Item No.
'STAFF REPORT
DATE: July 27, 2026
TO: Honorable Mayor and City Council
FROM: Dr. Sean M. Moore, City Manager
PREPARED BY: Hrant Manuelian, Director of Finance
Ryan Blackerby, Deputy Director of Finance
SUBJECT: Fiscal Year 2026-2027 Annual Budget and Capital Improvement Program RECOMMENDATION:
That the City Council:
1. Adopt Resolution No. 2026-20, approving the Fiscal Year 2026-2027 Operating Budget and Capital Improvement Program for the City of Yucaipa; and
2. If budget is approved as proposed including the closure of the YPAC, staff recommends that council provide direction to staff to issue a RFP for the operations of the YPAC by an outside entity; or
3. If budget is approved as proposed except for the closure of the YPAC, staff recommends that council take funding from the Streets fund and/or the Contingency account to fund the YPAC.
YPAC costs are estimated to be $1,376,745 in operations less projected revenues of $650,000 for a net of $726,745; or
4. Provide further direction to staff.
BACKGROUND/DISCUSSION:
The FY 26-27 Operating Budget and Capital Improvement Program represents the annual spending plan for each of the City's accounting funds and includes both operating and capital spending estimates.
There have been two budget workshops for the FY 26-27 budget. The first was on April 6, 2026 which was held at the Yucaipa Performing Arts Center, and a second workshop was held on June 81 2026. During these workshops staff received direction and recommendations from council. The budget was then presented for adoption at the June 22, 2026 Council meeting, however the budget was not adopted and Council provided additional direction and comments. Since the last council
meeting staff met with all five council members and all department directors and made additional changes as summarized below. These have been incorporated into the FY 26-27 budget being presented for adoption.
Summary of changes:
• General Fund has a balanced budget that is being presented for adoption. • Measure S revenues have been allocated 100% to support Public Safety Police Services. • Proposed closure of the YPAC.
• Total of seven positions frozen across all departments and two positions laid off due to the closure of the YPAC.
• Moved an additional $500,000 from the General Fund to the Streets Capital Fund for total available funding of $4,544,899.
• The Fire fund is projected to have an ending fund balance of over $4.2 million and when excluding one-time items the balance is projected to be over $6.7 million. • Costs were cut across several departments as summarized in the expenditure section below.
The most significant being the seven positions that have been frozen and the closure of the YPAC. These cuts all contributed to the addition of the Paramedic Squad.
The amounts in the FY 26-27 Budget are presented on the budgetary basis of accounting which focuses on flows into and out of each accounting fund. The budgetary basis differs from the modified -accrual basis which the City uses to compile governmental fund financial statements.
While the FY 26-27 Budget includes financial information for all accounting funds, staff would like to highlight the primary operating funds which are the General Fund and the Public Safety Fund.
G,enPral Find
Below is a summary of the revenues and expenditures being proposed for the City's Fiscal Year 2026-2027 budget.
Revenues
For fiscal year 26-27, we have budgeted total General Fund revenues of $54,019,107, which includes the General Fund, Police, Fire, and Paramedic services. This is an increase of $1,745,674 compared to the FY 25-26 revised budget. See chart below for listing of revenues by department.
See budget book for breakdown by revenue category.
Non -Departmental Revenue
Gen Svc Revenue
Finance Revenue
Community Services Revenue
Community Development Revenue
Public Works Revenue
Specific Plan
Paramedic Revenue
Police Services Revenue
Fire Services Revenue
Fire Services Revenue
General Fund Revenue Fd 223
General Fund Revenue Fd 250
GF and PS
Expenditures
2025-2026
2026-2027
Change from PY
Revised Budget
Council Draft
Budget
41,128, 505.00
42, 674,110.50
1, 545, 605.50
43, 620.00
38, 380.00
(5,240.00)
1,450.00
1,000.00
(450.00)
1, 689, 825.00
1, 209, 500.00
(480, 325.00)
2,130,325.00
1,948,725.00
(181,600.00)
387, 637.40
899, 505.00
511, 867.60
-
550.00
550.00
1, 090, 000.00
1, 090, 000.00
-
290, 874.00
536, 777.00
245, 903.00
5, 350, 000.00
5, 463, 000.00
113, 000.00
130, 000.00
131, 595.00
1,595.00
17,197.00
14,197.00
(3,000.00)
14, 000.00
11, 768.00
(2,232.00)
52, 273, 433.40
54, 019,107.50
1, 745, 674.10
Expenditures for FY 26-27 are proposed to be $57,783,731 which includes the General Fund, Police, Fire, and Paramedic services. This is an increase of $3,059,667 compared to the revised budget for FY 25-26. The table below shows expenditures by department. See the budget book for detailed breakdown by expenditure category.
