ITEM NO. 6
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CITY COUNCIL STAFF REPORT |
| TO: |
Honorable Mayor and Members of the City Council |
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| FROM: |
Arron Brown, City Manager |
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| BY: |
Arron Brown, City Manager |
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| DATE: |
04/14/2026 |
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| SUBJECT: | Presentation and Discussion of the Draft Fiscal Year 2026-27 Budget
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Recommendation:
Review and discuss the City's Draft Fiscal Year 2026-27 Budget.
Background/Analysis:
The attached Proposed Draft Budget for Fiscal Year 2026-27 is presented to the City Council for review and approval.
The Proposed General Fund revenues are $9,202,730, which is an increase of $419,080 over the previous Fiscal Year budget. Estimated General Fund expenditures are $9,313,052, an increase of $688,703 over the previous Fiscal Year Budget. The Proposed Budget reflects General Fund Expenditures over Revenues of $110,322 for Fiscal Year 2026-27, however, this includes $130,000 in the use of Restricted Reserves for Equipment Replacement for equipment for the new fire engine which was previously approved by the City Council.
The major changes from the City’s Fiscal Year 2025-26 Budget are as follows:
The Proposed General Fund revenues are $9,202,730, which is an increase of $419,080 over the previous Fiscal Year budget. Estimated General Fund expenditures are $9,313,052, an increase of $688,703 over the previous Fiscal Year Budget. The Proposed Budget reflects General Fund Expenditures over Revenues of $110,322 for Fiscal Year 2026-27, however, this includes $130,000 in the use of Restricted Reserves for Equipment Replacement for equipment for the new fire engine which was previously approved by the City Council.
The major changes from the City’s Fiscal Year 2025-26 Budget are as follows:
- An increase in tax revenues of $246,890 with the largest projected increase in Property Tax, Property Tax Fire, and Property Tax VLF due to higher assessed valuations and an increase in actual revenues received in FY 2025-26.
- An increase in Construction/Building Permit Fee revenues of $178,240 based on the Fiscal Year 2025-26 actual revenues received, new commercial cannabis projections and new fees.
- An increase in Miscellaneous revenue of $51,700 based on the Fiscal Year 2025-26 actual revenue received as well as projected reimbursements for Police and Fire services as well as an administrative reimbursement for the management of the City’s owned commercial property.
- The draft budget for staff salaries for non-sworn positions includes a cost-of-living increase of 3.00% and a planned merit increase of 5.00%, where applicable. It also includes a proposed new position for $102,440 which will be partially funded by the City’s Rental Fund. In addition, it includes the elimination of the Code Enforcement Division and the three full-time and one part-time positions.
- The City Council’s budget decreased by ($1,940). This includes a decrease in promotion and advertising of $11,000 offset by small increases in other line items.
- The City Manager’s Department budget increased by $37,581. The increase includes an increase in salaries and wages of $26,831 and $12,000 in professional services.
- The Community Development Department decreased by ($39,357). The decrease is due to a change in salary and benefits of ($86,057) offset by an increase in professional and specialized services of $38,250 for software and IT support.
- The City Clerk’s Division budget increased by $81,615. The increase includes an increase in salaries and benefits of $29,655 for a proposed change in a staff position, and an increase of $45,000 for the upcoming municipal election.
- The Finance Division budget decreased by ($80,942). This includes a decrease of ($67,417) in salaries and benefits which is the result of moving the Administrative Services Senior Analyst position to the newly created Human Resources Division, offset by the new Accounting Specialist position. Additional reductions include other items moved to the Human Resources Division.
- For Fiscal Year 2026-27, the City established the proposed new Human Resources Division. This is necessary due to the increase in the number of employees added with the City’s Fire and Police Departments, and the complex issues involved. The Administrative Services Senior Analyst position has been moved from the Finance Division as well as some of the human resources portions of that budget.
- The Planning Division budget decreased by ($27,800), which includes a decrease for General Plan services of ($30,000) offset by an increase of $2,200 in the regular planning costs.
- The Building & Safety Division budget increased by $94,798. The increase is due to the proposed new position with salary and benefits of $102,437, which will be partially funded by the City’s Rental Fund.
- The Law Enforcement budget decreased by ($1,947,120) due to the City’s proposed new Municipal Police Department. The proposed budget reflects only one month of the Contract Law Enforcement services provided by Riverside County Sheriff.
- The FY 2026-27 Budget includes the new City Municipal Police Department, which includes projected salary and benefits of $1,757,325, Operation and Maintenance costs of $636,930 offset by CalCOPS revenues of $210,000. The City is also saving costs as the Code Enforcement Division was eliminated with a small amount of those costs being transferred to the Police Department. The FY 2025-26 Code Enforcement costs were $401,896.
- The Fire Department Budget increased by $333,785, of which $133,902 is related to salary and benefit increases and $27,883 in operations. Salary increases are based on the agreed-upon 3.5% increase and, where applicable, 5.00% Step Increases.
- The Emergency Preparedness Division budget decreased by ($36,000) representing $30,000 for the contract with Riverside County for EMD services and $5,000 for CERT training with Riverside County.
- The Public Works Administration Division decreased by ($10,000) which represents $5,000 for on-call maintenance services and $5,000 for Interwest Consulting Group services.
- The NPDES Division Budget increased by $5,200 due to the increased costs for the LE/CL TMDL agreement.
- The Code Enforcement Division decreased by ($401,896), as the Division was discontinued.
- The Building & Facilities Maintenance Division increased by $342,343. Most of the increase is an increase of $317,970 in insurance costs, due to the rising costs of liability insurance and the new Municipal Police Department. Additional increases are due to the additional space occupied by the Police Department for utilities and maintenance costs.
City Staff are looking for feedback at this meeting and any direction given by the City Council will be incorporated into a final Budget, which will be presented to the City Council for adoption at the May 13, 2026, City Council meeting.
- Fiscal Impact Yes/No:
- No
Additional Fiscal Information:
There is no fiscal impact associated with the discussion of the draft budget.