HomeMy WebLinkAboutItem 5e - Fy2025-26 Q3 Budget Report Item 5e
Department: Finance
Cost Center: 2002
For Agenda of: 5/19/2026
Placement: Consent
Estimated Time: N/A
FROM: Emily Jackson, Finance Director
Prepared By: Riley Kuhn, Principal Budget Analyst
SUBJECT: FY 2025-26 Q3 BUDGET REPORT
RECOMMENDATION
1. Receive and file the FY 2025-26 Q3 Budget Report; and
2. Authorize a transfer of $30,049 from the South Broad Street Corridor project to the
Public Works & Utilities Department staffing budget to pay for the contract
Transportation Planner/Engineer I position assigned to the project; and
3. Authorize a transfer of $110,812 and $55,406 from each of the Prado Bridge Widening
and Prado Road Interchange projects to the Public Works & Utilities Department
staffing budget to pay for the contract Major City Projects Manager position assigned
to the projects; and
4. Authorize an increase in the Transit Fund staffing budget of $30,000 .
POLICY CONTEXT
The City’s budget policies require that the City Council review the City’s budget and
financial condition at least every six months. City Charter Code Section 804 states that at
any meeting after the adoption of the budget, the Council may amend or supplem ent the
budget by motion adopted by a majority vote of the Council.
The Q3 Budget Report is part of the ongoing reporting process to fulfill these
requirements.
DISCUSSION
Budget Report Organization
The budget report follows a standard format in line with recent quarterly budget updates
and is intended to provide a high-level overview of the year to date fiscal performance for
the General Fund, the four major enterprise funds, and the special revenue funds. The
report includes the following sections:
General Fund Summary: Three quarters through the year, no new risks to budget
attainment have emerged. Development fees and investment income are trending above
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Item e
budget and revenue overall is expected to modestly exceed budget. Expenditures broadly
are in line with expectations despite several areas of risk as detailed in the report.
Water Fund Summary: Results after three quarters are largely as expected.
Sewer Fund Summary: Results after three quarters are largely as expected.
Parking Fund Summary: Results after three quarters are largely as expected. Staff note
that revenue may underperform if parking activity, particularly at meters, does not pick up
in the fourth quarter in line with typical seasonal trends.
Transit Fund Summary: Grants revenue is trending below budget due to timing of capital
projects and reimbursements, but no impact to fund balance is expected and fee
revenues are in line with budget.
Staffing expenditures are trending above budget, largely because the newly created
Assistant Director of Public Works and Director of Public Works and Utilities positions are
partially allocated to the Transit Fund but the Director of Public Works position they
replaced was not. Staff’s recommendation is to increase the FY 2025 -26 budget
accordingly, and the proposed FY 2026-27 budget will reflect the new position allocations.
Special Revenue & Other Fund Summaries: All other funds results are generally in line
with expectations and staff do not expect significant variances to budget at year end.
2023 Winter Storm Update: Staff continue to work through the Federal Emergency
Management Agency’s (FEMA) process to obtain reimbursement for damages incurred
in the 2023 winter storms. To date, the City has received $1.9 million in reimbursement
and expect additional reimbursement, although timing is uncertain.
CIP Update: The report provides an update on the tasks ongoing or completed during
the third quarter of the year. Notable projects completed in Q3 include the Cultural Arts
District Parking Structure, Mid-Higuera Bypass Project, and the 2025 Roadway Paving
Project. Major ongoing projects include the Mission Plaza Enhancements and the Righetti
Community Park.
Major City Goals Update: The report includes an update on Major City Goal tasks with
an original or updated expected completion in Q3. Seven tasks were completed as
expected and eight are behind schedule.
Previous Council or Advisory Body Action
The report makes reference to the 2025-27 Financial Plan adopted by Council on June
17, 2025.
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Item e
Public Engagement
Public engagement on the item can be provided to the City Council through written
correspondence prior to the meeting or through public testimony at the meeting. The
report will also be posted on the City’s website for public review.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
action in this report because the action does not constitute a “Project” under CEQA
guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-26
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
Capital Outlay
Fund
140,861 N/A
Transit Fund 30,000 30,000
Fees
Other:
Total $ $170,861 $ $N/A
The recommendation to receive and file the Q3 report has no fiscal impact.
The recommendations to transfer funds from Prado Bridge Widening, Prado Road
Interchange, and South Broad Street Corridor project budgets from the General Capital
Outlay fund to the Public Works and Utilities Department’s staffing budget is aligned with
the initial plan to fund the Transportation Planner/Engineer I and Major Projects Manager
contract positions for the duration of FY 2025-26. These temporary positions are not
funded by the department’s staffing budget and additional transfers will be required in FY
2026-27, however, as contracts are temporary in nature there is no ongoing cost .
The recommendation to increase the Transit Fund’s staffing budget is necessary to
accommodate the increased staffing costs of the Assistant Director of Public Works and
the Director of Public Works & Utilities. These positions were created after Financial Plan
adoption and are allocated partially to the Transit Fund. The Public Works Director
position they replaced was budgeted entirely within the General Fund and costed to
various funds through the Cost Allocation Plan.
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Item e
ALTERNATIVES
Council could decide not to approve the recommended transfers from project
budgets to staffing budgets. Should Council pursue this alternative, the Public Works
and Utilities Department may be able to offset the unbudgeted expenditures with savings
from other vacant positions.
Council could decide not to approve the recommended increase for the Transit
Fund staffing budget. Should Council pursue this alternative, the Transit Fund should
be expected to exceed its staffing budget for the year.
ATTACHMENTS
A - FY 2025-26 Q3 Budget Report
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FY 2025-26 Third Quarter Budget Report
Introduction
This report provides an overview of the City’s revenues and expenditures through the third quarter of FY
2025-26 (July 1, 2025 – March 31, 2026). It also provides an update on the status of the City’s Capital
Improvement Plan (CIP) projects and progress on Major City Goal tasks.
Throughout the document, reference will be made to the data available as of the time the report was
drafted. Revenues are often not available for up to two months after month-end and in some cases,
revenues are not received evenly throughout the year. Expenditures are often recorded in advance for
annual costs or for purchase orders opened at the beginning of the year. The net impact is that actual
results booked three quarters into the year should not always be expected to equal three quarters of
budgeted amounts. Commentary will be provided only when analysis suggests that full-year results may
differ significantly from budget.
Table of Contents
General Fund Summary……………………………………
Water Fund Summary………………………………………
Sewer Fund Summary……………………………………..
Parking Fund Summary…………………………………….
Transit Fund Summary……………………………………..
