Council to weigh $335 million spending plan Tuesday

Pedestrians walk past a mural in Downtown Downey, where city officials are considering investments such as public Wi-Fi to enhance the downtown corridor and create a more vibrant, connected pedestrian experience.

DOWNEY — The Downey City Council on Tuesday will consider adopting a $335 million budget for the 2026-27 fiscal year, a spending plan city officials say remains balanced while funding basic services, capital projects, public safety, infrastructure improvements and several council priorities.

The proposed annual operating budget totals $335,022,076 and includes personnel costs, operations, materials, supplies, capital equipment, capital improvement projects and transfers to other funds.

Under the City Charter, Downey must adopt its annual budget by June 30.

The budget is larger than the $327.1 million proposal presented during the City Council’s June 1 budget workshop, largely because of carryover funding for capital improvement projects whose expenses did not occur during the current fiscal year and will instead be available in 2026-27.

The final proposal also includes an additional $500,000 in Measure D funding to install security cameras at all city parks, a request raised by council members during the budget workshop.

The city’s General Fund budget remains unchanged from the earlier proposal, with $122,068,714 in operating expenditures and estimated revenues of $122,141,977. That leaves the city with a projected General Fund surplus of $73,264.

The General Fund pays for the city’s basic services, including police, fire, public works, parks and recreation, library services, community development and administrative functions such as executive leadership, human resources and finance.

City Manager Roger Bradley, in his transmittal letter to the council, described the budget as structurally balanced and reflective of Downey’s “continued commitment to sound fiscal management” amid economic uncertainty.

Although inflation has moderated compared to prior years, city officials said Downey and other California municipalities continue to face elevated costs tied to labor, infrastructure, construction, utilities, insurance, technology and public safety operations.

The proposed General Fund revenues are about 2% higher than the amended 2025-26 budget. Property taxes remain the city’s largest General Fund revenue source, accounting for about 33% of revenues, or roughly $40.5 million. Sales and use taxes make up about 24% of General Fund revenues, or about $29.5 million.

Property tax revenues are expected to remain relatively stable, supported by annual assessed valuation increases under Proposition 13. Sales tax revenue is projected to increase about 1% compared to the 2025-26 adjusted budget, reflecting what city officials described as stable local economic activity despite more cautious consumer spending.

City officials said Downey’s restaurant, grocery-related and general retail sectors have shown resilience, though discretionary retail remains more sensitive to inflation, higher borrowing costs and consumer uncertainty.

The city also noted broader economic concerns, including elevated interest rates, fuel price volatility, higher construction costs, uncertainty in federal and state funding priorities and geopolitical instability. The budget specifically cites the conflict involving Iran as a factor adding uncertainty to the fiscal outlook by contributing to higher oil and fuel prices, renewed inflationary pressure and potential impacts on transportation, construction and consumer spending.

Downey’s unemployment rate was about 5.2% as of March, with a labor force of about 58,000 people, including about 55,000 employed residents and approximately 3,000 unemployed residents. That was generally in line with Los Angeles County’s 5.1% unemployment rate and California’s 5.3% rate.

The budget also highlights the local housing market, noting that Downey’s median home sale price was about $875,000, up 7% from the previous year. City officials said reduced housing turnover could moderate growth in property tax revenues because properties are generally reassessed at market value only when ownership changes.

A major component of the spending plan is the city’s Capital Improvement Program, which city officials say will fund projects involving streets, public facilities, water improvements, traffic safety, sewer work and storm drain infrastructure.

The city manager’s transmittal letter describes a proposed Capital Improvement Program of $98.9 million, while the budget document also references more than $92 million toward capital improvement projects. The investments include street rehabilitation, water and sewer upgrades, stormwater projects and facility improvements.

Among the listed capital investments are $21.7 million for street improvements, including pavement rehabilitation on Lakewood Boulevard and Bellflower Boulevard; $5.2 million for traffic safety projects, including Safe Routes to School, Phase 1 of the Downey Bicycle Master Plan implementation and Firestone Boulevard traffic signal updates; $20.3 million for public facilities, including the Columbia Memorial Space Center second building, Inspiration shuttle renovation and park security cameras; $29.6 million for water improvements, including design of a new water treatment plant and Bellflower Boulevard system upgrades; and $31.5 million for sewer and storm drain projects, including stormwater capture and infiltration projects at Furman Park, Apollo Park and Independence Park.

The budget relies on several funding sources for capital improvements, including Measures S and D, Proposition C, Measure R, Measure M, SB 1 road maintenance funds and other revenues.

Measure D, the voter-approved sales tax measure, continues to play a role in public safety and quality-of-life investments. In addition to the proposed $500,000 for park security cameras, Measure D has helped fund recent public safety staffing increases, including 17 Police Department positions added in 2024-25 following a department operations assessment.

