TITLE:
title
FISCAL YEAR 2025-26 MID-YEAR BUDGET UPDATE
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DEPARTMENT: FINANCE DEPARTMENT
PRESENTED BY: MARK KHOU, BUDGET AND PURCHASING MANAGER
CONTACT INFORMATION: MARK KHOU, BUDGET AND PURCHASING MANAGER (714) 754-5241
RECOMMENDATION:
recommendation
Receive and file the Fiscal Year 2025-26 Mid-Year Update, including updated projections for General Fund revenues and expenditures for the fiscal year ending June 30, 2026.
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BACKGROUND:
On June 3, 2025, the City Council approved a General Fund (Fund 101) balanced budget of $186.9 million, and the All Funds (including Restricted Funds) budget totaled $224.9 million with a total of 599 Full-Time Equivalents (FTEs) across City Departments. The Council approved a partial waiver of the Capital Asset Needs (CAN) in the amount of $1.25 million contribution and partial waiver of the Technology Information Needs contribution in the amount of $1.16 million to ensure a balanced FY 2025-26 budget. The repayment towards the deferral of both respective funds is spread over a 10-year period beginning in FY 2026-27. All City Departments continue to exercise fiscal prudence by monitoring their budgets to ensure focused delivery of essential services and programs.
During calendar year 2025, the U.S. economy exhibited volatility driven by market and consumer reactions to evolving federal policies and changes including the implementation of new tariffs, and the extended federal government shutdowns. The volatility continued into 2026 and so far, exacerbated by the ongoing war in Iran. The resulting spike in fuel prices along with economy-wide uncertainties has shaken consumer confidence and restrained discretionary spending for the average household. Furthermore, Federal immigration enforcement and lingering impacts from tariff policies add to unsettled consumer confidence across a range of markets including but not limited to the labor, real estate, and financial markets. Although the full impact of these policies ...
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