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San Bernardino projects mid‑year $14M revenue shortfall, eyes street repairs after bids come in under estimate
Summary
City staff reported a mid‑year revenue shortfall of about $14 million and an expected fund balance of roughly $200 million; six bids were received for pavement repairs and the lowest came in under the $6 million engineer's estimate, with a contract recommendation slated for the May 7 council meeting.
City staff delivered a mid‑year financial update to the San Bernardino City Council on March 19, reporting lower revenue and expenditure projections for fiscal year 2024‑25 and presenting a near‑term plan for street repairs and next steps on the 2025‑26 budget.
Finance staff said the city expects revenues to be roughly $14 million below the adopted budget and expenditures about $13.2 million below the adopted budget. Staff emphasized a conservative revenue projection for the remainder of the fiscal year, citing slowing consumer spending, weaker sales and use taxes and reductions in transient occupancy and property transfer taxes.
The update showed the city’s fund balance is expected to remain near $200 million at year end after the council previously authorized a one‑time use of fund balance to support street segment repairs. Staff reiterated that the city’s required reserve—established in municipal code and increased via charter provisions in 2016 to 25 percent—remains a target for maintaining fiscal stability.
On capital work, the city manager said six bids were received this week for a pavement and repair project covering 14 streets. “The lowest apparent bid came in below the engineer's estimate of $6,000,000,” staff said. Staff will evaluate the bids for compliance and return to the council with a contract award recommendation at the May 7 meeting. Because the apparent low bid was below the engineer’s estimate, staff said it will consider whether additional streets could be added to maximize the use of the approved funds.
City staff proposed a 2025‑26 budget calendar with a special budget workshop in late April (proposed April 23), a preliminary budget presentation on May 7 and budget adoption targeted for June 4. The city manager said staff expects a “rollover” budget that carries forward current operating levels and that any use of the fund balance should be treated as one‑time spending with a policy to guide payback and minimum reserve levels.
Councilmembers discussed reserve policy language and emphasized the importance of maintaining the 25 percent minimum reserve while allowing measured, repayable use of one‑time fund balance for critical capital projects. The council voted unanimously to receive and file the mid‑year financial update.
Why it matters: The budget shortfall projections and the plan to spend one‑time reserves on street repairs shape near‑term capital projects, staffing and service decisions. Staff urged conservatism in revenue forecasting given statewide and national economic trends.
