Rancho Santa Margarita projects modest surplus in midyear budget; council approves staff recommendations

The Rancho Santa Margarita City Council received a midyear general-fund budget update on March 11 and unanimously approved staff’s recommendation to receive and file the report and adopt a related resolution, including a $25,900 budget amendment to replace a failing commercial refrigerator at the Bell Tower that supports senior Meals on Wheels.

Finance presenter Stephanie Turner told the council the city completed its FY2024–25 audit and that midyear projections show the city is “anticipating ending the fiscal year overall under budget with a surplus,” and staff currently project a roughly $190,000 surplus. Turner said property-tax and investment-income performance are driving much of the improvement while sales-tax receipts are expected to be about $74,000 below the original estimate due to weakness in auto and fuel categories.

Turner described permit-fee revenue as higher than budget because of increased volume and several high-value commercial projects. In response to council questions, staff emphasized that fees are set as cost-recovery charges and may not exceed the cost of the service they fund.

Mayor Beal moved to receive and file the midyear report and to adopt the staff-recommended resolution; the motion was seconded and carried unanimously.

The midyear presentation also listed planned uses of reserves for capital-improvement projects (noted at about $4.07 million for current CIP items) and previewed the FY2026–27 budget workshops planned to begin in May. Staff said the city will continue to monitor law‑enforcement contract negotiations and expected costs related to the Orange County Sheriff contract could change later in the year.

What's next: Staff will begin the FY2026–27 budget compilation in the coming weeks and present a budget workshop in May.