ENCINITAS — The Encinitas City Council recently reviewed a draft budget for the upcoming fiscal year, highlighting spending priorities and infrastructure needs while projecting $8.5 million in available funds.
City staff presented the preliminary operating and capital improvement budget for fiscal year 2025-26 during a special council meeting on March 26. The proposal includes $113.2 million in expected revenue — a 4.6% increase over the current year — and $105 million in planned spending.
Most of the city’s income comes from taxes, including $71 million from property taxes, $16 million from sales taxes, and $6 million from hotel taxes. Public safety accounts for 43% of spending, and employee salaries and benefits comprise the largest portion of the budget at 54%.
The city’s full-time equivalent staffing level remains flat at 249.4 full-time employees (FTEs).
Finance Director and City Treasurer Tom Gallup said the city expects to finish the current fiscal year with a $6.5 million surplus. After accounting for extra revenue, debt payments and capital projects, the city estimates a $2.1 million net increase to its general fund.
“That leaves $8.5 million available for appropriation,” Gallup said.
About $5.5 million is budgeted for debt payments on major city facilities, such as parks and the library. The city expects to pay off those bonds within 13 years and maintains a $13.1 million borrowing limit to protect its AAA bond rating, Gallup said.
City Manager Jennifer Campbell presented two operations and maintenance requests: reallocating an unfilled homeless solutions coordinator position to fund a deputy fire marshal role, and purchasing a new vehicle for the fire chief.
“We would not be increasing FTEs; we would be at the same number of FTEs,” Campbell said. “We actually save a little bit of money by eliminating the coordinator position and having a deputy fire marshal.”
Staff also provided cost estimates for adding new law enforcement personnel. A new traffic deputy with a vehicle would cost $458,000 in the first year, while a motorcycle deputy would cost $408,000. Ongoing annual costs would be slightly lower for both positions.
In addition to core budget items, Director of Engineering Jill Bankston presented an updated list of active capital improvement projects.
Bankston said the city completed six projects in the past fiscal year and anticipates finishing another five before year-end. New projects will be prioritized based on council direction and incorporated into the final budget for adoption in June.
Council members voiced support for addressing core infrastructure needs, such as street repairs, storm drain upgrades, and flooding issues in Leucadia.
“When pavement starts breaking down, it costs more to repair,” Councilmember Bruce Ehlers said. “If we get these [storm drains] lined, then our sinkhole failure rate should drop.”
Ehlers proposed $1 million each for pavement and storm drain work, and $5 million for flooding solutions in Leucadia.
Several residents urged the city to focus on long-standing issues such as at-grade rail crossings, safer walking and biking routes, and improved stormwater systems.
“It might be easy to forget that the city’s Housing Element, finally adopted after years of difficulties, placed 44% of all the upzoning in Leucadia, with much of it within about a half-mile radius of the La Costa and Vulcan intersection,” wrote Leucadia resident Nancy Deghionno. “Some of the upzoned developments in our area have already been completed and more are following close behind. Please prioritize at-grade crossings and North Vulcan Avenue upgrades this year.”
Others advocated for funding to explore more options for affordable housing.
“Affordable housing is a top concern for Encinitas residents,” wrote Theresa Beauchamp. “We need more housing for those who make less than $58 per hour. We are losing vital community members, and our city’s public health is suffering. To address our unmet housing needs, the budget should fund evaluating potential affordable housing sites.”
Councilmember Luke Shaffer emphasized the importance of having shovel-ready designs for future grant opportunities. Councilmember Jim O’Hara called for a prioritized list of unfunded projects so the city can act quickly if money becomes available
The council did not take any formal action but gave feedback to staff. A follow-up budget workshop is scheduled for April 23. At that meeting, staff plan to use a budget calculator to help visualize potential trade-offs based on council priorities.
The final budget is expected to be adopted on June 11.
“The idea was — since this is new and a lot of projects are being introduced — to have comments tonight,” Campbell said. “And we can maybe start populating a little bit, but what we would do on April 23 is get the projects in and show you where [the council members] rank, and then vote to see what the majority of the council would like to do.”