FY 2025-2026
FY 2026-2027
Revised
Proposed
Change From
Budget
Budget
Prior Year
Non -Departmental
1,283,491.00
649,294.00
(634,197.00)
City Manager
2,165,553.00
1,531,487.00
(634,066.00)
H R / R M
2, 321, 510.70
2, 576, 294.00
254, 783.30
City Council
212,243.00
239,012.00
26,769.00
Gen Svcs/City Clerk
3,316,832.00
3,286,325.00
(30,507.00)
Finance
1,958,786.00
1,988,850.00
30,064.00
Community Services
4,602,998.00
3,918,958.00
(684,040.00)
Community Developemnt
3,140,396.00
2,831,256.94
(309,139.06)
Public Works
6,985,143.00
8, 327, 216.13
1, 342, 073.13
Paramedic Services
2,364,188.00
3,842,816.00
1,478,628.00
Police Services
16,575,281.00
18,241,642.00
1,666,361.00
Fire Protection
9,797,642.00
10,350,580.00
552,938.00
Total
54, 724, 063.70
57, 783, 731.07
3, 059, 667.37
Significant changes noted:
1. Non -Departmental — Decrease in expenditures is mainly due to an additional $500,000 reduction in the contingency budget to provide additional funding to the Streets Capital fund.
2. City Manager — The City Manager department had a reduction of $634,066. City Manager decrease is due to salary and benefit saving from two positions being frozen, Assistant City Manager and Sr. Management Analyst and a decrease in Professional Services of $350,000 which was for several items, including a state and federal lobbyist, consultant, Props AV, and a Podcast host.
3. HR/RM — Human Resources has an increase of $91,638, which is mainly due to the COLA adjustment for salaries and increased PERS costs for FY 26-27. Risk Management has an increase of $163,144 due to increased insurance premiums from CIRA.
4. Finance — Decrease is due to two positions being frozen and therefore not budgeted. The Office Assistant and Purchasing Officer positions are being frozen.
5. Community Services — Overall costs increased across all divisions within Community Services, however it is being proposed to shut down the YPAC, which would provide a savings of $1,414,164 less projected revenues of $650,000. This decrease is offset by increases in the Sports & Special Events division of $226,865 and Senior Services division of $346,295. To account for notice to be given to employees for layoffs and potential vacation leave payout we included two months of salary and vacation leave payout for the full amount due per the City policy. Also 25% of utility costs are included as it is expected that there will still be some costs as operations wind down. As an alternate to the complete shut down of the YPAC, staff can issue an RFP for outside entities to take over and run the operations of the YPAC.
6. Community Development — This department is made up of Planning, Building & Safety, and Economic Development. The Planning division has savings of $287,799 made up of savings from a position that has been frozen. Also, there was a decrease in professional services of $149,870. The Building & Safety division has a decrease of $230,460 mainly due to the new contract for Building & Safety services.
7. Public Works - Increase in Public Works of $1,342,073 is mainly due to reclassifying salary and benefits to the General Fund because to avoid going negative in the Gas Tax fund due to lack of adequate funding this accounts for $981,148 of the increase. Public Works Streets also has an increase in Professional Services, mainly for Signal Repairs estimated at $300,000. In addition, the Park & Facilities Maintenance division has an increase of $241,232 due mainly to increased utilities costs and unanticipated facility repairs.
8. Paramedic Services — Increase in the Paramedics department is due to the addition of Paramedic Squad along with two squad vehicles and related equipment. Total increase in budget of $1,478,628.
9. Police Services — Increase in Police services of $1,666,361 is mainly due to the overall increase in sheriff costs. The Schedule A contract with the San Bernardino Sheriff increased by $1,416,663 in total compared to the prior fiscal year which included a Cost - of -Living Adjustment of 7% that went into effect in November 2025. The increase in cost per Deputy Sheriff was 4.96%. The increase also includes an additional Deputy Sheriff
($263,674) and an additional Marked Unit ($27,559). Other major cost increases noted in the Schedule A contract were vehicle insurance, which increased $139,824 or 151%, personnel liability & bonding increased $295,019 or 31 % and Workers' Comp. experience modification increased from a credit of $46,364 to a cost $26,322 an increase of $72,686.
10. Fire Protection - Fire Protection has an increase of $552,938. The schedule A contract has an increase of 4.4% and the addition of one Fire Captain.
Men,.nre S
In November 2024, voters passed Measure S, a general 1 % sales tax measure. Measure S funds are general tax monies and therefore are not restricted and can be used to support the general services of the government. For FY 26-27 we are proposing a budget of $9M based on data currently available and sales tax analysis by HdL (outside sales tax consultant). Currently all of the Measure S revenues are being used to support the police services of the City. For FY 25-26 of the nearly $5M received to date all of it has been used to support police services. Police services is the largest department in terms of expenditures and accounts for 32% of the General and Public Safety budget.
