FY 2026-27 Proposed Budget
May 13, 2026 – Budget Subcommittee Meeting
City of South San Francisco
Presented by: Christie Donnelly, Finance Director
Government Code Section 54957.5
SB 343 Item #2
05/13/2026 SP BUDGET SC
Agenda
2 Key Themes / Overview
FY 2025-26 (Current Year) General Fund Projection
FY 2026-27 General Fund Proposed Budget
Summary
Anticipated Revenues & significant drivers
Anticipated Expenditures & significant drivers
Fund & Reserve Balances
FY 2026-27 Recommended Departmental Adjustments
Positions
Appropriations Adjustments – General Fund
Appropriations Adjustments – Non-General Fund
Takeaways
Requests & Questions
Key Themes &
Budget Overview
Key Themes
4 •Balanced Budget Preserves Current Service Levels
•Limited Reserve Use Addresses Near-Term VLF Impacts
•Prior-Year Budget Slack Reduced
•Revenue Uncertainty Remains, Especially Related to VLF •One-Time Funds Are Not Used for Ongoing Operations
Overview: What This Budget Does — and Does Not Do
A balanced near-term operating plan that preserves services, while recognizing unresolved future risks ✓ What This Budget Is / Does ! What This Budget Is Not / Does Not Address ✓ Balanced Operating Budget
✓ Maximizes Available Funding
✓ Modest, Targeted Adjustments
✓ Addresses City Council Priorities &
Preserves Services
! Future VLF Impacts Remain
Unknown
! State Action Remains Uncertain
.
! Future CalPERS UAL Impacts Not
Yet Determined
! One-Time Funds Not Used for
Ongoing Needs
Bottom line: this budget solves the current-year
operating challenge without using onetime/project funds for ongoing operations — but several major future variables remain
unresolved.
2025-26 Projected FYE
FY 2025-26 General Fund Projection (Excluding Meas W) (in millions) 8 2025-26
Adopted
Budget
Mid-Year 2025-26
Projected FYE
Updated 2025-26
Projected
FYE
Revenues/Transfers In $ 140.5 $ 154.7 $ 158.4
Expenditures/Transfers Out (152.7) (160.5) (159.0)
2026-27 Proposed Budget
General Fund Revenue Updates
10 (vs. $6.8M owed)
General Fund Expenditure Updates
11 Expenditure Updates
Base Payroll Update • Salary and benefits are projected to increase 3.4% over adjusted budget due to:
• 4.0% COLA, step-increases, 3.7% CalPERS UAL payment, and Health Premium (3.2% for Kaiser, 9.2% for Blue Shield) increases. • A vacancy factor of $8.0M salary savings is assumed (approx. 6.4%) Services and Supplies
Adjustment
• Removed approx. $2.4M from the base budget to align the base budget with demonstrated spending patterns.
• This is in addition to $6.0M in savings realized in the current FY.
Interdepartmental
Charges Adjustment
• Increase of $2.5M across all funds ($2.0M GF) to align budget charges with the City’s actual risk-management obligations.
FY 2026-27 General Fund – Proposed Budget Summary (in millions) 12 Beginning Available* Fund Balance $ 42.5
Revenues 156.9
Less: Expenditure 162.4
Surplus/ (Deficit) (5.5)
Use of Available Unassigned Balance 5.5
Net Surplus/(Deficit)
Balanced
Budget
Ending Available Fund Balance** $ 40.5
*Available fund Balance is unassigned general fund balance after policy-level reserves subtracted **20% reserve requirement decreased $3.5M due to lower proposed revenue FY 2026-27 – Projected General Fund Balance
13 Recommended Departmental
Adjustments
Positions
Non-Personnel Operating
Adjustments
General Fund Appropriation
Adjustments - $1.7M total
1. City Attorney
• Expense: $55k Contract Increase
2. City Clerk
• Expense: $200k Elections
3. Economic & Community Development
• Expense: $493k
• $218k EAC Operation Costs and Rent – offset by PLHA grant & rent revenue • $200k Legal Fees (accounting adjustment)
• $75k Consulting Fees
• Revenue: $41k Rent
General Fund Appropriations Adjustments - $1.7M total
17 4. Fire
• Expense: $262k
• $105k EMS-band Radio Replacement
• $157k Supplies and Services – detailed on Attachment 2
5. Human Resources
• Expense: $340k Contract Negotiations and Staffing Study
6. Library
• Expense: $40k PLS Network Increase
