Redlands council updates reserve policy, reconstitutes financing corporation and approves City Hall contract amendment

Finance staff presented a mid‑year budget review and the council approved several finance‑and‑governance actions, including a fund balance policy update, reconstitution of the Redlands Public Improvement Corporation (RPIC) and a contract amendment for State Street City Hall construction management.

Finance Director Garcia told the council audited FY2025 results showed about $14.5 million in net positive variance between projections and audited results—largely the result of timing, higher property tax revenue and investment income—and that actual department savings were roughly $6 million after adjusting for project carryovers. Garcia said the FY2026 financial plan anticipates approximately $10 million in carryover projects from FY2025, which will appear as the use of reserves in FY2026.

In separate motions the council adopted Resolution No. 8757 to update the city’s fund balance policy. The revision clarifies that previously described minimum percentage set‑asides are discretionary and will be recommended by the city manager and approved by council, aligning the written policy with current practice.

The council also moved to reactivate the Redlands Public Improvement Corporation (a nonprofit financing corporation previously inactive) by appointing three trustees (Councilmember Berridge, Mayor Pro Tem Shaw and Councilmember Davis) and adopting bylaw amendments that will make all five council members ex officio directors once the bylaws are recorded. City staff said the action does not itself authorize any financing or debt; it reconstitutes governance so the entity may be available to support financing for the safety hall project if needed. City Manager Charlie Duggan explained the proposed officer roles created by the bylaws—mayor as chair and city manager as president, with the city treasurer and city clerk in officer roles—so that documents approved by the board could be signed by designated officers.

On capital contracting, assistant city manager Boatman explained the First Amendment to the professional services agreement with Tilden Coyle Constructors increases the contract by roughly $745,152, bringing the total not‑to‑exceed amount to $2,108,510 to reflect increased project scope; the amendment also extends the delivery schedule to about 14 months. The council approved the amendment and the associated appropriation on a recorded roll call.

Separately the council approved a First Amendment to the purchase and sale agreement for a 4.67‑acre city property with Sartan Properties LLC to align the sale price with the appraised value; staff said internal protocols were adjusted to prevent future pricing mismatches.

Next steps: staff will implement the updated fund balance policy language, record the RPIC bylaw amendments and trustee appointments, and monitor contract and project schedules for the State Street City Hall work.