Pacifica projects $3.2 million structural gap in FY 2025–26 base budget; staff seeks council direction on ERAF and VLF risks

Pacifica city staff told the City Council on May 12 that the city’s FY 2025–26 base budget shows a structural gap unless the council provides further direction on reallocated ERAF revenues and potential state backfill of vehicle license fee (VLF) revenues.

Assistant City Manager Yuli Carter summarized the base‑budget approach, saying, “the base budget is what today’s services will cost us tomorrow.” City Finance Director Marisol Gomez gave the revenue estimate: “we're projecting 49,800,000.0 in revenues in general fund revenues, which is only 3% above the current year's revised budget level.”

Why it matters: the base budget is a staff exercise that keeps staffing and service levels unchanged and excludes policy‑level additions. Under that methodology staff projected $49.8 million in general‑fund revenue and $53.2 million in general‑fund expenditures — a roughly $3.2 million gap before accounting moves. Staff modeled a council‑directed reallocation of excess ERAF (Educational Revenue Augmentation Fund) receipts; applying $3.7 million of excess ERAF to the general fund reduced the projected shortfall and produced about $557,000 of one‑time available funds for council priorities. Staff also flagged a $2.3 million state VLF backfill as uncertain and said…