HomeMy WebLinkAboutFY 2025-26 Proposed Operating & CIP Budget Workshop PPTFY 2025/26 Proposed Operating &
CIP Budget Workshop
April 29, 2025
Bill Gallardo, Interim City Manager
Tanya Romo, Deputy City Manager
Jeannie Fortune, Interim Director of Finance & Management Services
Zuyva Ruiz, Budget Division Manager
FY 2025/26 Budget Workshop Agenda
2
•Executive Summary
•Economic Trends (National, State, County)
•Proposed FY 2025/26 Revenue & Expenditure
•Fund Balance
•Capital Improvement Program (CIP)
•FY 2025/26 Budget Calendar
EXECUTIVE SUMMARY
3
Aligning Strategic Goals & The Budget
4
FY 2025/26 Key Highlights
•Balanced budget amidst a complex and
uncertain economic landscape
•National, state, and local economies
continue to face volatility and uncertainty
5
FY 2025/26 Key Highlights
•Operational expenditure adjustments (decrease) of 5%
to ensure fiscal sustainability & flexibility
•Proposed 6-month targeted non-safety hiring deferral
to align with organizational priorities
6
ECONOMIC TRENDS
7
National Economic Trends
•Real GDP: Q4 2024 +2.4%
Q1 2025 -2.2%
8
•Federal Reserve: Interest rates held between
4.25% - 4.50%
•Unemployment: U.S. Economy added 228k jobs -
unemployment rate holds steady at 4.2%
California Economic Trends
•State Budget: $363 million surplus projected for FY
2025/26
Projection includes $7.1 billion drawdown from reserves
•Housing Market: Prices show minimal growth – high
mortgage rates, economic uncertainties
•Trade & Tariffs: Higher prices, reduced spending, lower
local sales tax revenue, decline in business investment
9
San Bernardino County Economic Trends
•County Unemployment Rate: 5.0% (lower than state
average of 5.3%)
•Housing Affordability: Mortgage payments consume 67.8%
per capita income
Limits disposable income, affects Sales Tax revenue
•Inland Empire CPI: March 2024 4.3% March 2025 2.5%
10
PROPOSED FY 2025-26
REVENUES
11
Proposed FY 2025/26 Revenues
12
Revenue Category FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adopted
FY 2024-25
Projected
Year-End Total
FY 2025-26
Proposed
% Change
from
Projected
Actuals
Sales and Use Tax $55,651,769 $55,612,168 $58,623,667 $52,796,986 $52,058,494 -1.4%
Utility Users Tax $31,208,992 $28,671,310 $28,893,750 $30,229,505 $31,740,980 5.0%
Franchise Tax $12,692,337 $14,328,378 $14,939,265 $14,402,938 $14,560,000 1.1%
Other Taxes $11,173,774 $12,414,954 $15,060,480 $11,259,440 $11,780,000 4.6%
Miscellaneous $3,304,140 $7,737,244 $4,238,229 $5,335,144 $7,411,797 38.9%
Licenses & permits $15,740,360 $16,059,891 $16,989,168 $14,083,412 $14,287,000 1.4%
Fines and forfeitures $1,082,037 $766,079 $1,593,262 $876,142 $891,000 1.7%
Investment income $963,828 $3,373,049 $999,900 $2,635,949 $1,050,000 -60.2%
Use of Money and Property $3,158,026 $5,273,844 $2,640,627 $4,887,459 $6,383,760 30.6%
Intergovernmental $2,225,143 $6,708,044 $2,949,651 $5,506,961 $5,018,400 -8.9%
Charges for services $9,107,888 $6,829,807 $10,319,801 $6,275,538 $5,822,130 -7.2%
Property Taxes in Lieu of VLF $21,312,883 $23,604,046 $25,806,000 $24,180,179 $25,149,250 4.0%
Measure S Sales Tax $52,124,592 $51,259,760 $53,550,000 $50,159,000 $52,040,000 3.8%
General Fund Revenue Total $219,745,769 $232,638,574 $236,603,800 $222,628,653 $228,192,811 2.5%
Revenue Trends
13
Revenue Decrease Trends
•Sales Tax: $0.74M
•Investment Income: $1.58M
•Intergovernmental: $0.49M
•Charges for Services: $0.45M
14
Revenue Increase Trends
•Utility User Tax: $1.51M
•Miscellaneous: $2.08M
•Use of Money & Property: $1.50M
•Measure S: $1.88M
15
Conservative & Realistic Revenue Forecasting
•Acknowledges external uncertainty; relies on verified local trends
•Conservative assumptions applied to protect against volatility
•$6M growth reflects real, sustainable recovery – not temporary spikes
•Forecast safeguards the City’s fiscal health against external factors
16
PROPOSED FY 2025/26
EXPENDITURES
17
Expenditure Budget Strategies
•Economic experts project California to maintain a steady growth trajectory between 2% and 3% for Calendar 2026, reflecting a moderated but stable economic outlook
•A gradual slowdown is anticipated (state-wide); no recession is forecasted at this time
•City departments are proactively aligning operations with current economic trends to support sustainable service delivery
•Revenue forecasts are intentionally conservative, with a projected 2.5% increase over the current year’s year-end estimates, reflecting cautious optimism and fiscal prudence 18
Expenditure Budget Strategies
•To align with the City’s modest revenue growth outlook, departments have identified $10.7m in operational adjustments (decreases), ensuring the continued delivery of essential City services.