Special Revenue Summaries……………………………
2023 Winter Storm Recovery Update………………
CIP Update………………………………………………………
Major City Goal Update……………………………………
2
5
7
9
10
12
16
17
19
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General Fund Summary
Three quarters through the year, staff expect that revenue targets will be attained and expenditures will
finish the year on budget. The tables below detail year-to-date (YTD) results as compared to budget and
prior year actuals. Commentary is provided where results are not in line with expectations.
Revenue:
Tax Revenue:
Sales Tax (including Local Revenue Measure & Prop 172 Safety Tax): The budget for sales tax revenue was
developed in February 2025, prior to the announcement of significant new and increased federal import
taxes. The City’s sales tax consultants advised staff in May 2025 that these tariffs would have a negative
impact on sales tax revenue and presented a risk of up to $1.3 million to the revenue budget. This impact
has yet to appear in sales tax data, which includes results through December. As of April 2026, the City’s
consultants now expect the City to meet or exceed its sales tax budget. Staff will continue to closely
monitor results for signs of impacts.
Property Tax: The City participates in the Teeter Plan, which means that it is not exposed to delinquent
payments and can reasonably expect to collect 100% of budgeted amounts. Staff expect to meet or
modestly exceed budget by year-end.
FY 2024-25 FY 2025-26
General Fund Actuals Budget YTD Actuals % Received
Tax & Franchise Revenue
Sales Tax 54,357,111$ 55,470,441$ 29,310,570$ 53%
Property Tax 24,923,847 25,944,966 16,053,233 62%
Transient Occupancy Tax 11,417,888 11,099,705 6,962,182 63%
Utility User Tax 7,501,436 6,605,306 4,233,843 64%
Business Tax 3,138,271 3,230,170 3,178,252 98%
Franchise Fees 2,622,351 2,242,429 1,160,790 52%
Cannabis Tax 814,502 1,000,000 642,109 64%
Total Tax & Franchise Revenue 104,775,406 105,593,017 61,540,979 58%
User Fees
Development Review 5,697,332 4,606,812 5,417,677 118%
Parks & Recreation 2,643,907 2,280,283 2,139,002 94%
Fire 3,331,998 1,950,305 1,736,223 89%
Police 834,584 690,200 659,554 96%
Business Licenses 792,548 632,470 335,890 53%
Total User Fees 13,300,370 10,160,069 10,288,346 101%
General Government 7,778,702 1,669,077 5,128,518 307%
2023 Storm Reimbursement 909,090 - 760,702
Total Revenue 126,763,568$ 117,422,163$ 77,718,544$ 66%
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Transient Occupancy Tax: The City has benefited from strong local tourism spending and this line is
trending above budget year to date. Staff expect to exceed budget by year-end.
Business Tax: This line should be largely collected for the year and any remaining revenue will be from
collections on delinquent renewals. Approximately 95% of businesses renewed on time and staff continues
efforts to bring others into compliance with Municipal Code requirements.
Cannabis Tax: This revenue stream experienced a significant decline in FY 2024-25 that shows no signs of
inflection in the current year. Staff has adjusted the budget for FY 2026-27 to this new, lower level.
While other tax revenue categories show year to date results higher or lower than 75%, staff do not expect
significant variances for the full year.
Fee & Other Revenue:
Development Review Fees: FY 2025-26 revenues are trending above projections. Three quarters into the
year, the Community Development Department has collected 118% of the total annual budget. This over-
realization of fee revenue was due in large part to a conservative budget. The FY 2025-26 revenue budget
was based on annualized revenues from the first half of FY 2024-25, a period marked by slowing
development activity and macroeconomic uncertainty driving historically low fee revenues. While overall
development remains below historical highs, the ongoing build-out of Avila Ranch and steady Accessory
Dwelling Unit (ADU) and commercial development are anticipated to support consistent revenue for the
department for the next several years. Staff has increased the budget for Development Review Fees in FY
2026-27.
Parks & Recreation Fees: Parks and Recreation revenues are cyclical in nature, driven primarily by program
registration timelines and enrollment patterns. Within Youth Services, the Kinder Gap Care program has
generated nearly $450,000 in unanticipated additional revenue due to its implementation after the
development of the 2025-27 Financial Plan. This program is a collaborative partnership with the school
district in which the district reimburses the City for care of 495 children across five school sites for
approximately six hours per day. As a result, the Department is trending above budget expectations for FY
2025-26; however, this increase is offset by corresponding staffing costs required to support program
delivery. Revenue activity within Youth Services is expected to normalize in the next fiscal year as the
Kinder Gap Care program returns to its traditional operating structure where the school district is providing
direct care for longer, resulting in less care needed by Youth Services staff.
Fire Department Fees: Three quarters through the year, the Fire Department has collected 89% of its
budgeted revenue. This is primarily due to the agreement to provide fire services to Cal Poly for which
revenue has been recognized for the full year. Fire Department Permits are also trending above budget
and prior year actuals from the same period. Staff expect a modestly favorable result at year-end.
Police Department Fees: Revenue is trending above budget primarily due to administrative citations. The
department conservatively budgets $150,000 annually and collected $262,300 through the end of the
third quarter. Collections are strongly seasonal and the highest revenue months coincide with holidays like
Halloween and St. Patrick’s Day, when doubled fines were in effect.
Business Licenses: Revenue is trending below budget due to timing of license fee collection. After
collection of Cannabis Operator Licenses in the Fourth Quarter, this line should finish on budget.
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General Government: This line includes earnings on cash and investment balances which have benefited
greatly from elevated interest rates in recent years. Staff expect investment income to outperform budget
once again, although to a lesser degree than years past due to recent policy actions by the Federal Reserve.
Geopolitical tensions and volatility in global markets could cause yields to increase rapidly before year end,
which would negatively impact investment income.
Though other fee categories show year-to-date results other than 75% of budget, staff do not expect
significant variances for the full year.
Operating Expenditures: Year-to-date results for the General Fund are largely as expected at this point in
the year.
Staffing: The General Fund is trending towards 3% salary savings at year-end, which is lower than the 4%
assumption built into the long-term forecast for the General Fund. This is in large part due to lower vacancy
rates Citywide which may be attributable to a deteriorating labor market. Other more distinct drivers are
detailed in the departmental sections below. Staff expect that the primary impact of lower salary savings
will be that unassigned fund balance at year-end will be slightly lower than in recent years.
Other Operating Expenditures: Based on year-to-date actuals this line item is expected to finish on budget.