Public Safety Fund
The Public Safety Fund as presented includes Sheriff services, Fire services, and Paramedic services.
Costs relating to police services and code enforcement are also included in this special revenue fund. Police costs are primarily based on the Schedule A with the San Bernardino County Sheriff's Department (SBCSD).
Notable additions to the budget that were included in the Public Safety Fund are: a Used Reserve Paramedic Squad Vehicle with its related equipment and staffing, one (1) additional deputy as part of the contract with SBCSD, overtime for Sheriff/SOP, and equipment maintenance cost for various policing equipment. Also, there is a rollover of $2.5 million from FY 25-26 for a ladder truck however, due to delays in manufacturing they were not available. The purchase is not expected to occur for at least 4-5 years.
See budget book for detailed breakdown of Public Safety revenues/expenditures breakdown.
Fend Rnlnnce
Below is the summary of estimated fund balances for the General Fund including Police Services.
The City has a healthy fund balance. The Government Finance Officers Association (GFOA) best practices recommend that City governments maintain a reserve balance of two months expenditures. The City has a General Fund balance of just over 12 months of General Fund expenditures.
City of Yucaipa
Budget Summary with Fund Balance Estimates
FY 2026-2027
Proposed
Proposed
Estimated
Revenue
Expenditure
Beginning
BudgetFY
BudgetFY
Fund Balance
26/27
26/27
GF
41,683,750.00
46,797,735.50
25,348,693.07
Police
1,160,276.00
536,777.00
18,241,642.00
Total GF
42,844,026.00
47,334,512.50
43,590,335.07
PS Fund
Propsed
Proposed
Estimated
Transfers In FY
Transfers Out FY
Ending FB
Change in Fund
26/27
26/27
6/30127
Balance
399,505.00
1,123,532.00
62,408,765.43
20,725,015.43
11,877.00
-
(16,532,712.00)
(17,692,988.00
411,382.00
1,123,532.00
45,876,053.43
3,032,027.43
Police
Fire 9,036,490.00 5,594,595.00 10,350,580.00 4,280,505.00 (4,755,985.00) Paramedic 620,294.00 1,090,000.00 3,842,816.00 (2,132,522.00) (2,752,816,00) Total PS 9,656,784.00 6,684,595.00 14,193,396.00 2,147,983.00 (7,508,801.00) Total GF and PS 54,019,107.50 57,783,731.07 411,382.00 1,123,532.00 48,024,036.43 (4,476,773.57) 1,657,479.00 IT ISF
2,500,000.00 Fire Truck
150,000.00 Squad Equip
200,000.00 Squad Vehicle
4,507,479.00 One Time and IT ISF
Total GF and PS Surplus/(deficit) 30,705.43
Capital Improvement Proms
Information presented for the Capital Improvement Program (CIP) follows the City Council's direction to continue prioritizing the completion of existing projects. Budget authorization for these projects is multi -year, meaning that the authorization to spend does not lapse at the end of the fiscal year, but instead the authorization continues until project completion. Accordingly, the planned spending within the CIP for FY 26-27 is primarily from previously authorized budgets (carryover budget). Staff successfully aimed to minimize new budget authorization in the CIP section of the FY 26-27 Budget, and identified carryover budget in various projects that can be defunded until future resources are available (identified as negative request amounts in the CIP pages of the budget book).
FISCAL IMPACT:
An approval of this item will authorize the operating and capital expenditure plan for FY 26-27.
Attachment(s):
1. Resolution No. 2026-20, FY 26-27 Budget
The proposed digital budget book is available electronically at the following link: FY27 Budget
ATTACHMENT
RESOLUTION NO.2026-20
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA, CALIFORNIA, ADOPTING THE FISCAL YEAR 2026-2027 OPERATING
BUDGET AND CAPITAL IMPROVEMENT PROGRAM
WHEREAS, the City Manager has submitted for the consideration of the City Council a proposed Operating Budget and Capital Improvement Program for Fiscal Year 2026-2027; and WHEREAS, the proposed Fiscal Year 2026-2027 Operating Budget and Capital Improvement Program is available on the City's website and on file in the office of the City Clerk.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:
Section 1. The Fiscal Year 2026-2027 Operating Budget and Capital Improvement Program is hereby adopted for the City of Yucaipa General Fund, Special Revenue Funds, Capital Projects Funds, Internal Service Funds and the multi -year budget related to the Capital Improvement Program as outlined in Exhibit A.
