Agenda Item Wording:
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Public Hearing and adoption of the Budget - Continue review of the Fiscal Year 2026/27 & 2027/28 Budget, conduct a public hearing, adopt the proposed budget and approve Resolution 2026-39.
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Agenda Date: 06/15/2026
Prepared by: Renee Nagel, Finance and Technology Director,559-713-4375, Renee.Nagel@visalia.gov, Amee Swearingen, Budget Analyst, 559-713-4170, Amee.Swearingen@visalia.gov
Department Recommendation: That the City Council take the following actions:
• Continue review and discussion of the proposed budget;
• Conduct a required public hearing to receive citizen input; and
• Approve the City Fiscal Year 2026/27 and 2027/28 Budget. Specific items may be requested for separate approval.
Summary:
The 2026-2028 Biennial Budget is comprised of all City funds, including the General Fund, Special Revenue Funds, Capital Funds, Enterprise Funds, and Internal Service Funds. The proposed budget appropriation for FY 2026/27 is $409 million and $359 million in FY 2027/28. The budget was developed using a conservative and responsible approach for both revenues and expenditures while meeting the community’s needs and addressing the goals established by the City Council for the next two years.
A detailed summary of the budget assumptions is included in the Budget Message of the document. The budget book can be viewed on the City Webpage at <https://www.visalia.gov/DocumentCenter/View/3095/Proposed-2026-27--2027-28-Budget-Document-PDF> .
Background Discussion:
The City Council has spent the last several months reviewing the Capital Budget and Measure N. Last meeting the operating budget and the budget, as a whole, was presented to Council. Questions raised at the June 1st meeting are addressed at the end of this report.
Staff recommends that the Council adopt a budget by June 30th to comply with the Charter requirements. The charter requires a budget appropriation for all expenditures. However, if Council desires further discussion of the budget, the June 15th public hearing could be continued to a special meeting which would need to be held before June 30th.
Finally, the Visalia Charter states that at any regularly scheduled meeting the City Council may make changes to the adopted budget. That being the case, Council has the ability to reshape the budget as it sees fit throughout the year. As staff often mentions, the budget is a living, breathing document, because fiscal circumstances change constantly and circumstances can dictate that changes to the budget must be made along the way.
The proposed budget appropriation for FY 2026/27 is $409 million and $359 million in FY 2027/28 as shown in Table 1 - Proposed Appropriation. The decrease in FY 2027/28 is due to less capital projects.
Table 1
Proposed Appropriations
The City’s budget includes all allocated positions and assumes no vacancies, as is the usual practice. In the past, vacancy savings have been used to fund emergency, unplanned, or projects that are scheduled in the future years.
The proposed budget includes a total of 737 full-time employees and 278 part-time employees. This count includes the addition of 21 new full-time positions across the organization. In total, 5 full-time positions are proposed within the General Fund, and 16 full-time positions in the Internal Service, Special Revenue, and Enterprise funds. The proposed positions are critical for the implementation of the City Council’s priorities and goals to enhance services and maintain the quality of life for our citizens. The proposed positions are listed in Table 2, FY 2026/27 & 2027/28 Recommended Positions.
Table 2
FY 2026/27 & 2027/28 Recommended Positions
General Fund
The City’s primary and largest fund is the General Fund which supports general municipal services such as police, fire, parks, recreation services, and general government. It consists of 9 operating departments. The General Fund proposed budget has an increase in FY 2026/27 of $3.1 million (2.8%) from the current budget and an increase of $0.4 million (.3%) for FY 2027/28. The General Fund proposed budget is balanced and is projected to have a surplus of $2.3 million in FY 2026/27 and $5.6 million in FY 2027/28 as shown in Table 3 - General Fund Recommended Budget.
Table 3
General Fund Recommended Budget
Special Revenue, Enterprise, and All Other Funds
The Measure T Plan will be brought to Council for the annual recertification on June 15th.
Measure N had its first public hearing April 20th and the second public hearing on May 4th. These meetings approved the next 10 year plan and the proposed budget for FY 2026/27 & 2027/28. The approved budget for Measure N is included in the Citywide Budget.
There are no other notable changes in the Special Revenue or Enterprise Funds. For more detail on the Special Revenue, Enterprise, and Other Funds, please refer to the Budget Message located in the first section of the biennial budget document.
Capital Improvement Projects (All Funds)
The City’s Capital Improvement Program (CIP) consists of a six year plan with the first two years being appropriated with the recommended biennial budget. The projects recommended have been reviewed by City Council and are listed in detail in the Capital Improvement Section of the budget document. The total CIP recommended for FY 2026/27 is $134 million and $76.6 million for FY 2027/28 as shown in Table 4, 2026/27 to 2031/32 CIP Summary.
Table 4
2026/27 to 2031/32 CIP Summary
Budget Conclusion
The budget projection includes continued revenue growth in majority of the funds as economic activity in the City continues to increase and new businesses open. While the City is in overall sound financial shape today, we must be cautious in approving expenditures that will impact the City in the long term. Revenue forecasts show continued growth; however, we must recognize that other foreign and domestic factors (i.e. inflation, housing prices, supply chain disruptions, etc.) could negatively impact the growth and expansion of our local economy. Any of these factors could also cause another economic downturn. Staff is optimistic about the financial outlook but we must also continue to be fiscally responsible by having sufficient reserves, balanced budgets, and prudent spending policies.
Response to Council Questions from June 1 meeting:
What percentage of the budget is for public safety of cities similar in size?
There were 7 cities that were surveyed, 5 with similar population and 2 near Visalia that are the closest in size. The average percentage spent on public safety is 65%. The City of Visalia is 61% for the General Fund only and 67% for the General Fund plus Measure T and N. Table 5, Public Safety Percentage of Total Budget shows each city and if they have a sales tax measure that contributes towards public safety. Other cities’ sales tax measure transfer money into the General Fund to balance the fund or the money is deposited into the General Fund. For this purpose for the City of Visalia, Measure N and T are combined with the General Fund.
Note: Some Cities expenses could include functions such as Animal Control Officers, Code Enforcement Officers, or Fire inspectors which were not clearly identified to be removed for comparison. In addition, other Cities may have additional Police or Fire funding that is not included in the percentage listed.
Fiscal Impact including annual maintenance and operating costs: None
Prior Council Action: Capital Presentations: February, March, April, May 2026, June 1, 2026
Alternatives: None
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to adopt the Fiscal Year 2026/27 & 2027/28 Budget and approve Resolution 2026-39.
Environmental Assessment Status: N/A
CEQA Review: N/A
Deadline for Action: 06/30/2026
Attachments: Resolution 2026-39
Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.
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☒ Economic Vitality |
☒  Organizational Excellence |
☒ Fiscal Strength |
☒  Infrastructure & Growth |
☒  Quality of Life |