The table below details the budget and year-to-date actuals for both staffing and other operating
expenditures by department:
While the General Fund as a whole is expected to finish the year on budget, staff note several
departmental level variances:
Fire: The Department’s staffing expenditures are trending above budget. Several vacant positions and
two long-term injury vacancies are driving significant unbudgeted overtime expenditures. Four firefighter
positions are currently vacant, requiring a minimum of one shift daily to be
FY 2024-25 FY 2025-26
General Fund Actuals Budget YTD Actuals % Expended
Staffing 75,489,526$ 78,840,346$ 57,986,273$ 74%
Other Operating Expenditures 18,291,470 21,699,819 16,301,290 75%
Total 93,780,996$ 100,540,165$ 74,287,563$ 74%
FY 2024-25 FY 2025-26
Department Actuals Budget YTD Actuals % Expended
Police 24,657,118$ 25,611,245$ 19,928,388$ 78%
Fire 18,787,150 18,134,272 14,052,294 77%
Public Works 16,581,895 18,140,176 13,643,873 75%
Administration & IT 11,565,191 12,655,801 8,776,034 69%
CDD 7,864,816 9,059,766 6,725,194 74%
Parks & Rec 6,014,160 6,231,512 4,526,014 73%
Finance 2,686,591 2,850,096 2,123,366 75%
Non-Departmental 350,542 2,399,772 359,608 15%
HR 2,085,986 2,061,730 1,513,953 73%
City Attorney 1,652,744 1,863,615 1,484,298 80%
Utilities 1,534,804 1,532,180 1,154,542 75%
Total 93,780,996$ 100,540,165$ 74,287,563$ 74%
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filled at overtime rates. The next recruit academy to hire new firefighters is planned for FY 2026-27 and
shift coverage overtime will persist until then. The savings from these vacant positions will partially offset
overtime costs, as will reimbursements for mutual aid. Despite these offsets, staff expect that the
department will exceed its staffing budget at year-end.
Police: The Department’s staffing expenditures are trending high mainly due to overtime expenditures.
Overtime hours increased by about 9% compared to the same time period last year. This has been mostly
attributed to mandatory training that occurs every other year, shift coverage due to vacancies or worker’s
compensation leave, Cal Poly events, and significantly increased investigative hours. It is likely, even with
vacancies, the department will exceed the total staffing budget at year end.
Parks and Recreation: The Department is projected to exceed its staffing budget by 2-3% at year-end
driven largely by additional youth services staffing for Kinder Gap Care, as described above in the
department’s revenue explanation. Staff plan to address this through an administrative budget adjustment
at year-end.
Non-Departmental: This budget includes a contingency for labor negotiations ongoing at the time of
budget adoption. Adjustments for cost of living, benefits, and other compensation changes were budgeted
for in a non-departmental cost center during negotiations as is typical City practice, but no transactions
are charged to this account, leading to a very low percent of budget expended.
City Attorney: As of the third quarter, the department was trending over budget due to unanticipated
legal expenditures. These have since been addressed by an administrative budget adjustment and the
department is expected to finish the year under budget.
Enterprise Fund Summaries
The City uses Enterprise funds to account for operations that are financed and operated in a manner
similar to private business enterprises, where the intent is that the costs of providing certain services is
recovered primarily through user charges. This section of the report includes a write up on the budget
status of the City’s four enterprise funds (Water, Sewer, Parking, and Transit) through the third quarter of
FY 2025-26.
Water Fund Summary
The Water Fund’s actuals through the third quarter for revenues and expenditures are generally in line
with expectations and anticipated trends. Observed variances are primarily attributable to seasonal
revenue patterns, timing of receipts, and standard budget administration practices, rather than structural
changes to the fund.
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Revenue:
Water Sales: Actuals through the third quarter of FY 2025–26 are at 64% of budget. This is primarily due
to timing differences in receipts and standard accrual accounting practices. Specifically, the table above
does not include receipts from the March billing cycle. Also, under accrual accounting, revenue is
recognized in the period in which the service is provided rather than when payment is received. As a result,
a portion of the July billing cycle (typically 65–75%) is recorded in June of the prior fiscal year. After
adjusting for timing differences, water sales are trending modestly ahead of expected levels.
Base Charges: Actuals through the third quarter of FY 2025–26 are at 58% of budget. This is primarily due
to timing differences in receipts and standard accrual accounting practices. Specifically, the table above
does not include receipts from the March billing cycle. Also, under accrual accounting, revenue is
recognized in the period in which the service is provided rather than when payment is received. As a result,
a portion of the July billing cycle (typically 65–75%) is recorded in June of the prior fiscal year. After
adjusting for timing differences, base charges are trending at expected year-to-date levels.
Setup Fees: Actuals through the third quarter of FY 2025–26 are at 90% of budget. Setup fee revenues are
trending above budget and include a one-time $36,000 payment resulting from a settlement agreement
with the developer of Avila Ranch. Because setup fees are driven by the timing of development activity,
they are inherently variable and fluctuate throughout the fiscal year.
Other Revenue: Actuals through the third quarter of FY 2025–26 are at 27% of budget. This category
includes grant reimbursements, investment earnings, and other miscellaneous revenues. The variance is
primarily due to the timing of reimbursements associated with the Proposition 1B grant, which funds the
Groundwater Well Development project. Of the $4.1 million budgeted for this grant, approximately
$176,000 has been received to date. Staff anticipate more significant drawdowns once construction
activities are underway.
Strong investment performance has partially offset lower-than-anticipated revenues in other areas of this
category. Investment income was budgeted at $50,000 for the fiscal year, while actuals total approximately
$770,000. However, investment earnings are inherently variable and should not be relied upon as a
consistent or ongoing source to offset revenue shortfalls.
FY 2024-25 FY 2025-26
Water Fund Actuals Budget YTD Actuals % Received
Water Sales 21,379,368$ 21,449,631$ 13,717,204$ 64%
Base Charges 7,650,544 8,448,140 4,910,333 58%
Setup Fees 125,561 160,000 144,237 90%
Other Revenue 6,972,868 4,351,680 1,157,788 27%
Total Revenue 36,128,340$ 34,409,451$ 19,944,762$ 58%
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Expenditures:
Staffing: Actuals through the third quarter of FY 2025–26 are at 67% of budget. Staffing expenditures are
trending below expectations primarily due to vacancies within the Utility Billing and Water Distribution
teams.
Operating Expenditures: Actuals through the third quarter of FY 2025–26 are at 83% of budget.
Approximately $14.9 million of these costs are attributable to Source of Supply expenses. A significant
portion of these costs are incurred on a lump-sum basis, resulting in higher expenditures earlier in the
fiscal year relative to a linear spending pattern.
Source of Supply costs primarily include expenses related to dam operations, maintenance, and capital
infrastructure for the City’s raw water supplies. Staff expect overall Water Fund expenditures to finish the
fiscal year within budget.
