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Duarte projects $1.4 million midyear surplus, council approves budget amendments
Summary
Assistant City Manager Kristen Peterson told the council one‑time development revenues are driving an estimated $1.4 million surplus for FY25–26; council approved midyear budget amendments allocating funds to project completion, a plan‑scanning effort, and anticipated contract increases.
Assistant City Manager and Director of Administrative Services Kristen Peterson reported a marked improvement in Duarte’s midyear budget position, driven mainly by one‑time development revenues. "We adopted our 2526 budget with a $937,000 deficit back in June 2025," Peterson told the council, and said updated midyear numbers now show the city "actually anticipating a surplus of $1,400,000."
Peterson attributed the swing primarily to building permit and plan‑check receipts tied to a small number of large projects: plan‑check fees and permits from the City of Hope PRO Building (pathology, radiology and oncology building), the Vallarta supermarket, and a Crestfield townhome project together drove a substantial portion of the increase. Peterson emphasized that these are "one‑time revenues" and cautioned that sales tax — a more sustainable revenue source — is coming in lower than projected.
Staff recommended and council approved several midyear budget amendments. Key items highlighted by staff included a $561,000 appropriation to finish a City Hall façade improvement project, a budgeted $670,000 increase to anticipate additional payments under the Charles Abbott contract for plan review and permit processing, $120,000 to start a building plan‑scanning project to digitize nonresidential plans, and an $84,000 increase to complete a South Yard electrical upgrade (work delayed pending coordination with Southern California Edison). Peterson framed some of these appropriations as 1‑time uses of 1‑time revenue when appropriate.
Council members welcomed the revenue turn but repeatedly asked about sustainability and the risks of relying on large, irregular permit receipts. Several members noted that sales tax — a recurring revenue source — remained flat and that general operating expenses have increased. Council discussed opportunities to diversify revenues (tourism‑related TOT, different commercial uses) and to avoid repeating a pattern of long gaps between fee studies; staff noted prior consultant recommendations to review fees more frequently and to track CPI annually.
After discussion, the council voted to receive and file the midyear budget report and to approve the recommended budget amendments. Staff said next steps include a capital projects workshop in April and a budget workshop May 5, with final budget adoption planned for June.
