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Council hears FY26 budget overview: parks spending jumps, several CIP items removed or resubmitted after grant results
Summary
Staff presented the FY26 budget framework and five‑year capital improvement program; notable changes include a large increase in park funding, removal of city hall and police station expansions from the near‑term CIP, and unsuccessful grant applications for several water projects.
City staff presented an FY26 budget overview and a revised five‑year capital improvement program at Monday’s work session, outlining personnel cost drivers, object‑code changes and several adjustments to long‑range projects discussed earlier in the year.
Staff said the budget was prepared under a zero‑based budgeting approach and noted object‑code reorganizations that moved some software and subscription costs into capital or intangible asset lines. Staff also highlighted that GASB and software accounting changes required reclassification of certain items.
Key CIP and capital highlights discussed:
- Parks and recreation: A major increase in parks funding was proposed, with park improvements rising in the five‑year CIP from $2 million to $22.5 million, phased over five years; Sundial 4 park renovation rose from $200,000 to $450,000 and was noted as partially grant‑funded.
- Neighborhood traffic calming: The neighborhood traffic calming program grew from $80,000 to $1,000,000 to cover proposed speed‑cushion and traffic‑calming installations.
- Council chambers audio/visual phase 2: The line listed in the CIP rose from an earlier $45,000 placeholder to $150,000 pending a vendor/acoustician estimate for FY26 work.
- Water projects and grants: Two CDBG projects (First Avenue and Ventura Street water main and a multi‑use trail) were not funded by grant applications; staff said those projects would be re‑submitted but are not included in the FY26 CIP unless grant funding is awarded. A previously requested water main replacement on First Avenue/ Ventura was estimated by staff at about $400,000 when last submitted.
- City hall and police station expansions: After discussion at the January CIP session, those expansion projects were removed from the proposed five‑year CIP; council members questioned whether the removals were permanent. Several council members asked staff to restore the police station and related facility needs to the CIP work plan or at least schedule a site tour and further evaluation.
Staff also reviewed budget drivers: personnel costs (step increases for public safety, merit and COLA assumptions of 3% merit and a 2.3% COLA), health insurance increases (4.5%), and employer retirement contribution rates (PSPRS for fire 16.2%; police 26.21; ASRS for non‑MOU employees 12%). Staff said the city maintained strong reserves and a Moody’s/ S&P double‑A rating. Grants and permit revenues were noted as trending up, and staff said one‑time revenues will not be used to fund ongoing expenditures.
Staff flagged some corrections that will be made before the tentative budget: reinstating $264,000 in non‑departmental line items (jail/court service and MCSO jail services) that were inadvertently removed from the current draft, and confirming carry‑forward capital projects and grant outcomes to finalize the tentative budget for May 6.
Ending — Next steps: staff will include vendor proposals for council‑chambers AV work, bring updated CIP and grant carry‑forwards for the May 6 tentative budget and return with specific cost estimates before any final appropriations.