•At the same time, the City carefully has to account for cost increases, including:
Step advancements for employees ($1.5m);
Rising retirement contribution costs ($0.4m);
Health benefit cost increases ($2.9m);
Growth in unfunded accrued liability (UAL) obligations ($4m).
19
Expenditure Budget Strategies
•Proposed 6-month targeted non-safety hiring deferral to strategically
align staffing with organizational priorities and fiscal sustainability
•Estimated $8.1m in savings to achieve a balanced budget while
preserving the City’s Fund Balance
•Staff will monitor fiscal conditions and may recommend extending the
deferral if needed to maintain financial stability
•Council updates to be provided on a quarterly basis
20
Expenditure Budget Strategies
•If revenues strengthen, City staff will return to Council with
an update and may recommend adjusting or lifting the
hiring deferral to address organizational and service
delivery needs.
21
Proposed FY 2025/26 Expenditures
22
Department FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adopted
FY 2024-25
Projected
Year-End
Total
FY 2025-26
Proposed
% Change
from
Projected
Actuals
Mayor $306,227 $279,481 $298,025 $298,025 $328,273 10.1%
City Council $1,015,993 $1,061,509 $1,156,448 $1,156,448 $1,191,224 3.0%
City Clerk $1,300,833 $1,391,383 $1,942,869 $1,571,500 $1,928,538 22.7%
City Attorney $4,559,283 $4,795,033 $5,181,587 $5,181,587 $5,197,318 0.3%
General Government $32,886,990 $19,370,893 $17,967,471 $18,227,743 $17,170,675 -5.8%
City Manager $2,103,300 $3,424,979 $5,156,385 $3,635,811 $3,729,562 2.6%
Human Resource & Risk Management $2,055,421 $2,390,082 $2,784,522 $2,772,510 $2,881,727 3.9%
Finance & Management Services $5,163,873 $5,044,637 $6,612,496 $5,947,838 $7,048,011 18.5%
Economic Development $0 $237,278 $1,785,363 $1,814,730 $2,900,814 59.8%
Special Assessment District $115,996 $114,321 $150,000 $120,000 $175,000 45.8%
Capital Improvement Projects $89,235 $320,505 $0 $3,715 $0
Community Development & Housing $9,040,721 $9,341,981 $15,004,584 $10,721,947 $14,866,073 38.7%
Police $103,840,116 $114,176,196 $132,847,479 $124,951,642 $134,646,578 7.8%
Parks, Recreation & Community $4,132,108 $5,109,685 $6,000,401 $5,936,896 $6,217,572 4.7%
Public Works $21,764,427 $26,606,218 $35,591,030 $29,008,952 $32,930,148 13.5%
Library $2,610,050 $2,601,058 $4,975,030 $4,221,603 $5,088,922 20.5%
Non-Departmental $0 $0 $0 $0 ($8,107,624)
General Total Operating Expenditures $190,984,572 $196,265,240 $237,453,690 $215,570,946 $228,192,811 5.9%
FUND BALANCE
23
Fund Balance Summary
24
•Balanced FY 2025/26 Operating Budget; reserves
maintained with no reliance on one-time funds for
operations
•Strategic use of $23.8m in capital project reserve to
advance critical CIP projects
•Public Works will present project details
20-Year Historical Fund Balance
25
Fund Balance Summary
26
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
Revenue, Expense and Fund Balance
Fund Balance Revenues Expenditure Required Reserve
Proposed
Use of Fund Balance
(CIP Projects – $23.8m)
City Required Reserve - 25%74.94%78.38%86.85%89.09%75.65%
GFOA Recommended Reserve - 17%
Fund Balance Designation
27
Category
FY 2021/22
Actuals
(audited)
FY 2022/23
Actuals
(audited)
FY 2023/24
Actuals
