Rancho Mirage Adopts 2025–26 Budget; Earmarks Reserves to Help Fund IID Substation for Affordable Housing

The Rancho Mirage City Council on June 5 adopted the city’s fiscal year 2025–26 operating and capital budget and gave tentative approval to the fiscal year 2026–27 plan, voting 5–0 to adopt the resolutions presented by staff.

City finance staff told council the FY 2025–26 operating budget assumes roughly $37,000,000 in operating revenue and $35,900,000 in operating expenditures, producing an operating surplus of about $1,100,000, while the capital (non‑operating) program will use reserves for roughly $3,900,000 in spending, leaving a projected reserve drawdown of about $2,700,000 for 2025–26.

The budget presentation by Joseph Carpenter, assistant and administrative services director, said the city expects to end FY 2024–25 with about $67,300,000 in reserves and projects an estimated reserve balance of approximately $63,200,000 at the end of FY 2026–27 after the planned capital spending.

Why it matters: about half of Rancho Mirage’s general fund operating revenue is tourist‑driven (transient occupancy tax and sales tax), making the city sensitive to economic swings. Council members emphasized that capital spending in the approved budget includes several multi‑year projects and one high‑priority regional coordination payment related to electric service in the northern part of the city.

Staff and council members said a principal non‑operating use of reserves is the city’s contribution toward construction of a new Imperial Irrigation District (IID) substation needed to serve parcels the city intends to develop for affordable housing. Council discussion placed the total cost of the substation at roughly “40‑ish million dollars or so” and said the Rancho Mirage portion would be “less than $10,000,000.” Council members described the substation as necessary for the affordable housing projects the city previously approved on city‑owned land in the northern area.

City staff and council noted other capital items funded from reserves and grants in the adopted budget, including the city’s share of the IID substation construction, continued design work for the Frank Sinatra water crossing and Ramon Road, and Dinah Shore roadway and sand‑fence improvements (the latter partially funded through a Caltrans grant).

Council and staff discussion also reiterated that public safety consumes a large share of general fund resources. The adopted operating budget dedicates about 49 percent of general fund operating expenditures — roughly $17,500,000 — to public safety costs chargeable to the general fund.

Public comment included concerns about nonprofit grant increases and general budget priorities. A member of the public said he was worried about raising nonprofit allotments and asked for more scrutiny; city leaders replied that the city runs an operating surplus and that reserve drawdown is targeted and tied to capital needs, notably the IID substation to enable the approved affordable housing projects.

The council’s motion approved resolutions adopting the FY 2025–26 budget and tentatively approving FY 2026–27; the motion passed 5–0. Staff will post the finalized budget documents and continue work on capital project schedules and funding agreements with regional partners.