30/25, investment rate of return was 12.0%
• Reduce the Unfunded Liability through investment gains • Additional Discretionary Payment, $600,000 is included in the budget • 6th consecutive year of ADP
• Current projected interest savings from payments made to date ($2.9 million) is $2.7 million
5 FY 2026-27 Proposed Budget Overview
• Sheriff contract fee increases
• FY 26-27, $18.9 million - 3.5% increase, $639,522
• Last year of current contract, expect future contract increases to be significantly more than currently experiencing
• Other future items
• $327.7 million in unfunded infrastructure
• Last year of current MOU with the Santee Firefighters’ Association • Medical, Liability, and Workers’ Comp increases
• Unfunded mandates
6 10-Year Forecast
7 Proposed FY 2026-27
Budget Summary
8 General Fund
Proposed Budget Summary
FY 2026-27
Revenues $68,023,090 639636 0
Expenditures (66,634,270)
Revenues Over (Under) Expenditures 1,388,820
Transfers to Other Funds (610,960)
Transfer to Capital Improvement Program (572,000)
Additional Discretionary Payment (CalPERS) (600,000)
Change to Fund Balance (394,140)
Available Fund Balance, 7/1/26 15,288,476
Available Fund Balance, 6/30/27 $14,894,336
General Fund -Revenues
$68.0 million
total
Increase of
$2.4 m over
est. current
year revenue
(3.67% overall
increase)
9 Major General Fund Revenues
Largest General Fund Revenue Source
• 42.6% of General Fund Revenues
• FY 2026-27 Estimate = $29.0 million
• $1.1 million increase
• Projected change in assessed valuation = 3.9%
• Based on valuation in place on January 1, 2026
Property Taxes
10 Major General Fund Revenues
Sales Tax
2nd Largest General Fund Revenue Source
• 30.7% of General Fund Revenues
• FY 2026-27 estimate = $20.8 million
• $567,090 or 3.2% increase over revised FY 25-26
estimate
• Growth in Autos & Transportation,
Building/Construction, Fuel & Service Stations and
County Pool
• Slight growth or flat in other categories
11 General Fund Revenues
Other Revenues
• Franchise Fees - $4.4 million
• $88,690 increase
• EMS Reimbursement - $7.1 million
• $388,410 increase
• Cannabis Community Benefit Fee - $300,000
• Conservative estimate, includes two retail stores fully operational throughout the year, and the remaining two opening within the year • Fire Benefit Fee - $1.2 million
• Fee supports 5% of the Fire Department budget
• Flat for 30 years, no CPI increase
12 General Fund Expenditures
$66.63 million total
• $1.9 million
increase, 2.9%
• Personnel costs
• Sheriff contract
• General Plan Update
• CSD projects
• Fire equipment &
station support
• Design of FS 4
Remodel
Fire & Life Safety
35%
Law
Enforcement
29%
Community
Services
12%
Engineering
5%
Planning & Building
5%
All Others
14%
13 General Fund Expenditures
Budget Requests vs. Included in Proposed Budget
• Personnel Requests, $998,010
• 8 requested positions
• Net zero additions, 2 new full-time positions included in proposed budget (including 2 full-time positions eliminated), net increase $81,050 • One-time departmental requests, $4,411,260
• Included in proposed budget, $1,065,850
• Vehicles, $1,670,690
• 7 vehicles requested
• 2 vehicles included in proposed budget, $197,650
14 Personnel Costs
3% COLA for Santee full-time employees
• Santee Firefighters’ Association (SFFA)
• All General and Management employees
• City Council
1.5% Negotiated market adjustment SFFA
effective the first full pay period in January
15 Personnel Costs
Net zero increase in full-time positions
• City Manager’s Office reorganization
• Addition of an Assistant City Manager
• Elimination of three positions: Economic Development Manager, Senior Management Analyst/Grants Coordinator, part-time Marketing Aide • Savings of $41,770
• Engineering Technician
• Front counter support for engineering related inquiries • Plan and encroachment permit review
• Allow more senior engineering staff to focus attention on higher level, more complex assignments
• $106,300
16 Personnel Costs (Continued)
• Emergency Medical Services (EMS) funding update
• Substantive changes to the funding distribution between EMS and GF • Squad 4 costs moved to the GF
• Assigning more administration costs to the EMS fund
• Cost, $308,850 for the GF and savings of $147,610 to EMS fund • Public Works Supervisors
• Aligning the salary three supervisory positions within Public Services (PSD) • $28,820
17 General Fund Department Highlights
City Council - $598,480 – State Lobbyist funding removed, $18,000, will utilize legislative resources provided by League of CA Cities