(audited)
FY 2024/25
Estimated
(current year)
FY 2025/26
Estimated
(proposed)
Beginning Fund Balance, as of June 30th 110,742,632$ 156,449,095$ 173,462,555$ 202,925,562$ 198,338,995$
Revenues 208,775,374$ 221,320,505$ 233,643,492$ 222,628,655$ 228,192,811$
Expenditures (includes CIP Expenditures)(163,068,911)$ (204,307,045)$ (204,180,485)$ (221,633,597)$ (228,192,811)$
Net Surplus/Deficit - Use of Fund Balance)45,706,463$ 17,013,460$ 29,463,007$ 995,058$ (0)$
Approved Use of Fund Balance - Street Repair (2,650,000)$
Approved Use of Fund Balance for Fleet (2,931,625)$ (1,929,129)$
Proposed Use of Fund Balance - CIP Projects (23,775,000)$
Ending Fund Balance 156,449,095$ 173,462,555$ 202,925,562$ 198,338,995$ 172,634,866$
Category
ACFR 2021-22
FUND BALANCE
06-30-2022
ACFR 2022-23
FUND BALANCE
06-30-2023
ACFR 2023-24
FUND BALANCE
06-30-2024
FUND BALANCE
06-30-2025
(estimated)
FUND BALANCE
06-30-2026
(estimated)
Nonspendable 40,204,687 41,421,536 40,806,497 41,000,000 40,000,000
Restricted 2,107,208 2,086,366 2,099,574 2,100,000 1,800,000
Committed
Animal Services - 68,387 - - -
General Plan Update 100,000 142,877 551,312 600,000 -
Measure S - Capital Projects 63,342,854 81,762,949 86,734,706 88,766,737 88,766,737
Proposed use of CIP reserves (23,775,000)
15% Emergency Reserve 24,460,337 28,788,264 35,618,054 33,245,040 34,228,922
10% Economic Contingency Reserve 16,306,891 19,192,176 23,745,369 22,163,360 22,819,281
Assigned 6,669,342 - 13,370,050 10,463,858
Unassigned 3,257,776 - - - 8,794,926
TOTAL FUND BALANCE 156,449,095 173,462,555 202,925,562 198,338,995 172,634,866
City Required Reserve - 25%74.94%78.38%86.85%89.09%75.65%
GFOA Recommended Reserve - 17%
CALCULATION OF FUND BALANCE
FUND BALANCE DESIGNATION
CAPITAL IMPROVEMENT PROGRAM
City Budget Workshop
Presented by
City of San Bernardino
Public Works Department
Capital Improvement Program Agenda
•Capital Improvement Program (CIP) Project Delivery
•CIP Budget Summary
•Existing CIP Projects Update
Capital Improvement Program (CIP)
Project Delivery
Project Delivery Phases
31
Project Delivery Workflow Process
PLANNING DESIGN CONSTRUCTION
1 years to 4 years
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
CIP Budget Summary
34
42 43
40
34
0
5
10
15
20
25
30
35
40
45
50
Proposed Planning Design Construction
Capital Projects by Phase
Capital Projects by Phase – Completed or Closed
14
30
0
5
10
15
20
25
30
35
Completed FY24/25 Completed before FY 24/25
Examples of Projects Completed in FY 2024/25 CIP are:
•Carousel Mal Demolition
•5th Street Senior Center Kitchen
•Paul Villasenor Reroof Improvements
•Pepper Avenue Street Rehabilitation
•2nd Street Bridge
•Upgrade 224 Signalized Intersections
•Advance Dilemma Zone
Examples of Projects Completed before FY 2024/25:
•Playground Equipment replacement
•Seccombe Lake Fencing
•Kendall Drive Slope Stabilization
•Sierra Way Improvements 9th to 30th Streets
•Co-Op with City of Highland
Existing Capital Projects by Category
General Buildings
17 Projects (15%)
Parks and Recreation
29 Projects (25%)
Storm Drain
12 Projects (10%)
Streets
39 Projects (33%)
Traffic Controls
20 Projects (17%)
FY 2025/2026:
117 Existing Projects
37
Existing Capital Projects Funding by Category
General Buildings
S43.8M (26.90%)Parks and Recreation
