The District utilizes fund accounting to organize and manage its financial transactions systematically. This accounting method is specifically designed for governmental entities and separates financial resources into distinct categories based on their intended purposes. By doing so, fund accounting facilitates transparent tracking of revenue and expenditures, enabling the District to meet its financial, legal, and contractual obligations effectively. The District's financial records are maintained in strict compliance with the generally accepted accounting principles (GAAP) established in the United States for governmental entities. These principles ensure accuracy, accountability, and uniformity in financial reporting, which are essential for decision-making and stakeholder trust.

Fund accounting serves as a crucial tool for the District's management by providing a clear structure for resource allocation, ensuring that funds are used solely for their designated purposes. This approach also supports robust internal controls and enhances the District's ability to demonstrate accountability to taxpayers, regulatory agencies, and other stakeholders. The following tables present a comprehensive summary of the District's adopted budget for the fiscal year 2025-2026, detailing anticipated revenues and planned expenditures across all funds.

The District’s top priority continues to be the delivery of high-quality fire protection and emergency medical services to the community. In support of this mission, the District remains focused on strengthening emergency response capabilities, expanding and adapting service offerings, and enhancing community engagement through public education and outreach programs. This commitment extends beyond addressing current service demands. It also includes proactive planning for future population growth, emerging risks, and the evolving complexity of emergency service delivery. Through these efforts, the District ensures that the community receives dependable, professional, and responsive service at all times.

For FY 2025-26, the District has maintained consistent service levels, with no significant changes to fees, property tax rates, or overall scope of operations. Budget priorities remain aligned with those established in the prior fiscal year, emphasizing core operational fire services, funding for critical capital projects, and continued investment in administrative efficiency and organizational effectiveness.

To support these ongoing priorities, the FY 2025-26 budget includes the addition of one full-time Training Captain position. This new FTE reflects the District’s strategic focus on maintaining industry-leading training standards and ensuring the workforce is equipped to respond effectively to increasingly complex emergencies. As service demands evolve, so too does the need for a robust, well-supported training program. The addition of this role will strengthen the District’s capacity to provide comprehensive and consistent training for its personnel.

In addition to maintaining core services, the District continues to advance several key initiatives, both ongoing and new, which are outlined in the Budget Highlights and Initiatives section. All of these efforts are guided by the District’s strategic goals, reinforcing a long-term vision that integrates operational excellence, financial sustainability, and community-centered service.

Tariffs and Inflationary Environment

Ongoing uncertainty surrounding federal tariff policies, combined with a persistently high inflationary environment, continues to challenge the District’s ability to procure necessary materials, supplies, and services in a timely and cost-effective manner. Prices for a wide range of goods and services remain elevated, and the potential for further cost increases remains a concern. Additionally, evolving tariff regulations at the federal level have introduced further unpredictability into the supply chain and procurement process. Since the full impact of these policies has yet to be realized, the District faces increased difficulty in forecasting long-term costs and maintaining budget stability.

In response to these economic pressures, the District has taken a proactive approach by incorporating both known and projected cost increases into the FY 2025-26 budget. This includes adjustments to line items most likely to be affected by inflation and tariffs. Furthermore, operational plans have been modified to account for potential delays in the delivery of goods and services due to ongoing supply chain disruptions. By anticipating these challenges and building flexibility into the budget and planning process, the District aims to minimize operational impacts while continuing to provide high-quality service to the community.

Interest Rate Climate

The current interest rate environment also presents a growing area of concern for the District, particularly with respect to non-operating revenues, such as investment interest income. In recent years, the District has benefited significantly from elevated interest rates, which led to a substantial increase in interest earnings. These higher-than-expected returns have played a key role in supporting a balanced budget, while also allowing the District to allocate additional funds to reserves for future needs, such as capital replacement, budget contingencies, and long-term liabilities.

However, as the District prepared the FY 2025-26 budget, signs from the Federal Reserve indicating potential interest rate cuts introduced a level of uncertainty around the sustainability of those investment returns. In light of this, the District took a conservative approach to revenue forecasting, particularly in estimating interest income from its investment portfolio. By avoiding overly optimistic assumptions, the District aims to maintain fiscal discipline while ensuring that revenues are realistically aligned with anticipated expenditures.

Real Estate Market

The real estate market within the District’s jurisdiction has continued to cool over the past several fiscal years and is projected to be at the same level or slow down further in FY 2025-26. This trend is largely driven by ongoing inflationary pressures, elevated interest rates, and fluctuations in the local job market. These factors collectively pose a risk to several key revenue sources for the District, most notably, property tax revenues, including Supplemental Property Taxes under SB813.

