Eastvale reviews $79 million preliminary budget; council weighs moving fire reserves to general fund

City staff on Wednesday presented a preliminary FY2026‑27 budget that projects roughly $79.4 million in revenues (excluding transfers) and highlights both a multi‑million‑dollar surplus in the short term and rising contract and insurance costs that will shape future choices.

"We continue to be fundamentally strong financially, incredibly strong," City Manager Mark said as he opened the budget workshop, noting the proposed spending plan starts July 1, 2026, and covers operations through June 30, 2027. Amanda Wells, the city’s finance director and treasurer, walked the council through revenue and expenditure assumptions, saying sales tax remains the city’s largest single revenue source at about $50 million and is projected to rise modestly under consultant HDL’s forecast.

Wells told the council the preliminary revenue figure is about $79.4 million excluding transfers; the draft includes transfers and reserve appropriations tied to capital projects, producing an overall operating surplus staff described as roughly $31 million when those items are counted. The presentation assumes a 3% cost‑of‑living adjustment effective July 1, 2026, plus merit increases and normal health insurance cost adjustments.

Several cost pressures emerged in the presentation. Wells said general liability insurance premiums have jumped roughly 29–30 percent and represent a notable part of a 6 percent increase in overall operating costs. The draft also factors in a roughly $1.1 million increase tied to the city’s contract with the Riverside County Sheriff’s Office; staff said the next contract rate projection is in the 6.75–7.25 percent range and that the city has incrementally added patrol, traffic and specialty services over prior years.

On the fire side, the fire fund projection shows about $10.4 million in revenues against roughly $9.9 million in operating expenditures, leaving a projected $470,000 surplus for the fund in 2026‑27. Staff proposed beginning work on a third fire station — including an initial $4.1 million appropriation for design — and floated a policy option to move the fire fund’s operational reserve into the general fund so the money can seed capital work while maintaining an overall reserve target of 50 percent in the general fund.

Mark and Wells emphasized the budget is preliminary and conservative. "If something changes, we have plenty of reserves," Wells said, adding the administration will return with refined revenue numbers and a fund‑balance policy for council consideration as the draft budget is prepared. The public schedule set by staff calls for a CIP workshop May 13, a proposed‑budget study session June 10 and final adoption June 24.

Council members asked for additional detail on several topics: (1) a breakdown of transient occupancy tax (TOT) vs. restaurants vs. hotels, which staff said they will request from HDL; (2) further explanation of the drivers behind the insurance premium increase, which risk management said stems from payroll growth, added property scheduling and a difficult insurance market; and (3) a review of the county revenue‑neutrality agreement that constrains some fire fund uses, which several council members asked the city attorney to examine.

The workshop produced no final votes on the draft budget; council provided direction to staff and requested follow‑up detail on the insurance increase, TOT splits, the county revenue‑neutrality agreement, and the proposed fund‑balance policy shift for the fire fund. Staff will return the draft budget and policy recommendations in the weeks ahead.