Sewer Fund Summary
The Sewer Fund’s actuals through the third quarter are generally in line with expectations. Variances are
primarily driven by the timing of receipts and standard budget administration practices rather than
changes in underlying financial drivers.
Revenue:
Service Charges: Actuals through the third quarter of FY 2025–26 are at 69% of budget. This is primarily
due to timing differences in receipts and standard accrual accounting practices. Specifically, the table
above does not include receipts from the March billing cycle. Also, under accrual accounting, revenue is
recognized in the period in which the service is provided rather than when payment is received. As a result,
a portion of the July billing cycle (typically 65–75%) is recorded in June of the prior fiscal year. After
adjusting for timing differences, service charges are trending modestly ahead of expected year-to-date
levels.
Base Charges: Actuals through the third quarter of FY 2025–26 are at 62% of budget. This is primarily due
to timing differences in receipts and standard accrual accounting practices. Specifically, the table above
does not include receipts from the March billing cycle. Also, under accrual accounting, revenue is
recognized in the period in which the service is provided rather than when payment is received. As a result,
FY 2024-25 FY 2025-26
Water Fund Actuals Budget YTD Actuals % Expended
Staffing 5,495,997$ 6,225,377$ 4,151,611$ 67%
Other Operating Expenditures 15,015,367 20,974,582 17,375,234 83%
Total Expenditures 20,511,364$ 27,199,960$ 21,526,845$ 79%
FY 2024-25 FY 2025-26
Sewer Fund Actuals Budget YTD Actuals % Received
Service Charges 15,201,167$ 15,229,215$ 10,538,669$ 69%
Base Charges 5,942,531 6,329,610 3,919,067 62%
Other Revenue 3,748,643 210,000 2,095,731 998%
Total Revenue 24,892,342$ 21,768,825$ 16,553,466$ 76%
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a portion of the July billing cycle (typically 65–75%) is recorded in June of the prior fiscal year. After
adjusting for timing differences, base charges are trending at expected YTD levels.
Other Revenue: Actuals through the third quarter of FY 2025–26 are at 998% of budget. This category
includes grant reimbursements, investment earnings, and other miscellaneous revenues. The significant
variance is primarily due to strong investment earnings, one-time reimbursements from regional partners,
and the timing of grant revenues.
Investment income was budgeted at $50 thousand for the fiscal year, while YTD actuals total approximately
$1.35 million. Additionally, approximately $208 thousand was received from Cal OES grant funding for the
Water Resource Recovery Facility (WRRF) upgrade that was originally anticipated in FY 2024–25, and $353
thousand was received from one-time reimbursements from regional partners for a shared project.
These revenues are largely one-time or timing-related in nature. Investment earnings are inherently
variable, and staff do not expect these elevated revenue levels to continue or serve as a reliable source to
offset future revenue shortfalls.
Expenditures:
Staffing: Staffing expenditures are trending below expectations primarily due to vacancies within the
Utility Billing team and Engineering and Planning Section.
Other Operating Expenditures: While the Sewer Fund is expected to finish the fiscal year within budget,
staff are monitoring two key operational considerations.
First, the Water Re source Recovery Facility’s (WRRF) regulatory sampling requirements are currently being
evaluated by the Regional Water Quality Control Board. Performance during baseline testing will inform
ongoing sampling requirements and may have a material impact on future operating costs.
Second, the WRRF biogas cogeneration system is at the end of its useful life and staff are evaluating options
for continued maintenance or potential replacement of this asset. This system currently offsets electrical
and natural gas usage at the facility, reducing operating costs and supporting implementation of the City’s
Lead by Example Climate Action Plan.
In addition, the WRRF’s post-construction operating budget will be evaluated in the coming year to assess
whether forecasted operating conditions and allocated resources remain sufficient.
FY 2024-25 FY 2025-26
Sewer Fund Actuals Budget YTD Actuals % Expended
Staffing 5,552,235$ 6,042,596$ 4,214,902$ 70%
Other Operating Expenditures 3,905,154 4,828,711 3,859,689 80%
Total Expenditures 9,457,388$ 10,871,306$ 8,074,591$ 74%
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Parking Fund Summary
The Parking Fund’s actuals through the third quarter are generally in line with expectations. Revenue
variances, primarily in Fines and Other Revenue, are due to delayed receipt of payments that will be
realized by year-end. Year -to-date expenditures reflect a minor variance due to annual upfront payments
and purchase orders opened at the beginning of the fiscal year.
Revenue:
The revenue budget is based on projections from the 2024 Parking Rate Study, reflecting reduced rates
effective July 1, 2024. Technology upgrades recommended in the Technology Roadmap, including new
payment equipment in parking garages and at on-street locations, were installed during the current fiscal
year and are operating as anticipated.
Meters: Parking meter revenue includes hourly parking sessions from on-street and surface parking lot
areas, including mobile app payments. New payment equipment was installed on-street and in surface
parking lot areas in November 2025. While the equipment is functioning as intended, meter revenue is
currently tracking slightly below budget due to fewer parking transactions compared to the same period
in the prior fiscal year. If on-street parking activity does not increase, staff anticipate a modest negative
variance to budget by year-end.
Structures: New parking structure gating equipment recommended by the Technology Roadmap was
installed at the beginning of the fiscal year. The equipment is functioning as intended, resulting in higher
revenue compared to the prior fiscal year when equipment failures occurred, and is meeting budget
expectations. Staff do not anticipate a variance to budget by year-end.
Long-Term Parking: Long-term parking revenue includes sales of on-street permits, residential district
permits, and garage parking permits. Garage parking permit rates were reduced from $85 per month to
$45 per month effective July 1, 2024. Since the rate reduction, garage permit sales have steadily increased
and are expected to continue to grow with the opening of the Cultural Arts District Parking Garage that
occurred in March 2026. In addition, the digital permit platform was expanded in April 2026 to include 10-
Hour On-Street Permits, which is anticipated to further support permit sales. Staff expect this increased
adoption will lead to budget attainment at year-end.
Fines: Parking Fines revenue includes all revenue collected from paid parking citations. In March 2025, the
City implemented a new citation management system consistent with recommendations from the
Technology Roadmap. Under the new system, citation payments are temporarily held in an escrow account
and reconciled monthly once mailed check payments are received. This change has resulted in a slight
FY 2024-25 FY 2025-26
Parking Fund Actuals Budget YTD Actuals % Received
Meters 4,589,728$ 4,312,367$ 2,719,185$ 63%
Structures 1,886,338 2,860,504 1,986,486 69%
Long-Term Parking 522,895 500,000 302,531 61%
Fines 1,113,016 1,231,100 549,773 45%
Other Revenue 2,671,989 671,984 283,143 42%
Total Revenue 10,783,966$ 9,575,955$ 5,841,118$ 61%
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delay in revenue recognition, contributing to the year-to-date variance. Staff expect these funds to be
received and does not anticipate a material variance to budget by fiscal year-end.
