PREPARED BY: ARTURO CASTILLO DATE OF MEETING: 03/16/2026
SUBJECT:
TITLE
CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO APPROVING THE MID-YEAR BUDGET AMENDMENT TO THE BIENNIAL 2024-26 YEAR-2 ADOPTED BUDGET FOR FISCAL YEAR 2025-26 TOTALING $2,858,817
CEQA: This is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2023-2025 Council Priority Workplan Compliance Statements:
Continue Best Management Practices, Fiscal Excellence, and Fiscal Transparency is a major policy goal contained in the FY 2024-26 City Council Priority Workplan,
BACKGROUND
On May 20, 2024, the City Council adopted the FY 2024-26 Biennial Budget via Resolution 2024-064, establishing the City’s two-year financial plan. Throughout the fiscal cycle, City staff routinely monitors revenue and expenditure performance and recommends adjustments to ensure alignment with operational needs and updated financial projections.
As part of this ongoing fiscal oversight, on August 4, 2025, the City Council adopted Resolution 2025-104, approving a 2024-26 Biennial Budget Mid-Cycle Amendment totaling $593,508. This action incorporated updated revenue estimates, contract cost increases, telecommunications service adjustments, and Special Revenue Fund spending needs.
The current FY 2025-26 Mid-Year Budget update builds upon these earlier adjustments and reflects updated revenue and expenditure trends through the midpoint of the 2025-26 Fiscal Year (FY). This Mid-Year update addresses projected revenue and expenditure shortfalls identified in Finance Department staff’s FY 2025-26 fiscal analysis. The net fiscal impact totals ($2,858,817) comprised of a total revenue decrease of ($1,171,729), and a total expenditure increase of $1,687,088 representing an increase over the adopted budget.
Revenue Reductions
Three major revenue sources are projected to come in below adopted budget estimates:
1. Casino Revenue ($900,887): Casino Contract revenue (Fund 100-0000-31610) was budgeted at $31,879,134. Based on actual receipts through November 2025 and projected payments through June 2026, year-end revenue is estimated at $30,978,247, resulting in a shortfall of ($900,887).
2. Sales Tax - Bradley Burns ($169,841): Bradley Burns sales tax revenue (Fund 100-0000-31300) was budgeted at $3,064,300. Updated projections estimate year-end collections at $2,894,459, a reduction of ($169,841).
3. Measure S Sales Tax ($101,001): Measure S sales tax revenue (Account 100-0000-31304) was budgeted at $2,200,001. Revised projections estimate year-end collections at $2,099,000, a reduction of ($101,001).
Expenditure Increases
Three major expenditure categories require additional appropriations:
1. CalPERS UAL $496,355: The CalPERS Unfunded Accrued Liability payment (Account 100-1430-41201) was budgeted at $4,781,130. CalPERS’ required payment was $5,277,485, an increase of $496,355.
2. Retiree Health (OPEB) $651,904: The Retiree Health obligation (OPEB Trust Fund 610, Account 610-0000-49999) was not appropriated correctly in the General Fund operating budget. An appropriation of $651,904 is required to fund the retiree health benefit obligation, to be funded from the OPEB Trust Fund (Fund 610).
3. General Liability Insurance $538,829: Property/Fire/Crime Insurance (Account 100-1430-44450) was budgeted at $3,440,091. The revised premium reflects an estimated cost of $3,978,920, an increase of $538,829.
The City Council approved a $5 million 2024-26 Biennial Budget Short-Fall approved via Resolution 2024-064. This appropriation would allow the City Manager to utilize General Fund Designated Reserve (GFDR) funds for any potential revenue short-falls, increased operational expenses or any unforeseen fiscal contingencies throughout the FY 2024-26 Biennial Budget Cycle.
The Finance Department staff recommend to not utilize the $5 million General Fund Designed Reserves (GFDR) fund allocation for the projected FY 2025-26 Budget Short-Fall adopted via Resolution 2024-064. The GFDR fund allocations have not been utilized throughout the FY 2024-26 Biennial Budget Cycle. The recommendation is to retain these GFDR reserve funds for other unexpected impacts for the remainder of the FY 2025-26.
Therefore, the Finance Department is recommending the following FY 2025-26 Budget Adjustments from the City’s Fiscal Resiliency Reserves and OPEB Retiree Health Fund for the projected revenue reductions and expenditure increases for FY 2025-26 detailed below:
|
Fund |
Types of Reserves |
Account # |
FY 26 Fund Balance |
FY 26 Mid-Year Budget Adjustments |
FY 26 Fund Balance 03/16/2026 |
|
103 |
Sales Tax Revenue Sustainability Reserve |
103-0000-49999 |
$1,836,566 |
($270,842) |
$1,565,724 |
|
104 |
General Liability Sustainability Reserve |
104-0000-49999 |
$918,283 |
($538,829) |
$379,454 |
|
105 |
Pension (CalPERS) Liability Sustainability Reserve |
105-0000-49999 |
$918,283 |
($496,355) |
$421,928 |
|
180 |
Casino Revenue Sustainability Reserve |
180-0000-49999 |
$12,855,957 |
($900,887) |
$11,955,070 |
|
610 |
OPEB Trust Fund: Retiree Health |
610-0000-49999 |
$18,965,539 |
($651,904) |
$18,313,635 |
|
|
Total: |
|
$35,494,628 |
($2,858,817) |
$32,635,811 |
Budget, Fiscal & Legislative Standing Committee Review
On February 25, 2026, the Standing Committee, consisting of Mayor Pabon-Alvarado and Councilmember Ponce, reviewed the proposed FY 2025-26 Mid-Year Budget Adjustments, and recommended it formal consideration and approval by the City Council.
FISCAL IMPACT
The proposed mid-year budget amendment totals $2,858,817 and will be funded through designated operating reserves and the OPEB Trust Fund. The proposed FY 2025-26 Budget Amendment adjusts revenue and expenditure projections within the current FY 2024-26 biennial budget. The accounting is detailed below for the FY 2025-26 Budget Amendment:
|
Fund |
Description |
From Account # |
To Account # |
FY 2025-26 Budget Amendment |
|
103 |
Sales Tax Revenue Sustainability Reserve |
103-0000-49999 |
100-0000-31610 |
$270,842 |
|
104 |
General Liability Sustainability Reserve |
104-0000-49999 |
100-0000-31300 |
$538,829 |
|
105 |
Pension (CalPERS) Liability Sustainability Reserve |
105-0000-49999 |
100-1430-41201 |
$496,355 |
|
180 |
Casino Revenue Sustainability Reserve |
180-0000-49999 |
100-0000-31610 |
$900,887 |
|
610 |
OPEB Trust Fund Transfer Out |
610-0000-39999 |
610-0000-49999 |
$550,000 |
|
100 |
General Fund OPEB Transfer In |
100-0000-49999 |
610-0000-39999 |
($550,000) |
|
610 |
OPEB Trust Fund: Retiree Health |
610-0000-49999 |
610-0000-41311 |
$651,904 |
|
|
Total: |
|
|
$2,858,817 |
ATTACHMENTS:
Att A - Resolution FY2025-26 Mid-Year Budget Amendment