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Home My WebLink AboutCC 2026-06-09_11b Mid Cycle Budget 26-27Item 11.b. MEMORANDUM TO: City Council FROM: Matthew Downing, City Manager BY: Nicole Valentine, Director of Administrative Services SUBJECT: FY 2026-27 Mid-Cycle Budget DATE: June 9, 2026 RECOMMENDATION: 1) Adopt a Resolution adopting the Fiscal Year 2026-27 Mid-Cycle Budget and making appropriations for the amount budgeted; and 2) Determine that adoption of the Budget is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.) Individual projects within the Budget may be subject to CEQA and environmental review will be conducted at the appropriate time during implementation of those projects. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The proposed Mid-Cycle Update for FY 2026-27 Budget recommends approximately $55 million in expenditures, including operating costs such as salaries, benefits, services, supplies, maintenance, debt service, and capital related items. The Consolidated General Fund budget includes approximately $35.7 million. The projected fund balance for the Consolidated General Fund at the end of FY 2026-27 is $6,558,426 or 18.4%. The budget as presented is balanced with the use of reserves, maintains adequate reserves at or above the policy goal of 20% with a minimum of 15%, and addresses several goals and priorities discussed previously with the City Council. BACKGROUND: Each year the City Council adopts a budget, which commits resources for the next Fiscal Year. The City Council adopted the FY 2025-27 Biennial Budget on June 10, 20251. The biennial budget process includes updates each quarter of the first year, a Mid -Cycle Update at the beginning of the second year that also includes appropriation of the second- 1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=14866 Page 250 of 427 Item 11.b. City Council FY 2026-27 Mid-Cycle Budget June 9, 2026 Page 2 year budget, and updates each quarter of the second year. Quarterly updates for FY 2025-26 have been provided on January 13, 20262, February 10, 20263, and May 26, 20264. On January 27, 20265, the City Council approved an update on City Council Goals and Priorities for FY 2025-27. Additionally, on May 12, 20266, the City Council adopted a resolution approving the 10-Year Capital Improvement Program (CIP) budget and the 10 - Year Measure O-06 and Measure E-24 Local Sales Tax Fund Expenditures Programs. The prioritization and direction provided by the City Council at these previous meetings have been incorporated into the FY 2026-27 Mid-Cycle Budget Update. On May 26, 20267, the City Council reviewed the preliminary FY 2026-27 Mid-Cycle Budget Update Report and provided direction to staff regarding proposed services and supplies requests, offsets, and changes related to Enterprise and Special Revenue funds. The FY 2026-27 Mid-Cycle Budget, described in more detail below, will provide funding for all City services performed during the next fiscal year. Each fund summary is provided as Attachment 2. ANALYSIS OF ISSUES: The proposed FY 2026-27 Mid-Cycle Budget Update recommends approximately $55 million in expenditures, including operating costs such as salaries, benefits, services, supplies, maintenance, debt service, and capital related items as shown in the consolidated fund summary Table 1 shown below. 2 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=17181 3 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=17335 4 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=19096 5 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=16946 6 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=18941 7 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=19098 Page 251 of 427 Item 11.b. City Council FY 2026-27 Mid-Cycle Budget June 9, 2026 Page 3 Table 1: FY 2026-27 All Funds Operating Budget Next Steps After Council adopts the FY 2026-27 Mid-Cycle Budget Update, staff will publish a copy of the Adopted FY 2026-27 Mid-Cycle Budget Update online. Adoption of the FY 2026-27 Mid-Cycle Budget Update is a part of a continuous financial management process. Ongoing monitoring efforts include: 1. Quarterly Financial Status Reports: Concise and comprehensive reports are issued by Staff to the Council and public on a quarterly basis. 2. Goal Status Reports: Staff will provide quarterly Goal Status Reports to the Council that includes progress towards completing Major City Goals and Capital Improvement Plan. These reports present updates and communications about the status of City projects, goals, and performance measures. ALTERNATIVES: The following alternatives are provided for the Council’s consideration: 1. Adopt a Resolution approving the FY 2025 -27 Biennial Budget; 2. Amend and adopt a Resolution approving the FY 2025 -27 Biennial Budget; or 3. Provide other direction to staff. ADVANTAGES: Adoption of the FY 2026-27 Mid-Cycle Budget Update will allow the City to continue funding all City services after the end of the current fiscal year on June 30, 202 6, and meet Council directed goals and priorities for the fiscal year. The recommendations in the proposed budget reflect revenue and expenditure strategies that will accomplish the following:  Maintain and, in certain cases, increase key service levels;  Maintain a substantial investment in improvements to the City’s infrastructure and facilities;  Address operational sustainability concerns; and Beginning Fund Balance 7,205,860$ 943,263$ 1,290,888$ 4,763,064$ 13,143,442$ 5,109,805$ 32,456,321$ Revenues: Revenues 21,055,350 2,975,500 5,936,000 10,876,832 2,522,991 423,944 43,790,617 Transfers In 2,862,500 - - 4,789,480 730,000 - 8,381,980 Total Revenues 23,917,850 2,975,500 5,936,000 15,666,312 3,252,991 423,944 52,172,598 Expenditures: Salaries and Benefits 14,908,800 - - 1,475,700 659,000 - 17,043,500 Services and Supplies 11,073,570 1,415,800 32,500 5,802,225 1,011,941 7,900 19,343,936 Debt Service 282,786 - - - 8,369 382,944 674,099 Capital Outlay 51,529 - - 1,024,256 195,000 - 1,270,785 Transfers Out 115,000 1,984,750 5,846,200 7,246,069 1,318,000 179,900 16,689,919 Total Expenditures 26,431,685 3,400,550 5,878,700 15,548,250 3,192,311 570,744 55,022,239 Total Operating Incr/(Decr)(2,513,835) (425,050) 57,300 118,062 60,680 (146,800) (2,849,642) Available Fund Balance 4,692,026$ 518,213$ 1,348,188$ 4,881,126$ 13,204,121$ 4,963,005$ 29,606,680$ TotalGeneral Fund Measure O-06 Measure E-24 Enterprise Funds Special Revenue Funds Agency Funds Page 252 of 427 Item 11.b. City Council FY 2026-27 Mid-Cycle Budget June 9, 2026 Page 4  Maintain reserves at or above the City’s policy levels. DISADVANTAGES: The recommendations do not fully address the long-term replacement needs of all City equipment and infrastructure. Limited staffing levels continue to be a challenge in regard to accomplishing all desired City priorities in a timely manner. Significant cos t increases related to pensions and insurance are still threats that will require close monitoring. The performance of the economy in general, and the impacts of specific economic development activities will also affect the financial condition and sustaina bility of City operations. ENVIRONMENTAL REVIEW: The FY 2026-27 Mid-Cycle Budget Update is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.) Individual projects within the Budget may be subject to CEQA and environmental review will be conducted at the appropriate time during implementation of those projects. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. ATTACHMENTS: 1. Resolution 2. FY 2026-27 Mid-Cycle Budget Page 253 of 427 ATTACHMENT 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING THE FISCAL YEAR 2026-27 MID-CYCLE BUDGET AND MAKING APPROPRIATIONS FOR THE AMOUNT BUDGETED WHEREAS, a proposed Budget for the City of Arroyo Grande for the Fiscal Year commencing July 1, 2026, and ending June 30, 2027, was submitted to the City Council and is on file with the Director of Administrative Services; and WHEREAS, the City Council also serves as the Board of Directors of the Successor Agency to the Dissolved Arroyo Grande Redevelopment Agency; and WHEREAS, proceedings for adoption of said Budget have been duly taken; and WHEREAS, total Operating Expenditures for FY 2026-27 are $55,022,239. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Budget is adopted for the City of Arroyo Grande for Fiscal Year commencing July 1, 2026, and ending June 30, 2027. The FY 2026-27 Mid-Cycle Budget Book is on file with the Director of Administrative Services and is posted on the City’s website. SECTION 2. At the close of each Fiscal Year, unexpended appropriations in the Operating Budget will be carried forward to the next fiscal year as necessary to un derwrite the expense of outstanding purchase commitments. Unexpended appropriations for authorized but uncompleted projects as approved by the City Council may be carried forward to the next succeeding Budget upon recommendation by the Administrative Services Director and approval of the City Manager. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 9th day of June, 2026. Page 254 of 427 RESOLUTION NO. PAGE 2 ____ CAREN RAY RUSSOM, MAYOR ATTEST: ________ JESSICA MATSON, CITY CLERK APPROVED AS TO CONTENT: _______________ MATTHEW DOWNING, CITY MANAGER APPROVED AS TO FORM: __ ISAAC ROSEN, CITY ATTORNEY Page 255 of 427 ATTACHMENT 2 FY 2026-27 MID-CYCLE BUDGET UPDATE REPORT Page 256 of 427 Table of Contents INTRODUCTION TO ARROYO GRANDE ....................................................................................................................... 1 City Structure ............................................................................................................................................. 2 Arroyo Grande at a Glance ......................................................................................................................... 5 Organizational Chart .................................................................................................................................. 6 BUDGET SUMMARY .................................................................................................................................................... 7 Guide to the Budget ................................................................................................................................... 8 Fund Structure ..................................................................................................................................... 9 Council Goals ............................................................................................................................................ 17 Council Goal’s Work Plans ................................................................................................................. 20 BUDGET OVERVIEW .................................................................................................................................................. 23 Overview .................................................................................................................................................. 24 Fund Summaries ....................................................................................................................................... 25 General Fund ............................................................................................................................................ 26 General Fund ..................................................................................................................................... 27 Local Sales Tax Funds ........................................................................................................................ 28 Consolidated General Fund ............................................................................................................... 29 Consolidated General Fund Revenues by Source .............................................................................. 30 Consolidated General Fund Revenues by Trends .............................................................................. 31 Consolidated General Fund Expenditures by Department ................................................................ 32 Enterprise Funds ...................................................................................................................................... 33 Special Revenue Funds ............................................................................................................................. 37 Agency Funds ........................................................................................................................................... 49 CAPITAL IMPROVEMENT PROGRAM ........................................................................................................................ 52 10-Year Summary by Project Type ........................................................................................................... 64 Projects Budgeted FY 2026-27 ................................................................................................................. 69 Projects Budgeted FY 2027-28 ................................................................................................................. 72 Projects Budgeted FY 2028-29 ................................................................................................................. 75 Projects Budgeted FY 2029-30 ................................................................................................................. 77 Projects Budgeted FY 2030-31 ................................................................................................................. 80 Projects Budgeted FY 2031-32 ................................................................................................................. 82 Projects Budgeted FY 2032-33 ................................................................................................................. 84 Projects Budgeted FY 2033-34 ................................................................................................................. 86 Projects Budgeted FY 2034-35 ................................................................................................................. 87 Projects Budgeted FY 2035-36 ................................................................................................................. 89 APPENDIX ................................................................................................................................................................. 90 Budget Glossary ....................................................................................................................................... 91 Guide to Funds by Number .................................................................................................................... 100 Page 257 of 427 1 INTRODUCTION TO ARROYO GRANDE Page 258 of 427 City Structure 2 MAYOR AND CITY COUNCIL GOVERNMENT STRUCTURE The City of Arroyo Grande is a general law city and operates under the Council-Manager form of government, with a five-member City Council elected by district for four-year overlapping terms. The Council is elected on a non-partisan basis, and Council members must live in the district they represent. The mayor is elected at-large for a two-year term and is the presiding officer of the Council. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring the City Manager and City Attorney. Page 259 of 427 City Structure 3 DISTRICT MAPS CITY BOARDS AND COMMISSIONS City Boards and Commissions are the underpinnings of the Arroyo Grande community – they are how the community navigates the daily and weekly decisions that make Arroyo Grande run smoothly to become the kind of community desired by City stakeholders. Boards and Commissions may forward matters to the City Council, as appropriate. Membership on City Boards and Commissions are voluntary positions. Members, with the exception of the Downtown Parking Advisory Board (DPAB) and Tourism Business Improvement District (TBID) Board must be registered voters of Arroyo Grande. Applicants for the DPAB shall have a business within the Arroyo Grande City Parking and Business Improvement Area. The TBID Board shall consist of five (5) members, with a preference that at least three (3) members shall be owners of lodging businesses within the Arroyo Grande TBID, or others with knowledge of tourism and/or the lodging industry. Members of each respective Commission/Board/Committee shall serve for a term ending the January 31st following the expiration of the term of the respective appointing Mayor or Council Member, as applicable. Page 260 of 427 City Structure 4 Members of each respective Commission/Committee/Board may be removed prior to expiration of their term by a majority vote of the Council. The following is a list of current City Boards and Commissions: • Planning Commission • Downtown Parking Advisory Board • Architectural Review Committee • Tourism Business Improvement District (TBID) Board • Community Service Grant Program (CSGP) Committee • Citizen Sales Tax Oversight Committee (CSTOC) CITY DEPARTMENTS The City Municipal Code (Chapter 2. Administration and Personnel) provides the basis for the departmental structure of the City and establishes that the City Manager be appointed by the City Council to manage the affairs of the City. The City’s Municipal code establishes the administrative organizational structure of the City under the control and direction of the City Manager. The City’s use of resources is budgeted in eight departments City Manager’s Office, Administrative Services, Legislative and Information Services, Community Development, Police, Public Works, Fire (JPA), and Recreation Services. FULL-SERVICE CITY The City of Arroyo Grande is considered a full-service city, meaning that all or most municipal services are provided by the City, as opposed to being contracted out to third-party providers. Some services commonly contracted out by municipalities include public safety and utility services; however, only fire services, sanitation treatment, and solid waste disposal are contracted out by the City of Arroyo Grande. Community Development Finance Human Resources Information Technology Public Works Police Recreation City Administration City Clerk/Information Services Page 261 of 427 Arroyo Grande at a Glance 5 The City of Arroyo Grande was incorporated in 1911 and operates as a general-law city under the Council- Manager form of government. Nestled approximately two miles inland from the Pacific Ocean along California’s Central Coast, Arroyo Grande is part of San Luis Obispo County and the vibrant “Five Cities” region. The city is known for its rich agricultural heritage, scenic valley setting, and charming historic Village district. Arroyo Grande attracts visitors and residents alike with its mild climate, picturesque vineyards, local wineries, and a welcoming small-town atmosphere. As of January 1, 2023, the California Department of Finance estimates the City’s population at approximately 18,412 residents. While much of the city remains residential, there is ongoing development that balances growth with preservation of the community’s unique character and natural beauty. At a Glance Incorporation 1911 Government Full-service, general-law city County San Luis Obispo County https://www.slocounty.ca.gov/ School Districts Lucia Mar Unified School District http://www.luciamarschools.org Location Located on the Central Coast, approximately two miles inland from the Pacific Ocean in San Luis Obispo County, midway between Los Angeles and San Francisco Climate Moderate Population 18,412 State legislature 17th Senate District Democrat John Laird 30th Assembly District Democrat Dawn Addis U.S. Congress Representative: California's 24th Congressional District Democrat Salud Carbajal Page 262 of 427 Organizational Chart 6 Page 263 of 427 7 BUDGET SUMMARY Page 264 of 427 8 GUIDE TO THE BUDGET Page 265 of 427 Fund Structure 9 PURPOSE OF THE BUDGET The City budget sets forth a strategic resource allocation plan that addresses the City Council’s Strategic Goals. The Budget is a policy document, financial plan, operations guide, and communication device all in one. Through the budget document, the City demonstrates its accountability to its residents, customers, and the community-at-large. The City’s Budget accomplishes the following: • Determines the quality and quantity of City programs and services; • Details expenditure requirements and the estimated revenue available to meet these requirements; • Connects the activities of individual City Departments to the City Council’s Strategic Goals; • Sets targets and provides a means of measuring actual accomplishments against goals; and • Serves as a communication device that promotes the City’s vision and direction, fiscal health and vitality, and what the public is getting for its tax dollars. Additionally, the budget provides the legal authority for expenditures and a means for control of municipal operations throughout the fiscal year. Accordingly, the City Charter mandates that a budget be adopted prior to the beginning of the fiscal year. The budget process furnishes departments with an opportunity to justify departmental work programs, to propose changes in services, and to recommend revisions in organizational structure and work methods. It also enables the City Manager to review these aspects and make appropriate recommendations to the City Council. Presentation of the budget to the City Council provides an opportunity to explain municipal programs and organizational structures. It also allows the Council to judge the adequacy of the proposed operating programs, to determine basic organizational and personnel staffing patterns, and to establish the level of municipal services to be provided with the available resources. In order to accomplish these objectives, the budget must combine an explanation of anticipated financial resources for the ensuing fiscal year with proposed expenditures, supported by sufficient information on the proposed programs and activities to assess the appropriateness of the recommended levels of services. THE OPERATING BUDGET, CAPITAL BUDGET, AND CAPITAL IMPROVEMENT PROGRAM The budget document contains information about both the City’s operating and capital budgets. The operating budget details the funding for the day-to-day operations and obligations of the City for a specific fiscal year such as personnel costs, vendors and contractors, utilities, building maintenance, and debt payments. The capital budget details planned expenditures for the same fiscal year to construct, maintain, or improve City facilities such as fire and police stations, libraries and museums, parks, recreation centers, streets, sewers, and electric and water infrastructure. Page 266 of 427 Fund Structure 10 The Capital Improvement Program (CIP) is a separate ten-year planning document that details planned capital expenditures. Capital projects range from road maintenance or construction to the renovation of municipal buildings, recreation centers and play structures, and water main and sewer system replacement. The CIP relates capital project needs to the financial sources that will support their realization and the timeframe in which both the financing and work will take place. Often spanning multiple years, capital improvement projects typically carry considerable future impact. Because of the more long-term nature of the CIP and the complex nature of capital project financing, the CIP is presented in a separate document. However, the first two years of the CIP are integrally related to the Biennial Budget document, and therefore a summary of the CIP is provided in the Capital Improvement Program Overview section of this budget, beginning on page 167. BUDGET PROCESS The City of Arroyo Grande’s fiscal year begins July 1 and concludes on June 30. In accordance with fundamental democratic principles, the City embraces the notion and practice of citizen participation, especially in key planning and resource allocation activities. Therefore, the development of the budget process begins early in the prior fiscal year to ensure adequate planning and community input into that planning. Engagement with City leadership, commissions and the community occur throughout the process. At the beginning of budget development, the City initiated community engagement with online surveys to gather input from residents and business owners. A Community Priorities Survey assessed residents' satisfaction and priorities. This feedback informed resource allocation decisions for the upcoming budget. MID-CYCLE BUDGET UPDATE/QUARTERLY REPORTS The City Manager presents a Mid-Cycle Budget Update in June of the second year of a biennial budget cycle. This update includes necessary adjustments to the operating budget and personnel detail that have been identified by staff since the adoption of the Biennial Budget. For all budgets adopted, whether annual or biennial, quarterly fiscal updates are presented to the City Council to keep City leadership and the public apprised of the City’s financial condition throughout the budget period. The quarterly updates include recommended budget adjustments and fiscal strategies as needed to respond to the current fiscal state of the City. ADJUSTMENTS TO THE ADOPTED BUDGET The City Council may amend or supplement the adopted budget with the majority vote of at least three members to authorize the transfer of unused balances appropriated to one department or fund to another department or fund or to appropriate available funds not included in the budget. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department and fund over the course of a fiscal year. Through City Council adoption of the budget resolution (page 205), the Director of Administrative Services/City Treasurer may authorize interfund Page 267 of 427 Fund Structure 11 transfers as required provided funds are available, or as authorized by the City Council through the adoption of the budget. City Council approval is required for all transfers from unappropriated fund balances or fund balance contingency reserves. BASIS OF BUDGETING The modified accrual basis of accounting is used by all General, Special Revenue, Debt Service, and Capital Projects Funds. This means that revenues are recognized when they become both measurable and available. Measurable means the amount of the transaction can be determined, and available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recorded when liabilities are incurred, except that principal and interest payments on long-term debt are recognized as expenditures when due. The full accrual basis of accounting is utilized by all Enterprise and Internal Service Funds. This means that revenues are recorded when earned and that expenses are recorded at the time liabilities are incurred. The City’s basis for budgeting is consistent with accounting principles generally accepted in the United States of America and with the City’s financial statements as presented in the Annual Comprehensive Financial Report (ACFR). Exceptions are as follows: • Capital expenditures within the Enterprise Funds are recorded as assets on an accounting basis but are shown as expenditures on a budgetary basis. • Depreciation of capital assets and amortization of various deferred charges are recorded on an accounting basis only. These charges are not reflected in the budget document. • Continued/Carryover appropriations represent previously budgeted funds unexpended at the end of the applicable budget period. Carryover requests approved by the City Council are added to the City’s current budget period but are not included in the budget document or original budget submission to the City Council. • Certain funding, such as grant funding, is not included in the budget document; these items are appropriated as needed throughout the fiscal year with approval from the City Council. BUDGETARY FUND BALANCE In a governmental agency, fund balance is considered in two separate, but intrinsically related, settings: budgetary fund balance and Annual Comprehensive Financial Report (ACFR) fund balance. Budgetary fund balance is a prospective calculation of ending fund balance based on estimated revenues and expenditures, whereas ACFR fund balance is a retrospective calculation based on the difference between fiscal year end assets and liabilities, and deferred inflows or outflows of resources. Following the financial audit of the active fiscal year, budgetary ending fund balance is reconciled to ACFR fund balance, accounting for actual fiscal year performance and any differences in the budgetary versus accounting basis of reporting. ACFR fund balance may be classified in one of five classifications defined in GASB Statement 54: Fund Balance Reporting and Governmental Fund Type Definitions as described below: Page 268 of 427 Fund Structure 12 • Non-spendable Fund Balance: Cannot be spent due to form or must be maintained intact legally or contractually. • Restricted Fund Balance: Subject to externally enforceable limitations by law, enabling legislation, or limitations imposed by creditors or grantors. • Committed Fund Balance: May only be used for specific purposes due to formal action of the City Council through adoption of a resolution prior to the end of the fiscal year. • Assigned Fund Balance: Reflects the City’s intended use of resources. • Unassigned Fund Balance: The residual classification that includes all spendable amounts not contained in the other classifications. For the purposes of budgetary fund balance, the last three classifications listed above (Committed, Assigned, and Unassigned) are generally not legally restricted by external parties or forces. FUND STRUCTURE The City records financial activity in six fund types as guided by generally accepted accounting principles (GAAP): General Fund, Special Revenue Funds, Debt Service Funds, Enterprise Funds, Private Purpose Funds, and Agency (Fiduciary) Funds. Within each fund type are multiple funds that relate to a city department or multiple city departments. General Fund The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The General Fund is generally used to account for functions of the City that are principally supported by taxes and intergovernmental revenues. The General Fund budget provides the majority of services commonly associated with local city government (e.g. public safety, recreation, community development, general government, and public works). Measure O-06 Sales Tax Fund The Measure O-06 Fund is a component of the General Fund and is used to separately account for and report the use of Measure O-06 revenue derived from a local 1/2% sales tax approved by the City's voters in November 2006. Measure E-24 Sales Tax Fund The Measure E-24 Fund is a component of the General Fund and is used to separately account for and report the use of Measure E-24 revenue derived from a local 1% sales tax approved by the City's voters in November 2024. Special Revenue Fund Special Revenue Funds are used to account for specific monies that are legally restricted for use for a particular purpose. Miscellaneous grants and other restricted funding are recorded as Grants of within a Restricted Programs fund. Grants are budgeted by individual Council action, whereas restricted funding, if recurring, guaranteed, and predictable, is budgeted in the City’s budget. • Developer Impact Fees are collected from developers for the expansion of the existing City service in order to serve future development, the budget includes 9 Special Revenue Funds: Page 269 of 427 Fund Structure 13 o Fire Protection Fund: impact fees collected from developers for the expansion of the existing fire station in order to serve future development. o Police Protection Fund: impact fees collected from developers for the expansion of the existing police facility in order to serve future development. o Park Development (Quimby) Fund: This fund accounts for the receipts of park-in-lieu fees (Quimby) and grant revenues that are used for construction, park acquisition, and development of park facilities. o Recreation Community Center Fund: impact fees collected from developers and used for recreation facilities in order to maintain the adopted level of service of recreation/community center facilities of 542 square feet per thousand population. o Park Improvement Fund: Impact fees collected from developers for park improvements are to be used to maintain the adopted level of service for neighborhood and community parks of 4.0 acres per thousand population. This fund accounts for the receipt and use of these monies. o Traffic Signalization Fund: impact fees collected from developers and used for the future cost of traffic signals. o Traffic Circulation Fund: developer traffic mitigation measure fees charged as a result of an environmental review. o Transportation Facility Fund: impact fees (AB1600 fees) paid to protect