Other Revenue: Other Revenue in FY 2024-25 included $1.7 million generated through higher returns on
investments. Elevated interest rates during FY 2024–25 produced stronger earnings on pooled cash
balances from the Cultural Arts District Parking Structure (CADPS) bond issuance, while budget
assumptions remained conservative. Investment interest is based on available cash, and as the CADPS
construction closes out, cash balance will dwindle; therefore, staff expects minimal investment income
and budgeted accordingly. This line also includes Other Rent & Lease Revenue which is budgeted based
on current lease agreements, for which most of the revenue is collected toward the end of the fiscal year.
Staff expect this line to finish on budget once all lease payments are collected.
Expenditures:
Staffing: Staffing expenditures are forecasted to continue tracking as anticipated and staff do not project
any variance to the budget by year-end.
Other Operating Expenditures: Expenditures are currently on track. Staff will continue to monitor
expenditures closely and anticipate the fund will finish the fiscal year under budget.
Transit Fund Summary
The Transit Fund’s actuals through the third quarter are generally consistent with expectations. The Transit
Fund is heavily subsidized by Federal grants which are reimbursement-based; as a result, revenues are
realized after expenses are incurred and draw down requests are submitted. Grant funds that are budgeted
but not expended during the current fiscal year will remain available for reimbursement in future fiscal
years. Through the first nine months of the current fiscal year, overall transit ridership has increased by
14% compared to the same period in the prior fiscal year, which significantly exceeds the 2% annual growth
forecasted in the recently adopted Short-Range Transit Plan.
Revenue:
FY 2024-25 FY 2025-26
Parking Fund Actuals Budget YTD Actuals % Expended
Staffing 2,109,475$ 2,198,513$ 1,598,414$ 73%
Other Operating Expenditures 1,707,291 1,750,531 1,249,937 71%
Total Expenditures 3,816,767$ 3,949,044$ 2,848,351$ 72%
FY 2024-25 FY 2025-26
Transit Fund Actuals Budget YTD Actuals % Received
Bus Fares 234,855$ 260,000$ 189,230$ 73%
Cal Poly Transit 750,000 750,000 562,500 75%
Federal Grants 8,859,273 8,254,281 641,382 8%
State Grants 1,360,509 2,733,722 1,189,324 44%
Other 998,813 30,455 635,058 2085%
Total Revenue 12,203,449$ 12,028,458$ 3,217,493$ 27%
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Local (Bus Fare): Local bus fare revenue includes fares collected on board buses, as well as revenue from
physical and digital pass sales. Revenue is expected to meet targets based on the first three quarters of
actuals.
Cal Poly Transit Payments: Cal Poly transit payment revenue is generated through a three-year agreement
between the City and Cal Poly for transit services. Payments are received quarterly, and three payments
have been received to date. Staff do not anticipate a variance to budget by year-end.
Federal Grants: Federal grant revenue consists of both capital and operating funds from formula and
discretionary programs. These funds are dependent on the timing of eligible capital expenditures and
operating costs reimbursements. The City continues to draw down on the American Rescue Plan Act
(ARPA) operating funds awarded in 2022. These funds are drawn down quarterly (October, January, April,
and July) in alignment with federal reporting requirements. To date , one drawdown is reflected in the table
above. Several federally funded capital projects are currently underway. Reimbursement requests for
eligible expenses are expected to be submitted by year-end. Any federal funds budgeted to these projects
but not expended this fiscal year will remain available for reimbursement in future fiscal years.
State Grants: State grant revenue primarily consists of Transportation Development Act (TDA) funds, which
are generated by statewide sales tax and administered by the San Luis Obispo Council of Governments
(SLOCOG). Because the City adopts its budget prior to the final calculation of TDA allocations, actual
funding amounts may differ from budgeted assumptions. Based on revised allocation amounts provided
by SLOCOG, the final calculation was less than previously estimated. Staff anticipate a negative variance of
$385,000 by year-end. This reduction in funding is not expected to impact service levels or the delivery of
capital projects because the Transit Fund has sufficient TDA fund reserves from prior fiscal years that can
be drawn upon to cover any eligible operating or capital expense shortfalls resulting from the negative
variance.
Other Revenue: Other revenue includes earnings on cash and investment balances, as well as other grants
and subventions. During the fiscal year, the City applied for and received a $400,000 rebate from Central
Coast Community Energy (3CE) related to the purchase of six new electric buses. In addition, interest
earnings are currently exceeding budget by approximately $235,000 due to higher than anticipated
investment returns driven by the continued elevated interest rate environment. As a result, staff anticipate
a significant positive variance by year-end.
Expenditures
Staffing: Staffing is trending higher than budget as of the end of the third quarter, due to the additional
position costing of a small portion of the Director and Assistant Director positions, related to the
consolidation of the Public Works and Utilities departments earlier in the fiscal year. These increased costs
to the Transit Fund are partially mitigated by salary savings, and as a result staff anticipate a variance of
FY 2024-25 FY 2025-26
Transit Fund Actuals Budget YTD Actuals % Expended
Staffing 393,432$ 391,095$ 329,336$ 84%
Other Operating Expenditures 4,992,796 5,612,975 4,959,878 88%
Total Expenditures 5,386,228$ 6,004,069$ 5,289,215$ 88%
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around $30,000 to the staffing budget by year-end. Staff recommend an additional appropriation to cover
this variance in the current year and will adjust the budget accordingly going forward.
Other Operating Expenditures: Actuals through the third quarter include purchase orders established at
the beginning of the fiscal year. While these amounts are reflected as obligations, only 50% of the budget
has been expended to date. Staff will continue to monitor expenditures closely particularly as fuel costs
continue to sharply rise.
Special Revenue and Other Fund Summaries
Tourism Business Improvement District
The Tourism Business Improvement District (TBID) assessment is set at 2% of the lodging industry’s gross
receipts. The program annually aligns its operating budget with its anticipated revenues, and any
difference is due to open purchase orders carried over from the prior year.
Revenue:
Revenue is recorded on a more than one month delay and staff expect to collect at least the budgeted
amount for the full year. As of the end of February (the most recent month available), revenue collections
were pacing 6.2% higher than the previous fiscal year.
Expenditures:
Staffing expenditures are pacing below budget because a staff member was on leave for a portion of the
fiscal year. The TBID procures many of its services in advance, leading to a high percent of other operating
expenditures budget expended early in the year. The fund is expected to finish on budget for the full year.
