SAN MARCOS — The San Marcos City Council unanimously approved a balanced 2026-27 budget on Tuesday that includes $23.7 million in Measure Q sales tax revenues to support the city’s new Fire Station 5 and improvements to local infrastructure and parks.
The budget for 2026-27, which begins July 1, projects $104 million in General Fund revenues and $103.8 million in General Fund expenditures. The city is also planning a $21.6 million capital improvement project program, funded by various sources.
“I think today is a day to be celebrated because we have a proposed budget in front of us that is balanced and is fiscally sound, so I do want to congratulate everybody on that. I see all the hard work that is happening,” said City Councilmember María Nuñez.
Approved by city voters in 2024 and taking effect last April, the one-cent sales tax Measure Q is intended to fund maintenance of roads and infrastructure, public safety and emergency response, and parks and community spaces.
The tax will be in effect for 10 years, with the 2026-27 fiscal year being the second budget year to benefit from it. Proposed uses of the tax revenue are reviewed and overseen by the Measure Q Citizens’ Oversight Committee.
“Measure Q has provided critical stability and we’re using that opportunity strategically, not just to maintain services, but to strengthen the city’s foundation for the future,” said City Manager Michelle Bender.
Of the projects and programs that will receive $23.7 million in Measure Q revenues, one of the most significant is the city’s planned fifth fire station that will serve northwest San Marcos. Fire Station 5 is planned for construction at the corner of Armorlite Drive and Las Posas Road, on the site of the former Karl Strauss beer garden.
The station will receive a total of $8.4 million in funding in this year’s budget, including $4.5 million in Measure Q funds. The total project cost is estimated at $25 million, with additional funds to be allocated over the next two years.
Another $9.4 million in Measure Q funds will go toward other public safety and emergency response needs, including replacing fire apparatuses and equipment and ensuring sufficient fire department staffing.
Another $5.6 million is allocated for road and infrastructure maintenance, including the city’s annual storm drain inspection and cleaning program to prevent costly future repairs.
Lastly, $4.3 million in Measure Q funds is allocated for maintenance and rehabilitation of parks and community spaces, including renovation of the flooring, kitchen, and restroom at Williams’ Barn at Walnut Grove Park.
City Council members said it’s evident that Measure Q funds are critical to supporting basic city services.
“It’s really hard to trust a city with your tax dollars, and we really want to appreciate the residents putting their faith in us. I really think we are following through on all of those promises and I’m really proud to support this budget,” said Councilmember Danielle LeBlang.
The Fire Station 5 project will also receive $1.5 million allocated from the city reserves, which the city will replenish with interest in the coming years. Pulling from the city’s own reserves was more cost-effective than seeking a third-party loan for the project, staff said.
“These types of loans from external entities would cost millions of dollars in interest, and other finance-related costs, which would inflate the project budget significantly,” said Budget and Analysis Manager Janet Brotherton. “A loan from the city’s opportunity reserves would result in the lowest borrowing cost to the project and with interest payable to our reserves itself.”
This move will temporarily lower the city’s reserves from the target 40% level — one of the highest in the county — to 36%.
Budget basics
City staff said they expect a modest but positive increase in revenue sources in the next year, including a 5% increase in property tax revenues and 7% increase in revenues from charges for service.
Revenue from the city’s real estate portfolio is also expected to increase by around $2 million, due to the city’s completion of major capital projects and maintenance of existing real estate assets such as the Creekside Marketplace.
At the same time, cities across the country are experiencing inflation, and San Marcos is also accounting for a planned 3.5% increase in San Diego County Sheriff’s Office services under its contract, as well as additional increases in its pension liabilities.
The 2026-27 CIP budget outlines several new and ongoing projects.
In addition to Fire Station 5, other planned projects include condition assessments of existing fire stations, repairs to the Discovery Lake Bridge, the Discovery Lake Restoration project, the Bradley Park Master Plan, a General Plan update, the replacement of the Olive Street Bridge, and the city’s General Plan update.
San Marcos is also planning several road and traffic projects, including three projects related to San Marcos Boulevard.
These include a $3.9 million multiway project that will realign sidewalks and add new bike lanes separated from traffic, the $11.6 million reconstruction of the boulevard from Knoll Road to Rancho Santa Fe Road to replace deteriorated surfaces, and the creation of a transportation corridor plan for the boulevard from Twin Oaks Valley Road to Rancho Santa Fe Road.
Deputy Mayor Mike Sannella, who led the meeting in Mayor Rebecca Jones’ absence, said it is important for the city to communicate with residents about road projects so they can stay apprised and know what to expect.
“Once we’ve actually budgeted for it, we know it’s coming, it might be nice to give them a rough ETA,” Sannella said.
Councilmember Ed Musgrove noted that the city is also preparing to kick off a project with Caltrans that will address traffic issues at the state Route 78 offramp onto Nordahl Road by syncing the city’s traffic systems with Caltrans’.