PASSED, APPROVED, and ADOPTED this 27th day of July, 2026.
ATTEST:
Ana V. Sauseda, MMC
Director of General Services/City Clerk
Chris Venable, Mayor
1 Exhibit A
City of Yucaipa Budget Summary
All Governmental and Proprietary Funds
Estimated
Carryover
Net
Estimated Expenditure Proposed Proposed Proposed Proposed Estimated Estimated
Equity' Authorization Revenues Expenditures Transfers -In Transfers -Out Equity' Change in
6/30/26 6/30/263 2026-2027 2026-2027 2026-2027 2026-2027 6/30/27 Fund Balance
Governmental Funds
General Fund
$ 41,683,750 $
- $ 45,548,231
$ 20,875,441
$ 434,938
$ 25,077,910 $
41,713,568
$
Special Revenue Funds
Air Quality Improvement
79,951
-
-
-
-
79,951
-
American Rescue Plan Act
-
-
-
-
CA Dept. of Transportation (CaITRANS)
454,498
640,101
640,101
454,498
-
Development Impact Fees (DIF)
1,054,851
561,614
-
322,030
1,294,435
239,584
Gas Tax
(422,575)
1,603,524
1,077,750
525,774
(422,575)
-
Housing Authority
-
-
-
-
-
Landscaping & Lighting Maint. Districts
3,660,889
1,049,555
1,049,555
-
3,660,889
Measure I (Arterial)
(259,893)
4,140,071
-
4,140,071
(259,893)
Measure I (Local)
123,839
1,300,000
-
1,823,208
(399,369)
(523,208)
Miscellaneous Special Revenue
154,323
2,868,267
811,250
25,790
2,224,592
12,538
(141,785)
Public Educational & Gov't Access (PEG)
1,155,015
57,500
25,000
-
-
1,187,515
32,500
Public Safety Fund Group
-
Public Safety Fund (sub -fund)
1,160,276
7,209,498
35,409,147
28,199,649
-
1,160,276
-
Fire Services Fund (sub -fund)
8,036,490
-
127,743
-
5,743,826
2,164,921
(5,871,569)
Paramedic Zone (sub -fund)
70,294
-
-
-
-
70,294
Total Public Safety Fund Group
9,267,060
7,209,498
35,536,890
28,199,649
5,743,826
3,395,491
(5,871,569)
Road Maintenance & Rehab. Account (SB1)
(14,869)
1,538,750
-
-
1,543,013
(19,132)
STARS
-
-
-
-
-
-
State Law Enforcement Grant
917,450
100,000
100,000
-
-
917,450
Total Special Revenue Funds
$ 16,170,538 $
- $ 21,068,880
$ 38,600,445
$ 28,225,439
$ 16,962,615 $
9,901,797
(6,268,741)
Capital Projects Fundsz
Community Dev. Block Grant (CDBG) Capital
181,166
287,389
-
-
287,389
-
181,166
Development Impact Fee Capital Funds
(17,058,134)
7,521,033
1,543,989
2,337,847
5,970,210
379,064
(19,781,879)
(2,723,745)
General Capital Projects
707,834
1,304,707
465,859
130,485
967,658
-
706,159
(1,675)
Low Water Crossings
(146,720)
450,837
-
2,018
400,849
-
(198,726)
(52,006)
Miscellaneous Capital Projects Fund
7,694,603
-
84,751
-
159,543
7,450,309
(244,294)
Park Capital Replacement Fund
261,817
25,000
2,983
-
-
233,834
(27,983)
Sidewalks
48,475
421,032
-
-
421,032
-
48,475
-
Street Maintenance (Pavement Mgmt Prgm)
4,790,947
70,000
100,000
3,988,277
4,444,899
48,278
5,229,291
438,344
Total Capital Projects Funds
$ (3,520,012)
$ 10,079,998 $
2,109,848 $
6,546,361 $
12,492,037 $
586,885
$ (6,131,371)
(2,611,359)
Proprietary Funds
Internal Service Funds
Information Technology Fund
1,002,969
-
1,657,479
2,006,549
-
-
653,899
(349,070)
Self -Insurance Fund
800,457
-
2,151,567
1,474,996
123,885
(676,571)
Total Internal Service Funds
$ 1,803,425
$ - $
1,657,479 $
4,158,116 $
1,474,996 $
-
$ 777,784
(1,025,641)
NOTES:
1) Equities as presented are tentative estimates that are subject to change. 2) Capital Projects Funds contain multi -year Capital Improvement Program (CIP) budget that carries -forward (does not lapse at the end of the fiscal year) and may not be spent until future years.
3) Estimated Carryover Expenditure Authorizations include current year requests to defund prior year spending authorization; see CIP pages in the budget book for details.