Boysen Ranch Conservation Fund
Boysen Ranch consists of approximately 116 acres bounded by Los Osos Valley Road, Foothill Boulevard,
and O’Connor Way. The City holds a series of conservation easements that protect approximately 25 acres
of the Ranch to mitigate impacts to wetlands and waters caused by the nearby commercial development
projects on Los Osos Valley Road. As part of the original easement agreement, Boysen Ranch’s owners
provided the City with an endowment to fund required monitoring activities.
FY 2024-25 FY 2025-26
TBID Actuals Budget YTD Actuals % Received
Assessments 2,304,764$ 2,219,941$ 1,300,972$ 59%
Total Revenue 2,304,764$ 2,219,941$ 1,300,972$ 59%
FY 2024-25 FY 2025-26
TBID Actuals Budget YTD Actuals % Expended
Staffing 241,390 262,464$ 150,378$ 57%
Other Operating Expenditures 1,911,188 2,109,984 1,973,119 94%
Total Expenditures 2,152,578$ 2,372,448$ 2,123,498$ 90%
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Revenue:
The Boysen Ranch Conservation Fund is an endowment fund, and budgeted revenue is provided by
investment income. As in prior years, the fund has benefited from elevated interest rates and is expected
to exceed its budget for the full year. Any unspent funds will earn additional income eligible for
expenditure in future years.
Expenditures
The fund has made its budgeted payment for authorized conservation activities. Staff expect no further
payments and the fund will finish on budget.
Insurance Fund
The Insurance Fund serves to pay the City’s annual costs for liability, workers’ compensation, pollution,
volunteer, and property insurance needed to protect the City, as well as claims-related expenses. It is also
intended to maintain adequate reserves for future claims and unpredictable increases in insurance costs.
Revenue:
Insurance Fund revenues are transfers in from the General Fund and will finish on budget.
Expenditures:
Expenditures include annual premiums, member contributions to California Joint Powers Insurance
Authority and claims expenses within the self-insured retention limit. All are expected to finish on budget.
Policy calls for funding the reserve at 150% of the trailing five-year average claims cost, or the Historical
Claims Basis level, and as called for by the City’s actuaries, or the Actuarial Basis level. Based on the most
FY 2024-25 FY 2025-26
Boysen Ranch Actuals Budget YTD Actuals % Received
Investment Income 20,157$ 7,500$ 8,136$ 108%
Total Revenue 20,157$ 7,500$ 8,136$ 108%
FY 2024-25 FY 2025-26
Boysen Ranch Actuals Budget YTD Actuals % Expended
Authorized Expenditures 5,023 12,535$ 12,535$ 100%
Total Expenditures 5,023$ 12,535$ 12,535$ 100%
FY 2024-25 FY 2025-26
Insurance Fund Actuals Budget YTD Actuals % Received
Transfers in 6,000,000$ 6,000,000$ 4,500,000$ 75%
Total Revenue 6,000,000$ 6,000,000$ 4,500,000$ 75%
FY 2024-25 FY 2025-26
Insurance Fund Actuals Budget YTD Actuals % Expended
Workers Comp 774,732 2,069,183$ 1,769,313$ 86%
Liability & Other 3,020,344 3,457,975 2,685,816 78%
Total Expenditures 3,795,076$ 5,527,158$ 4,455,128$ 81%
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recent actuarial study dated October 10, 2025, the City should maintain a reserve of $5,129,000 for liability
claims and $3,222,000 for workers’ compensation claims, totaling $8,351,000 if funding at a 75%
probability level. The insurance fund reserve was $5,982,492 as of March 31, 2026. This is $633,765 above
the Historical Claims Basis level, and $2,368,508 below the Actuarial Basis level.
Staff plan to recommend additional contributions from unassigned fund balance over the next five years
to meet the reserve level recommended by the City’s actuaries, which is $3.0 million higher than the
Historical Claims Basis level as detailed in the table below:
Public Safety Equipment Replacement Fund
The Public Safety Equipment Fund (PSEF) was created with the 2019-21 Financial Plan to help budget and
forecast the replacement of public safety equipment that has expired or become damaged. The Fund had
received an original seed amount with the FY 2019-20 budget and, going forward, an annual allocation is
made from the General Fund.
Revenue:
The fund receives revenue in the form of transfers in from the General Fund and will finish on budget.
Expenditures:
The fund budgets for replacement of public safety equipment currently in service and is expected to finish
the year on budget. Any unspent funds remain available for future scheduled replacements of critical
public safety equipment.
FY 2024-25 FY 2025-26
Public Safety Actuals Budget YTD Actuals % Received
Transfers in 387,334$ 236,226$ 177,170$ 75%
Total Revenue 387,334$ 236,226$ 177,170$ 75%
FY 2024-25 FY 2025-26
Public Safety Actuals Budget YTD Actuals % Expended
Equipment Purchases 307,329 222,889$ 117,605$ 53%
Total Expenditures 307,329$ 222,889$ 117,605$ 53%
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San Luis Ranch CFD
A Mello-Roos Community Facilities District (CFD) was established and approved by City Council on April
16, 2019 (Ordinance No 1661) pursuant to section 5.02 of the San Luis Ranch Development Agreement.
The boundaries of the CFD are identical to the San Luis Ranch Specific Plan and includes 131.4 acres
approved for up to 580 dwelling units and commercial development, a 200-room hotel, 100,000 square
feet of office space, 150,000 square feet of retail space, 7.8 acres of parks/ open space, and 52.3 acres of
farmed agriculture land. The purpose of the CFD is to fund major road improvements, potable and non-
potable water system improvements, drainage system improvements, wastewater system improvements,
solid waste improvements, park and paseo improvements, open space improvements, and utilities.
Revenue:
The fund collects property tax from residents under the Teeter Plan with the County and is expected to
finish the year on or above budget.
Expenditures:
The fund budgets for authorized expenditures, largely debt service, and is expected to finish the year on
budget.
Avila Ranch CFD
A Mello-Roos Community Facilities District was established and approved by City Council on October 24,
2017 (Resolution No 10844) pursuant to section 5.02.1 of the Avila Ranch Development Agreement. The
CFD boundaries are identical to those of the Avila Ranch Development project and located at the northeast
corner of Buckley Road and Vachell Lane. The Avila Ranch Project will include up to 720 dwelling units,
15,000 square feet of office and retail, 18 acres of parks, 53 acres of open space, riparian corridors and
farmed agricultural land. The CFD was formed with purpose of funding services as well as facilities of the
CFD. Services to be funded can include the maintenance and lighting of parks, parkways, streets, roads,
and open space; flood and storm protection services; police & fire protection services; maintenance and
operation of real property. Facilities to be funded can include park, recreation, parkway, and open space
facilities; construction and undergrounding of utilities (water, natural gas, telephone lines, electric, cable
television); for the acquisition, improvement, or rehabilitation of real property.