City Attorney - $958,580 – Key highlights include efforts involving homelessness, cannabis business permits, the new Financial Software contract, trainings, and other special projects City Manager - $1.2 million – highlights include a reduction in conferences and trainings Information Technology - $1.4 million
• No significant non-personnel changes to this budget
18 General Fund Department Highlights
Animal Control - $496,740
• This is the cost of year one of a three-year agreement with San Diego Humane Society for animal control services, a $18,140 increase City Clerk - $448,220
• Did not include $80,000 for annual election expense
Human Resources & Risk Management - $2.0 million
• No significant non-personnel changes to this budget
Finance - $1.9 million
• Costs associated with credit card processing have been reduced by $15,000 based on revised pricing plan from vendor
19 General Fund Department Highlights
Engineering - $3.4 million
• No significant non-personnel budget changes
Planning and Building - $3.5 million
• Includes $275,000 for work related to the Comprehensive General Plan Update. The GP update reaches across multiple departments, specifically Fire (Safety Element) and Engineering (Mobility Element)
• Third year of five-year funding strategy to fund the General Plan. Years 4 and 5 have a combined required amount of $965,000.
• California Planning and Zoning law requires cities to maintain and periodically update their GP, but unfunded by the State 20 General Fund Department Highlights
Community Services - $8.1 million
• $800,310 addition of the Fleet division
• $56,330 - Switch gear box replacement at TCCPW
• $16,100 - Big Rock Park sports court resurfacing
• $4,320 - iPads and connectivity to allow staff to respond, via Energov, to resident concerns and service requests in the field. In total, there will be 20 working iPads for this service.
Law Enforcement - $19.1 million
• $639,500 (3.5%) annual increase in the Law Enforcement Services contract with San Diego County
• Continues City’s financial support towards the School Resource Officer at West Hills and Santana High Schools ($203,090)
• Funding to lease 6 Sheriff cameras
21 General Fund Department Highlights
Fire - $23.5 million
• $25,550 - Central Zone Fire Academy
• $38,400 - Equipment for second BLS unit (FY 25-26 Mid-Year Update) • $46,730 - Portable radios and chargers
• $8,790 - Window and screen replacements for FS 5
• Other increases include:
• Medical supplies
• Agency contributions
• Wearing apparel
22 General Fund Department Highlights
Other Uses - $1.8 million
• Funding for design costs for FS 4 remodel - $572,000
• Transfers to Other Funds
• Vehicle Replacement - $497,710
• Technology Replacement Fund - $70,000
• Highway 52 Coalition Fund - $43,250
• A $600,000 supplementary payment (ADP) to reduce the
City’s unfunded CalPERS liability
23 Other Funds
• Vehicle Acquisition & Replacement Fund
• Gas Tax Fund
• Flood Control Fund
• Emergency Medical Services
24 Vehicle Acquisition & Replacement Fund
• Total requested - 1 engine, 1 trailer, 5 vehicles, $1.7 million • Proposed FY 2026-27 Vehicle Acquisitions
• Ford F-250 BC Fire Command Vehicle, $173,260
• Replacement of V-170
• Tilt Utility Trailer, $24,390
• New trailer to replace V-67 and V-137
• Trailer better suited for carrying heavier equipment
• No new Leases through Enterprise Fleet Management
• Currently paying debt service on one Fire vehicle, Triple Combo Pumper
25 Gas Tax (Highway Users Tax) Fund
(CSD/ENG)
Received from State of CA – Restricted for street and road purposes FY 2026-27 Projected Revenue - $1.7 million
FY 2026-27 Operating Budget - $2.0 million
• Mast Blvd Median renovation, $45,360
• Cuyamaca Sound Wall repairs, $12,870
• Underground Utility Location services, $5,000
• Increases in utility charges, electricity and water, and street sweeping costs
26 Zone 2 Flood Control District
Property tax allocation used for activities required by the Municipal Storm Water Permit
FY 2026-27 Projected Revenue - $562,580
FY 2026-27 Proposed Budget - $613,930
*Additional Stormwater Program costs reflected in the General Fund 27 Emergency Medical Services Fund
The City’s share ofrevenue generated through SLEMSA
FY 2026-27 Projected Revenue - $6.4 million
FY 2026-27 Proposed Budget - $7.4 million
• Funding to include $308,000, design costs FS 4 remodel • Reimbursement of all costs associated with the Fire Department’s EMS division • Increase in ambulance fees approved by SLEMSA Commission on June 8th. Increase in fees supported by a fee study prepared by NBS Consulting. Expecting approximately $500,000- $600,000 in increased revenue.
