Department of City Manager
Reference: 2026 Budget Amendment No. 1
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Kathryn Mortensen, Director of Budget and Innovation
Date Prepared: February 6, 2026
PURPOSE
To amend the 2026 budget to account for expenditures related to the YouthLink IGA, an unanticipated water share purchase, an acceleration of spending on the Sable Corridor Improvements project, a reimbursement of impact fee revenue to the utility funds, use of lodging tax fund balance, increase costs concerning landscaping contracted maintenance, use of impact fees on developer agreements, newly awarded grant funds, and appropriating the total amount of cemetery perpetual care fund interest.
BACKGROUND
The City Council adopted the 2026 Budget on October 21, 2025, at $279,681,910.
This first amendment to the 2026 budget includes several items that were unknown at the time the budget was adopted in 2025. The first item is the City's intergovernmental agreement with YouthLink to provide personnel support to the organization in lieu of the previously anticipated monetary contribution. This support involves the City paying salary and benefits for YouthLink employees. While these costs will eventually be fully reimbursed by revenue from YouthLink, an appropriation is required as it will show as an expense. While that will result in an increase in budget, the financial impact is neutral.
This amendment also includes an increase in appropriation to cover a water share purchase that staff became aware of the opportunity in January 2026. The water share purchase has been approved by City Council and there are sufficient funds to cover the purchase. This amendment will provide the appropriation for the spending.
There is an additional increase in appropriation to accelerate the timeline of the Sable Corridor Improvements projects. This brings a portion of the appropriation planned in 2027 forward to the cu...
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