FY 2024-25 FY 2025-26
San Luis Ranch CFD Actuals Budget YTD Actuals % Received
Tax Revenue 1,911,925$ 1,368,152$ 771,661$ 56%
Total Revenue 1,911,925$ 1,368,152$ 771,661$ 56%
FY 2024-25 FY 2025-26
San Luis Ranch CFD Actuals Budget YTD Actuals % Expended
Authorized Expenditures 181,313 339,417$ 194,273$ 57%
Transfers 245,664 207,243 155,432 75%
Debt Service 927,450 946,700 946,700 100%
Total Expenditures 1,354,427$ 1,493,360$ 1,296,405$ 87%
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Revenue:
The fund collects property tax from residents under the Teeter Plan with the County and is expected to
finish the year on budget or better. Year -to-date results include accruals for tax payments to be made in
April and are subject to change.
Expenditures:
The fund budgets for authorized services expenditures including maintenance, utilities, and supplies, and
is expected to finish the year on or under budget. Because the development is new, maintenance costs
are currently lower than revenues. At full buildout it is expected that costs to serve this neighborhood will
exceed revenue and the General Fund will provide services above and beyond what the CFD pays for. All
unexpended funds fall to fund balance and are available for expenditure in future years
2023 Winter Storm Recovery Update
Staff continues to work through the Federal Emergency Management Agency’s (FEMA) process to obtain
reimbursement for the 2023 Winter Storms. In early March, the Assistant City Manager, Finance staff and
Public Works staff met with Congressman Carbajal’s office to provide an update on 2023 Winter Storm
recovery efforts and seek assistance from the Congressman and his staff on moving some of the City’s
projects forward in FEMA’s process. City staff has also provided this information to Senator Schiff’s office.
The FEMA review process continues to move slowly, but the City’s efforts are paying off. To date, the City
has received $1.9M in reimbursement from FEMA and the California Office of Emergency Services
(CalOES). In addition, at the end of April staff was notified that the City’s appeal of FEMA’s initial
determination that the work the City did to mitigate against additional damage at the Marsh Street Bridge
was ineligible for reimbursement. FEMA’s initial determination was due in part to FEMA having incorrectly
entered GPS coordinates for the project, which led them to determine that the project work was located
on a Federal Highway. Staff provided a lot of evidence to the contrary, and after 12 months of review,
FEMA determined that the City was correct. While the Marsh Street Bridge project has not yet been
obligated for reimbursement, staff expects that obligation is very likely once FEMA completes their review
of the project documentation.
FY 2024-25 FY 2025-26
Avila Ranch CFD Actuals Budget YTD Actuals % Received
Tax Revenue 560,516$ 767,253$ 775,917$ 101%
Total Revenue 560,516$ 767,253$ 775,917$ 101%
FY 2024-25 FY 2025-26
Avila Ranch CFD Actuals Budget YTD Actuals % Expended
Authorized Expenditures 50,435 99,011$ 87,488$ 88%
Transfers 386,517 234,122 175,592 75%
Total Expenditures 436,952$ 333,133$ 263,079$ 79%
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Capital Improvement Program Update
During the third quarter of the fiscal year, the City continued to make significant progress in delivering its
Capital Improvement Program (CIP) projects. The capital summary table below provides detail on
completed and ongoing projects during this period, showcasing ongoing work to maintain and enhance
infrastructure and improve community spaces.
Key projects completed during this period include the Cultural Arts District Parking Structure, Mid-Higuera
Bypass Project, and the 2025 Roadway Paving Project. These accomplishments underscore the City's
commitment to providing high-quality public facilities and ensuring long-term reliability and durability of
essential infrastructure.
In addition to completed projects, the City continues to dedicate resources to active construction efforts,
including the Mission Plaza Enhancements Project, which will activate the west side of Mission Plaza with
a kiosk café and patio area, and the Righetti Community Park Project, which will provide a wide range of
amenities for all ages, including pickleball courts, a bike pump track, play fields, and playground structures.
Project Number Project Total Budget Estimated Construction
Completion Date Additional Comments
2090649 Mid-Higuera Bypass $ 11,550,000 Q3 FY 25-26 Completed
2091439 Mission Plaza Enhancements $ 3,729,574 Q3 FY 25-26 Construction Ongoing.
2000577-04 1106 Walnut TI $ 1,887,843 Q3 FY 25-26 Construction Ongoing.
2000616 Roadway Paving 2025 $ 9,117,000 Q3 FY 25-26 Completed
2000577-04 1106 Walnut Fence $ 512,734 Q3 FY 25-26 Construction Ongoing.
2000615-01 Grand Ave Striping and Signage
Modifications $ 429,000 Q3 FY 25-26 Completed
2000117 Cultural Arts District Parking Structure $ 47,000,000 Q3 FY 25-26 Completed
2000402_403 EV Bus Charging Infrastructure $ 1,103,225 Q4 FY 25-26 Ongoing
2000054-01 Righetti Community Park $ 13,668,912 Q2 FY 27-28 Construction Started in Q3
FY25-26
2001059 South & King Crossing $ 632,816 Q2 FY 26-27 Construction Started in Q3
FY25-26
1000025 Fire Station 1 Solar Installation $ - Q1 FY 26-27 Construction Started in Q3
FY25-26
2091506-1
Groundwater Project -
Tetrachloroethylene Plume
Characterization Project Drilling and
Construction of Monitoring Wells
$ 443,562 Q1 FY 26-27 Construction Started in Q3
FY25-26
Completed & Ongoing Construction Capital Projects (January 2026 - March 2026)
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Project Number Project
TOTAL ESTIMATED
PROJECT COST
(Construction Phase)
Estimated Construction
Start Date Additional Comments
2091503 California and Taft Roundabout $ 6,800,000 Q1 FY 26-27
Right of way acquisition in
progress and finalizing design
documents. Construction start
pending right-of-way
resolution, could slip into Q2
FY27.
2091252 Prado Road Bridge and Road Widening $ 33,100,100 Q2 FY 27-28
Regulatory permits secured.
90% constuction documents
under development. A value
analysis of this project in
coordination with the Prado
Interchange is under
development.
2091613 Prado Road Interchange $ 99,000,000 Q2 FY 29-30
Construction cost reduced by
Council on November 4, 2025
from $124M to $99M. The
consultant team is currently
developing a supplemental
project report and advancing
construction documents.
Supplemental project report is
planned to be considered by
Council in mid-calendar year
2026.