$37.5M (23.01%)
Storm Drain
$15.4M (9.46%)
Streets
$56.8M (34.85%)
Traffic Controls
$9.4M (5.77%)
FY 2025/2026:
$162.9M Existing Projects
38
General Buildings
$0.25M (1.53%)Parks and Recreation
$2.0M (12.20%)Storm Drain
$8.0M (48.81%)
Streets
$5.6M (34.41%)
Traffic Controls
$0.5M (3.05%)
Existing Capital Projects Funding Needs by Category
FY 2025/2026:
$8M Measure S
$8.4M Special Funds
$16.4M Needed for existing Projects
Proposed Capital Projects by Category
39
General Buildings
14 Projects (33%)
Parks and
Recreation
5 Projects (12%)
Storm Drain
2 Projects (5%)
Streets
11 Projects (26%)
Traffic Controls
10 Projects (24%)
FY 2025/2026:
42 Proposed Projects
40
General Buildings
$3.3M (11.24%)
Parks and Recreation
$2.1M -7.10%,
Storm Drain
$0.35M (1.18%)
Streets
$22.6M (76.49%)
Traffic Controls
$1.2M – 3.99%
FY 2025/2026:
$13.43M Measure S
$16.15M Special Funds
$29.58M Total in Proposed Projects
Proposed Capital Projects Funding Needed by Category
41
Capital Projects Budget Summary
Existing CIP Funds
$162.9M (78.00%)
Existing CIP …
Proposed Projects
$29.6M (14.16%)
Added Funds
FY 2025/2026:
$162.9M Existing CIP Projects
$16.4M Needed for existing Projects
$29.6M Proposed CIP Projects
Total $208.9 Million in CIP Projects
Existing CIP Projects Update
43
California Theater Renovation
Project Category: Building Ward: 1
Project Description:
Renovation of historic downtown theater
Adopted Budget: $5,870,453
Remaining Budget: $1,000,000
Current Project Phase:
Estimated Project Completion: Fall 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
44
Animal Shelter Renovations
Project Category: Building Ward: 3
Project Description:
Various improvements to existing animal shelter facilities
Adopted Budget: $4,000,000
Remaining Budget: $596,453
Current Project Phase:
Estimated Project Completion: Fall 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Roosevelt Bowl Rehabilitation
Project Category: Parks Ward: 2
Project Description:
Renovation of outdoor venue at Perris Hill Park
Project Budget: $1,200,000
Remaining Budget: $729,298
Current Project Phase:
Estimated Project Completion: Winter 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Speicher Park East Side Skate Park
Project Category: Parks Ward: 2
Project Description:
Construction of new skate park facilities at Speicher Park
Project Budget: $1,795,000
Remaining Budget: $484,866
Current Project Phase:
Estimated Project Completion: May 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Nicholson Park Improvements
Project Category: Parks Ward: 6
Project Description:
Renovation of outdoor facilities at Nicholson Park
Adopted Budget:$11,772,877
Remaining Budget: $1,583,952.29
Current Project Phase:
Estimated Project Completion: Summer 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Seccombe Lake Park Improvements
Project Category: Parks Ward: 1
Project Description:
Renovation of Seccombe Lake Park facilities
Project Budget: $13,792,332.00
Remaining Budget: $1,131,333.36
Current Project Phase:
Estimated Project Completion: Spring 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Speicher Park – Ballfield Improvements
Project Category: Parks Ward: 2
Project Description:
Renovation of Speicher Park Ballfield facilities (five fields).
