BANNING, CA — As the city of Banning continues to dig itself out of years of financial challenges, the city council adopted a "balanced, transitional" budget that maintains municipal services while the city cleans up its books.
The mayor said adopting the 2026-2027 budget was the next step toward bringing the city out of financial distress while keeping services running.
A report released in June from a Riverside County civil grand jury titled "Banning: A City Alarmingly Mismanaged" alleged fiscal mismanagement by the city. The report found that the finances for Banning Electric Utility dropped from a $31 million surplus in 2018 to a $9 million deficit by 2022.
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Mayor Richard Royce said the city has "made big strides" over the year by embracing a new strategic plan, hiring new leadership, providing relief to utility customers during a billing disruption, hosting public workshops related to the budget, and more before adopting the budget last week.
"That's a big milestone and it's worth taking a minute to talk about how we got here because it did not happen overnight. In less than a year, this council and staff have done a lot of work, very necessary work, to put Banning back on track to a sustainable future," Royce said in his video address released on Sept. 23.
On Feb. 24, the city council adopted a strategic plan and hired its new city manager Elizabeth Gibbs, replacing interim city manager Art Vela who held the position following Doug Schulze's departure in February 2025. Gibbs was the city manager of Beaumont before leaving in September 2025 after serving 30 years with the city.
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"The strategic plan is our road map. It works like a fitness plan. Be honest about where you are, then commit to the steady, disciplined work of getting stronger. One of its top priorities is Banning's workout plan to fiscal sustainability, also known as Banning 2030," Royce said.
In April, the city's new finance director official started, focused on cleaning up the city's books, Royce added.
"That means accurate records, clear reporting and numbers we can trust. We can't fix what we can't see. We also looked out for everyone when our utility billing system was disrupted back in 2024. The new council made sure that no one was charged a late fee, no penalty and no interest for that period," he said.
On May 14, city officials shared the workout plan with residents during a public workshop. The next month, the city council adopted a continuing resolution to keep essential services active while the city worked on a new budget. On June 23, the council adopted a fiscal emergency resolution.
"That was not an easy vote, but it was necessary. It told the community the truth about our finances and gave us the tools to act quickly. And we've been putting those tools to work."
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Royce said the city reviewed its fire services contract with Riverside County before reducing positions in the fire marshal's office. The city then presented the budget to residents during public workshops in August and September before the city council adopted its "balanced budget" on Tuesday, Sept. 22.
"I'm going to be painfully honest, it does use some one-time money. So, while balanced, think of it as a transitional budget. One that keeps services steady while the longer-term changes in our workout plan take hold," he added.
Royce said the city's audits are back on track, and its roadmap to long‑term sustainability is underway.
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