The 2026-27 budget includes four new full-time positions, two position eliminations and three reclassifications. Two additional Information Technology positions were eliminated earlier in the fiscal year, resulting in no net increase in full-time positions compared to 2025-26.

Of the four new positions, one would be funded by Measure R, one by the Columbia Memorial Space Center fund and two by the General Fund.

The city currently has about 470 budgeted positions, compared to 481 in 2008-09. City officials said staffing remains relatively lean despite increased service demands, infrastructure responsibilities, technology needs and operational complexity.

The budget also reflects an Information Technology restructuring effort following recent leadership changes. Two vacant IT positions were frozen while the city uses outside expertise and professional services to support technology and network modernization, including Microsoft 365 solutions, cybersecurity, operational continuity and network infrastructure.

At the June 1 budget workshop, council members asked staff to evaluate several possible additions to the budget, including a spay and neuter program, downtown Wi-Fi, security cameras in all parks, Sunday library hours, lighting for city artwork, additional park janitorial service, Christmas decorations along Firestone Boulevard and pursuing the All-America City Award.

Those items could cost between $368,538 and $563,538 from the General Fund, depending on which are selected and the final costs. Staff noted that the projected General Fund surplus is only $73,264 and recommended against spending the entire surplus, saying it provides a buffer against economic uncertainty and helps the city live within its means.

The possible General Fund items include $5,000 to $10,000 for a spay and neuter program; $110,000 to $230,000 for downtown Wi-Fi; $50,000 to $100,000 for Christmas decorations along Firestone Boulevard from Brookshire Avenue to Paramount Boulevard; $26,997 for Sunday library services; $15,000 to $35,000 for lighting city artwork; $121,541 for additional park janitorial services; and $40,000 for the two-year All-America City Award process.

The $500,000 park security camera project would be funded through Measure D. Staff said there are available Measure D funds for the project, though installation may still become a multiyear effort depending on staff capacity. Including the full amount upfront could allow staff to move from park to park without waiting for future budget approvals, potentially accelerating the timeline.

The budget also projects the General Fund reserve at $33,472,965 by the end of 2026-27.

Long-term challenges identified in the budget include rising retirement costs, health care premiums, inflation, reserve management, staffing levels and infrastructure needs.

Downey contracts with CalPERS for employee retirement benefits and continues to face growing pension costs. The city’s required unfunded accrued liability contributions for 2026-27 are estimated at $3.938 million for the Miscellaneous Plan and $8.83 million for the Safety Plan. The combined unfunded liability for both plans exceeds $146 million, with funded ratios of about 81% for both plans.

City officials said a 2021 refinancing of a portion of the city’s unfunded accrued liability produced projected gross savings of about $65 million, but retirement costs remain a major budgetary obligation.

The city is also budgeting for an estimated $450,634 increase in employee health care premiums, or about 5.2%, consistent with recent increases of 4% to 6%.

Infrastructure is another major concern. The budget notes that aging infrastructure requires more investment than available recurring revenues can support, while higher construction costs have reduced the city’s purchasing power for capital projects. Officials said delaying needed projects can increase long-term costs and risks.

The budget also includes several goals tied to the City Council’s priorities and the Downey Forward 2030 Strategic Plan.

Under fiscal responsibility, the city aims to continue receiving budget and financial reporting awards, expand the Columbia Memorial Space Center Foundation Board, continue fundraising for shuttle restoration and develop its 15th structurally balanced annual operating budget.

Economic goals include refreshing the Discover Downey brand, implementing the Economic Action Plan, developing a personalized small business program, continuing work on 20 acres of undeveloped land behind the Downey Landing shopping center, and the Rancho Los Amigos South Campus.

Efficiency and adaptability goals include finalizing implementation of a new Enterprise Resource Planning system for finance, human resources, utility billing and other functions; expanding tools in the Accela system; and transitioning the city’s website to a .gov domain.

Quality-of-life, safety and infrastructure goals include beginning implementation of operations and staffing plans for the expanded Space Center, installing security cameras at all parks and beginning Phase 1 of the city’s Security Master Plan.

Public engagement goals include the 2026 municipal elections for council districts 2 and 4, implementation of the Arts Master Plan, leveraging the 2028 Los Angeles Olympics, updating the Parks Master Plan and continuing expanded social media posting and city messaging.

The proposed budget follows a year in which the city pointed to several accomplishments, including securing more than $41 million in grants, advancing the Rancho Los Amigos South Campus effort, launching new Downey LINK technology with real-time bus tracking, completing 25 capital improvement projects totaling $31 million, paving 25 miles of roadway since July 2025, launching a residential streetlight installation program and installing security cameras at Barbara J. Riley Community and Senior Center, Apollo Park and Golden Park.

Other cited accomplishments include the Columbia Memorial Space Center expansion groundbreaking, creation of the STEP homelessness response team, launch of a home and business security rebate program, the city’s selection as an official FIFA Fan Zone host, and the unveiling of Apollo, the city’s astronaut mascot.