Encinitas emphasizes infrastructure in new budget
City approves $158.5 million plan that sets aside millions for capital projects and debt payments while maintaining reserves and limiting new spending
ENCINITAS — The City Council adopted its $158.5 million budget for fiscal year 2026-27 on Wednesday, featuring a structural balance and nearly $16 million in infrastructure commitments.
The budget reflects total revenue across all funds against $149.2 million in operating expenses. The General Fund, the primary discretionary account, is projected to generate $121.7 million in revenue, while funding $113.1 million in expenditures.
The city estimates a surplus of roughly $8.6 million in the General Fund, but the bottom line shows a net decrease of $6.2 million. City Manager Jennifer Campbell and Finance Manager Kelly Sanders said this is intentional, as the plans include transferring $7.9 million into capital improvement projects and $5 million toward debt payments. The city’s unassigned ending balance is projected at just under $750,000, leaving little for discretionary spending or new programs.
“The budget also includes a one-time half-million discretionary payment to CalPERS to reduce the city’s unfunded pension liability and provide an 80% funded level,” Sanders added. “The proposed FY 26-27 budget supports the council’s annual work plan objectives, maintains a balanced budget with recurring revenues exceeding recurring expenditures, and meets all general fund reserve policies.”
The primary revenue driver for the city has been property taxes, which totals $76.1 million (62.6%) of all General Fund revenue. Property taxes represent a 6.4% increase over last year due to the annual Proposition 13 inflation adjustment and property ownership transfers, according to Campbell.
