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Home My WebLink AboutPRA 2026-128 (Flock)_City Council Study Session Presentation - 03.03.2026Proposed Budget Outlook & Fiscal Sustainability FY 2026/27 Budget Workshop March 3, 2026 | 2-5 p.m. | City Hall Windmill Room Welcome to the FY 2026/27 Budget Season Today’s agenda is structured to provide adequate time and space to review, debate and decide. New Workshop Based Approach proactive and solutions-based long-term quality of life at forefront in-depth review enhanced public engagement Hard Truths A structural deficit is expected that threatens long-term sustainability. impacts on reserves impacts on current services reduced flexibility This fiscal challenge is not unique to Diamond Bar. Revenue vs. Expenses FY 28Projected Structural Deficit The projected deficit will average 11.7% over the next decade. FY30 FY32 FY34 FY36 $30M $35M $40M $45M $50M$25M$20M$15M$10M -$2.1M -$3.1M -$4.5M -$5.5M -$7M $33.6M $35.3M $36.9M $38.5M $40.4M $35.7M $38.4M $41.4M $43.9M $47.4M revenue expenses Impact on General Fund Reserves A structural deficit is expected that threatens long-term sustainability. Fiscal Year Fund Balance Reserve % 2027 $27,659 85% 2028 $25,680 78% 2029 $23,136 69% 2030 $19,987 60% 2031 $16,176 50% 2032 $11,647 39% 2033 $6,443 27% 2034 $1,044 15% 2035 -$5,228 -2% 2036 -$12,258 -11% Structural Deficit Drivers Costs continue to outpace revenues. Operational CostsMain Revenue Sources Property Tax Sales Tax Services and Programs Maintenance Staffing, Supplies, Equipment, & Utilities What’s at Stake Quality of Life Public Safety Public Infrastructure What’s at Stake Community Aesthetics Special Events Timely Services What’s Next Exploring ways to maintain services. Revenue EnhancementsBudget Reductions short-term long-term Revenue Raising Measures Economic Development Increased Fees and Licenses Service and Program Cuts Other Cost-Saving Measures Starting Structural Deficit $702,000 starting structural deficit FY 2025/26 $751,000 one-time use of fund balance $49,000 adopted General Fund FY 2025/26 surplus The FY2025/26 General Fund started with a structural deficit that was closed using a one-time fund balance. There are no additional one-time funds to fill next year’s deficit. Efforts to Balance FY 2026-27 Budget $224K Further reductions across all departments, reflected in proposed budget surplus of $406K. $0.6M Initial reductions across all departments focused primarily on internal services, plus updates to user fees and CPI. Reduced initial deficit from approx. $1.6M to approx. $1M. Already Reduced $1.1M potential program cuts There are 17 items for Council to deliberate and vote on. All are discretionary, not mandated services valued at $1.1M The proposed further reductions bring the FY 26-27 GF Budget into balance, with a nominal surplus. FY 2026-27 Budget InvestmentsGeneral Fund Revenue Property Tax in Lieu of VLF $8.4M Property Tax Sales Tax Building Permits Transient Occupancy Tax Recreation Programs $7M $6.3M $2.9M $1.4M $1.4M $1.5M $960K $727K 4% 1% 2% 6% 23% 18% Franchise Fees Gas Tax$34.2M 0% 80% 4% $3.5M 18%*Other * due to planning and engineering fees FY 2026-27 Budget Crossing Guard Services General Fund Expenditures Law Enforcement $9.3M All Other City Departments Public Works Animal Control $7.8M $6.9M $4.8M $587K $300K 5% 7% Parks and Recreation Community Development$35.1M 3% 0% 5% 5% 25%$3.3M $2.3MTransfers Out 42%** due to self-insurance fund Today’s Goals understand the Challenge identify priorities make difficult but necessary decisions Prepare for ongoing FY 2026-27 budget discussions with a focused deliberative process that addresses the structural deficit. Offer additional public engagement opportunities consistent with Preserve Diamond Bar efforts. The Process 2 public comment 1 high-level overview 3 Council deliberation and direction 4 additions may require use of reserves The Impact retain most essential core services streamline expenditures noticeable impacts on service levels Expect a much different budget this year. Council Direction Starting Point $406K in surplus 17 items for deliberation and direction Keep Proposed Cuts in Place Return Items to Budget Council will discuss and provide direction to staff on the following sixteen items. Items that are returned to the budget will reduce the nominal surplus and, depending on the cost, result in a deficit requiring offset with other cuts or reserves. There are 17 items for