City staff present long-term financial plan showing balanced projections through FY31; plan to be referred to Financial Review Committee

City finance staff presented the updated long-term financial plan to the Dana Point City Council on April 15, projecting general-fund revenues and expenditures from fiscal year 2026 through fiscal year 2031 and recommending referral of the plan to the Financial Review Committee for additional consideration.

C. Shelton (staff) said the plan uses the amended fiscal year 2025 budget as a baseline and currently reflects general-fund revenues of $49,500,000 and expenditures and transfers out totaling $63,200,000. Shelton told the council that budgeted expenditures include $12,200,000 in transfers out to other funds and a one-time payment to CalPERS of $1,850,000; excluding those two items, budgeted revenues exceed expenditures by approximately $320,000. Shelton said staff expects actual revenues to exceed budgeted amounts and actual expenditures to remain below budget.

The plan projects that general-fund revenues will keep pace with, and slightly exceed, expenditures through fiscal year 2031 and that all reserves are fully funded in accordance with council policy. Shelton said the general fund's unassigned fund balance is projected to remain above 7% of budgeted revenues throughout the forecast period. The plan assumes conservative revenue and expenditure estimates and notes the planned opening of two new hotels in the harbor in late fiscal year 2029.

Staff recommended the long-term financial plan be referred to the Financial Review Committee and returned to council in June as part of the biennial budget process; the Financial Review Committee is scheduled to review the proposed budgets at its April 29 meeting and the citybudget workshop is scheduled for May 6. Council members congratulated staff for the results and asked follow-up questions about pension actuarial returns and the city's investment options; Shelton said state law limits allowable investments and that actuarial return updates typically arrive in July.

Action: staff recommended referral to the Financial Review Committee; council discussion followed but no separate appropriation or final action was taken at the meeting. Staff will return with the proposed budgets and any recommended appropriations during the budget adoption process.