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CC - Item 5B - FY 2026-27 Budget Presentation1 Overview •FY 2026-27 Proposed Budget •General Fund Overview •Key Revenue and Expenditure Assumptions •Budget Highlights •Staffing Changes •New Capital Improvement Program Projects •Housing Development Corporation Budget •Recommended Actions 2 3 General Fund FY 2025-26 FY 2026-27 $ Change % Change Revenues $32,188,700 $33,805,600 $1,616,900 5% Recurring Expenses $31,073,280 $33,574,500 $2,501,220 8% Surplus/(Deficit)$1,115,420 $231,100 ($884,320) One-Time Expenses $1,050,000 $1,041,000 ($9,000)-1% CIP Projects $60,000 $0 ($60,000) Surplus/(Deficit)$5,420 ($809,900)($815,320) Property Tax –– 4.9% increase based on estimates Sales tax – slight increase of 0.6% based on HdL (3rd party consultant) estimates. Transient Occupancy Tax – slight decrease of 2.6% based on trend. Development permits – increase of 29.6% based on trend and anticipated development activity. Interest earnings decreased based on trend. 4 Personnel costs include current step and merit increases. PERS Unfunded Accrued Liability (UAL) payments increase by approximately $113,000. Sheriff contract costs increase by $436,000 (3.9%). Insurance costs increase by approximately $148,400, including higher liability and workers' compensation premiums. Lobbying service costs increase by approximately $162,000, reflecting City Council-approved enhancements to state and federal advocacy services. Water expenditures increase by $50,000 based on historical trends. 5 Staffing & Organizational Changes (Amounts reflect fully loaded salary and benefit costs.) ◦Deputy City Manager Position – $264,000 ◦ARPA-Funded Position Transition Costs – $163,000 ◦Management Analyst Position – $147,000 Offsetting Savings ◦Delete Human Resources Analyst Position – ($73,500) ◦Eliminate Public Works Inspector Position – ($132,000) Community Investment ◦New Community Events – $51,500 6 7 Adopted Adopted Proposed Department 2024-25 2025-26 2026-27 Administration 9 9 9 City Clerk 3 3 3 Finance 6 5 6 Public Safety 8 9 9 Public Works 25 25 24 Parks & Recreation 8 8 8 Community Development 14 8 8 Total Full-Time Positions 73 67 67 8 FY 22-23 FY 23-24 FY 24-25 FY 25-26 P FY 26-27 B Total General Reserves 32,430,433$ 34,465,908$ 37,028,084$ 38,301,178$ 37,491,279$ Reserves % of Next Yr Expense 104%112%115%111%107% Balance at 40% Reserve Level 10,032,513 12,329,412 12,177,312 13,013,400 14,011,659 Reserve above 40% level 22,397,920 22,136,496 24,850,772 25,287,778 23,479,620 All Funds FY 2026-27 Revenues $50,456,900 Expenses $45,700,750 Surplus/(Deficit)$4,756,150 CIP Projects $8,475,250 Surplus/(Deficit)($3,719,100) 9 Project Type #Amount New Projects 3 $3,275,000 Additions to Current Projects 5 $3,770,250 Annual Projects 3 $1,430,000 Current Projects 21 $44,284,806 Total 32 $52,760,056 10 PG #Project FY 2026-27 Request Funding Source Funding Source 16 Street Rehabilitation Projects FY 26-27 $3,175,000 RMRA (SB1) Measure R Measure M $2,000,000 $800,000 $375,000 11 PG #Project FY 2026-27 Request Funding Source Funding Source 39 Marquees Signs at Various Sites $50,000 DIF Gov’t $50,000 12 PG #Project FY 2026-27 Request Funding Source Funding Source 40 Public Announcement Sound System at RCRC $50,000 Public Facilities $50,000 13 Expenditure FY 2025 Actuals FY 2026 Budget FY 2027 Proposed $ Change % Change Expenditure 1,355,335 1,042,300 1,373,300 331,000 32% Revenues 512,352 503,200 512,500 9,300 2% S/A Subsidy 761,871 553,000 860,800 307,800 56% Surplus Deficit (81,112) 13,900 - (13,900)-100% 14 1 2 3 FY 2026-27 Budget