Council to deliberate and vote on. All are discretionary, not mandated services. Crossing Guard Services Item 1 of 17 Cancels the current crossing guard services contract, eliminating positions at all current locations. Department: Public Safety Eliminate for$300K Saving Flock Safety Contract Item 2 of 17 Department: Public Safety The contract’s 30-day escape clause would be exercised, and Flock Safety would be responsible for removing equipment from the public ROW. Will reduce available investigative tools. Eliminate for$170K Saving Added Suppression Patrols Item 3 of 17 Department: Public Safety Reduce the annual appropriation for added LASD crime suppression patrols from $50,000 to $25,000. This action retains flexibility to conduct significant suppression patrols while freeing up funding to offset expected increases in the cost of the annual law enforcement contract. Reduce for$25K Saving Homeless Services Fund Item 4 of 17 Reduces annual allocation available for encampment remediation by 50%. Department: Public Safety Reduce for$25K Saving Sidewalk Maintenance Item 5 of 17 Reduces the number of sidewalk locations that can be removed and replaced (R&R) and may require the use of alternative methods, such as asphalt ramping, to minimize the City’s exposure. Department: Public Works Reduce for$100K Saving District 38 Subsidy Item 6 of 17 Reduces service levels from once a month to once every other month with irrigation shut off in several areas, including but not limited to the turf along Golden Springs Dr., portions of Brea Canyon Rd., Temple Ave., Pathfinder Rd., Lemon Ave., Golden Prados Dr., Tin Dr., Sunset Crossing Rd., and Diamond Bar Blvd. Department: Public Works Reduce for $161.7K Saving Watering of Landscaped Areas Item 7 of 17 Strategically reduces water/irrigation in select turf and shrub areas throughout the parks, excluding sports fields. Department: Public Works Reduce for$50K Saving Tree Maintenance Contract Item 8 of 17 Reduces the number of tree-related service requests, plantings, and maintenance that can be accommodated outside of the five-year trimming cycle. Department: Public Works Reduce for$50K Saving Cancel 2026 Winter Snowfest Item 9 of 17 Impacts approx.1,200 attendees, crafters, volunteers, and nonprofit organization fundraising. Department: Parks and Recreation Cancel for$96.3K Saving Reduce Concert Schedule, Eliminate Movies Item 10 of 17 Impacts approx. 6,000 unique attendees, non-profit organizations, and Volunteens. Department: Parks and Recreation Reduce for$65.5K Saving Cancel Windmill Lighting Event Item 11 of 17 Impacts approx. 250 attendees, local school district choir, and Diamond Bar Community Foundation. Department: Parks and Recreation Cancel for$25.3K Saving Community Organization Support Fund Item 12 of 17 Reduces annual allocation available to local non-profit groups. This figure does not include in-kind donations of City staff time, equipment, etc. Department: City Manager’s Office Reduce for$10K Saving Regional Housing Trust Item 13 of 17 Cease participation in the San Gabriel Valley Regional Housing Trust Joint Powers Authority, a regional entity established to fund/finance homeless and low income housing in the area. Department: City Manager’s Office Cease for$17K Saving US Flags On Grand Ave. Item 14 of 17 Department: Public Works Refrain from installing US flags on Grand Avenue during three customary periods (Independence Day, Memorial Day, Veterans Day). Cancel for$23K Saving Restaurant Week Banners Item 15 of 17 Department: Economic Development Refrain from installing customary promotional banners during the period leading up to and during Restaurant Week. Cancel for$8K Saving Holiday Decor and Banners Item 16 of 17 Department: Public Works Refrain from installing holiday banners and décor on City Hall and on traffic signals and light poles during the months of November and December. Cancel for$12K Saving Military Banner Program Item 17 of 17 Department: Parks and Recreation Refrain from accepting new applicants and do not replace any existing banners during FY 2026-27. Maintain nominal funding to remove weather-damaged banners as needed. Cancel for$23K Saving Public Comment Period City Council Deliberation and Direction FY 2026/27 Budget Season Next Steps Summarize direction Continue budget discussions Additional workshops as needed Future Study Sessions This is an ongoing process supported by staff and guided by community input and council collaboration.