• Revenue: $89k Project Read, ASES Grant, and Fines and Fees General Fund Appropriations Adjustments - $1.7M total
18 7. Parks and Recreation
• Expense: $310k
• $249k Orange Memorial Park Aquatics Center pool-related expenses • $61k Utility increase for new parks
• Revenue: $245k Aquatics Expansion
8. Police
• Revenue: $24k Dispatch Services
9. Public Works
• Expense: $11k Additional Services and Supplies, Meeting and Training expenses General Fund Appropriations Adjustments - $1.7M total
19 Non-General Fund Appropriation
Adjustments - $2.2M total
1. Economic & Community Development
• $30k General Plan Website Maintenance
• $30k Developer Deposits
• $300k Housing Service Contracts
• $100k Affordable Housing
• $200k Commercial Linkage Impact Fee
2. Fire
• $525k Portable Radio Replacement and Fire Alerting Hardware:
• $410k Measure W
• $115k Fire Impact Fee
3. Police
• $525k Handgun and Body-Worn/In-Car Cameras and Taser Replacement:
• $359k Measure W
• $166k Police Impact Fee
Non-GF Appropriations Adjustments - $2.2M total
21 4. Public Works
• Expense: $518k
• $510 Stormwater Capture Maintenance and Permit Fee Increase – Stormwater Fund • $8k Safety Attire and Equipment – Sewer Fund
• Revenue: $686k Sewer Rate Increase – Sewer Fund
5. Information Technology
• Expense: $309k Software and Equipment
• $309k Internal Service Fund
6. Stormwater Fund
• Due to statutory limitations, this is currently heavily subsidized with transfers from the General Fund and Gas Tax revenues. This year, an increase of $500k from Measure W to the Stormwater fund is proposed to cover the expenses of operating the City’s new storm capture improvement.
Non-GF Appropriations Adjustments - $2.2M total
22 Position Adjustments
Parks and Recreation
• Convert 1.0 FTE Building Maintenance Stationary Engineer to Lead Crafts Person • Convert 1.0 FTE Arborist Technician to Parks Maintenance Supervisor Public Works
• Convert 1.0 FTE Utility Locator to Senior Public Works Maintenance Worker Position Adjustments – Budget Neutral
24 Parks and Recreation – Measure W & increased pool revenue • Add 15.77 FTE Aquatics Positions
• Add 0.5 FTE Park Maintenance Worker - Hourly
• Add 0.5 FTE Building Maintenance Custodian
Economic and Community Development
• Convert - 1.0 FTE Management Analyst I to Management Analyst II Information Technology – ISF Fund: Allocated in part to GF • Add 1.0 FTE Information Technology Manager
Position Adjustments – Offset through non-GF Funds
25 Oyster Point CFD – Special Tax B (Fund 236):
• 3 Positions previously subsidized by General Fund now able to be funded by increased revenue to Fund 236 • Parks Maintenance Worker • Lead Parks Maintenance Worker
• Senior Parks Maintenance Worker
City Manager’s Office
• Remove – (1.0) FTE Diversity, Equity, and Inclusion Officer Library:
• Add 1.0 FTE Librarian II (GF)
• Add 0.5 FTE Office Specialist – Hourly (GF)
Position Adjustments – General Fund
26 Key Takeaways
• City is in relatively good financial health overall
• Unassigned Fund balance position establishes resiliency to withstand economic cycles
• Prudence requires us to discuss and plan for long-term solutions to ongoing & increasing budget deficit
• Budget and forecast will continue to be monitored, updated and refined throughout the year – update(s) will be presented as soon as needed
28 Key Takeaways
• How much can/should the General Fund subsidize
programming?
• How much of unassigned fund balance can/should be
leveraged to offset upcoming stressors such as UAL & OPEB? • How best to prepare for VLF worst-case-scenario?
29 Questions to Begin Asking
• Input on Use $5.5M of General Fund Unassigned Fund
Balance to balance current year General Fund budget.
• Input on Use of $1.1M of Measure W operating revenue
to fund increased costs of Measure-W funded Aquatic
Center
• Any additional guidance to staff in preparation for the City Council study on May 27, 2026.
30 Requested Actions of the Committee
Questions?
FY 2026-27 Proposed Budget
City of South San Francisco
THANK YOU
FOR JOINING US TODAY