While new developments are still anticipated, as reflected in the projected assessed value growth provided by the County Assessor’s Office, the financial gains from these developments may be partially offset by broader market conditions. High interest rates and recent job layoffs are slowing housing activity, leading to fewer property transactions, which directly impacts SB813 revenue, a source that is closely tied to changes in property ownership and reassessment values.

Additionally, the slowdown in real estate development is expected to affect revenues related to building activity, particularly inspection fees and permit application charges. These impacts have already begun to materialize, with the previous fiscal year showing a noticeable decline in development-related activity. For FY 2025-26, the District is projecting a 20% decrease in plan submittals, which is consistent with reduced construction activity and diminished demand for fire safety inspections and permitting.

In developing the FY 2025-26 budget, the District took these economic indicators into careful consideration. As a result, projected revenues from SB813 and licenses and permits have been reduced relative to the prior year’s budget. This prudent but realistic approach ensures that anticipated revenues are aligned with current market conditions, allowing the District to maintain a structurally balanced budget and continue delivering core services without relying on uncertain or inflated revenue projections. By planning prudently, the District is better positioned to manage risk and maintain fiscal stability in the face of changing economic conditions.

Fire Station 1 - Rebuild

On June 11, 2024, the Board of Directors formally approved the Station 1 Replacement Project, marking a major milestone in the District’s long-term capital planning efforts. This significant project involves the complete reconstruction of Fire Station 1, along with the development of an integrated training center and a new administration building. With an estimated total cost of the conceptual design at $121 million, it represents the largest capital investment the District has undertaken to date.

To prepare for this substantial project, the District has taken a disciplined and forward-looking approach to financial planning.

For several years, it has been systematically allocating funds to capital reserves as part of its annual budget process. This intentional reserve strategy not only supports large-scale infrastructure projects like Station 1, but also positions the District to address other long-term obligations such as budget stabilization, pension liabilities, and emergency contingencies, all of which are aligned with the fund balance policy adopted by the Board.

During the development of the FY 2025-26 budget, the Station 1 project was a key consideration in ensuring that the District maintains adequate funding for both operational needs and capital investments. Balancing these priorities requires careful forecasting and prudent resource allocation. The District continues to evaluate its capital improvement plan annually to ensure that critical infrastructure needs are addressed without compromising service delivery or financial stability.

By incorporating the Station 1 project into its broader budget strategy, the District demonstrates its commitment to responsible fiscal management and long-term sustainability, while also reinforcing its mission to support public safety through modern, resilient, and efficient facilities.

The District’s adopted budget for FY 2025–26 totals $103.3 million. This amount includes a $18.7 million transfer from the General Fund to the Capital Improvement Program (CIP) Fund, which is recorded as an expenditure in the General Fund and as a revenue in the CIP Fund for budgetary purposes, as shown in the table below. The General Fund accounts for approximately 92% of the total adopted budget.

General Fund

For FY 2025–26, the District developed its General Fund budget using an approach where each line item is carefully reviewed and justified based on current needs and priorities, rather than applying across-the-board increases or reductions from the prior year. This method supports fiscal discipline and ensures that funding decisions are directly tied to operational requirements and strategic objectives. The final General Fund expenditure budget totals $76.3 million, reflecting a 6.0% increase ($4.3 million) over the amended budget for FY 2024–25. The increase is primarily due to higher personnel costs including salaries, benefits, retirement contributions, and stipends as well as continued investments in training, public safety, and employee wellness. The budget also includes funding for one additional full-time Training Captain position to support the growing demands of fire service training and ensure the District remains aligned with industry standards.

Other budget priorities remain focused on maintaining high-quality emergency services while strategically funding administrative improvements and long-term planning efforts. The District has allocated $18.7 million in transfers to the Capital Improvement Program (CIP) Fund, supporting major initiatives such as the Fire Station 1 rebuild, the largest capital project in the District’s history. Despite economic pressures, including rising pension obligations, workers’ compensation costs, and inflation, the District remains committed to a structurally balanced budget. With no planned use of reserves to balance operations in FY 2025–26, the District maintains a structurally balanced budget while continuing to invest in workforce readiness, public safety initiatives, capital improvements, and financial sustainability. 