the public health, safety, and welfare by maintaining the existing level of public services for existing and future residents within the City of Arroyo Grande. o Drainage Facility Fund: impact fees paid by development and are restricted to improving drainage within the City. • The Community Development Department budget includes three Special Revenue Funds: o In-Lieu Affordable Housing Fund: This fund accounts for monies paid by developers in meeting the City's mandatory affordable housing requirements. o In-Lieu Underground Utility Fund: This fund accounts for monies paid by developers in meeting the City's underground utility requirements. o Community Development Block Grant (CDBG) Fund: This program is a flexible program that provides the City with resources to address a wide range of unique community development needs. • The Police Department budget includes one Special Revenue Fund: o State COPS Block Grant Fund: This fund accounts for the receipt and use of monies from the State of California restricted to the purchase of police equipment and technology for crime prevention. • The Public Works Department’s budget includes seven Special Revenue Funds: o Three Landscape Maintenance District Funds account for and report on the activities of landscape maintenance districts. o The Special Gas Tax Fund is used to account for the construction and maintenance of city streets funded by the City’s share of State gasoline taxes. o Transportation Fund: This revenue source is provided by the San Luis Obispo County of Government’s (SLOCOG) Local Transportation Fund (LTF). The annual appropriation is restricted to transportation systems, including transit, pedestrian, street and road maintenance. o Water Neutralization Fund: The City requires development projects that increase total water consumption in the City to “neutralize” that demand by reducing water consumption in existing development by an equivalent amount or by paying a fee in-lieu Page 270 of 427 Fund Structure 14 of performing water consumption reductions. This fund accounts for the amount collected from developers and is used towards the City’s water conservation efforts. o Water Availability Fund: Pursuant to the provisions of Section 38743 of the Government Code, water availability charges is a “special charge” which is levied to each parcel of property not served with city water. These charges are restricted for the sole purpose of expanding water supply such as a desalination plant, recycled water, a scalping plant, etc. • The Recreation Services Department budget includes one Special Revenue Fund: o Tourism Business Improvement District (TBID) Fund: The purpose of the Tourism Business Improvement District (TBID) is to provide projects, programs and activities that benefit lodging businesses located and operating within the City of Arroyo Grande. A two percent (2%) assessment is levied on all lodging businesses of the rent charged by the operator per occupied room per night for all transient occupancies. Revenue collected is used to promote the lodging industry within the City. • Other Special Revenue Funds include: o Public Access Television Fund: This fund accounts for fees collected from Charter Communications that are restricted for support of public, education, and government access programming and equipment. Enterprise Funds The City’s enterprise funds are a type of proprietary fund used to manage services delivered to the public on a user-fee basis, operating much like a private business. These funds are self‑supporting; revenues come primarily from service charges, and they cover both operating expenses and capital costs. The City has 5 Enterprise Funds: Sewer, Sewer Facility, Water, Lopez, and Water Facility. Agency Funds The City’s agency funds are used to account for assets held temporarily on behalf of others—such as the Successor Agency to RDA, Downtown Parking, and the Sanitation Distribution funds. They are not City revenues and are excluded from government-wide financial reporting of expenses or fund balances. Page 271 of 427 Fund Structure 15 Page 272 of 427 Fund Structure 16 GOVERNMENTAL FUND TYPES General Fund – is the general operating fund of the City and accounts for all unrestricted financial resources except those required to be accounted for in another fund. Special Revenue Funds – to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts, or capital projects) that are restricted by law or administrative action to expenditures for specific purposes. Debt Service Funds – to account for the accumulation of resources for and the payment of interest and principal on general long-term debt and related costs. The City currently does not have general long-term debt that would be obligated to use a debt service fund. Capital Project Funds – to account for financial resources segregated for the acquisition of major capital projects or facilities (other than those financed by proprietary fund types). PROPRIETARY FUND TYPES Enterprise Funds – to account for operations in a manner similar to private business enterprises, where the intent is to have the costs (expenses, including depreciation) of providing goods or services to the general public to be financed or recovered primarily through user charges. FIDUCIARY FUND TYPES Agency Funds – to account for assets held by the City as trustee or agent for individuals, private organizations, or other governmental units, and/or other funds. These funds are custodial in nature (assets correspond with liabilities) and do not involve measurement of results of o Page 273 of 427 17 COUNCIL GOALS Page 274 of 427 Council Goals 18 On December 9, 2024, an Arroyo Grande Community Priorities Survey was published. This 4-question online survey was posted on the City website and promoted on social media channels. The survey was open for one month and closed on January 15, 2025. The survey allowed community members to provide input regarding their thoughts on what the top priorities should be for the City over the next 2-3 years. The survey included a combination of multiple-choice and short-response questions. On February 10, 2025, the City Council held a Goal Setting Workshop focused on priorities for the FY 2025- 27 Budget. The Results of this Goal Setting Workshop were provided to the City Council on March 11, 2025. The City Council established five (5) major City goals for staff to prioritize for the biennial budget cycle. The goals were established considering the results of the community survey and input from the public and staff. This set of priorities has been used by staff to create work plans and the biennial budget. Here are the five major goals. Page 275 of 427 Council Goals 19 Page 276 of 427 Council Goal’s Work Plans 20 The budget is built from base operations. Once the base budget is established, work plan budget items are considered. These items include program enhancements, staffing modifications, service modifications, etc., that fit within the City’s goals. The ability to add work plan items changes from year to year and is based on the amount of funding available. Goal Strategy Task/Action Carryover Action or New Responsible Department Anticipated to Start Completion Target 1.1 Revenue Generation 1.1a 400 W. Branch Disposition and Development Agreement Carryover CMO/CA/CD In Progress 1Q FY 2026-27 Pursue New Revenue Sources 1.1b Develop a Special Event that drives visitation during shoulder and winter months and build destination awareness Carryover Rec In Progress 4Q FY 2025-26 1.1c Develop an Economic Development Program New CMO 1Q FY 2025-26 4Q FY 2025-26 1.2 Consider Cannabis as a Means of Economic Development 1.2a Evaluate cannabis operations that bring in revenue New CD/CMO 1Q FY 2025-26 2Q FY 2025-26 1.2b Conduct study session with the City Council regarding potential cannabis ordinance Carryover CD/CA/CMO/LIS 3Q FY 2025-26 3Q FY 2025-26 1.2c Conduct study session with the City Council regarding potential cannabis development agreement Carryover CD/CA/CMO/LIS 4Q FY 2025-26 4Q FY 2025-26 1.2d Prepare and adopt cannabis ordinance, if directed by the City Council Carryover CD/CA/CMO 4Q FY 2025-26 1Q FY 2026-27 1.2e Evaluate feasibility of a Cannabis Tax, if directed Carryover CD/AS/CA/CMO 4Q FY 2025-26 1Q FY 2026-27 1.3 Transient Occupany Tax Changes 1.3a Work on changes to TBID ordinance for expanded use of TOT funds New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 1.3b Bring changes to TBID assessment and ordinance to Council for approval New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 1.3c Evaluate opportunities related to City TBID and potential TOT Measure New CMO/Rec/LIS In Progress 4Q FY 2024-25 1.3d Hold study session with City Council and visitor serving accomodations to eliminate TBID New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 1.3e If directed by Council, issue RFP for consultant to develop a survey and outreach strategy to community for TOT New CMO/LIS 1Q FY 2025-26 2Q FY 2025-26 1.3f Award contract for consultant to survey and develop outreach strategy for TOT New CMO/LIS 2Q FY 2025-26 2Q FY 2025-26 1.3g Conduct public education regarding need for TOT New CMO/LIS 2Q FY 2025-26 2Q FY 2026-27 1.3h Bring TOT measure to City Council for consideration of placing on the November 2026 ballot New CMO/Rec/LIS 4Q FY 2025-26 4Q FY 2025-26 FY 2025-27 City Council Goal's Work Plan Page 277 of 427 Council Goal’s Work Plans 21 Goal Strategy Task/Action Carryover Action or New Responsible Department Anticipated to Start Completion Target 2.1 Pursue 2026 State Water Ballot Measure 2.1a Meet with Department of Public Works at the County of San Luis Obispo to begin discussion surrounding purchasing some allocated State Water New CMO/PW 4Q FY 2024-25 1Q FY 2025-26 Achieve Water Resilience 2.1b If directed by Council, Issue an RFP for a Consultant to evaluate feasibility of State Water Ballot Measure New CMO/PW/LIS 1Q FY 2025-26 1Q FY 2025-26 2.1c Award bid to consultant and begin public outreach and community messaging regarding a potential State Water Ballot Measure New CMO/PW/LIS 2Q FY 2025-26 2Q FY 2026-27 2.1d Seek Council approval on placing a November Ballot Measure New CMO/PW/LIS 4Q FY 2025-26 4Q FY 2025-26 2.2 Seek new Water Sources 2.2a Identify opportunities and constraints associated with new Water Sources New CMO/PW In Progress Ongoing 2.2b Support ongoing development and financing of regional water solution New CMO/PW In Progress Ongoing 2.2c Conduct a water and wastewater rate study to adjust rates based on changes to water supply and changing or new regional partnerships New AS/PW 1Q FY 2025-26 4Q FY 2026-27 2.3 Work with Regional Partners 2.3a Preserve Lopez water supply by working with the County on Lopez litigation New CMO/PW/CA In progress Ongoing 2.3b NCMA Management Agreement Amendments Carryover PW In progress Ongoing Prioritize Key Infrastructure Projects 3.1 Prioritize Key Infrastructure Projects 3.1a 2025 Pavement Management Program Construction New PW 3Q FY 2025-26 4Q FY 2025-26 3.1b Traffic Way Bridge Replacement Project Carryover PW In progress 2Q FY 2025-26 3.1c Halcyon Complete Streets Design and Construction Carryover PW 3.1d Concrete Repair Program Carryover PW 2Q FY 2025-26 4Q FY 2025-26 3.1e CMP Lining Carryover CD/PW In Progress Ongoing 3.2 Pursue Alternative Funding Sources for Infrastructure Funding 3.2a Pursue Grant applications and administration for infrastructure projects Carryover PW/CD/AS In progress Ongoing 4.1 Economic Development Tasks 4.1a Retail Market Analysis Carryover CD 4Q FY 2024-25 1Q FY 2025-26 4.1b Market Demand Studies Carryover CD 4Q FY 2024-25 1Q FY 2025-26 4.2 General Plan Elements 4.2a Land and Safety Analysis Carryover CD 3Q FY 2023-24 2Q FY 2025-26 4.2b Administrative Draft Carryover CD 4.3 EIR 4.3a Complete draft EIR Carryover CD 1Q FY 2025-26 3Q FY 2025-26 4.3b Complete final EIR Carryover CD 3Q FY 2024-25 4Q FY 2025-26 4.4 Code Update 4.4a Kick off code update Carryover CD/LIS 4.4b Bring code changes to Planning Commission for approval Carryover CD 3Q FY 2025-26 3Q FY 2025-26 4.4c Bring draft Ordinance of code revision update to Council Carryover CD 4Q FY 2025-26 4Q FY 2025-26 4.5 Climate Action Plan 4.5a Kick off CAP and research Carryover CD 1Q FY 2025-26 4Q FY 2025-26 4.5b Admin Draft Carryover CD 4Q FY 2025-26 2Q FY 2026-27 4.5c Final CAP Carryover CD 2Q FY 2026-27 3Q FY 2026-27 FY 2025-27 City Council Goal's Work Plan Continued Complete General Plan Update Page 278 of 427 Council Goal’s Work Plans 22 5.1 Scope of Work and RFP 5.1a Define scope, research other communities New CD 4Q FY 2024-25 1Q FY 2025-26 5.2 Kick Off and Public Outreach 5.2a Kick Off New CD 1Q FY 2025-26 1Q FY 2025-26 5.2b Public Outreach New CD Ongoing Ongoing 5.3 CEQA 5.3a Environmental Review New CD 2Q FY 2025-26 3Q FY 2025-26 5.4 Plan Draft 5.4a Administrative Draft Plan New CD 3Q FY 2025-26 4Q FY 2025-26 5.5 Final Draft and Hearings 5.5a Final Draft New CD 4Q FY 2025-26 1Q FY 2026-27 5.5b Planning Commission Hearings New CD 1Q FY 2026-27 2Q FY 2026-27 5.5c City Council Hearings New CD 2Q FY 2026-27 2Q FY 2026-27 CMO AS LIS PD PW Rec Fire CD City Manager's Office Administrative Services Legislative and Information Services Key Redevelop the East Grand Avenue Corridor (Halcyon Road to Elm Street) FY 2025-27 City Council Goal's Work Plan Continued Community Development Five Cities Fire Authority Recreation Services Public Works Police Department Page 279 of 427 23 BUDGET OVERVIEW Page 280 of 427 Overview 24 The City’s Biennial Budget serves as the Council-approved spending plan and provides the legal authority for departments to commit financial resources in support of services provided to the Arroyo Grande community. As part of the biennial budget process, the City conducts a mid-cycle review to evaluate current economic conditions, revenue trends, expenditure projections, and operational needs for the second year of the budget. The FY 2026-27 Mid-Cycle Budget Update includes recommended adjustments to revenues, expenditures, and service levels based on updated financial information. The proposed FY 2026-27 budget reflects projected expenditures of approximately $55 million, including salaries, benefits, services, supplies, maintenance, debt service, and capital-related costs, as summarized in the consolidated fund information presented in Table 1. Table 1: FY 2026-27 Consolidated Fund Summary Beginning Fund Balance 7,205,860$ 943,263$ 1,290,888$ 4,763,064$ 13,143,442$ 5,109,805$ 32,456,321$ Revenues: Revenues 21,055,350 2,975,500 5,936,000 10,876,832 2,522,991 423,944 43,790,617 Transfers In 2,862,500 - - 4,789,480 730,000 - 8,381,980 Total Revenues 23,917,850 2,975,500 5,936,000 15,666,312 3,252,991 423,944 52,172,598 Expenditures: Salaries and Benefits 14,908,800 - - 1,475,700 659,000 - 17,043,500 Services and Supplies 11,073,570 1,415,800 32,500 5,802,225 1,011,941 7,900 19,343,936 Debt Service 282,786 - - - 8,369 382,944 674,099 Capital Outlay 51,529 - - 1,024,256 195,000 - 1,270,785 Transfers Out 115,000 1,984,750 5,846,200 7,246,069 1,318,000 179,900 16,689,919 Total Expenditures 26,431,685 3,400,550 5,878,700 15,548,250 3,192,311 570,744 55,022,239 Total Operating Incr/(Decr)(2,513,835) (425,050) 57,300 118,062 60,680 (146,800) (2,849,642) Available Fund Balance 4,692,026$ 518,213$ 1,348,188$ 4,881,126$ 13,204,121$ 4,963,005$ 29,606,680$ TotalGeneral Fund Measure O-06 Measure E-24 Enterprise Funds Special Revenue Funds Agency Funds Page 281 of 427 25 FUND SUMMARIES Page 282 of 427 26 GENERAL FUND Page 283 of 427 27 GENERAL FUNDS FUND: 100 GENERAL FUND 2023-24 2024-25 FINAL FINAL ADOPTED AMENDED ESTIMATED ADOPTED PROPOSED ITEM ACTUAL ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 11,784,649$ 11,604,740$ 7,460,674$ 9,467,073$ 9,467,073$ 5,703,133$ 7,205,860$ Revenues: Revenues 20,108,630 20,476,541 20,304,750 20,303,000 20,443,562 21,180,350 21,055,350 Transfers In 2,755,008 2,751,258 2,940,200 2,951,500 2,851,492 2,986,900 2,862,500 Total Revenues 22,863,638 23,227,799 23,244,950 23,254,500 23,295,054 24,167,250 23,917,850 Expenditures: Salaries and Benefits 12,790,046 13,509,247 14,292,200 14,357,774 14,383,696 14,879,500 14,908,800 Services and Supplies 8,808,940 9,222,388 10,287,905 10,275,531 10,140,756 10,609,350 11,073,570 Debt Service 492,390 302,422 294,386 294,386 294,386 282,786 282,786 Capital Outlay 135,043 379,500 13,000 50,100 50,693 51,529 51,529 Transfers Out 817,128 1,951,909 115,000 686,736 686,736 115,000 115,000 Total Expenditures 23,043,548 25,365,465 25,002,491 25,664,527 25,556,267 25,938,165 26,431,685 Total Operating Increases (Decreases (179,909) (2,137,667) (1,757,541) (2,410,027) (2,261,213) (1,770,915) (2,513,835) Available Fund Balance 11,604,740$ 9,467,073$ 5,703,133$ 7,057,046$ 7,205,860$ 3,932,218$ 4,692,026$ Percent of Expenditures 50.4%37.3%22.8%27.5%28.2%15.2%17.8% This is the primary operating fund of the City, which accounts for resources and services traditionally associated with government. The General Fund provides administrative, financial, police protection, community development, public works, and recreation services to the community and other funds. The General Fund accounts for revenues that have unrestricted uses and are not required legally or by contractual agreement to be accounted for in another fund. 2025-26 2026-27 Page 284 of 427 28 LOCAL SALES TAX FUNDS 2023-24 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 7,887,211$ 5,017,872$ 3,753,651$ 3,575,443$ 3,575,443$ 2,129,471$ 943,263$ Revenues: Revenues 3,283,349 3,191,022 2,942,500 2,942,500 2,944,500 3,019,500$ 2,975,500 Transfers In - - - - - - - Total Revenues 3,283,349 3,191,022 2,942,500 2,942,500 2,944,500 3,019,500 2,975,500 Expenditures: Salaries and Benefits - - - - - - - Services and Supplies 1,006,561 1,025,365 1,119,800 1,119,800 1,119,800 1,150,600 1,150,600 Capital Outlay - - - - - - - Transfers Out 5,146,127 3,608,086 3,446,880 5,602,957 4,456,880 2,286,435 2,249,950 Total Expenditures 6,152,688 4,633,450 4,566,680 6,722,757 5,576,680 3,437,035 3,400,550 Change in Fund Balance (2,869,340) (1,442,429) (1,624,180) (3,780,257) (2,632,180) (417,535) (425,050) Ending Fund Balance 5,017,872$ 3,575,443$ 2,129,471$ (204,814)$ 943,263$ 1,711,936$ 518,213$ FUND: 120 MEASURE O-06 LOCAL SALES TAX This fund accounts for the revenues derived from Measure O 2006 Sales Tax, a local 1/2% sales tax approved by the City's voters in November 2006. 