Encinitas staff presents balanced preliminary FY2025–26 budget; council focuses on infrastructure, storm drains and rail crossings

City staff presented a preliminary, balanced operating and capital budget for fiscal year 2025–26 at a special City Council workshop in Encinitas, detailing projected revenue of $113,200,000 and projected expenditures of $105,000,000 and leaving an estimated unassigned general fund balance of roughly $6,500,000.

The presentation, led by Tom Gallup, director of finance and city treasurer, included an overview of reserves and planned transfers and noted pending and potential outside funding. “As staff prepared the proposed preliminary budget, we ensured that revenues exceeded expenditures. Thus, we have a balanced budget to propose,” Gallup said. He told the council staff is projecting a year‑end unassigned fund balance of about $6.5 million and that the general fund contingency reserve remains at the city’s 20% policy target.

Why it matters: the budget outlines how Encinitas will fund basic services and capital projects next year, and council members used the workshop to prioritize projects that city staff said could reduce future repair costs or unlock state and federal grants. Staff also flagged several uncertain items — notably a pending FEMA reimbursement and a PERS payment decision — that would change available funds if finalized.

Most important numbers and constraints - Projected revenue: $113,200,000. - Projected expenditures: $105,000,000 (a 3.6% increase from the current year, per staff). - Unassigned general fund balance staff cited: about $6,500,000. - Staff also noted a midyear unassigned balance of $6,900,000 and a potential net increase to fund balance of roughly $2,100,000 in the proposed budget, leaving about $8,500,000 available for appropriation before additional decisions. - Personnel: the budget does not propose additional FTEs; the budgeted FTE count remains at 249.4. Personnel costs were the largest single expenditure category (about 54% of expenditures).

Major open items and contingent funding - FEMA: staff reported a pending FEMA reimbursement of $2,600,000 that is in…