Item Number: 1
City Council / Board of Directors
Public Hearing(s)
Meeting of: February 3, 2026
Submitted By:
Carmen Cun, Finance Director / City Treasurer
Subject:
Mid-Year Budget Review and Amendment Request to the Fiscal Year 2025-2026 Revised Fiscal Budget
Recommendation:
That the Honorable City Council and Board of Directors approve the changes reflected in this agenda item along with the included attachments by adopting:
(1) Resolution No. 26-001 of the City Council of the City of Victorville amending Resolution 25-040, as amended, the budget resolution for the City of Victorville for Fiscal Year 2025-2026, relating to an appropriation of funds; (2) Resolution No. VWD-26-001 of the Board of Directors of the Victorville Water District amending Resolution VWD-25-008, as amended, the budget resolution for the Victorville Water District for Fiscal Year 2025-2026, relating to an appropriation of funds;
(3) Resolution No. SCLAA-26-001 of the Board of Directors of the Southern California Logistics Airport Authority amending Resolution SCLAA-25-010, as amended, the budget resolution for the Southern California Logistics Airport Authority for Fiscal Year 2025-2026, relating to an appropriation of funds;
(4) Resolution No. CHAS 26-001 of the City Council of the City of Victorville as the Housing Asset Successor to the Victorville Redevelopment Agency amending Resolution CHAS 25-002, as amended, the budget resolution for the City as the Housing Asset Successor for Fiscal Year 2025-2026, relating to an appropriation of funds;
(5) Resolution No. LBT 26-001 of the Library Board of Trustees amending Resolution No. LBT 25-002, as amended, the budget resolution for the Victorville Library for Fiscal Year 2025-2026, relating to an appropriation of funds; and (6) Resolution No. 26-007 of the City Council of the City of Victorville amending, the budget resolution for the City of Victorville for Fiscal Year 2025-2026, relating to an appropriation of funds for Grant AB3229.
4 5
3 7
Fiscal Impact:
Approval of this agenda item would result in an increase of $20,470,595.02 in the total citywide expenditures and an increase of $14,276,230.26 in the total revenue budget for the Fiscal Year 2025-2026.
A summary of the Mid-Year budget changes is as follows (Attachment A):
City of Victorville – An appropriation of funds, increasing the expenditures by $18,704,839.35 and increasing the revenue by $11,835,953.70. Victorville Water District – An appropriation of funds, increasing the expenditures by $1,014,811.90 and increasing the revenue by $2,433,693.96. Southern California Logistics Airport Authority – An appropriation of funds, increasing expenditures by $602,954.68 and decreasing the revenue by $21,286.60.
Housing Asset Successor – An appropriation of funds, increasing the expenditures by $72,480.06.
Library – An appropriation of funds, increasing the expenditures by $25,509.03 and increasing the revenue by $27,869.20.
Grant AB3229 – An appropriation of funds, increasing the expenditures by $50,000.
Strategic Plan Goal:
A.Financial Sustainability Goal – foster disciplined long-term planning, cost control, increased revenues, and cost recovery.
Updated multi-year cash flows were presented to the Executive Team to ensure current year actions were sustainable and planning and forethought were put into the current and future City needs. Staff continues thinking of ways to sustain and improve programs while protecting the City against unexpected expenses or economic fluctuations.
B.Public Safety Goal – implement strategies to support a growing community. Measure P funding continues to support the Public Safety Plan and increase staffing and resources for Police, Fire, Code Compliance and Animal Control.
This includes funding a reserve for the continued replacement of aging fire apparatus, improvements to the fire stations, additional medical and fire equipment, reserve funding for the new police station, and continued funding of additional code compliance and animal control staff to support a proactive approach for our community.
C.Reduce Homelessness Goal – implement effective solutions to reduce Homelessness.
The City continues to address the issues of homelessness through our new Wellness Center and working with external agencies toward integrated solutions for our business and residential communities.
D.Invest in Infrastructure Goal – create a healthy-livable community by investing in infrastructure and innovations.
The City is focusing on infrastructure projects for FY 2025-2026 that include several roof replacements, upgrading booster stations and valve replacements to ensure continuous water availability, and several road pavement projects. 4 5
3 7
E.Organizational Effectiveness and Sustainability Goal – provide high-quality services utilizing local government best practices, employee development, support, and retention.
The City continues to focus on its employees through promotion of the core values of customer service, transparency, integrity, and accountability. A focus on training and education reflects the continued desire to invest in the development, support, and retention of our growing staff. This enables the City to continue our priorities to provide the best access to city services as well as continuous improvements in customer service for our residents and businesses.