2025-26 2026-27 2023-24 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance -$ -$ 1,409,028$ 1,409,028$ 1,409,028$ 1,293,888$ 1,290,888$ Revenues: Revenues - 1,412,063 5,870,000 5,870,000 5,867,000 6,025,000 5,936,000 Transfers In - - - - - - - Total Revenues - 1,412,063 5,870,000 5,870,000 5,867,000 6,025,000 5,936,000 Expenditures: Salaries and Benefits - - - - - - - Services and Supplies - 3,035 32,500 32,500 32,500 32,500 32,500 Capital Outlay - - - - - - - Transfers Out - - 5,952,640 5,952,640 5,952,640 5,846,200 5,846,200 Total Expenditures - 3,035 5,985,140 5,985,140 5,985,140 5,878,700 5,878,700 Change in Fund Balance - 1,409,028 (115,140) (115,140) (118,140) 146,300 57,300 Ending Fund Balance -$ 1,409,028$ 1,293,888$ 1,293,888$ 1,290,888$ 1,440,188$ 1,348,188$ FUND: 140 MEASURE E-24 LOCAL SALES TAX This fund accounts for the revenues derived from Measure E 2024 Sales Tax, a local 1% sales tax approved by the City's voters in November 2024. 2025-26 2026-27 Page 285 of 427 29 CONSOLIDATED GENERAL FUND The General Fund is the primary operating fund of the City, which accounts for resources and services traditionally associated with government. The General Fund provides administrative, financial, police protection, community development, public works, fire, and recreation services to the community and other funds. The General Fund accounts for revenues that have unrestricted uses and are not required legally or by contractual agreement to be accounted for in another fund. The City has historically reported on the General Fund separately from the Local Sales Tax Fund, although the City’s auditors traditionally combine this information in the Annual Comprehensive Financial Report (ACFR). There are two Local Sales Tax Funds. Measure O-06 accounts for the revenues derived from the local 1/2% sales tax approved by the City's voters in November 2006. Measure E-24 accounts for the revenues derived from the local 1% sales tax approved by the City's voters in November 2024. To ensure accountability, these measures include provisions requiring the City to publish and distribute an annual report to each household on the revenues and expenditures from the sales tax proceeds. To aid in the collection and reporting of this information, the City has accounted for this fund in a separate account. General Fund Beginning Fund Balance $7,206 $943 $1,291 $9,440 Revenues: Revenues 21,055 2,976 5,936 29,967 Transfers In 2,863 - - 2,863 Total Revenues 23,918 2,976 5,936 32,829 Expenditures: Salaries and Benefits 14,909 - - 14,909 Services and Supplies 11,074 1,416 33 12,522 Debt Service 283 - - 283 Capital Outlay 52 - - 52 Transfers Out 115 1,985 5,846 7,946 Total Expenditures 26,432 3,401 5,879 35,711 Total Operating Incr/(Decr)(2,514) (425) 57 (2,882) Available Fund Balance $4,692 $518 $1,348 $6,558 Reserve %17.8%15.2%22.9%18.4% FY 2026-27 Measure O-06 Consolidated Total Measure E-24 Page 286 of 427 30 CONSOLIDATED GENERAL FUND REVENUES BY SOURCE Page 287 of 427 31 CONSOLIDATED GENERAL FUND REVENUES TRENDS Property Tax Property Tax revenues are estimated to increase by 4.25% in FY 2026-27. Sales and Use Tax Sales Tax revenues are estimated to increase by 1% in FY 2026-27. Transient Occupancy Tax Transient Occupancy Tax revenues are estimated to increase by 1% in FY 2026-27. Page 288 of 427 32 CONSOLIDATED GENERAL FUND EXPENDITURES BY DEPARTMENT 2026-27 C onsolidated G eneral Fund E xpenditures by Department Page 289 of 427 33 ENTERPRISE FUNDS Page 290 of 427 34 ENTERPRISE FUNDS FUND: 612 SEWER 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Working Capital 1,413,624$ 1,356,465$ 1,430,236$ 1,430,236$ 1,507,065 1,487,032 Revenues: Revenues 1,153,501 1,383,100 1,383,100 1,383,100 1,424,400 1,427,900 Transfers In - - - - - - Total Revenues 1,153,501 1,383,100 1,383,100 1,383,100 1,424,400 1,427,900 Expenses: Salaries and Benefits 405,807 444,900 444,900 444,900 462,900 494,700 Services and Supplies 153,580 221,200 221,200 221,200 216,100 216,100 Debt Service - - - - - - Operating Equipment 10,285 35,000 35,000 35,000 175,000 175,000 Capital Improvement Progra 21,997 - 10,000 10,000 332,000 193,256 Transfers Out 545,220 531,400 615,204 615,204 578,900 578,900 Total Expenditures 1,136,889 1,232,500 1,326,304 1,326,304 1,764,900 1,657,956 Ending Available Working Capi 1,430,236$ 1,507,065$ 1,487,032$ 1,487,032$ 1,166,565 1,256,976 2026-272025-26 This fund is used to account for maintenance of sewer lines connecting City residents to the South San Luis Obispo County Sanitation District sewer treatment plant. Money is collected from utility bills paid by customers. 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Working Capital 378,609$ 415,609$ 557,805$ 557,805$ 452,609 594,805 Revenues: Revenues 179,196 37,000 37,000 37,000 37,000 37,000 Transfers In - - - - - - Total Revenues 179,196 37,000 37,000 37,000 37,000 37,000 Expenses: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Debt Service - - - - - - Capital Outlay - - - - - - Capital Improvement Program - - - - - - Transfers Out - - - - - 138,744 Total Expenditures - - - - - 138,744 Ending Available Working Capital 557,805$ 452,609$ 594,805$ 594,805$ 489,609 493,061 2026-27 FUND: 634 SEWER FACILITY This fund is used to account for the accumulation of sewer facility revenues to be used in capital improvement projects in the City. Money is collected from development to offset the impacts new development has on the sewer collection system. 2025-26 Page 291 of 427 35 ENTERPRISE FUNDS FUND: 640 WATER 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Working Capita 1,766,698$ 1,222,829$ 1,854,225$ 1,854,225$ 1,431,068 920,207 Revenues: Revenues 7,959,864 9,077,095 9,077,095 9,077,095 9,346,932 9,346,932 Transfers In 578,700 401,100 443,872 401,100 191,955 191,955 Total Revenues 8,538,564 9,478,195 9,520,967 9,478,195 9,538,887 9,538,887 Expenses: Salaries and Benefits 758,144 919,000 919,000 919,000 955,800 981,000 Services and Supplies 843,442 958,900 958,900 958,900 988,600 988,600 Debt Service - - - - - - Capital Outlay 101,578 94,000 194,000 194,000 206,000 106,000 Capital Improvement Pr 662,380 800,000 1,182,772 700,000 885,000 550,000 Transfers Out 6,085,494 7,486,147 7,607,351 7,640,313 7,785,100 6,528,425 Total Expenditures 8,451,038 10,258,047 10,862,023 10,412,213 10,820,500 9,154,025 Ending Available Working 1,854,225$ 442,977$ 513,169$ 920,207$ 149,455 1,305,069 This fund is used to account for the activities associated with the transmission and distribution of potable water by the City to its users. Money is collected from utility bills paid by customers. 2025-26 2026-27 FUND: 641 LOPEZ 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Working Capital 1,202,662$ 1,202,662$ 0$ 0$ 1,130,291 1,082,480 Revenues: Revenues - - - - - - Transfers In 4,200,059 5,283,297 5,283,297 5,283,297 3,889,750 4,597,525 Total Revenues 4,200,059 5,283,297 5,283,297 5,283,297 3,889,750 4,597,525 Expenses: Salaries and Benefits - - - - - - Services and Supplies 5,402,720 3,962,121 4,200,817 4,200,817 3,889,750 4,597,525 Debt Service - - - - - - Capital Outlay - - - - - - Capital Improvement Program - - - - - - Transfers Out - - - - - - Total Expenditures 5,402,720 3,962,121 4,200,817 4,200,817 3,889,750 4,597,525 Ending Available Working Capital 0$ 2,523,838$ 1,082,480$ 1,082,480$ 1,130,291$ 1,082,480$ 2026-27 This fund is responsible for the purchase of water from Lopez Dam. The City has a 50.55% share of the water and expense generated by Zone 3 – County of San Luis Obispo’s Flood Control and Water Conservation District. 2025-26 Page 292 of 427 36 ENTERPRISE FUNDS FUND: 642 WATER FACILITY 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Working Capital 1,094,568 1,159,568 1,238,470 1,238,470 1,224,568$ 902,370$ Revenues: Revenues 143,903 65,000 65,000 65,000 65,000 65,000 Transfers In - - - - - - Total Revenues 143,903 65,000 65,000 65,000 65,000 65,000 Expenses: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Debt Service - - - - - - Capital Outlay - - - - - - Capital Improvement Progra - - - - - - Transfers Out - - 401,100 401,100 - - Total Expenditures - - 401,100 401,100 - - Ending Available Working Cap 1,238,470$ 1,224,568$ 902,370$ 902,370$ 1,289,568$ 967,370$ 2026-27 This fund is used to account for the accumulation of water facility revenues to be used in capital improvement projects in the City. Money is collected from development to offset the impacts new development has on the water distribution system. 2025-26 Page 293 of 427 37 SPECIAL REVENUE FUNDS Page 294 of 427 38 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 426,745$ 463,313$ 463,313$ 463,313$ 489,313$ 489,313$ Revenues: Revenues 36,568 26,000 26,000 26,000 26,000 26,000 Transfers In - - - - - - Total Revenues 36,568 26,000 26,000 26,000 26,000 26,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures - - - - - - Change in Fund Balance 36,568 26,000 26,000 26,000 26,000 26,000 Ending Fund Balance 463,313$ 489,313$ 489,313$ 489,313$ 515,313$ 515,313$ FUND: 210 FIRE PROTECTION IMPACT FEES This fund accounts for impact fees collected from developers for the expansion of the existing fire station in order to serve future development. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance (120)$ 20,865$ 20,865$ 20,865$ 23,165$ 23,165$ Revenues: Revenues 37,531 42,200 42,200 42,200 42,200 42,200 Transfers In - - - - Total Revenues 37,531 42,200 42,200 42,200 42,200 42,200 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 16,546 39,900 39,900 39,900 39,900 39,900 Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures 16,546 39,900 39,900 39,900 39,900 39,900 Change in Fund Balance 20,985 2,300 2,300 2,300 2,300 2,300 Ending Fund Balance 20,865$ 23,165$ 23,165$ 23,165$ 25,465$ 25,465$ FUND: 211 PUBLIC ACCESS TELEVISION This fund accounts for fees collected from Charter Communications that are restricted for support of public, education, and government access programming and equipment. 2025-26 2026-27 Page 295 of 427 39 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 64,023$ 79,321$ 79,321$ 79,321$ 84,621$ 84,621$ Revenues: Revenues 15,299 5,300 5,300 5,300 5,300 5,300 Transfers In - - - - - Total Revenues 15,299 5,300 5,300 5,300 5,300 5,300 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - 25,000 25,000 Total Expenditures - - - - 25,000 25,000 Change in Fund Balance 15,299 5,300 5,300 5,300 (19,700) (19,700) Ending Fund Balance 79,321$ 84,621$ 84,621$ 84,621$ 64,921$ 64,921$ FUND: 212 POLICE FACILITIES IMPACT FEES This fund accounts for impact fees collected from developers for the expansion of the existing police facility in order to serve future development. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 1,490,533$ 1,630,136$ 1,630,136$ 1,630,136$ 1,686,136$ 1,686,136$ Revenues: Revenues 139,603 56,000 56,000 56,000 56,000 56,000 Transfers In - - - - Total Revenues 139,603 56,000 56,000 56,000 56,000 56,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - 310,000 175,000 Total Expenditures - - - - 310,000 175,000 Change in Fund Balance 139,603 56,000 56,000 56,000 (254,000) (119,000) Ending Fund Balance 1,630,136$ 1,686,136$ 1,686,136$ 1,686,136$ 1,432,136$ 1,567,136$ This fund accounts for the receipts of park-in-lieu fees (Quimby) and grant revenues that are used for construction, park acquisition, and development of park facilities. 2025-26 2026-27 FUND: 213 PARK FACILITIES Page 296 of 427 40 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 207,747$ 242,947$ 242,947$ 242,947$ 231,847$ 231,847$ Revenues: Revenues 71,427 50,900 50,900 50,900 50,900 50,900 Transfers In - - - - - - Total Revenues 71,427 50,900 50,900 50,900 50,900 50,900 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 36,226 62,000 62,000 62,000 62,000 62,000 Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures 36,226 62,000 62,000 62,000 62,000 62,000 Change in Fund Balance 35,200 (11,100) (11,100) (11,100) (11,100) (11,100) Ending Fund Balance 242,947$ 231,847$ 231,847$ 231,847$ 220,747$ 220,747$ FUND: 214 PARK IMPROVEMENT Impact fees collected from developers for park improvements are to be used to maintain the adopted level of service for neighborhood and community parks of 4.0 acres per thousand population. This fund accounts for the receipt and use of these monies. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 32,468$ 43,137$ 43,137$ 43,137$ 48,487$ 48,487$ Revenues: Revenues 10,669 2,350 2,350 5,350 2,350 2,350 Transfers In - - - - - - Total Revenues 10,669 2,350 2,350 5,350 2,350 2,350 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures - - - - - - Change in Fund Balance 10,669 2,350 2,350 5,350 2,350 2,350 Ending Fund Balance 43,137$ 45,487$ 45,487$ 48,487$ 50,837$ 50,837$ FUND: 215 RECREATION COMMUNITY CENTER This fund accounts for impact fees collected from developers and used for recreation facilities in order to maintain the adopted level of service of recreation/community center facilities of 542 square feet per thousand population. 2025-26 2026-27 Page 297 of 427 41 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 34,455$ 37,020$ 37,020$ 37,020$ 30,920$ 30,920$ Revenues: Revenues 10,955 10,000 10,000 10,000 10,000 10,000 Transfers In - - - - - - Total Revenues 10,955 10,000 10,000 10,000 10,000 10,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 6,795 14,500 14,500 14,500 14,500 14,700 Capital Outlay - - - - - - Transfers Out 1,596 1,600 1,600 1,600 1,600 1,600 Total Expenditures 8,391 16,100 16,100 16,100 16,100 16,300 Change in Fund Balance 2,565 (6,100) (6,100) (6,100) (6,100) (6,300) Ending Fund Balance 37,020$ 30,920$ 30,920$ 30,920$ 24,820$ 24,620$ FUND: 216 GRACE LANE ASSESSMENT DISTRICT This fund accounts for the landscape maintenance within the Grace Lane housing tract. A special benefit assessment is levied on property owners to pay for landscape maintenance expenditures. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 6,460$ 9,828$ 9,828$ 9,828$ 8,628$ 8,628$ Revenues: Revenues 6,107 5,900 5,900 5,900 5,900 5,900 Transfers In - - - - - - Total Revenues 6,107 5,900 5,900 5,900 5,900 5,900 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 1,336 5,700 5,700 5,700 5,700 5,700 Capital Outlay - - - - - - Transfers Out 1,404 1,400 1,400 1,400 1,400 1,400 Total Expenditures 2,740 7,100 7,100 7,100 7,100 7,100 Change in Fund Balance 3,368 (1,200) (1,200) (1,200) (1,200) (1,200) Ending Fund Balance 9,828$ 8,628$ 8,628$ 8,628$ 7,428$ 7,428$ This fund accounts for the landscape maintenance of parkways within two housing tracts. A special benefit assessment is levied on property owners to pay for landscape maintenance expenditures. FUND: 217 LANDSCAPE MAINTENANCE DISTRICTS 2025-26 2026-27 Page 298 of 427 42 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 532,186$ 578,032$ 578,032$ 578,032$ 364,202$ 364,202$ Revenues: Revenues 70,119 46,500 46,500 46,500 46,500 46,500 Transfers In - - - - - - Total Revenues 70,119 46,500 46,500 46,500 46,500 46,500 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 21,969 32,400 32,400 32,400 32,400 32,400 Capital Outlay - - - - - - Transfers Out 2,304 2,300 2,300 227,930 2,300 2,300 Total Expenditures 24,273 34,700 34,700 260,330 34,700 34,700 Change in Fund Balance 45,846 11,800 11,800 (213,830) 11,800 11,800 Ending Fund Balance 578,032$ 589,832$ 589,832$ 364,202$ 376,002$ 376,002$ FUND: 219 PARKSIDE ASSESSMENT DISTRICT This fund accounts for revenue derived from annual assessments, which are used to pay the cost incurred by the City for landscape maintenance. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 3,569$ (969)$ (969)$ (969)$ 61$ 61$ Revenues: Revenues 1,042,786 1,044,700 1,044,700 1,033,000 1,059,800 1,072,200 Transfers In 520,703 695,000 695,000 708,900 730,000 730,000 Total Revenues 1,563,489 1,739,700 1,739,700 1,741,900 1,789,800 1,802,200 Expenditures: Salaries and Benefits 528,655 623,100 623,100 623,100 647,300 659,000 Services and Supplies 321,253 382,700 382,700 382,700 382,700 382,700 Debt Service 8,369 8,369 8,369 8,369 8,369 8,369 Capital Outlay 122,076 140,000 140,000 140,000 140,000 140,000 Transfers Out 587,673 586,700 586,700 586,700 605,200 605,200 Total Expenditures 1,568,027 1,740,870 1,740,870 1,740,870 1,783,569 1,795,269 Change in Fund Balance (4,538) (1,170) (1,170) 1,030 6,231 6,931 Ending Fund Balance (969)$ (2,139)$ (2,139)$ 61$ 6,291$ 6,991 This fund accounts for receipts and expenditures of money apportioned by the State under Streets and Highway Code. The use of gas tax revenues can only be used to construct and maintain streets, roads and highways. FUND: 220 STREETS (GAS TAX) 2025-26 2026-27 Page 299 of 427 43 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 1,195,833$ 1,235,706$ 1,235,706$ 1,235,706$ 1,271,706$ 1,271,706$ Revenues: Revenues 76,888 36,000 36,000 36,000 36,000 36,000 Transfers In - - - - - - Total Revenues 76,888 36,000 36,000 36,000 36,000 36,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out 37,015 - - - - - Total Expenditures 37,015 - - - - - Change in Fund Balance 39,872 36,000 36,000 36,000 36,000 36,000 Ending Fund Balance 1,235,706$ 1,271,706$ 1,271,706$ 1,271,706$ 1,307,706$ 1,307,706 This fund accounts for traffic signalization assessment levied against developments for the future cost of traffic signals. FUND: 222 TRAFFIC SIGNALIZATION 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 159,741$ 167,560$ 167,560$ 167,560$ 168,060$ 168,060$ Revenues: Revenues 7,819 500 500 500 500 500 Transfers In - - - - - - Total Revenues 7,819 500 500 500 500 500 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures - - - - - - Change in Fund Balance 7,819 500 500 500 500 500 Ending Fund Balance 167,560$ 168,060$ 168,060$ 168,060$ 168,560$ 168,560$ FUND: 223 TRAFFIC CIRCULATION This fund accounts for developer traffic mitigation measure fees charged as a result of an environmental review. 2025-26 2026-27 Page 300 of 427 44 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 2,835,751$ 3,084,459$ 3,084,459$ 3,084,459$ 2,744,459$ 2,744,459$ Revenues: Revenues 248,708 60,000 60,000 60,000 60,000 60,000 Transfers In - - - - - - Total Revenues 248,708 60,000 60,000 60,000 60,000 60,000 Expenditures: Salaries and Benefits - - - - - - Debt Service - - Capital Outlay - - - - - - Transfers Out - - 400,000 400,000 1,238,500 1,600,000 Total Expenditures - - 400,000 400,000 1,238,500 1,600,000 Change in Fund Balance 248,708 60,000 (340,000) (340,000) (1,178,500) (1,540,000) Ending Fund Balance 3,084,459$ 3,144,459$ 2,744,459$ 2,744,459$ 1,565,959$ 1,204,459$ FUND: 224 TRANSPORTATION FACILITY IMPACT This fund accounts for developer impact fees (AB1600 fees) paid to protect the public health, safety, and welfare by maintaining the existing level of public services for existing and future residents within the City of Arroyo Grande. 2025-26 2026-27 FUND: 225 TRANSPORTATION 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 1,412,141$ 1,451,779$ 1,451,779$ 1,451,779$ 1,402,229$ 1,402,229$ Revenues: Revenues 481,591 570,450 570,450 570,450 516,000 516,000 Transfers In - - - - - - Total Revenues 481,591 570,450 570,450 570,450 516,000 516,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Debt Service - - Capital Outlay - - - - - - Transfers Out 441,953 620,000 620,000 620,000 655,000 655,000 Total Expenditures 441,953 620,000 620,000 620,000 655,000 655,000 Change in Fund Balance 39,638 (49,550) (49,550) (49,550) (139,000) (139,000) Ending Fund Balance 1,451,779$ 1,402,229$ 1,402,229$ 1,402,229$ 1,263,229$ 1,263,229$ This revenue source is provided by the San Luis Obispo County of Government’s (SLOCOG) Local Transportation Fund (LTF). The annual appropriation is restricted to transportation systems, including transit, pedestrian, street and road maintenance. 2025-26 2026-27 Page 301 of 427 45 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 251,183$ 275,490$ 275,490$ 275,490$ 255,190$ 255,190$ Revenues: Revenues 51,012 52,000 52,000 52,000 52,000 52,000 Transfers In - - - - - - Total Revenues 51,012 52,000 52,000 52,000 52,000 52,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 26,705 72,300 72,300 72,300 72,300 72,300 Debt Service - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures 26,705 72,300 72,300 72,300 72,300 72,300 Change in Fund Balance 24,307 (20,300) (20,300) (20,300) (20,300) (20,300) Ending Fund Balance 275,490$ 255,190$ 255,190$ 255,190$ 234,890$ 234,890$ FUND: 226 WATER NEUTRALIZATION IMPACT The City requires development projects that increase total water consumption in the City to “neutralize” that demand by reducing water consumption in existing development by an equivalent amount or by paying a fee in-lieu of performing water consumption reductions. This fund accounts for the amount collected from developers and is used towards the City’s water conservation efforts. 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 5,965$ 12,174$ 12,174$ 12,174$ 16,174$ 16,174$ Revenues: Revenues 6,210 4,000 4,000 4,000 4,000 4,000 Transfers In - - - - - - Total Revenues 6,210 4,000 4,000 4,000 4,000 4,000 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - 12,500 12,500 Total Expenditures - - - - 12,500 12,500 Change in Fund Balance 6,210 4,000 4,000 4,000 (8,500) (8,500) Ending Fund Balance 12,174$ 16,174$ 16,174$ 16,174$ 7,674$ 7,674$ FUND: 231 DRAINAGE FACILITY This fund accounts for impact fees paid by development and are restricted to improving drainage within the City. 2025-26 2026-27 Page 302 of 427 46 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 1,306,929$ 334,500$ 334,500$ 334,500$ 371,000$ 371,000$ Revenues: Revenues 105,941 26,500 26,500 36,500 26,500 26,500 Transfers In - - - - - - Total Revenues 105,941 26,500 26,500 36,500 26,500 26,500 Expenditures: Salaries and Benefits - - - - - - Services and Supplies 1,078,370 - - - - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures 1,078,370 - - - - - Change in Fund Balance (972,430) 26,500 26,500 36,500 26,500 26,500 Ending Fund Balance 334,500$ 361,000$ 361,000$ 371,000$ 397,500$ 397,500$ 2025-26 2026-27 FUND: 232 IN-LIEU AFFORDABLE HOUSING This fund accounts for monies paid by developers in meeting the City's mandatory affordable housing requirements. 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 20,648$ 21,658$ 21,658$ 21,658$ 166,758$ 166,758$ Revenues: Revenues 1,011 - - 145,100 - - Transfers In - - - - - - Total Revenues 1,011 - - 145,100 - - Expenditures: Salaries and Benefits - - - - - - Services and Supplies - - - - - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures - - - - - - Change in Fund Balance 1,011 - - 145,100 - - Ending Fund Balance 21,658$ 21,658$ 21,658$ 166,758$ 166,758$ 166,758$ This fund accounts for monies paid by developers in meeting the City's underground utility requirements. FUND: 233 IN-LIEU UNDERGROUND UTILITY 2025-26 2026-27 Page 303 of 427 47 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 438,184$ 383,013$ 383,013$ 383,013$ 386,111$ 241,813$ Revenues: Revenues 307,731 328,598 299,450 289,150 319,020 299,450 Transfers In - - - - - - Total Revenues 307,731 328,598 299,450 289,150 319,020 299,450 Salaries and Benefits - - - - - - Services and Supplies 312,899 275,500 469,350 380,350 411,850 451,850 Debt Service - - - - - - Capital Outlay - - - - - - Transfers Out 50,004 50,000 52,500 50,000 50,000 52,500 Total Expenditures 362,903 325,500 521,850 430,350 461,850 504,350 Change in Fund Balance (55,171) 3,098 (222,400) (141,200) (142,830) (204,900) Ending Fund Balance 383,013$ 386,111$ 160,613$ 241,813$ 243,281$ 36,913$ The purpose of the Tourism Business Improvement District (TBID) is to provide projects, programs and activities that benefit lodging businesses located and operating within the City of Arroyo Grande. A two percent (2%) assessment is levied on all lodging businesses of the rent charged by the operator per occupied room per night for all transient occupancies. Revenue collected is used to promote the lodging industry within the City. FUND: 240 TOURISM BUSINESS IMPROVEMENT DISTRICT 2025-26 2026-27 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 73,035$ 112,235$ 112,235$ 112,235$ 170,235$ 170,235$ Revenues: Revenues 39,200 58,000 58,000 58,000 58,000 58,000 Transfers In - - - - - - Total Revenues 39,200 58,000 58,000 58,000 58,000 58,000 Expenditures: Services and Supplies - - - - - - Debt Service - - Capital Outlay - - - - - - Transfers Out - - - - - - Total Expenditures - - - - - - Change in Fund Balance 39,200 58,000 58,000 58,000 58,000 58,000 Ending Fund Balance 112,235$ 170,235$ 170,235$ 170,235$ 228,235$ 228,235$ FUND: 241 WATER AVAILABILITY FUND Pursuant to the provisions of Section 38743 of the Government Code, water availability charges is a “special charge” which is levied to each parcel of property not served with city water. These charges are restricted for the sole purpose of expanding water supply such as desalination plant, recycled water, scalping plant, etc. 2025-26 2026-27 Page 304 of 427 48 SPECIAL REVENUE FUNDS 2024-25 ADOPTED AMENDED ESTIMATED CURRENT PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 787,470$ 942,280$ 942,280$ 942,280$ 831,570$ 872,080$ Revenues: Revenues 235,134 140,800 140,800 167,300 140,800 140,800 Transfers In - - - - - - Total Revenues 235,134 140,800 140,800 167,300 140,800 140,800 Expenditures: Salaries and Benefits - - - - - - Services and Supplies - 12,500 12,500 12,500 - 20,000 Capital Outlay 80,325 25,000 25,000 25,000 25,000 55,000 Transfers Out - 200,000 444,300 200,000 125,000 275,000 Total Expenditures 80,325 237,500 481,800 237,500 150,000 350,000 Change in Fund Balance 154,809 (96,700) (341,000) (70,200) (9,200) (209,200) Ending Fund Balance 942,280$ 845,580$ 601,280$ 872,080$ 822,370$ 662,880$ FUND: 271 STATE COPS BLOCK GRANT This fund accounts for the receipt and use of monies from the State of California restricted to the purchase of police equipment and technology for crime prevention. 2025-26 2026-27 Page 305 of 427 49 AGENCY FUNDS Page 306 of 427 50 AGENCY FUNDS 2025-26 2026-27 2023-24 ADOPTED AMENDED PROPOSED PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 3,453,077$ 3,257,408$ 3,257,408$ 3,255,408$ 3,253,408$ Revenues: Revenues 6,456 412,944 412,944 412,944 412,944 Transfers In - - - - - Total Revenues 6,456 412,944 412,944 412,944 412,944 Expenditures: Salaries and Benefits - - - - - Services and Supplies 3,350 2,000 2,000 2,000 2,000 Debt Service 168,775 382,944 382,944 382,944 382,944 Capital Outlay - - - - - Transfers Out 30,000 30,000 30,000 30,000 30,000 Total Expenditures 202,125 414,944 414,944 414,944 414,944 Change in Fund Balance (195,669) (2,000) (2,000) (2,000) (2,000) Ending Fund Balance 3,257,408$ 3,255,408$ 3,255,408$ 3,253,408$ 3,251,408$ FUND: 286 SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY This private-purpose trust fund was created to hold the assets of the former redevelopment agency of the City of Arroyo Grande until they are distributed to other units of state and local government after the payment of enforceable obligations have been made. 2024-25 Page 307 of 427 51 AGENCY FUNDS 2025-26 2026-27 2023-24 ADOPTED AMENDED PROPOSED PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 1,675,016$ 1,701,201$ 1,701,201$ 1,699,701$ 1,698,201$ Revenues: Revenues 27,859 - - - - Transfers In - - - - - Total Revenues 27,859 - - - - Expenditures: Salaries and Benefits - - - - - Services and Supplies 1,674 1,500 1,500 1,500 1,500 Debt Service - - - Capital Outlay - - - - - Transfers Out - - - - - Total Expenditures 1,674 1,500 1,500 1,500 1,500 Ending Fund Balance 1,701,201$ 1,699,701$ 1,699,701$ 1,698,201$ 1,696,701$ FUND: 287 SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY - HOUSING FUNCTION This private-purpose trust fund was created to hold the housing assets of the former redevelopment agency of the City of Arroyo Grande until they are distributed to other units of state and local government after the payment of enforceable obligations have been made. 2024-25 2025-26 2026-27 2023-24 ADOPTED AMENDED PROPOSED PROPOSED ITEM ACTUAL BUDGET BUDGET BUDGET BUDGET Beginning Fund Balance 154,797$ 156,796$ 156,796$ 157,496$ 158,196$ Revenues: Revenues 11,802 11,000 11,000 11,000 11,000 Transfers In 6,217 - - - Total Revenues 18,018 11,000 11,000 11,000 11,000 Expenditures: Salaries and Benefits - - - - - Services and Supplies 10,115 4,400 4,400 4,400 4,400 Capital Outlay - - - - - Transfers Out 5,904 5,900 5,900 5,900 149,900 Total Expenditures 16,019 10,300 10,300 10,300 154,300 Ending Fund Balance 156,796$ 157,496$ 157,496$ 158,196$ 14,896$ FUND: 751 DOWNTOWN PARKINGThis agency fund collects assessments from Arroyo Grande Village merchants for the maintenance of the Village parking lots for the Downtown Village Merchants Association. 2024-25 Page 308 of 427 52 CAPITAL IMPROVEMENT PROGRAM Page 309 of 427 Capital Improvement Program 53 OVERVIEW This Capital Improvement Program (CIP) 10-year plan outlines anticipated City infrastructure improvements for fiscal years (FY) 2026-27 through FY 2035-36 and serves as a public information document, approved by the City Council, to advise residents and property owners on how the City plans to address significant capital needs. It contains information about the scope, location and funding for these projects. Each year, the overall goal for capital improvements and the means for accomplishing them are assessed. Every project in the plan has been considered for its financial feasibility, public safety, state and federal compliance, environmental impact, conformance to previously adopted plans, priorities established from the City Council, and ability to meet public needs. The FY 2026-27 through FY 2035-36 CIP totals $129,380,435. It is a flexible plan that can be altered as conditions, funding, priorities and regulations change. The Capital Improvement Program (CIP) represents a 10-year scheduling plan of public infrastructure improvements and expansion, with many of it largely based on previously adopted master plans such as the IT Strategic Plan, Wastewater, and Water Master Plans. The CIP is divided into nine category types – Bridges, Drainage, Parks & Play Structures, Public Facilities, Sewer, Sidewalks, Streets and Transportation, Technology, and Water. The benefits of adopting a Capital Improvements Plan are that it: • Preserves and improves the infrastructure of Arroyo Grande through capital asset construction, rehabilitation and maintenance, • Maximizes the useful life of capital investments by scheduling major renovations and modifications at the appropriate time in the life cycle of the facility; • Improves coordination and scheduling of public improvements that require more than one year to complete, • Provides an opportunity for long-range financial planning and management, and • Offers an opportunity for residents and the community to participate in decisions that impact their quality of life. With growing demands for project expenditures and a limited amount of revenues available, it has become increasingly difficult to predict the availability of future funding for capital projects. As the population in Arroyo Grande continues to grow, so do the demands on City services. It is imperative that the City formulate and organize the use of our limited dollars wisely to complete this plan and