Capital Improvement Project Fund

The Capital Improvement Project (CIP) Fund supports the acquisition, renovation, and construction of District facilities and capital assets, funded primarily through General Fund transfers. For FY 2025–26, the total CIP expenditure budget is $6.6 million, a 7.1% increase from the prior year. This includes $4.5 million for construction projects and $2.1 million for fixed asset purchases, such as a water tender, airboat, defibrillators, and IT equipment. Major ongoing projects include the Station 1 rebuild ($1.8 million), continued construction at Station 77 ($1.3 million), and generator upgrades at Station 77 and the warehouse. New project proposals include a kitchen remodel at the administration building, a Fire Station alerting system upgrade, a driveway redesign at Station 6, HVAC installation at Station 77’s shop office, and a District-wide traffic pre-emption system update. 

Special Revenue Fund

The Special Revenue Fund supports the District’s role as the sponsoring agency for California Urban Search and Rescue Task Force 3 (CA-TF3) through cooperative agreements with FEMA. The program is structured around four core areas: Administration, Equipment, Storage/Maintenance, and Training, all of which are reimbursable under FEMA grants. The FY 2025–26 budget is balanced at $1.75 million, representing a 45.6% decrease from the prior year’s amended budget. This reduction is primarily due to the winding down of earlier cooperative agreements and the exclusion of the anticipated 2025 grant, which will be added to the budget once the application is approved and formally accepted by the Board, likely in October.  The largest share of the budget is allocated to Administration at $951,515 (54%), while Equipment and Training represent 31% and 10%, respectively. Three active cooperative agreements (FY 2022, 2023, and 2024) will carry forward remaining funds into FY 2025–26, totaling nearly $1.75 million in anticipated reimbursable expenditures.

The District does not have any debt. All expenditures are funded from tax revenues, charges for services, and other revenue sources received.

FY 2025-26 District Adopted Budget - All Funds Transfers In/Out

• Property taxes remain the District’s primary source of revenue, accounting for 92% of the total general fund revenue budget. As a stable and reliable revenue stream, property taxes provide a strong financial foundation for the District. Over the past five years, property tax revenue has grown at an average annual rate of approximately 7%. This consistency allows for more predictable financial planning, even during periods of broader economic uncertainty.

• Other operating revenues have shown mixed performance. Licenses and permits have generally remained stable, though a slowdown is expected due to the cooling of the real estate market. Revenue from the use of money and property has increased significantly, driven by the implementation of a new investment program over the past two years, which has delivered high interest returns. In contrast, deployment claim reimbursements continue to fluctuate considerably from year to year due to their inherently unpredictable nature.

• Salaries and benefits make up the largest portion of the operating budget, accounting for roughly 84% of total expenditures. This reflects the District's primary mission of providing fire and emergency services, an effort carried out by safety personnel, who represent 82% of the budgeted staff. These personnel-related costs rise steadily each year due to general wage increases and changes to benefits outlined in labor Memoranda of Understanding and compensation agreements. 

• The cost of services and supplies is trending upward, primarily due to overall increases in the prices of materials, supplies, and contracted services. Year-to-year fluctuations may also occur based on program requirements, shifting priorities, and special projects undertaken during a given fiscal year.

• Capital improvement projects and capital outlay expenditures are projected to rise significantly over the next few years, driven by planned asset replacements and ongoing infrastructure improvements. The most substantial increase will stem from the Station 1 rebuild project, which was approved by the Board with an estimated cost of approximately $121 million. 

• FEMA provides the District with about $1.4 million annually in stable funding through cooperative agreements tracked in the special revenue fund.

General Fund - Between the FY26 proposed budget and the final adopted budget, the General Fund saw an increase of $74,000 in the "Other Operating" category. This adjustment was necessary to address rising costs in the general liability and auto insurance markets. To maintain a balanced budget, this increase is fully offset by a corresponding reduction in the excess transfer out to the Capital Improvement Program (CIP) Fund in FY26. 

Capital Improvement Project (CIP) Fund - The Capital Improvement Program (CIP) budget for FY26 was adjusted to reflect a $74,000 reduction in excess transfers from the General Fund. This change was made to offset a $74,000 increase in general operating expenses related to rising costs in general liability and auto insurance. As a result, the overall CIP funding for FY26 has been slightly reduced to accommodate this necessary adjustment in the General Fund. 

FY 2025-26 Adopted Budget Resolution

The Board of Directors adopted the FY 2025-26 budget on June 17, 2025.

(Please click the link above to see the signed resolution.)