Background:
The Fiscal Year 2025–2026 Budget, effective July 1, 2025, was adopted by the City Council/Board of Directors on June 3, 2025. The Mid-Year Budget Review provides an assessment of actual revenues and expenditures relative to the adopted budget and supports informed adjustments based on current financial conditions. This process enables departments to re-evaluate operations, identify unanticipated needs, address budget variances, and recommend budget amendments necessary to sustain efficient and effective City operations. Through this review, the City of Victorville reinforces its commitment to fiscal responsibility, transparency, and prudent financial management in response to evolving community needs.
Discussion:
The following chart presents a comparison of the Citywide Fiscal Year 2025–2026 adopted budget, revised budget, and year-to-date (YTD) revenues and expenditures as of December 2025. The column titled “FY 2025–2026 Revised Budget” reflects the budget approved by the City Council, inclusive of all Council-approved resolutions authorizing additional appropriations through December 31, 2025.
Citywide
FY 2025-2026
Adopted Budget
FY 2025-2026
Revised Budget
Actuals Through
12/31/25
% Received /
Expended
Revenue $376,296,015 $390,035,949 $180,250,350 46%
Expenditures $387,669,612 $499,688,507 $144,887,394 29% *Note: FY 2025-2026 Revised Budget includes $156.7 million in Capital Improvement Projects.
As of December 31, 2025, the City has received $180,250,350 in total revenues across all funds, representing approximately 46% of the revised revenue budget of $390,035,949. Expenditures total $144,887,394, or approximately 29% of the revised expenditure budget of $499,688,507. Overall, revenue collections are tracking consistently with projections, while expenditures remain below budgeted levels.
To better align the budget with current departmental operations and service demands, several budget adjustments are being recommended. These proposed changes would result in a net increase of approximately $14,276,230 in revenues and $20,470,595 in expenditures across all funds. A detailed summary of the major adjustments, organized 4 5
3 7
by fund type, including the General Fund, Measure P Fund, Special Revenue Funds (Other Governmental Funds), and Enterprise Funds is provided in the sections that follow.
Overview of Major Changes and Recommended Adjustments by Fund Type:
General Fund:
General Fund FY2025-2026
Revised Budget
Request Increase
(Decrease)
Mid-Year
Proposed Budget
Revenue $108,981,833 $8,567,504 $117,549,337
Expenditures $113,508,421 $ 977,376 $114,485,797
General Fund revenues are projected to increase by $8,567,504.10, primarily attributable to the following factors:
General Fund revenues are projected to increase by approximately $5,937,130.65, reflecting stronger-than-anticipated performance across multiple revenue categories. Property tax revenues are expected to increase by $2,727,187.60 based on historical collection trends. Interest income is projected to increase by $1,400,000 based on first-quarter earnings. Revenues from the Redevelopment Property Tax Trust Fund (RPTTF) are anticipated to increase by $1,391,713.99 following a review of actual receipts. Cost allocation revenues from other departments are projected to increase by $228,349.06, consistent with the recently completed Cost Allocation Plan study. In addition, sales tax revenues are projected to increase by $163,280 in accordance with HdL’s October forecast, and transient occupancy tax revenues are expected to increase by $100,000 based on first- quarter collections. These increases are partially offset by a projected decrease of $73,400 in franchise fee revenues based on receipts to date. In accordance with Schedule A of the Sheriff’s contract, the City receives credits for vacant positions. Based on staffing levels for the first half of the fiscal year, an increase of $2,402,896.32 is projected for the remainder of FY 2026. While vacancy credits have exceeded initial expectations, the City was notified in late December that most Sheriff vacancies have nearly been filled. Business license revenues are projected to increase by $165,000 based on year- to-date collections and anticipated fee adjustments.
Economic Development revenues are expected to increase by $134,250 attributable to Auto Park sign lease revenues.
Code Compliance revenues are projected to increase by $100,000, reflecting that approximately 70 percent of administrative citation cases have been resolved.
General Fund expenditures are projected to increase by $977,375.54, primarily due to the following factors:
The Police Department’s budget is projected to increase by $900,000, largely to support overtime costs and training expenses associated with new hires.
Persistent vacancies have necessitated the continuation of overtime to maintain adequate public safety service levels. This increase in cost is offset by the aforementioned credits in the revenue section.
