HEMET — The City of Hemet’s adopted budget for the year that started July 1 spends more than it collects in the funds that pay for day-to-day city operations.
City Council adopted the Fiscal Year 2026-27 operating budget on June 23 by Resolution 2026-105. Combined General Fund and Measure U revenues are budgeted at $86,535,000. Combined expenditures are budgeted at $96,123,000. The difference is $9,588,000, a $9.6 million use of fund balance.
Those figures come from the adopted budget tables. They are the city’s official plan for the year ending June 30, 2027.
Across all city funds, the adopted budget lists $150,757,303 in revenue and $154,184,303 in expenditures.
The combined General Fund is two pots. Fund 110 is the city’s main operating fund. It is budgeted at $69,550,000 in revenue and $74,717,000 in spending. That is a $5,167,000 gap.
Fund 115 is Measure U. Voters approved that 1 percent transactions and use tax in 2016. The adopted budget describes it as a general sales tax restricted solely to public safety by resolution. Measure U is budgeted at $16,985,000 in revenue and $21,406,000 in spending.
The Measure U gap is $4,421,000. The adopted budget says Measure U fund balance is being used to buy equipment such as radios, cameras, hoses and vehicles, to rehabilitate fire stations, and to help pay liability insurance for police and fire.
One-time Measure U uses listed in the budget total $4,537,000. The largest items are $1.5 million for retiring police personnel payouts and $1.5 million toward the liability insurance premium. Other listed items include four police interceptors, 50 radios, two traffic motorcycles, cameras, Fire Station 5 work, and fire hose replacements.
One-time General Fund uses listed in the budget total $1,233,000. They include downtown parking lot repavement, a truck routing ordinance, radios, storage work, branding, Christmas decorations, and other one-time purchases.
The budget says revenues have begun to flatten while costs keep rising. It cites inflation, personnel costs, insurance, and contracts. Cost-containment steps in the document include a hiring freeze on vacant posts, limiting new hires to mission-critical and revenue-generating jobs, and a 10 percent cut in department maintenance and operations spending.
Citywide positions are down 8.5 full-time equivalents from the prior adopted budget. The document lists 17 frozen positions, including six police officers, a deputy fire chief, and other public safety and civilian posts.
Liability insurance is called out as a major pressure. For fiscal 2026-27, the budget puts liability premiums at about $7.0 million, plus a $2.0 million self-insured retention for claims. That is about 4.9 percent higher than the prior year, the document says.
Hemet’s written reserve policy requires spendable, unrestricted General Fund reserves equal to at least 40 percent of current expenditures. The City Council raised that target from 20 percent to 40 percent beginning in fiscal 2023-24. The adopted budget says the reserve totaled about $28.9 million as of June 30, 2025.
The city’s latest posted Annual Comprehensive Financial Report remains the report for the year ended June 30, 2024. That is the newest ACFR on the Finance Department’s financial information page.
The operating budget is separate from the capital program. The city’s five-year Capital Improvement Program for fiscal 2026-27 through 2030-31 lists a grand total of $159,501,108. The fiscal 2026-27 column is $21,736,408. Those totals are in the CIP project summary, not the operating-budget tables.
On the November 3, 2026, ballot, Hemet voters will decide Measure Q. It is a separate 1-cent transactions and use tax. The City Council placed it on the ballot on July 14. The city’s Measure Q FAQ and the city attorney’s impartial analysis both say the tax is estimated to generate about $16 million a year.
Measure Q would be a general tax. Proceeds would go to the General Fund and could be used for any lawful city purpose, according to the proposed ordinance and the impartial analysis. The tax would last until ended by voters. The city says groceries, prescription medicine, diapers, and feminine hygiene products are exempt. The city also says the money would stay in Hemet, with public disclosure, independent citizens’ oversight, and audits.
Hemet’s current sales tax rate is 8.75 percent, the city’s FAQ states. Measure Q would add 1 cent on each dollar of taxable purchases.
The city has scheduled three Measure Q open houses at the Hemet Public Library, 300 E. Latham Ave.: Sept. 16 from 11 a.m. to 1 p.m., Sept. 26 from 10 a.m. to noon, and Oct. 16 from 6 to 8 p.m.
The adopted operating budget does not include Measure Q revenue. The November vote is a separate question from the books the council already adopted for this fiscal year.
