Encinitas council workshop narrows FY2025–26 capital priorities after requests exceed available funds

At a special City Council budget workshop, Encinitas staff presented the proposed fiscal year 2025–26 operating and capital budgets and asked the City Council for direction on allocating roughly $7.5 million available for capital projects.

Finance Director Tom Gallup summarized staff estimates, telling the council the city could borrow up to “13,100,000.0 to maintain and still maintain its existing AAA rating, which would add up to $750,000 in annual debt service per year.” He said an off-cycle emergency appropriation of about $1,000,000 for repair of the D Street beach access staircase reduced the staff’s previously reported $8.5 million available for capital to “approximately 7,500,000.0.”

The workshop focused on which projects to fund from that $7.5 million. Staff presented a long list of candidate capital projects — from pavement rehabilitation and storm drain lining to beach-stair repairs, an Encinitas Habitat Stewardship program, and a proposed “shared software and equipment replacement” internal service fund — and noted several projects already have outside funding or pending grants. Gallup said, “Staff is recommending a 500,000 payment to CalPERS this year as it prepares a pension policy and receives the latest annual valuation report from CalPERS,” and described other operating items included or proposed in the operating budget.

City Manager Jennifer Campbell reviewed the council’s nine adopted goals for 2025 and tied many proposed projects to those priorities, including beach access, mobility improvements, and storm drain work. Director of Engineering Gil Bankston and other staff explained the city’s “donut chart” of capital work, the funding status of project phases, and the meaning of graphic markers showing fully funded, partially funded, unfunded, or complete phases.

Key funding details and proposals discussed - Available for appropriation: staff reported about $7.5 million for capital projects after the emergency D Street repair estimate reduced the earlier $8.5 million figure. - One-time items and contingencies: staff proposed a $500,000 discretionary additional payment to CalPERS and a $500,000 minimum unassigned fund balance; staff said the midyear FEMA…