Year-end budget changes for the fiscal year that just ended

In plain English

This is the city's end-of-year cleanup of its budget for fiscal year 2026, which has already ended. Finance staff reviewed where departments and projects spent more or less than the council had approved, and this resolution formally moves money between funds and projects to match what actually happened. The largest pieces include a $1,218,000 General Fund transfer to the Municipal Wharf fund and $1,431,989 to the Parking fund to cover spending that exceeded those funds' revenues, $1,584,070 more for outside legal services in one General Fund department, and the shifting of big street projects (such as Downtown Intersection Improvements and Bay Drive Protected Bike Lanes) out of the Gasoline Tax fund into the General Capital Improvement fund. A yes vote adopts all of these adjustments; staff say the changes are one-time and do not create ongoing spending commitments.

The adjustments decide which city accounts absorb last year's overspending — General Fund money is being used to backfill the Wharf and Parking funds by about $2.65 million combined — and they formally cancel an Electric Vehicle Charging Station Expansion because expected 3CE and CARB Greenzones grant money will not arrive.

Key facts

General Fund (Fund 101): revenue adjustments of 126,225 and expenditure adjustments of 2,751,214; Municipal Wharf (Fund 104) revenue adjustment of 1,218,000; Parking (Fund 741) revenue adjustment of 1,431,989 and expenditure adjustment of (21,615,000).
Increases include 1,584,070 and 160,000 for outside legal services and other professional services in one department, 261,663 for outside personnel services, and 249,055 for internal legal services; these are offset by reductions elsewhere, including (541,819) in overtime, (302,959) and (488,637) in regular full-time pay, so the net General Fund impact of that group of changes is $0.
The Electric Vehicle Charging Station Expansion loses (211,526) in spending and related grant revenue because requested 3CE and CARB Greenzones funding "will not be received," and "the infrastructure and charger installation will not proceed as budgeted."
New or expanded spending includes 264,857 for Driving Range Roof & Bldg Improvements after inspection found a larger repair scope, and 206,538 for maintenance of Pure Water Soquel equipment at the Wastewater Treatment Facility, which became operational in FY 2026 and was not in the original budget.
Storm and wharf damage repair budgets are cut because insurance pays a maximum of $1 million per incident: December 2023 Storm Repair spending drops (940,229), February 2024 Storm Repair drops (583,946), and Wharf Damage 12-23-24 drops (367,972) as that project has no remaining work.

Reasons to support

Council Policy 12.6 requires council approval for new appropriations, transfers between departments or funds, and transfers between capital projects over $100,000, so this annual item is how the books are legally brought in line with actual FY 2026 spending.
Most changes are corrections rather than new spending: project budgets are being moved between funds (for example, Downtown Intersection Improvements and Bay Drive Protected Bike Lanes shifting from the Gasoline Tax fund to Fund 311) and several Water Department transfers are described as "net zero," with staff stating all adjustments are one-time and create no ongoing commitment.
Some increases cover unavoidable costs already incurred, such as maintaining newly operational Pure Water Soquel assets (206,538) and finishing Driving Range roof repairs after inspection showed a larger scope (264,857).

Reasons to oppose or change it

General Fund money is being used to cover shortfalls in two enterprise operations — $1,218,000 to the Wharf fund and $1,431,989 to the Parking fund — which is general tax money backfilling operations that were expected to pay for themselves through their own fees and revenues.
Outside legal services ran $1,584,070 over the approved amount in one department, plus $109,706 in another and $249,055 in internal legal services; the report explains the accounting fix but not what drove costs that far above the council-approved allocation.
The Electric Vehicle Charging Station Expansion and part of the Solar PV Expansion at the Corp Yard are being scaled back or dropped because grants did not materialize, so planned charger installation will not go forward.

Official wording

Year-End Budget Adjustment for Fiscal Year (FY) 2026 - Budget Adjustment (FN) LOCATION: Citywide Motion to adopt a resolution amending the FY 2026 budget to adjust annual revenue and expenditure budgets in various funds.

Official agenda

Summary written by claude-opus-5 from the agenda and the Staff report (agenda packet, pages 38-53). It can contain mistakes. The official documents govern.