Despite the City of Yucaipa reaping nearly a third more in sales tax income than it previously anticipated bringing in as a result of the passage of Measure S in 2024, the city’s financial picture has only marginally approved, Yucaipa Finance Director Phil White told the city council during a mid-year budget review at the February 23 city council meeting.
According to graphs and charts and a verbal summary that White provided, at the beginning of the fiscal year in July, it was projected that the city would see $43.912, 589 in revenues over the course of 2025-26 and that there would be expenditures of $22,195,396 over the same period. The city handles its general fund and public safety fund on separate ledgers, even though money from the general fund is utilized to make up for the income to cost differential that is an institutional reality in Yucaipa in terms of its public safety operation. Over the same 12-month period, according to White, in the city’s public safety fund, $6,738,000 in revenue was anticipated and $30,437,687 in expenditures were expected to to cover the cost of its law enforcement service contract with the sheriff’s department and pay for fire protection service from the California Department of Forestry and Fire Protection over the course of July 1, 2025 to June 30, 2026, as well as covering the city’s provision of paramedic service and code enforcement.
White said the mid-fiscal year adjustment staff has made on those projections shows some the city gaining ground gains with regard to the general fund and losing ground with its public safety fund.
White said of the transfers in to the general fund, which he also referred to as inflow, had changed from $43.912,589 to $44,176,785 and that the $43,582,834 in expenditures or, as he put it, outflows, overall, which included sending money from the general fund to cover the massive shortages in the public safety fund. At the same time, he said, it appears that the spending on public safety will jump from the earlier projection of $30,437,687 to $31,657,730.
While the city is on track to accrue a $593,591 surplus in its general fund as of June 30, 2026, White showed documents that pegged public safety fund income of $30,537,687, including money brought over from the general fund, adjusted public safety expenditures of $31,657,730, which translated into a deficit of $1,120,043 on public safety spending in the current fiscal year.
“In the public safety fund,” White said, using approximate numbers, “we have amended inflows of $30,500,000, amended outflows of $31,600,00, so we have a budgetary deficit of $1.120,043. So we’ve got roughly a $500,000 net budgetary deficit up until tonight. That is reflective of what we have adopted and all the amendments along the way.”
The numbers White provided were extrapolated from what was in the city’s accounts kept for its two main operating funds — the general fund and the public safety fund — as of midnight on December 31, 2025. His review contrasted the adopted and current budgets against actual revenues and expenditures through that dated.
The review he was a glance at the city’s fiscal health “midstream” provided an “opportunity” to make adjustments to the spending plan now, just a little more than four months before the fiscal year closes out on June 30, White aid.
“We’re halfway through the year with midyear, we should be about 50 percent of that percent to the current budget,” White said, an allusion to the Christmas spending season that essentially starts in November and continues for a month, during which sales tax revenue increases dramatically over what occurs during most of the rest of the year.
“The timing of all the [city’s] revenues are not fluid throughout the year,” White said. “ A lot of them are second-half-of-the-year heavy, and same with expenditures.”
The California Department of Tax and Fee Administration provides data with regard to the one cent per dollar sales tax revenue that Yucaipa, like all California cities, realizes as the result of the state’s base sales tax rate of 7.25 percent. Yucaipa voters in 2024 augmented that with another one percent with the passage of Measure S. Early data provided by the California Department of Tax and Fee Administration of the city’s share of the 7.25 percent tax was not uniform or consistent over the six months from July 1 to December 31, White said. Available information shows the city brought in more from the Measure S sales tax collection than was projected.
“At this point, we’re starting to see a trend, and it’s better than what we had originally estimated,” White said. “What we’re projecting now, instead of the $6 million, is $8 million of Measure S money for fiscal year ’26.”
White and the rest of the city staff recommended that the city base its spending calculations through the rest of the fiscal year on the increase in measure S revenue, that being the $2 million difference between $6 million and $8 million. The city simultaneously took a minor hit with regard to other subventions, specifically the city’s cut of Bradley-Burns sales tax, which means instead of receiving an early prognosticated $5.7 million, it will see something on the order of $100,000 less than that, roughly $5.6 million, according to HDL, a consultant that monitors sales tax revenue issues for the city. “There’s been a downward projected sales tax revenue statewide,” White said, which he said will “impact Yucaipa’s projection.” The city will also bring in roughly $400,000 less than it earlier thought it would realize from ticket sales at the Yucaipa Performing Arts Center. So, based on the Bradley-Burns sales tax revenue loss, the $400,000 ticket sales loss, subtotaling $500,000, balanced against the addition of another $2 million in measure S revenue, staff is now predicting a net $1.5 million increase in where total general fund revenue for 2025-26 will be as of June 30, 2026.
The $44 million in projected general fund revenue will not be depleted as rapidly by actual spending this year as was projected in the budget, since some staff positions, which were supposed to be filled as the fiscal year progressed remained vacant. This is keeping the city in the black but it has an impact on the provision of municipal services, which is the city’s raison d’etre, White said.
The city has “a lot of stuff to get done,” White said, “but if there’s not the people here to process and get it done, there’s a bottleneck and the services aren’t going out,” White said.
City spending on maintenance projects will increase during the remainder of 2025-26, White said.
The city is also likely to put money into other improvements at City Hall, including agenda management software requested by City Clerk Ana Sauseda, the construction of a digital sign in front of City Hall and the purchase of a new truck to be used by the public works division, the sheriff’s department, fire department and other city departments as needed. “The truck is used by Public Works for maintenance of traffic signals, lighting and signage; by Community Services to set up special events and install banners and lighting; by the city’s IT division to maintain communications equipment and cameras; and by public safety personnel for installation and maintenance of automated license plate reader cameras,” Development Services Director Fermin Preciado said.
–Mark Gutglueck