San Marino has locked in a 49.4 million dollar spending plan for fiscal year 2026-27, keeping library hours intact and major projects moving, even as a nearly 1 million dollar operating gap looms in the background.
The City Council on May 29 adopted the budget that lays out 49.4 million dollars in expenditures across all funds against projected revenues of 40.79 million dollars. On paper, the general fund carries an operating deficit of about 966,000 dollars, but city leaders are pointing to a healthy cushion: an unassigned general-fund balance of roughly 17.7 million dollars, which sits above San Marino's 40 percent reserve policy.
The plan also puts 10.68 million dollars into capital projects and equipment, signaling that streets, facilities and gear will not be sacrificed just yet. The Crowell Public Library keeps its hours and regains some part-time staffing, a small but symbolic win for residents who watch service levels closely. According to Outlook Newspapers, the council also approved a 4 percent cost-of-living adjustment for staff and signed off on a 3 percent inflation-based bump to the city fee schedule.
Measure S and expiring taxes
Hovering over the entire financial plan is Measure S, a proposed one-cent transactions and use tax that appeared on the June 2 primary ballot. If voters said yes, the measure is expected to bring in about 1.65 million dollars per year. BallotReady lists the 1.65 million dollar estimate and describes Measure S as a local transactions and use tax intended to support city services.
The council has been pitching Measure S as one piece of a broader revenue puzzle, not a magic fix. If it passes, the tax is supposed to blunt the projected operating shortfalls that show up in the city's long-term forecasts. If it fails, the conversation gets tougher, and faster.
Reserves, forecasts and what comes next
City budget documents outline a short-term strategy that leans on prefunded pension reserves as a bridge while San Marino tests out revenue solutions. The five-year forecast assumes that expiring levies are renewed, but even with that optimistic assumption the general fund deficit is projected to widen to about 1.5 million dollars in 2027 and roughly 1.9 million dollars by 2031. Staff has also flagged about 50.7 million dollars in unfunded capital needs over the next five years, a reminder that the wish list is bigger than the wallet.
As Outlook Newspapers reports, the city expects to lean on reserves that are parked in a pension-prefunding vehicle similar to the California Employers' Pension Prefunding Trust. Guidance from CalPERS explains that Section 115 prefunding trusts are designed to smooth out future pension contributions instead of letting costs spike unpredictably.
What to watch this summer
City officials have been blunt that the June election results and how quickly they draw on those prefunded reserves will determine what comes next. If Measure S underperforms or fails, the council could be forced back to the table to talk about cuts, higher fees or other ways to find cash before the fiscal year is over.
The council is already scheduled for a mid-year checkup on finances and capital projects, and staff has signaled it will return with more detailed timelines and program proposals once bids and revenues are clearer. For now, the adopted budget keeps core services in place, buys the city some time and leaves the next move partly in the hands of San Marino voters.
