San Carlos council adopts mid‑cycle general fund adjustments, transfers $5 million to capital fund

The San Carlos City Council on June 22 adopted mid‑cycle adjustments to the city’s general fund for fiscal year 2026–27, approving a $5 million transfer from the facilities and infrastructure reserve to the general capital fund and a small package of one‑time program enhancements.

Administrative Services Director Rebecca Mendenhall told the council the mid‑cycle review reconciles actual performance and updated assumptions since the biennial budget was adopted. Staff projects a preliminary operating surplus of about $2.8 million for the fiscal year (final audited numbers will be available after September close). Revenue variances include about $800,000 more than budgeted from one‑time reimbursements and increased business registration revenue; offsetting shortfalls remain in development‑related fees and sales tax.

Program changes included funding for three limited‑term interns in Community Development ($26,100 total) to assist planning and sustainability work, and Parks & Recreation requests totaling $103,600 for annual Diwali programming, vegetation management, and downtown activation. Full‑time position requests were not funded because of ongoing structural budget concerns; staff indicated they will reconsider positions if a future local revenue measure passes.

Council members pressed staff on what would be delayed without new positions, especially in traffic engineering and public‑works delivery; Assistant Public Works Director Tracy Scaglia said some CIP projects would need to be reprioritized and certain traffic engineering projects may slip.

The council adopted Resolution 2026‑85 by roll call (4–0, Vice Mayor absent). Staff will return to the council after the fiscal‑year close with final audited figures and recommendations for use of any one‑time savings.