4 5
3 7
Information Technology (IT) Department expenditures are projected to increase by $365,000 to support critical network infrastructure enhancements. These improvements include the installation of high-availability network switches to ensure continuous operations and failover capability, as well as upgrades to increase bandwidth across 14 locations, add a new City Hall connection, and expand E-LAN and internet capacity. Collectively, these upgrades are intended to improve network performance, reliability, and system resiliency. The remaining expenditure adjustments consist of minor increases and decreases distributed across other General Fund–supported departments.
With the recommended adjustments, projected cash flow is estimated at approximately 81% of the General Fund Reserve, substantially exceeding the minimum reserve requirement of 17%. Overall, the Mid-Year Budget Review indicates that General Fund revenues are projected to exceed expenditures by $3.9 million, reflecting continued fiscal stability and prudent financial management.
Projected Reserve Amount $92,644,182
Required Reserve Amount $19,460,821
Measure P:
Measure P FY2024-2025
Revised Budget
Request Increase
(Decrease)
Mid-Year Proposed
Budget
Revenue $31,578,839 $ (130,500) $31,448,339
Expenditures $65,156,513 $ 556,631 $65,713,144 Animal Control Shelter revenues are projected to increase by $50,500, reflecting higher-than-anticipated collections across multiple revenue sources, including donations and sterility voucher fees.
Measure P revenues are projected to decrease by $130,500 as a result of revenue classifications identified during the mid-year review, in which certain permit revenues were consolidated to more accurately reflect current collection patterns.
In addition, Fire Permit revenues are projected to decline by $35,000 due to collections trending below initial estimates.
Measure P expenditures are projected to increase by $556,630.52, primarily attributable to a cost allocation adjustment totaling $565,596.56 and the partial- year funding (six months) for a Veterinary Assistant position, a Registered Veterinary Technician-Shelter Lead, and a Fire EMS Management Technician, with a combined cost of $97,078.47. These increases are partially offset by a $104,429.93 reduction in Police Department expenditures associated with vacant positions.
With the recommended budget adjustments, projected cash flow is estimated at approximately 90% of the Measure P Fund Reserve, significantly exceeding the minimum reserve requirement of 17%.
4 5
3 7
Projected Reserve Amount $43,701,013
Required Reserve Amount $8,286,537
Special Revenue Funds:
The following summarizes the most significant mid-year adjustments to the City’s Special Revenue Funds:
Special Revenue Fund revenues are projected to decrease by $2,979,190.92, primarily due to several factors. Development Impact Fee revenues are expected to decline by $1,924,280.92 as a result of construction project delays throughout the City. In addition, revenues are projected to decrease by $574,060 following Burrtec’s discontinuation of fueling services with the City due to a recent buyout, and by $492,600 resulting from the City no longer receiving bed fees from the Symba Center. These reductions are partially offset by an anticipated annual buyout payment from Burrtec of $275,000.
Special Revenue Fund expenditures are projected to increase by $1,792,048.81 to support capital improvements across multiple ongoing projects that enhance public services and infrastructure. Significant allocations include $475,000 for the Third Avenue Road Improvement project and $412,590 for the Fire Hydrant Installation project. Additional projects include $288,914 for the Installation of Streetlights project, $142,410.12 for the Police Station Design Services project, and $90,752 for the Fire Station Capacity Improvement project. Collectively, these investments are intended to improve public safety, accessibility, and overall quality of life for City residents.
Proprietary Funds:
Proprietary Fund revenues are projected to increase by $8,818,417.08, while expenditures are projected to increase by $17,094,540.15, driven by the following factors:
Victorville Water District (VWD):
VWD’s overall revenues are projected to increase by $10,078,913.20, primarily attributable to anticipated payments of $9,947,798 from the Sanitary Sewer Fund (Fund 425) for treatment expenses related to Service Area B sewer flows.
Additional revenue includes unanticipated lease income of $25,000 from Centro water rights.
The Industrial Wastewater Treatment Plant (IWWTP) revenues reflect a decrease of $7,645,219.24, largely due to the reclassification of sewer use fees. All non- industrial Sewer Use Fees, totaling $7,364,931.56, are now recorded in the Sewer Fund (Fund 425). Interest income is also projected to decrease by $280,287.68 based on first-quarter earnings.
VWD’s overall expenditures are projected to increase by $1,014,811.90. This increase is primarily attributable to a proposed $2,128,500 appropriation from the IWWTP Capacity Charge Fund to support construction of the IWWTP expansion.
Additional capital expenditures include $884,651 for infrastructure improvements, consisting of $400,000 for IWWTP direct connection improvements, $305,051 for the Mojave Drive Improvement Project, and $120,000 for the Third Avenue Road project, $30,000 for the proposed purchase of a vehicle for the SCADA 4 5
3 7
Instrumentation Technician, and $29,600 for office cubicles. Additional contributing factors include $100,000 for on-call water feasibility studies and $102,443 in security cost incurred in the current fiscal year.