ultimately benefit all citizens of Arroyo Grande. CAPITAL PROJECT DEFINITION Capital projects are typically projects that lead to the acquisition, construction, improvement or extension of the useful life of capital assets. Capital assets include but are not limited to land, facilities, buildings, parks, playground equipment, streets, sidewalks, bridges, water, wastewater and storm drain infrastructure, technology systems Page 310 of 427 Capital Improvement Program 54 and equipment, traffic control devices, and many other items that deliver a public benefit for a prolonged period of time. Capital expenditures and operating expenditures are primarily differentiated by two characteristics: the dollar amount of the expenditure and the useful life of the asset acquired, constructed, or maintained. Capital expenditures typically enhance, acquire or extend the useful life of assets through a variety of activities. Activities that are associated with capital projects include: land acquisition, feasibility and design studies, planning, design, construction, rehabilitation, enterprise technology acquisition, and project Implementation. In general, capital projects in the CIP: • Have a total project cost in the range of $25,000 or more, • Consist of construction, renovation, rehabilitation, conversion or demolition of infrastructure or facilities; and • Have a minimum useful life of three years, significantly extend the useful life of a capital asset, or significantly alter the nature, character or use of an asset. PLANNING PROCESS Public Works serves as the lead Department for developing the Adopted FY 2026-27 CIP Program and Budget. Public Works, in conjunction with other Departments, reviewed the City’s capital needs and prioritized project submittals based on established criteria outlined below. Departments submit projects for funding consideration with a priority ranking, and the Public Works Department, Administrative Services Department, and City Manager review and evaluate submittals. Project submittals are also evaluated within the context of available funding limits to ensure that the limited resources available fund priority projects, while at the same time, maintain the City’s existing infrastructure and minimize future replacement costs. The following criteria are taken into consideration: • The ability of the project to meet health, safety, and legal concerns and mandates, • The value of the project to prolong the life of City assets or avoid/minimize future repair costs, • The benefit the project will provide the community is in support of the goals articulated in the Council Goals, • The potential for the project to generate savings or increase productivity, and • The extent to which the project will secure future funds through program planning or grant eligibility. PROPOSED PLAN The FY 2026-27 through FY 2035-36 CIP totals $129,380,435. The City completed 9 projects in the previous fiscal year. Completed projects no longer to be shown in the CIP, and New Projects, are listed below: Completed projects: • New Play Structure – Parkside Park • Traffic Way Bridge Replacement Page 311 of 427 Capital Improvement Program 55 • Financial Management Software Phase II – Payroll and HR Modules • Police Department Emergency Operations Center Upgrade • Guardrail Improvements • Striping Improvements • Bridge Street Bridge Habitat Mitigation • Water Main and Service Replacements • Sidewalk Improvements New Projects in FY 2026-27: • Public Tree Management Program • City Facility Access Control Upgrades (PW, Parks, Chambers, Fire, PD) • City Council Chambers Remodel • Replace City Hall upstairs flooring • Facility Assessment Strategic Plan • Trenchless Sewer Rehabilitation - Pilgrim Way, Orchard Avenue, West Cherry Avenue and California Street • Lift Station #3 - Creek Bank Analysis • Le Point Street Parking Lot Expansion • Huasna Road, Corbett Canyon, and E. Branch Street Intersection Roundabout • East Grand Streetscape Planning • Radar Speed Survey • Highway 101 & Grand Improvements • Virtual Server Farm at City Hall and PD, and Nimble Network Storage • Update IT Firewall at City Hall • Report Management System (RMS) Upgrade at PD • Reservoir No. 4 Exterior Coating • Arroyo Grande Golden State Interconnect These capital projects represent the vision for short- and long-range development, maintenance, improvement, and building of new infrastructure and facilities to benefit residents, businesses, property owners, City service operations, and visitors. Because the Plan addresses several years of projects, it will serve as a guidance document and must be adjustable to changes and therefore the capital projects included in the Plan are not guaranteed to be delivered. If priorities change, emergent needs arise, or funding sources evolve, capital projects may be added, modified in scope, or eliminated. Table 1 depicts the proposed annual appropriations for the 10-year period in each of the major project category, which are primarily major maintenance activities on City infrastructure. The largest categories of projects are for the Streets and Transportation, which includes the Pavement Management Program totaling $75.3 million, followed by Water projects totaling $14.7 million, including Water Main and Service Replacement and the Advanced Metering Infrastructure projects. This is followed by $10.2 million for bridge replacement projects, $9.3 million for public facilities, $5.8 million for Sewer projects, $4.7 million for parks & play structures, $4.5 million for Page 312 of 427 Capital Improvement Program 56 sidewalks, $3.4 million for drainage, and $1.5 million for technology projects. It should be noted that the types of projects are based on the best fit and may cover multiple project types. Table 1 lists the types of projects and their total amounts by fiscal year for FY 2026-27 through FY 2035-36. Table 1 is followed by Chart 1 illustrating the types of projects over the entire 10-year CIP. Page 313 of 427 Capital Improvement Program 57 Table 1 – FY 2026-27 through FY 2035-36 Capital Improvement Projects by Project Type Page 314 of 427 Capital Improvement Program 58 Chart 1 – FY 2026-27 through FY 2035-36 Capital Improvement Projects by Project Type Page 315 of 427 Capital Improvement Program 59 Capital projects are scheduled throughout the 10-year plan only those projects with activity scheduled during the current FY 2026-27, are adopted as part of the City’s Mid-Cycle Budget Update process. Projects slated for subsequent years may be adjusted to reflect changes in priority or funding. Preparation of the CIP is a result of considerable effort from staff in all departments in the City. Each year staff reassesses overall goals for capital improvements, and the means for accomplishing them. FUNDING All funding sources that may be used for various capital improvements are reviewed each year. Much of the work to develop the CIP focuses on the balancing of available resources with the identified capital needs. Consideration must be given to factors such as annual revenue projections from various sources, restrictions on the uses of certain funds, legal limitations on debt capacity, and City policies relative to project funding. There are limited sources of funding available for capital improvements, some sources like Development Impact Fees (DIF) have restrictions on their use within broad categories, which are described below. For this reason, outside grants are a significant source of funding for capital projects and are typically needed to advance major capital investments. Internal Sources Measure O-06 Sales Tax Fund (Fund 120): This fund accounts for the revenues derived from Measure O 2006 Sales Tax, a local 1/2% sales tax approved by the City's voters in November 2006. Measure E-24 Sales Tax Fund (Fund 140): This fund accounts for the revenues derived from Measure E 2024 Sales Tax, a local 1% sales tax approved by the City's voters in November 2024. Senate Bill 1 (SB1) Fund (Fund 220): On April 28, 2017, the Governor signed SB1, known as the Road Repair and Accountability Act of 2017. SB1 increases gasoline taxes and vehicle registration fees to address deferred maintenance on the State highway system and the local street and road system. These additional taxes are deposited by the State Controller into the Road Maintenance and Rehabilitation Account (RMRA). State COPS Block Grant Fund (Fund 271): This fund accounts for the receipt and use of monies from the State of California restricted to the purchase of police equipment and technology for crime prevention. Sewer Fund (Fund 612): This fund is used to account for maintenance of sewer lines connecting City residents to the South San Luis Obispo County Sanitation District sewer treatment plant. Money is collected from utility bills paid by customers. Water Fund (Fund 640): This fund is used to account for the activities associated with the transmission and distribution of potable water by the City to its users. Money is collected from utility bills paid by customers. In-Lieu Parking Fee Fund (Fund 751): This fund accounts for revenue derived from in-lieu fees charged to businesses when using parking spaces within the Village parking lots. Page 316 of 427 Capital Improvement Program 60 Development Impact Fee (DIF) Sources Fire Facilities DIF (Fund 210): This fund accounts for impact fees collected from developers for the expansion of the existing fire station in order to serve future development. Police Facilities DIF (Fund 212): This fund accounts for impact fees collected from developers for the expansion of the existing police facility in order to serve future development Park Facilities DIF (Fund 213): This fund accounts for the receipts of park-in-lieu fees (Quimby) and grant revenues that are used for construction, park acquisition, and development of park facilities. Park Improvement DIF (Fund 214): Impact fees collected from developers for park improvements are to be used to maintain the adopted level of service for neighborhood and community parks of 4.0 acres per thousand population. This fund accounts for the receipt and use of these monies. Recreation Facilities DIF (Fund 215): This fund accounts for impact fees collected from developers and used for recreation facilities in order to maintain the adopted level of service of recreation/community center facilities of 542 square feet per thousand population. Traffic Signalization DIF (Fund 222): This fund accounts for traffic signalization assessment levied against developments for the future cost of traffic signals. Transportation Facilities DIF (Fund 224): This fund accounts for transportation facilities fees paid to protect the public health, safety, and welfare by maintaining the existing level of public services for existing and future residents within the City. Storm Drain Facilities DIF (Fund 231): This fund accounts for impact fees paid by development and are restricted to improving storm drains within the City. Sewer Facility DIF (Fund 634): This fund is used to account for the accumulation of sewer facility revenues to be used in capital improvement projects in the City. Money is collected from development to offset the impacts new development has on the sewer collection system. Water Facility DIF (Fund 642): This fund is used to account for the accumulation of water facility revenues to be used in capital improvement projects in the City. Money is collected from development to offset the impacts new development has on the water distribution system. Other CIP Funding Sources The City continues to aggressively seek grants for a wide variety of needs. While by their nature, these grants are only available for specific projects and purposes, and are often cyclical and competitive, they represent a significant addition to local funds. Grants are the most viable source to fund new improvements and allow internal funds to be kept available for existing assets. Internal funds are also necessary for leverage and matching fund requirements of grants. Arroyo Grande receives a significant amount of funding from outside sources. These include grants received from the Active Transportation Program (ATP), Community Development Block Grant (CDBG), Highway Bridge Program Page 317 of 427 Capital Improvement Program 61 (HBP), and Safe Routes to School (SR2S). Outside grants fund a wide array of projects, including parks, recreational facilities, bicycle and pedestrian facility improvements, bridge reconstruction and retrofits, and transportation and safety projects. Staff continue to seek grants whenever projects are competitive and meet the City’s need to address unfunded priorities. The FY 2026-27 through FY 2035-36 Capital Improvement Plan has 22 funding sources. The total estimated cost of all projects included in the ten-year plan, is $129,380,435. A summary of the costs by funding source is summarized below. This table is followed by a pie chart illustrating the percentage of each funding source supporting the entire 10-year CIP plan. Page 318 of 427 Capital Improvement Program 62 Table 2 – FY 2026-27 through FY 2035-36Capital Improvement Projects by Funding Source Page 319 of 427 Capital Improvement Program 63 Chart 2 – FY 2026-27 through FY 2035-36 Capital Improvement Projects by Funding Source The following pages provide summary information for each project with proposed funding during the ten year period as well as an overall summary of all projects. The final section breaks down each fiscal years projects. Page 320 of 427 10-Year Summary by Project Type 64 Page 321 of 427 10-Year Summary by Project Type 65 Page 322 of 427 10-Year Summary by Project Type 66 Page 323 of 427 10-Year Summary by Project Type 67 Page 324 of 427 10-Year Summary by Project Type 68 Page 325 of 427 Projects Budgeted FY 2026-27 69 Page 326 of 427 Projects Budgeted FY 2026-27 70 Page 327 of 427 Projects Budgeted FY 2026-27 71 Page 328 of 427 Projects Budgeted FY 2027-28 72 Page 329 of 427 Projects Budgeted FY 2027-28 73 Page 330 of 427 Projects Budgeted FY 2027-28 74 Project Number Category Request Title Description of Improvement Funding Source FY 2027-28 4423 - Active Transportation Program (ATP)640,000 4960 - Measure E-2024 Sales Tax 160,000 4825 - Developer Contributions (Cherry/Rugged Radio)- 4926 - Transportation Facilities DIF 472,000 4950 - Measure O-2006 Sales Tax 328,000 350-56XX Streets & Transportation Opt-com preemptive devices on traffic signals within City Limits Adding opt-com pre-emptive devices on traffic signals within City 4922 - Traffic Signalization 84,000 640-5944 Water Water Well #11 Facilities This project will develop and implement a blending strategy for Well 11 to achieve compliance with regulatory water quality standards. While an existing treatment system is in place, the well is not currently able to meet required limits. Completion of this project will allow Well 11 to be fully operational and available for use. 4940 - Water Fund 43,000 640-59XX Water Reservoir No. 5 Redundancy Interconnect (Los Ciervos to Andre Dr.) The water distribution system for Reservoir No. 5 pressure zone has only one watermain that can provide water to the pressure zone. This project will provide a redundant interconnect to assure the zone has water delivery from Reservoir No. 5 with the watermain off. The project will interconnect the watermain from Los Ciervos to Andre Drive. 4940 - Water Fund 100,000 640-59XX Water AMI - Advanced Metering Infrastructure Upgrading to automated meter reading system will allow the City to 4940 - Water Fund 750,000 Total FY 2027-28 Projects 11,189,700 350-56XX A Traffic Way corridor plan is needed to identify appropriate improvements to traffic circulation to address increased traffic due to growth in this area. Design phase of the East Grand Streetscape project. East Grand Streetscape Planning and Construction Streets & Transportation Traffic Way Corridor PlanStreets & Transportation 350-56XX Page 331 of 427 Projects Budgeted FY 2028-29 75 Page 332 of 427 Projects Budgeted FY 2028-29 76 Page 333 of 427 Projects Budgeted FY 2029-30 77 Page 334 of 427 Projects Budgeted FY 2029-30 78 Project Number Category Request Title Description of Improvement Funding Source FY 2029-30 4920 - SB1 541,400 4960 - Measure E-2024 Sales Tax 4,854,400 4463 - CDBG 50,000 350-56XX Streets & Transportation Branch Mill Road Slope Stabilization This is one of the 3 main streets not addressed in the 13-year PMP. The design phase of this project will help find solutions to correct the slope that continues to fall into the nearby creek area. Once the City Council has approved the design of the slope stabilization the construction contractor will be selected and construction can begin. 