Hemet council adopts FY 2025–26 budget with one‑time projects and Measure U allocations; approves $750,000 remodel for ARRW location

On June 10 the Hemet City Council adopted the city’s recommended budget for fiscal year 2025–26, approving a mix of ongoing allocations and one‑time uses of fund balance and Measure U proceeds. Members approved several one‑time projects and directed staff to include $750,000 plus a 20% contingency to remodel a city property at St. John’s Place for an expanded Active Response Outreach (ARRW) team location; council also authorized staff to pursue a three‑year insurance self‑insured retention (SIR) reduction option at an estimated additional cost.

Administrative Services Director Tiffany Barnett presented the recommended budget and outlined key cost drivers: increases in insurance premiums and excess claims, a CalPERS unfunded liability (UAL) increase, step and COLA adjustments (a 3% COLA), an anticipated increase in public safety internal service costs and a projected animal services contract increase. The recommended budget assumes the addition of three animal control officers in its baseline but council later signaled willingness to approve two officers depending on the June 24 follow‑up on service coverage.

Barnett said combined general fund and Measure U balances were approximately $76.0 million before recommended one‑time uses. One‑time items funded in the budget include a $1.5 million Pension 115 trust contribution (policy‑driven), kitchen and façade grant programs, park and facility investments, and a comprehensive fee study. Measure U one‑time recommendations included $120,000 for Fire Station 3 improvements and $39,000 for police radio updates. Barnett reported an estimated operating deficit of about $3.7 million to be drawn from fund balance after the proposed allocations.

Mayor Pro Tem Krupa and others proposed increasing the city’s reserve target from 40% to 50% in future planning; council asked staff to schedule a workshop to analyze scenarios and the tradeoffs of higher reserves.

Council Member Mills moved to receive and file the Measure U citizen oversight committee’s letter of support and to adopt the budget and appropriations for July 1, 2025–June 30, 2026, with the addition of the $750,000 remodel for the ARRW location (plus 20% contingency). The motion passed 5–0. Council also approved inclusion of the proposed options for lowering SIRs with the understanding that the insurance option would commit the city to a three‑year premium and cost; staff said the option could be incorporated if the council chose to fund it.

Staff noted the budget assumes some ongoing pressures, including pension and OPEB costs, and that the Measure U reserve policy and 40% reserve remain an important buffer. Council and staff agreed to return with more detailed analyses on reserve scenarios and the animal control staffing option at the next meeting.