Montclair

FINANCE

City Keeps Surplus Despite Revenue Decline T he City of Montclair projects a reduction in General Operating Fund revenues in the Fiscal Year 2025-26 Budget. This is due in part to a 3% decline in sales tax revenues with only a minor projected recovery of approximately 2% year-over-year for Fiscal Year 2026-27.

• Sunset Park Improvements • Saratoga Park Improvements • Benson Avenue Improvements • Reeder Ranch Park Project • San Antonio Creek Trail • San Antonio Creek Crossing Design

JANET KULBECK DIRECTOR OF FINANCE

The City Council continues to develop its role as a responsive governing body that is focused on sensible fiscal management practices. The Montclair organization is committed to maintaining a balance between its commitment to the organization and its people, and its commitment to provide a superior level of services for the community.

There are several factors affecting the City’s collection of sales tax revenues: inflation, which directly relates to consumer attitudes about the economy and how they adjust their spending habits to cope with rising prices; interest rates, higher interest rates are impacting the ability of developers to borrow money and move forward on planned projects; reduced spending by consumers; a shift away from brick-and-mortar stores to online stores which impacts local sales tax revenue; impact of “reciprocal” tariffs imposed by the U.S. on more than 200 nations; and declining consumer confidence. Despite the impact the reduced sales tax revenue has on the City, a minor surplus in General Fund revenues over appropriations was achieved in the Fiscal Year 2025-26 Budget after careful review of each department’s budget. This minor surplus will be allocated to the General Fund Operating Fund Unassigned Reserve Fund and the Budgetary Contingency Reserve Fund to continue to maintain a healthy reserve balance to meet future liabilities and long-term objectives. However, the General Fund Operating Unassigned Reserve Fund showed a reduction in the Operating Fund Unassigned Reserve Ratio of the proposed General Fund Operating Appropriations from 22.82% in Fiscal Year 2024-25 to 16.55% in Fiscal Year 2025-26. Montclair has been able to maintain a healthy General Fund Operating Fund Unassigned Reserve Fund balance through commitment to implementing sound economic policies and practices, maintaining an appropriate employee ratio, implementation of revenue enhancement measures, and evaluation of the distribution of appropriations to the General Fund and other City funds and entities. New proposed housing developments in North Montclair will increase property tax and sales tax revenue as these developments bring new residents to Montclair. Projects now under development include: Village at Montclair, consisting of 350 mixed-units; Alexan-Kendry Expansion, consisting of 137 units; and The Marlowe, consisting of 302 units. A Proposition 64 Compliance Program is being considered by the City Council and if approved could potentially produce between $2 to $4 million in revenue annually. Funding for continuing the A Line (Gold Line) to Montclair has been approved by the State, however, the San Bernardino County Transportation Authority recently withdrew their funding support which leaves the additional revenue potential in jeopardy. Infrastructure projects made possible by the acquisition of a Lease Revenue Bond continue to improve the overall quality of life for the residents of Montclair. The City of Montclair continues to pursue grants for infrastructure improvements that work hand-in-hand with the Lease Revenue Bond funds. Completed and in progress projects include: • Safe Routes to Schools

City of Montclair 2025-26 General Fund Revenues By Source Total Budget - $40,085,115

Licenses/Permits 1.3%

Interest Income 2.0%

Intergovt. Revenues 0.7%

Transaction/Use Tax 21.1%

Sales Tax 25.9%

Misc. Income 1.2%

Fines/Forfeits 0.9%

Utility User Tax 6.0%

Property Tax 9.5%

Other Taxes 19.7%

City of Montclair 2025-26 General Fund Operating Budget By Department Total Budget – $39,524,382 Charges for Services 11.6%

City of Montclair 2025-26 General Fund Operating Budget By Department Total Budget – $39,524,382

Economic Development 1.6%

City Manager 16.3%

Police 31.6%

City Council 1.0%

City Attorney 0.9%

Human Services 5.7%

Administrative Services 4.2%

Community Development 4.4%

• Flashing Stop Sign Replacement • Parks and Recreation Master Plan • Central Avenue Rehabilitation Phase 2

Fire 13.4%

Citywide 9.0%

Public Works 11.8%

CITY OF MONTCLAIR | 2025 ANNUAL NEWSLETTER | 19

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