These expenditure increases are partially offset by a reduction of $2,583,689.20.
Of this amount, $1,365,635 reflects the cancellation and closure of three projects— Project 74290 (Replace 2-inch Small Diameter Pipeline) and Project 74471 (Water Pipeline Area 29), which are being evaluated under the updated Water Master Plan, and Project 74522 (SCADA Instrumentation Technician vehicle purchase), which was completed in June 2025. An additional reduction of $1,218,054.20 results from updates associated with the cost allocation plan study.
Victorville Municipal Utilities Services (VMUS):
VMUS revenues are projected to increase by $1,662,210, primarily driven by higher interest earnings and increased natural gas sales. VMUS expenditures are projected to increase by $1,134,657.95, largely attributable to a $930,000 request for the design and construction of a centralized warehouse to consolidate departmental parts, materials, and equipment.
Additional increases reflect higher legal and study-related costs associated with the proposed 230 kV interconnection projects, including cost-of-service studies, the SCE facility study, and the SCE system impact study.
Sanitary/Solid Waste Management:
Sanitary/Solid Waste Division revenues are projected to increase by $4,743,799.72, primarily due to the reclassification of $4,298,367 in sewer fees.
The fund now records Sewer Treatment Service Area B fees previously accounted for in Water Fund (Fund 412). Additional increases include $255,422.72 in penalty and late fees, which are trending above budget and consistent with prior-year activity, and $40,000 in Sewer Feasibility Study permit revenues. Sanitary/Solid Waste Division expenditures are projected to increase by $14,342,115.62, primarily driven by a $9,947,798.88 increase resulting from a fiscal year 2026 fund realignment transferring all non-industrial sewer user revenues from Solid Waste Fund (Fund 425) to Water Fund (Fund 412) to align with the Sewer Rate Study.
Additional expenditure increases include the proposed purchase of land for the Household Hazardous Waste (HHW) Recycling Consolidated Center in the amount of $2,500,000; the proposed construction of Sewer Capacity Projects C2 and C3 totaling $650,000 to upsize the existing sewer main from 8 inches to 15 inches along the Oro Grande Wash corridor between Palmdale Road and Hesperia Road; and the proposed acquisition of a hybrid SUV for $75,000.
Southern California Logistics Airport:
Southern California Logistics Airport revenues reflect a proposed net decrease of $21,286.60. While total revenues are projected to increase by $302,355.72, primarily due to the commencement of the Velo Aviation lease for $92,348.13 and the addition of multiple new tenants totaling $91,331.05. These gains are largely offset by a $238,293.82 reduction, primarily associated with the Boeing lease in 4 5
3 7
the amount of $174,633.50 and a $49,232 reductions in VVEDA wage reimbursements.
Airport Operations expenditures are projected to increase by $602,954.68, primarily due to an additional appropriation of $592,576.88 for insurance costs not included in the adopted budget. Additional increases include $126,200 for the installation and relocation of reduced-pressure detection assembly valves and PIV valves for Buildings 682 and 685. These increases are partially offset by a $122,028 reduction in cost allocations resulting from the updated cost allocation plan study.
Grant AB3229 for the Supplemental Law Enforcement Services Fund:
An appropriation of funds, increasing the expenditures by $50,000, is being requested by Public Works and Risk Management to enhance the portable radios and related infrastructure used across all City departments. These two-way devices ensure clear audio, support both digital and analog modes, and offer multiple channels and zones for the organization. This provides reliable communication with an extended range in open areas.
Conclusion
The Mid-Year Review Report reflects the City’s continued prioritization of public safety and its sustained investment in critical infrastructure improvements. Overall, the City’s financial position remains strong, with the General Fund projected to close the fiscal year with an estimated surplus of $3.9 million, as revenues are anticipated to outpace expenditures. While the use of fund reserves is necessary to address shortfalls in certain funds, continued monitoring and periodic adjustments throughout the remainder of the fiscal year will be essential to maintaining long-term fiscal sustainability. The City also remains proactive in identifying and pursuing new revenue sources to support community needs, preserve fiscal stability, and ensure adequate resources for future operations.
Staff remain available for any questions the Council may have.
Attachments: A. Mid-Year Budget Summary
B. Resolution No. 26-001
C. Resolution No. VWD-26-001
D. Resolution No. SCLAA-26-001
E. Resolution No. CHAS 26-001
F. Resolution No. LBT 26-001
G. Resolution No. 26-007