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Hemet staff presents FY25–26 midyear budget update; projection shows operating deficit under full‑spend scenario
Summary
Administrative Services Director Tiffany Barnett presented the midyear budget report showing adopted FY25–26 revenues and projected uses of one‑time funds. Staff said year‑to‑date general fund revenues were 24.2% as of Dec. 31, 2025, and presented a projection methodology that, if all budgeted revenues and expenditures occur, would show a $3.6 million operating deficit.
Administrative Services Director Tiffany Barnett presented the city’s fiscal year 2025–26 midyear update on Jan. 27, reviewing adopted budget assumptions and year‑to‑date results and noting how one‑time investments and interest income affected projections.
Barnett reminded the council the FY25–26 budget (adopted June 10, 2025) projected revenues of about $81,500,000 with use of one‑time fund balance of roughly $4.8 million. She said the general fund had recorded 24.2% of budgeted revenue collections as of Dec. 31, 2025 (compared with 31.5% at the same point the prior year), and explained most revenues (sales tax and property tax) are collected in the second half of the fiscal year. She reported substantial interest income in recent years, noting the city earned about $7.4 million in interest citywide in FY24–25 and the general fund recorded roughly $3.6 million of that.
Barnett outlined budgeted one‑time investments (examples given included $1.5 million to reduce liability premium/SIR exposure and $1.5 million to a Pension 115 trust) and Measure U allocations such as $900,000 for rehabilitation of a structure at St. John’s Place and $120,000 toward Fire Station 3 rehabilitation. Under a full‑receipt and full‑expenditure projection model staff presented, the operating deficit was estimated at about $3.6 million; staff emphasized that the projection is an illustrative methodology and that prior years closed with a larger fund balance (ended FY24–25 with a $67.3 million fund balance, well above the city’s 40% reserve requirement).
Council and staff characterized the report as a receive-and-file informational item; no contested action was taken beyond the receipt of the report.