4960 - Measure E-2024 Sales Tax 600,000 350-5491 Technology Digital Community Bulletin Board Project This project is to replace the current outdated and deteriorating physical community bulletin board located outside City Hall with a modern, digital bulletin board that allows for more dynamic, accessible, and user-friendly communication for community members. 4950 - Measure O-2006 Sales Tax 40,000 The City’s Pavement Management Program provides maintenance history and pavement condition index (PCI) for all public streets in Arroyo Grande. The City annually performs pavement maintenance on public streets to the extent that funds are available. Streets are selected based on pavement condition, location, and the type of maintenance application. Maintenance applications are digouts, slurry seals, chip seals, and pavement overlays. 350-5638 Streets & Transportation Pavement Management Program Page 335 of 427 Projects Budgeted FY 2029-30 79 Project Number Category Request Title Description of Improvement Funding Source FY 2029-30 4940 - Water Fund 143,045 4942 - Water Facility 191,955 640-59XX Water Reservoir No. 5 Booster Modification & Temporary Storage (Rancho Grande) Improvements to Rancho Grande Pump station to increase long term reliability and reduce temporary s torage required to provide water supply with Reservoir 5 offline which will occur for Reservoir 5 Cleaning and Interior Coating. 4940 - Water Fund 500,000 Total FY 2029-30 Projects 13,170,800 Phased Main Replacement - Highway 101 Crossing Upgrade, El Camino Real to West Branch Street Upgrade the existing 8-inch cast iron pipe to an 8-inch high density polyethylene (HDPE) pipe under Highway 101 from El Camino Real to West Branch Street. 640-5973 Water Page 336 of 427 Projects Budgeted FY 2030-31 80 Page 337 of 427 Projects Budgeted FY 2030-31 81 Project Number Category Request Title Description of Improvement Funding Source FY 2030-31 350-56XX Streets & Transportation Branch Mill Road Slope Stabilization This is one of the 3 main streets not addressed in the 13-year PMP. The design phase of this project will help find solutions to correct the slope that continues to fall into the nearby creek area. Once the City Council has approved the design of the slope stabilization the construction contractor will be selected and construction can begin. 4960 - Measure E-2024 Sales Tax 2,000,000 350-56XX Streets & Transportation Harden Street Slope Stabilization This is one of the 3 main streets not addressed in the 13-year PMP. The design phase of this project will help find solutions to correct the slope that continues to fall into the nearby creek area. Once the City Council has approved the design of the slope stabilization the construction contractor will be selected and construction can begin. 4960 - Measure E-2024 Sales Tax 200,000 350-56XX Streets and Transportation Safe Routes to School - Newport Slope Stabilization Solution for access and slope stabilization on Newport 4493 - SR2S (Safe Routes to School)2,000,000 4940 - Water Fund 150,000 4942 - Water Facility 150,000 Total FY 2030-31 Projects 12,578,500 Complete upgrade on the Miller Way Booster Station, including a new pump building (or enclosed package pump station), new pumps and motors (2 x 5-HP), and new bladder tanks. The upgraded booster station will have a design capacity of 75- gpm. This will increase the reliability of the water supply to the Miller Way zone and will improve water service pressure. In addition, this is expected to decrease maintenance costs and increase efficiency. 640-59XX Water Miller Way Booster Zone Upgrade Page 338 of 427 Projects Budgeted FY 2031-32 82 Page 339 of 427 Projects Budgeted FY 2031-32 83 Project Number Category Request Title Description of Improvement Funding Source FY 2031-32 350-54XX Technology Virtual Server Farm at City Hall and PD, and Nimble Network Storage Update the existing Virtual Server's that the City uses for storage at City Hall and the Police Station. 4950 - Measure O-2006 Sales Tax 100,000 350-54XX Technology Digitalize Records Consolidate any remaining physical records into one digitized storage. 4950 - Measure O-2006 Sales Tax 100,000 640-59XX Water Reservoir No. 5 Cleaning and Interior Coating Interior coating is showing signs of failing and must be recoated to preserve the steel tank and protect water quality. The inspection in 2003 indicated it had a useful life of 5 years which has elapsed. 4940 - Water Fund 730,000 Total FY 2031-32 Projects 8,796,500 Page 340 of 427 Projects Budgeted FY 2032-33 84 Page 341 of 427 Projects Budgeted FY 2032-33 85 Page 342 of 427 Projects Budgeted FY 2033-34 86 Page 343 of 427 Projects Budgeted FY 2034-35 87 Page 344 of 427 Projects Budgeted FY 2034-35 88 Project Number Category Request Title Description of Improvement Funding Source FY 2034-35 350-5491 Technology Digital Community Bulletin Board Project This project is to replace the current outdated and deteriorating physical community bulletin board located outside City Hall with a modern, digital bulletin board that allows for more dynamic, accessible, and user-friendly communication for community members. 4950 - Measure O-2006 Sales Tax 40,000 640-59XX Water Alpine Crossing, Bennett and Bell Mains and Services The 4 inch main segment along Bennett Ave and N. Alpine St. lacks sufficient capacity to meet fire flow requirements. This project was identified as a project A-6 to upgrade this main to 6" or greater PVC pipe. 4940 - Water Fund 719,000 640-59XX Water Well #1 Replacement A supply shortage was identified if Lopez and Well 3 are out of service. Well No. 1 is the oldest well installed in 1940 and is the candidate to be replaced. 4940 - Water Fund 2,635,000 Total FY 2034-35 Projects 13,577,435 Page 345 of 427 Projects Budgeted FY 2035-36 89 Project Number Category Request Title Description of Improvement Funding Source FY 2035-36 350-5601 Streets & Transportation Fair Oaks Ave Active Transportation Improvements, Valley Road to Traffic Way Construct improvements on this corridor with better pedestrian and bicycle facilities, traffic calming and improved access and circulation at the intersection of US 101 south bound ramps and Orchard Ave. Work toward applying for Active Transportation Project funding to complete the design and construction. 4950 - Measure O-2006 Sales Tax 2,000,000 640-59XX Water 4" Mains Upgrades Replace segments of 4" water main which are inadequate to provide fire flow. 4940 - Water Fund 5,875,000 Total FY 2035-36 Projects 7,875,000 Page 346 of 427 90 APPENDIX Page 347 of 427 91 BUDGET GLOSSARY Page 348 of 427 Budget Glossary 92 Account: A subdivision within a fund for the purpose of classifying transactions. Account Number: A numeric identification of the account. Typically, a unique number or series of numbers. The City of Arroyo Grande’s number structure is comprised of three (3) fields of characters. The first field is three (3) characters wide and identifies the various FUNDS within the account system. The next field contains four (4) characters and identifies the PROGRAMS and/or DIVISIONS within the City. The final field contains four (4) characters and identifies the OBJECT CODE of the account number. The combination of the three fields makes up the account number. Accrual Basis or Accrual Method: Accounting method whereby income and expense items are recognized as they are earned or incurred, even though they may not have been received or actually paid in cash. The alternative is Cash Basis. The City of Arroyo Grande uses the method of “Modified Accrual” basis of accounting for governmental and agency funds. All proprietary funds are accounted for using the accrual basis of accounting. ACFR: Annual Comprehensive Financial Report which is an audited and printed copy of the City’s financial statement at the end of a given fiscal year. Actual: The recorded revenue or expenditure for a specific account number. The actual columns, referenced in this document, report the revenues or expenditures as audited by an independent auditor. Adopted Budget: A budget which typically has been reviewed by the public and “Adopted” (approved) by the City Council prior to the start of the fiscal year. The adopted budget is the legal authority to expend money for specified purposes in the fiscal year time period. AGPOA: Arroyo Grande Police Officers Association. This union represents sworn and non-sworn police employees working for the City. AGTBID: Arroyo Grande Tourism Business Improvement District. Established in May 2013 by Ordinance, the district exists to provide projects, programs and activities that benefit lodging businesses located and operating with the boundaries of the City. Assessments are levied on all lodging businesses and are subject to annual review by the City Council in accordance with the requirements contained in the Parking and Business Improvement Area Law of 1989 (Streets and Highways Code Sections 36500 et seq.). Appropriate: Set apart for, or assign to, a particular purpose or use. Appropriated Expenditure: A budget amount set-aside for a specific acquisition or purpose. Appropriation: An authorization by the City Council to make expenditures and to incur obligation for specific amounts and purposes. For most local governments, the adopted budget document is the source for all or most appropriations. Page 349 of 427 Budget Glossary 93 Assessed Valuation: An official value established for real estate or other property as a basis for levying property taxes. Assessments: Charges made to parties for actual services or benefits received. Assets: Property owned by the City which has book or appraised monetary value. Audit: A review of the accounting system and financial records to verify that government funds were spent and received in accordance with Generally Accepted Accounting Principles (GAAP) and in compliance with the legislative body’s appropriations. Authorized Positions: Employee positions, which are authorized in the adopted budget, to be filled during the year. Available (Undesignated) Fund Balance: Funds remaining from prior years, which are available for appropriation and expenditure in the current year. Balance Sheet: A statement presenting the financial position of an entity or fund by disclosing the value of its assets, liabilities, and equities as of a specified date. Balanced Budget: Budgeted resources, including revenue, transfers from other funds, and unallocated fund balance from previous years meet or exceed the budgeted use of resources, including expenditures and transfers to other funds. Base Budget: The ongoing expense level necessary to maintain service levels previously authorized by the City Council. Beginning Balance: Unencumbered resources available in a fund from the prior fiscal year after payment of prior fiscal year expenditures. Bond: A written promise from a local government to repay a sum of money on a specific date at a specified interest rate. Bonds are most frequently used to finance capital improvement projects such as buildings, streets, and bridges. Budget: A plan of financial operation, for a set time period, which identifies specific types and levels of services to be provided, proposed appropriations or expenses, and the recommended means of financing them. Budget Amendments: The City Council has the sole responsibility for adopting the City’s budget, and may amend or supplement the budget at any time after adoption by majority vote. The City Manager and Administrative Services Director have joint authority to approve line-item budgetary transfers between expenditure objects of the budget, as long as transfers do not affect ending fund balances. Page 350 of 427 Budget Glossary 94 Budgetary Basis: The basis of accounting used to estimate financing sources and uses in the budget. Budget Message: The opening section of the budget, which provides the City Council and the public with a general summary of the most important aspects of the budget, changes from previous years, and presents recommendations made by the City Manager. Budget Year: Is the FISCAL YEAR for which the budget is being considered. Budgetary Unit: An organizational component budgeted separately, usually a department or a division. Capital Expenditures: An acquisition or an improvement (as distinguished from a repair) that will have a life of more than one year. Capital Improvement Budget: A financial plan or authorized expenditures for tangible, long-term construction of, or improvement to, public physical facilities. Capital Improvement Program (CIP): A long-term plan for multi-year projects such as street or park improvements, building construction, and various kinds of major facility maintenance. The projects set out in the plan usually require funding beyond the one-year period of the annual budget and the plan details funding sources and expenditure amounts. Capital Outlay: Expenditures that result in the acquisition of or addition to, fixed assets. A capital item is tangible, durable, and non-consumable, and has a useful life of more than one year. Carryover: Unspent funds, either encumbered, reserved, or unobligated, brought forward from prior fiscal years. Cash Basis: A basis of accounting in which transactions are recognized only when cash is increased or decreased. Consumer Price Index (CPI): Measure of change in consumer prices as determined by a monthly survey of the U.S. Bureau of Labor Statistics. Many pension and employment contracts are tied to changes in consumer prices as protection against inflation and reduced purchasing power. Among the CPI components are the costs of housing, transportation, and electricity. Also known as the Cost-of-Living Index. Contingency: A budgetary reserve set aside for emergencies or unforeseen expenditures not otherwise budgeted. Contractual Services: Services rendered to a government by private firms, individuals, or other governmental agencies. Examples include maintenance agreements, professional contracts, and tree trimming agreements. Page 351 of 427 Budget Glossary 95 Debt Service: The City’s obligation to pay the principal and interest of all bonds and other debt instruments according to a pre-determined payment schedule. Deficit: The excess of an entity’s liabilities over its assets or the excess of expenditures or expenses over revenues during a single accounting period. Department: A basic organizational unit of government that is functionally unique in its delivery of services. The components are hierarchically arranged as follows: Department (such as Public Works): and Division (such as Sewer Maintenance). Depreciation: The loss in value of an asset, due to physical changes, obsolescence, or factors outside of the asset. Development-related Fees: Fees and charges generated by building, development, and growth in a community. Included in development-related fees are building permits, development review fees, and zoning and subdivision fees. Disbursement: The expenditure of monies from an account. Division: An organizational component of a department. Encumbrance: The commitment of appropriated funds to purchase goods or services. An encumbrance is not an expenditure. An encumbrance reserves funds to be expended on a specific item or service. Enterprise Fund: A proprietary fund used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of enterprise funds is to have the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The rate schedule for these services is established to ensure that revenues are adequate to meet all necessary expenditures. Expenditure/Expense: The outflow of funds paid or to be paid for an asset obtained or goods and services obtained regardless of when the expenditure is actually paid. The term expenditure applies to Governmental Funds, while the term expense is used for Enterprise and Internal Service Funds. Expenditure Object Code: Unique identification number and title for a minor expenditure category. Represents the most detailed level of budgeting and recording of expenditures, also referred to as a “line item.” Fiscal Policy: A government’s policies with respect to revenues, spending, and debt management as these relate to government services, programs and capital investment. Fiscal policy provides an agreed- upon set of principles for the planning and programming of government budgets and their funding. Page 352 of 427 Budget Glossary 96 Fiscal Year (FY): The 12-month period