Adopted Budget: $5,824,670
Remaining Budget: $2,148,774.10
Current Project Phase:
Estimated Project Completion: Fall 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
50
Sierra Way Storm Drain Improvements
Project Category: Storm Drain Ward: 7
Project Description:
New drainage system along Sierra Way between
31st Street and 40th Street
Project Budget for Original & Modified: $6,700,00
Remaining Budget for Original & Modified: $6,259,801
Current Project Phase:
Estimated Project Completion: November 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
51
Meyers Creek Focused Drainage Study
Project Category: Storm Drain Ward: 5
Project Description:
Study detailing future improvement options for Meyers Creek drainage
Project Budget: $266,771
Remaining Budget: $48,548
Current Project Phase:
Estimated Project Completion: Summer 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
52
Mount Vernon Storm Drain
Project Category: Storm Drain Ward: 6
Project Description:
Storm drain improvements along Mount Vernon Ave
from 16th Street to Cajon Boulevard.
Project Budget: $6,300,000
Remaining Budget: $6,125,245
Current Project Phase:
Estimated Project Completion: Summer 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
53
Street Rehabilitation – 21 Locations
Project Category: Streets Ward: All
Project Description:
Rehabilitation of various street segments throughout the City.
Project Budget: $8,980,102
Remaining Budget: $659,361.
Current Project Phase:
Estimated Project Completion: Spring 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Pavement Management Program
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Project Category: Streets Ward: All
Project Description:
Citywide Pavement Management Program to assess, prioritize, and plan for the
maintenance and rehabilitation of streets across the City.
Adopted Budget: $1,000,000
Remaining Budget: $179,700
Estimated Project Completion: Fall 2025
55
Pavement Projects for Measure S, RMRA & Gas Tax Funding
Project Category: Streets Ward: All
Project Description:
Phased City Wide street rehabilitation at approximately 50 Locations. Locations will be
confirmed based on the results of the upcoming pavement management plan.
Proposed Budget: $20,000,000.
Current Project Phase: Planning Stage
Estimated Project Completion: Fall 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
56
State HWY I-215 & University Parkway Interchange Improvements
Project Category: Streets Ward: 5 & 6
Project Description:
Construction of a new diamond diversion interchange system at the I-215 and
University Parkway interchange.
Project Budget: $3,759,177
Remaining Budget: $2,993,731
Current Project Phase:
Estimated Project Completion: Fall 2025
Signal Phasing and Traffic Movements 1
Signal Phasing and Traffic Movements 2
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Mount Vernon Ave Bridge Replacement
Project Category: Streets Ward: 1
Project Description:
Replacement of the Mount Vernon Avenue Bridge
Total Project: $245,679,885
Measure I Public Share $24,839,652
City Share: $14,686,779
Remaining Budget: $2,927,601
Current Project Phase:
Estimated Project Completion: August 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
University Parkway Landscape: Phase 2 – 16th St. to Baseline St.
Project Category: Streets Ward: 6
Project Description:
Landscaping and irrigation improvements along State Street
between 16th Street and Baseline Street
Project Budget: $1,182,040
Current Project Phase:
Estimated Project Completion: Summer 2026
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Cross Street Bridge
Project Category: Streets Ward: 2
Project Description:
Replacement of the existing bridge on Cross Street near Fairfax Drive.
Adopted Budget: $3,812,260
Remaining Budget: $469,056
Current Project Phase:
Estimated Project Completion: Summer 2025
Preliminary
Engineering
Design Bid &
Award Design Construction
Bid & Award Construction
Foothill Blvd Route 66-Pepper Ave to I-215 Street Improvements- Caltrans –Summer 2025
Waterman Ave- 30th St to North of 40th St- Pavement Rehabilitation-Caltrans- Fall 2025
3rd Street-Del Rosa Ave to Victoria Ave Street Improvements- IVDA - Spring 2026
3rD St and Sterling Ave Access to the SB Int airport-IVDA - Spring 2026
Victoria Ave- 6th St to 3rd St Storm Drain, Street and signal improvements – City of Highland. CIP/Funding
SB City – TBD
I-210 FWY and Victoria Interchange Project Approval / Environmental Determination (PA/ED). The lead
agency is City of Highland and the tribe.
Inter-Jurisdictional Projects – Non CIP
BUDGET CALENDAR
61
FY 2025/26 Budget Calendar
62
Date Purpose
April 29, 2025 Special Council Meeting: Budget Workshop (Operating & CIP)
TBD Special Council Meeting: Budget Workshop #2 (Operating & CIP)
May 21, 2025 Regular Council Meeting: Public Hearing & Budget Adoption
Questions?
63