Status of Major and Legacy Projects in Design
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Major City Goals Update
This report includes an update on all Major City Goal tasks from the 2025-27 Financial Plan with an original
or revised completion date in the third quarter of FY 2025-26. During the third quarter, seven Major City
Goal tasks have been completed or are on track and eight have been delayed. Additional detail on how
each task was completed or why it was delayed can be found in the tables that follow:
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MCGMajor City Goal TaskEstimated Completion DateStatus UpdateOn track tasks:CV,ER,&FS2 - Support the cultural arts, including the Cultural Arts District: b. Complete the construction of the Cultural Arts District Parking Structure.FY 2026 Q3Completed. Construction of the Cultural Arts District Parking Structure project is complete, with the formal ribbon cutting held on March 16, 2026. The facility officially opened to the public on March 17, 2026.CV,ER,&FS5 - Balance operational needs and infrastructure investments with consideration of the long-term fiscal sustainability of the City organization: f. Complete a fiscal analysis of the golf operations at the Laguna Lake Golf Course and conduct a Council Study Session to evaluate fiscal impacts, capital needs, and potential reuse options prior to major infrastructure investments.FY 2026 Q3 Completed. Study Session held on February 3, 2026HNL-HSA3 - Ensure housing is safe, healthy, and affordable, while facilitating stronger protections for renters: b. Conduct a study session with the City Council on potential Rental Housing Registry. This study session would discuss parameters of potential registry and discussion of resources needed for establishment and ongoing maintenance of registry.FY 2026 Q3 Completed. Study Session held on February 24, 2026IST1 - Advance street safety improvements and support Vision Zero goals for all road users: c. Start construction of the South/King Signalized CrossingFY 2026 Q3Underway and ontime. Construction initiated March 2026. Completion expected fall (FY 2027 Q2), pending delivery of traffic signal equipment.IST3 - Ensure public spaces, roads, and utilities support future growth and development: b. Complete the WRRF Upgrade Project.FY 2026 Q2Completed. The WRRF project was completed and the Ribbon Cutting Ceremony was conducted in October 2025. This project completed under budget and has resulted in a drastic reduction in offsite odor. Public tours are occurring. IST5 - Support policies and programs aimed at expanding mass transportation and public transit: b. Reinstate transit services to pre-pandemic levels.FY 2026 Q3Partially Completed. As of January 2026, all fixed-route services have been reinstated. Two tripper services suspended during the pandemic are scheduled to be reinstated in August 2026.OS,CA,&R1 - Continue implementation of the OS,CA,&R Plan (CAP) and Lead by Example (LBE) Plan Work Programs: j. Install publicly accessible EV charging projects at the Cultural Arts District Parking Structure.FY 2026 Q3Completed. EV charging infrastructure installation at CADPS is complete, and the stations are available for public use as of March 17, 2026.Page 70 of 415
MCGMajor City Goal TaskEstimated Completion DateStatus UpdateDelayed tasks:CV,ER,&FS2 - Support the cultural arts, including the Cultural Arts District: a. Complete the construction of the Mission Plaza Project to enhance the experience of the plaza and downtown.FY 2026 Q2FY 2026 Q4 Delayed, but near complete. Overall completion is behind schedule due to weather and contractor delays. The restrooms are open, and tenant improvements to the Kiosk are currently being reviewed by City Staff.HR2 - Leverage external funding to expand crisis response and continuum of shelter and housing programs with regional partners: a. Homekey - Utilize State Homekey funding to implement Calle Joaquin Homekey project, providing 75 permanent supportive housing units. FY 2026 Q1FY 2027 Q4Underway and ontime. People's Self Help Housing (PSHH), the City's development partner, was awarded a Tax Credit for the project in September 2025. Due to the additional scope of work that will be completed with the Tax Credit funding, the construction and occupancy timelines have been delayed to Q2 of 2027. PSHH closed on their tax credit funding on April 7th and the phase two construction began on April 10, 2026. OS,CA,&R1 - Continue implementation of the OS,CA,&R Plan (CAP) and Lead by Example (LBE) Plan Work Programs: g. Develop and adopt internal polices focused on zero emissions buildings, facilities, and vehicles (LBE)FY 2026 Q3FY 2026 Q4 An internal review draft has been written and is currently under review. The project is behind schedule because the time to draft the policy was greater than expected. Staff expects the internal policies to be completed and enforced by FY 2026 Q4. DEI4 - Foster an inclusive organizational culture with equitable practices in recruiting, hiring, and retention: e. Annually report out in Q3 on demographic data collected in NeoGov for City job applicants and identify targeted strategies to address potential equity gaps. The Council Compensation Committee will review data regarding advisory body members and make recommendations to Council in FY 2026 Q4.FY 2026 Q3FY 2027 Q3 Underway and ontime. Human Resources has pulled applicant demographic data for calendar year 2025. This is the first year of data so we will be able to compare it in future years to understand trends. This item is behind schedule due to not having a DEI Manager in place and managing the multiple iniaitives within the DEI Strategic Plan.HNL-HSA2 - Promote the expansion and diversification of housing opportunities for all: c. Annually, or as needed for compliance, and by obtaining information from housing partners, complete updates to the Zoning Regulations to implement state law and to address identified barriers to affordable housing and housing production. FY 2026 Q3FY 2026 Q4 Near Complete. Updates scheduled for City Council on May 5, 2026. This item was delayed slightly due to staffing vacancies in the Housing Team.HNL-HSA4 - Foster diverse, connected, and safe neighborhoods that are livable for all: d. Create a project plan and standard operating procedures for Community Development enforcement of zoning code regulations pertaining to Greek houses. Consider potential updates to zoning code to facilitate efficient regulation of Greek houses. FY 2026 Q3FY 2027 Q1Delayed. Completion date is recommended to be adjusted to FY 2027 Q1 in order to allow additional input from the Community and City Council through the Code Enforcement Study Session and due to staffing constraints in Building and Safety.IST2 - Continue implementation of the Active Transportation Plan, including expansion of multimodal transportation networks to improve connectivity, advocating for regional financial support as necessary. : a. Start construction of the Higuera Complete Streets Project.FY 2026 Q3FY 2027 Q1Delayed. Date for start of construction updated to FY 2027 Q1. Project will be advertised and contract awareded FY 2026 Q4, assuming responsive bids are within approved budget. Some delays were incurred due to the time required finalize of the project contract documents following Council's policy input at the February 17th meeting.IST4 - Build out park infrastructure to support community recreation and accessibility: b. Start construction of Devaul Ranch Playground Replacement Project.FY 2026 Q3FY 2027 Q3 Delayed. Plans have achieved the 100% milestone and are under review by City Staff. Project delay due to staffing constraints and building code compliance requirements. Page 71 of 415
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