28 Next Steps
City Council and public input/discussion
June 24th – Budget Adoption
29 End of Presentation
Back up slides if needed
30 FY 25-26 % FY 26-27 % FY 27-28 % FY 28-29 % FY 29-30 % FY 30-31 % FY 31-32 % FY 32-33 % FY 33-34 % FY 34-35 % Adopted Change Projected Change Projected Change Projected Change Projected Change Projected Change Projected Change Projected Change Projected Change Projected Change Total Revenues and Transfers In $ 65,613,740 $ 71,773,090 9.4% $ 85,607,870 19.3% $ 88,328,078 3.2% $ 91,243,065 3.3% 94,244,480 3.3% 97,309,733 3.3% 100,568,273 3.3% 103,941,195 3.4% 107,318,834 3.2% Total Operating Expenditures 64,754,553 66,634,270 2.9% 70,817,230 6.3% 74,988,405 5.9% 77,200,285 2.9% 79,928,446 3.5% 82,758,152 3.5% 85,705,582 3.6% 88,776,211 3.6% 91,975,658 3.6% Excess of Revenues Over (Under)
Expenditures 859,187 5,138,820 14,790,640 13,339,673 14,042,780 14,316,034 14,551,581 14,862,691 15,164,984 15,343,176 Transfers Out/Other Uses:
CalPERS Trust 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 Infrastructure Funded by Sales tax - 1,550,000 13,787,733 10,194,433 10,483,133 13,721,580 12,484,440 12,718,440 12,959,479 12,799,774 Capital Improvement Program 4,058,140 572,000 1,000,000 - 1,000,000 - 1,000,000 - 1,000,000 - Vehicle Replacement Fund 1,396,230 497,710 400,000 400,000 400,000 425,000 400,000 450,000 500,000 550,000 Technology 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 Other 43,240 43,240 43,240 43,240 43,240 43,240 43,240 43,240 43,240 43,240 Total Transfers Out/Other Uses 6,167,610 3,332,950 15,900,973 11,307,673 12,596,373 14,859,820 14,597,680 13,881,680 15,172,719 14,063,014 Excess of Revenues Over (Under)
Expenditures and Operating
Transfers Out (5,308,423) 1,805,860 (1,110,333) 2,032,000 1,446,407 (543,786) (46,099) 981,011 (7,735) 1,280,162 Reserves, beginning of year 20,021,916 15,288,493 17,094,354 15,984,021 18,016,021 19,462,427 18,918,642 18,872,543 19,853,554 19,845,819 Reserves, end of year $ 15,288,493 $ 17,094,354 $ 15,984,021 $ 18,016,021 $ 19,462,427 $ 18,918,642 $ 18,872,543 $ 19,853,554 $ 19,845,819 $ 21,125,981 Required Reserve, end of year $ 14,197,400 $ 14,599,039 $ 15,579,791 $ 16,497,449 $ 16,984,063 $ 17,523,758 $ 18,206,793 $ 18,855,228 $ 19,530,766 $ 20,174,145 Reserve excess (shortfall) $ 1,091,094 $ 2,495,314 $ 404,230 $ 1,518,572 $ 2,478,365 $ 1,394,884 $ 665,749 $ 998,326 $ 315,052 $ 951,836 Reserve % 23.6% 25.7% 22.6% 24.0% 25.2% 23.7% 22.8% 23.2% 22.4% 23.0%
CITY OF SANTEE
GENERAL FUND
TEN YEAR PROJECTION SUMMARY
FY 2025-26 TO FY 2034-35
10-Year Forecast with 1 cent add-on sales tax with
infrastructure projects