TO: Honorable Mayor and Members of the City Council
FROM: Paul Young, Finance Director
SUBJECT:
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2026/27 Budget Adoption
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RECOMMENDED COUNCIL ACTION:
recommendation
1) The City Council adopt the budget and the Appropriations Limit Schedule for FY 2026/27 as recommended by the Budget Committee.
2) The City Council approve the Fund 19 expenditures which are included in the FY 2026/27 budget and listed in the Summary Section.
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SUMMARY:
The City Budget is presented to the Council annually for adoption as the spending plan for the coming fiscal year. The Council’s Budget Committee met with staff many times, over the course of many hours and days, and made recommendations regarding the preparation of the proposed budget.
The proposed budget includes the following expenditures out of Fund 19, earmarked by Council to be used for WWTP improvements. By adopting this budget, Council is revising its earmarked funds to be spent as follows:
10-19-760220-0100 Improvements: $200,000 for Kimball Road.
10-19-720340-0100 Professional Services: $12,000 for an MS4 consultant.
PREVIOUS COUNCIL ACTION:
On June 17, 2025, City Council approved the FY 2025/26 Budget and Appropriations limits.
DISCUSSION:
The current 2025/26 budget started with a general fund balance of $8,775,046. Fund balances are resources from prior years available to spend in the current year. The 2025/26 general fund budget is projected to end with $5,567,787, a decrease of $3,167,259. The projection is a conservative estimate based on revenue projections from consultants and current sending patterns, actual results could differ.
The proposed 2026/27 budget begins with an estimated general fund balance of $5,567,787. The 2026/27 general fund budget recommended by the Budget Committee ends with an estimated general fund balance of $693,244, a decrease of $4,874,543.
The General Revenues have been budgeted for $13,674,395, which is $234,768 or a 1.8% increase from the prior year. Details are available on page 15 of the budget. Total General Fund Budgeted revenues are based on consultant projections for sales, property, and VLF taxes. Other general revenues are budgeted based on historical amounts.
General Fund Expenditure increased $545,185 or 2.7% from the prior year Origanal Budget. Personal costs increased modestly as savings in workers compensation insurance offset most of the inflation in salaries resulting in a $111,095 increase. Capital Outlay increased $243,967 due to Park outbuilding restoration, wood fiber for playgrounds and increase cost of police vehicles.
General Fund Summary details of expenditures are available on pages 16 to 36 of the budget. Total Budget expenses represent the maximum allowable expenditures; actual expenditures may be lower. Budgets are presented in level of budget controls on page 5 of the budget.
After including departmental related revenues and transfers the net cost of the general fund related programs is $18,548,938, to be funded by general revenues of $13,674,395 and a ending fund balance of $693,244.
The Government Finance Officers Association (GFOA) recommends that, at a minimum, regardless of the size of the entity, the unrestricted general fund balance should be no less than two months of general fund expenditures. The City of Red Bluff Policy is to reserve 15% ($3,135,066) of general fund expenditures for contingencies and uncertainties. With the current budget, it is expected that the general fund could no longer meet its reserve policy.This is based on conservative preliminary estimates for how the 2025-2026 fiscal year will end.
Due to this, the Budget Committee will meet again in September 2026, once 2025-2026 fiscal year revenues are in and more accurate expenditure amounts are available. The budget committee will review all options in order to maintain the 15% reserve.
The city has a history of underspending the budget, and the city is coordinating with department heads to continue that trend of controlling spending. The city will continue to monitor actual results and plans to have a continuing dialogue during the quarterly budget presentations.
The Budget Committee would like to thank the Public Works Director, Community Development Director, Police and Fire Chief, and all City staff for their help, input, and hours of work that led to the proposed 2026/27Fiscal Year Budget.
The Budget Committee would also like to thank every department head and employee for their past, current, and future efforts at controlling costs and efforts to keep spending within their department budgets.
CITY FISCAL IMPACT:
The above recommendations by the Budget Committee will result in a projected General Fund Balance of approximately $693,244 on June 30, 2027.
ATTACHMENTS:
1. CITY OF RED BLUFF 2026-2027 BUDGET
2. 2026-2027 Budget Presentation