for recording financial transactions. The City of Arroyo Grande has specified the fiscal year to begin July 1st and end June 30th. Fixed Assets: Assets of long-term character such as land, buildings, machinery, equipment, and furniture. Franchise Fee: A franchise fee is charged for the privilege of using public rights-of way and property within the City for public or private purposes. The City currently assesses franchise fees on utilities such as electricity, gas and solid waste collection. Full-time Equivalent Position (FTE): Positions or fractions thereof based on full-time definition of forty hours of work per week. Fund: A separate accounting entity with a self-balancing set of accounts to record all financial transactions (revenues and expenditures) for specific activities or government functions. Funds are classified into three categories: governmental, proprietary, and fiduciary. Commonly used funds in governmental accounting are General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, Enterprise Funds, Internal Service Funds, Agency Funds, and Special Assessment Funds. Fund Accounting: The basis of accounting used particularly by governments. Since there is no profit motive, accountability is measured instead of profitability. The main purpose is stewardship of financial resources received and expended in compliance with legal requirements. Financial reporting is directed at the public rather than investors. Fund Balance: The excess of assets over liabilities of a fund. GANN Limit: State of California legislation that limits a City’s total appropriations from tax revenues. Gas Tax Fund: A fund to account for receipts and expenditures of money apportioned under Street and Highway Code section 2105, 2106, 2107, and 2107.5 of the State of California. General Fund: The primary operating fund of the City, which accounts for resources and services traditionally associated with government. The General Fund provides administrative, financial, police protection, community development, public works, and recreation services to the community and other funds. The General Fund accounts for revenues that have unrestricted uses and are not required legally or by contractual agreement to be accounted for in another fund. Generally Accepted Accounting Principles (GAAP): Uniform minimum standards for financial accounting and recording, encompassing the conventions, rules, and procedures that define accepted accounting principles. Page 353 of 427 Budget Glossary 97 General Obligation Bond: Bonds that are usually limited by state law as to the amount as well as the length of indebtedness that a government can have. These “Full Faith and Credit” bonds are secured by all of the financial assets of the local government, including property taxes. Goal: A general statement of broad direction, purpose, or intent that describes the essential reason for existence and which is not limited to a one-year time frame. Generally, a goal does not change from year to year. Grant: Contributions of gifts or cash or other assets from another governmental entity to be used or expended for a specific purpose, activity, or facility. An example is the Community Development Block Grant awarded by the federal government. Indirect Cost: Costs that cannot be easily seen in the product or service. Electricity, insurance, and data processing costs are examples of indirect costs. Infrastructure: The physical assets of the City, i.e. streets, water, sewer, public buildings, and parks, and the support structures within a development. Interfund Transfers: The movement of monies between funds to assist in financing the services for the recipient fund. Intergovernmental Revenue: Funds received from federal, state, and other local government sources in the form of grants, shared revenues, and payments in lieu of taxes. JPA: Joint Powers Agreement. An entity created by two or more public authorities to jointly exercise any power common to all of them. The City of Arroyo Grande joined in a JPA, California Joint Powers Insurance Association, for the purpose of jointly managing liability and workers compensation issues. The City is also a member of the Five Cities Fire Authority, a JPA for fire services with the City of Grover Beach and Oceano Community Services District. Jurisdiction: Geographic or political entity governed by a particular legal system or body of laws. Liability: Debt or other legal obligations arising out of transactions in the past which must be liquidated, renewed or refunded at some future date. Measure O-06 Local Use Tax Fund: Fund to account for the ½% local sales tax increase approved by the voters in November of 2006. Measure E-24 Local Use Tax Fund: Fund to account for the 1% local sales tax increase approved by the voters in November of 2024. Long-term Debt: Debt with a maturity of more than one year after the date of issuance. Page 354 of 427 Budget Glossary 98 Modified Accrual Basis or Modified Accrual Method: Accounting method whereby income and expense items are recognized, as they are available and measurable. Objective: Measurable statement of the intended beneficial and tangible effects of a program’s activities. An objective is a specific target toward which a manager can plan, schedule work activities, and make staff assignments. An objective is stated in quantifiable terms such that it is possible to know when it has been achieved. Examples are increase an activity by a specific amount by a certain date; maintain a service level; reduce the incidence of something by a specific amount by a given date, or eliminate a problem by a set date. The emphasis is on performance and its measurability. Operating Expense: A series of object codes, which include expenditures for items, which primarily benefit the current period and not defined as personnel services, contractual services, or capital outlays. Operating Revenues: Funds that the government receives as income to pay for ongoing operations. It includes such items as taxes, fees from specific services, interest earnings, and grant revenues. Operating revenues are used to pay for day-to-day services. Organization Chart: A chart showing the interrelationships of positions within an organization in terms of authority and responsibilities. There are basically three patterns of organization: line organization, functional organization, and line and staff organization. Performance Measures: Specific quantitative measures of work performed with a program (i.e. miles of streets cleaned). Also, specific quantitative measures of results obtained through a program (i.e. percent reduction in response time compared to previous year). PERS: Public Employees Retirement System, which is the state retirement system for public employees that provides its members with benefits at retirement or upon disability or death. Program: A group of related activities performed by one or more organizational units for the purpose of accomplishing a function for which the government is responsible. Proprietary Funds: These funds account for records of operations similar to those found in a business, such as Enterprise funds and Internal Service funds. Redevelopment Agency (RDA): A separate legal entity governed by the California Community Redevelopment Law. RDAs were officially dissolved by the California Legislature as of February 1, 2012. To facilitate the dissolution process, Successor Agencies were established to manage redevelopment projects underway, make payments on enforceable obligations, and dispose of redevelopment assets and properties. Redevelopment Fund: A fund to account for transactions related to proceeds from bonds and other resources and their use to perform redevelopment activities within specific project areas. Page 355 of 427 Budget Glossary 99 Resolution: A special or temporary order of a legislative body; an order of a legislative body requiring less legal formality than an ordinance or statute. Restricted Fund Balance: The portion of a fund’s balance legally restricted for a specific purpose and, therefore, not available for general appropriations. Revenues: Funds received from various sources and treated as income to the City that are used to finance expenditures. Examples are tax payments, fees for services, receipts from other governments, fines, grants, licenses, permits, shared revenue, and interest income. SEIU: Service Employees International Union, Local 620. This union represents all full time employees other than police and management employees. Special Assessment Fund: Contain moneys received from special charges levied on property owners who benefit from a particular capital improvement or service. Special Revenue Fund: A governmental fund type used to account for specific revenues that are legally restricted to expenditures for particular purposes. Subvention: That portion of revenues collected by other government agencies on the City’s behalf. Taxes: Compulsory charges levied by a government for the purpose of financing services performed for the common benefit of the people. This term does not include specific charges made against particular persons or property for current or permanent benefit, such as special assessments. Transient Occupancy Tax: A tax imposed on travelers who stay in temporary lodging establishments in the City. The tax is collected by the operators of lodging establishments located within the City, on behalf of the City. This tax is then remitted to the City. User Charges/Fees: The payment of a fee for the direct receipt of a public service by the party benefitting from the service. Page 356 of 427 100 GUIDE TO FUNDS BY NUMBER Page 357 of 427 Guide to Funds by Numbers 101 100 General Fund – The primary operating fund of the City, which accounts for resources and services traditionally associated with government. The General Fund provides administrative, financial, police and fire protection, community development, parks and recreation, and public works services to the community and other funds. The General Fund accounts for revenues that have unrestricted uses and are not required legally or by contractual agreement to be accounted for in another fund. 120 Measure O-06 Local Use Tax Fund – Fund to account for the ½% local sales tax increase approved by the voters in November of 2006. 140 Measure E-24 Local Use Tax Fund – Fund to account for the 1% local sales tax increase approved by the voters in November of 2024. 210 Fire Protection Impact – This fund accounts for impact fees collected from developers for the expansion of the existing fire station in order to serve future development. 211 Public Access Television – This fund accounts for fees collected from Charter Communications that are restricted for support of public, education and government access programming and equipment. 212 Police Protection Impact – This fund accounts for impact fees collected from developers for the expansion of the existing police facility in order to serve future development. 213 Park Development – This fund accounts for the receipts of park-in-lieu fees (Quimby) and grant revenues that are used for construction, park acquisition, and development of park facilities. 214 Park Improvement – Impact fees that are collected for park improvements will be used to maintain the adopted level of service for neighborhood and community parks of 4.0 acres per thousand population. This fund accounts for the receipt of these monies. 215 Recreation Community Center – This fund accounts for impact fees collected for recreation facilities in order to maintain the adopted level of service of recreation/community center facilities of 542 square feet. 216 Grace Lane Assessment District – Fund to account for revenues derived from annual assessments of properties within the District, which are used to pay the cost incurred by the City for landscape maintenance. 217 Landscape Maintenance District – This fund accounts for the landscape maintenance of parkways within two housing tracts. A special benefit assessment is levied on property owners to pay for landscape maintenance expenditures. Page 358 of 427 Guide to Funds by Numbers 102 219 Parkside Assessment District – Fund to account for revenues derived from annual assessments of properties, which are used to pay the cost incurred by the City for landscape maintenance. 220 Street (Gas Tax) Fund – The fund that accounts for receipts and expenditures of money apportioned by the State under Streets and Highway Code sections. Gas tax revenues can only be used to construct and maintain streets and highways. 222 Traffic Signalization – This fund accounts for traffic signalization assessments levied against developments for the future cost of traffic signals. 223 Traffic Circulation – This fund accounts for developer traffic mitigation measure fees charged as a result of an environmental review. 224 Transportation Facility Impact – This fund accounts for developer impact fees (AB1600 fees) paid to protect the public health, safety, and welfare by maintaining the existing level of public services for existing and future residents within the City of Arroyo Grande. 225 Transportation Fund – The fund accounts for revenues from the Local Transportation Fund (LTF), the South County Transit (SCT), and a senior taxi program administered by SCT. Expenditures are restricted to public transportation. 226 Water Neutralization Impact Fund – This fund accounts for mitigation fees collected from developers to neutralize projected water demand, of development projects, above historical usage amounts. 231 Drainage Facility – This fund accounts for development drainage fees restricted to improving drainage within the City. 232 In-lieu Affordable Housing – The fund accounts for monies paid by developers in meeting the City’s mandatory affordable housing requirements. 233 In-lieu Underground Utilities – The fund accounts for monies paid by developers in meeting the City’s underground utility requirements. 240 Arroyo Grande Tourism Marketing Improvement District Fund – The fund that accounts for assessments collected from lodging establishments, which are restricted for programs, projects and activities that benefit lodging businesses in the City. 241 Water Availability Fund – The fund that accounts for impact fees collected to mitigate future water requirements. Page 359 of 427 Guide to Funds by Numbers 103 250 CDBG Grant Fund – The fund accounts for revenues and expenditures related to Community Development Block Grant Funds. 271 State COPS Block Grant Fund – The fund that accounts for the receipt of revenues from the State of California restricted to the purchase of police equipment and technology for crime prevention. 286 Successor Agency to the Former Redevelopment Agency Administration – Fund used to account for tax increment revenues to be used for Successor Agency administration and payment of the former Redevelopment Agency enforceable obligations. 287 Successor Agency to the Former Redevelopment Agency Housing Function – The fund accounting for tax increment revenues of the former Redevelopment Agency to be used for low and moderate housing within the City. 350 Capital Improvement Program – Fund established to account for transfers from other City funds and grant revenues to be used for infrastructure improvements within the City. The Program is divided into six project types – Miscellaneous Projects, Park Projects, Street Projects, Drainage Projects, Sewer Projects, and Water Projects. 612 Sewer Fund – Fund used to account for maintenance of sewer lines connecting City residents to the San Luis Obispo County Sanitation District sewer plant. Maintenance costs are funded by user charges. 634 Sewer Facility Fund – This fund accounts for the accumulation of sewer facility revenues to be used in capital improvement projects in the City. 640 Water Fund – Fund used to account for the operation of water utility service to the community. Revenues are received from fees for service. 641 Lopez Fund – The Lopez Fund is responsible for the purchase of water, debt servicing, and the maintenance and operation of Lopez Dam. User Fee charges for water availability and utility billing are the major revenue sources of this fund. 642 Water Facility Fund – Fund used to account for the accumulation of revenues from charges for current services to be used for future water infrastructure improvements. 751 Downtown Parking – Agency Fund collecting assessments from Village merchants for the maintenance of Village parking for the Downtown Village Merchants Association. Page 360 of 427