Item 12
CITY OF CITRUS HEIGHTS
CITY COUNCIL STAFF REPORT
MEMORANDUM
DATE
: June 24, 2026
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FR
OM: Susan Talwar, Administrative Services Director
SU
BJECT: Approval of Master Services Agreement with Hinderliter de Llamas and Associates (HdL) for Sales and Use Tax Analytics and Related Revenue Services
Reco
mmendation
Sta
ff recommends the City Council adopt Resolution No. 2026-___ A Resolution of the City Council of the City of Citrus Heights, California, authorizing the City Manager to execute the agreement between the City of Citrus Heights and Hinderliter de Llamas and Associates (HdL) for Sales and Use tax Services.
St
rategic Plan Alignment
Th
is item is in alignment with the following City Council priority:
Goal
: Maintain and Enhance Fiscal Stability While Supporting Operational Excellence Fi
scal Impact
The
agreement results in a net increase of $4,200; however, savings realized from recent banking services will fully offset this amount. Therefore, no budget adjustment is required at this time.
Ba
ckground and Analysis
HdL
has been a longstanding consultant to the City of Citrus Heights, providing specialized revenue consulting, sales and use tax analysis, economic forecasting, and audit recovery services for well over a decade. Their services have supported City staff, budget planning efforts, quarterly financial reporting, and economic development initiatives.
On a
quarterly basis, HdL provides detailed reports and meets with staff from Finance, Economic Development, and the City Manager’s Office to review sales tax trends, discuss statewide economic factors, and update financial forecasts. These meetings regularly include detailed Item 13
reporting packets consisting of Consensus Forecast Reports, Final Reports, Geo Reports, and industry specific evaluations. This structure has provided the City valuable insights during annual budget development, midcycle updates, long-range forecasting, and economic development project planning.
HdL has consistently demonstrated responsiveness and professionalism in supporting the City’s needs, including providing special analyses, corrected reports, training, and technical support.
Staff rely heavily on the firm’s subject matter expertise in California sales and use tax law, California Department of Tax and Fee Administration (CDTFA) reporting practices, and economic trend analysis. HdL’s work has proven especially valuable during periods of economic fluctuation, retail sector shifts, and other factors affecting City revenues.
HdL’s services offer significant value to the City by delivering accurate and timely forecasting, which is essential for both annual and midcycle budget development. The firm’s expertise enables the identification of previously unreported or misallocated revenues, resulting in meaningful revenue recovery. HdL provides strategic insight into retail performance and economic trends that supports economic development efforts. Their direct staff support and training help free up internal resources, maximizing efficiency within City departments. HdL also ensures compliance with CDTFA confidentiality laws through their specialized systems and knowledge, while consistently providing high-quality technical support and responsive service to City staff. Collectively, these benefits allow the City to stay competitive and well informed in a changing retail and economic environment, with reliable sales tax forecasting playing a crucial role in maintaining essential City services.
The proposed Master Services Agreement preserves the structure of services historically relied upon by the City while updating the terms, fee schedules, and clarifying responsibilities related to access to confidential CDTFA data under Revenue & Taxation Code Section 7056.
Attachments
1. Resolution No 2026- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS, CALIFORNIA, authorizing the City Manager to execute the agreement between the City of Citrus Heights and Hinderliter de Llamas and Associates (HdL) for Sales and Use tax Services.
2. Master Services Agreement
Item 13
RESOLUTION NO. 2026-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS,
CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT
BETWEEN THE CITY OF CITRUS HEIGHTS AND HINDERLITER DE LLAMAS AND
ASSOCIATES (HDL) FOR SALES AND USE TAX SERVICES
WHEREAS, the City of Citrus Heights has relied on Hinderliter de Llamas and Associates (HdL) for over a decade to provide specialized revenue consulting, sales and use tax analysis, economic forecasting, and audit recovery services; and
WHEREAS, the proposed Master Services Agreement maintains the long-established service structure provided by HdL while updating terms, fee schedules, and responsibilities related to access to confidential CDTFA data under Revenue & Taxation Code Section 7056; and
WHEREAS, the updated agreement results in a net cost increase of $4,200; however, savings from recently updated banking services fully offset this amount, requiring no budget adjustment; and
WHEREAS, the proposed agreement aligns with the City Council’s Strategic Goal to Maintain and Enhance Fiscal Stability While Supporting Operational Excellence.
NOW THEREFORE BE IT RESOLVED AND ORDERED that the City Council of the City of Citrus Heights does hereby authorizes the City Manager to execute the Master Services Agreement between the City of Citrus Heights and Hinderliter de Llamas and Associates (HdL) for Sales and Use Tax Analytics and related revenue services.
The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.
PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 24 day of June 2026 by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSTAIN: Council Members:
ABSENT: Council Members:
MariJane Lopez-Taff, Mayor
ATTEST:
Amy Van, City Clerk
Item 13
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (this “Agreement”) is entered into as of _____________, 2026 ( the “Agreement Date ”) by and between Hinderliter de Llamas and Associates (“Consultant”), and City of Citrus Heights (“Client”), which is located within the state of California (the “State”).
W I T N E S S E T H:
WHEREAS, Consultant is engaged in the business of providing consulting, software and other services that help public agencies understand and maximize their collection of sales, use and transactions taxes, business license taxes, property and lodging taxes, and other revenues, as well as their delivery of public services (collectively, “Consultant’s Business”); and WHEREAS, Client desires to contract with Consultant to obtain one or more of the services included within Consultant’s Business (as provided for in Section 1) upon the terms and conditions contained in this Agreement;
WHEREAS, Consultant desires to contract with Client to render such services upon the terms and conditions contained in this Agreement.
NOW THEREFORE, in consideration of the covenants and promises contained herein, Client and Consultant mutually agree as follows:
1. Services.
1.1 Consultant will perform those services included within Consultant’s Business that are described in any and all schedule(s) referencing this Agreement and signed by Client and Consultant as of the Agreement Date or hereafter ( individually and collectively, the “Schedule(s)”), upon the terms and conditions contained in this Agreement (including the Schedules) (such services are, collectively, the “Services”). In performing the Services, Consultant is acting as an independent contractor (and not as an agent or employee of Client).
1.2 Client acknowledges and agrees that any other public agency (including, without limitation, any participating government agency) located within or outside of the State (e.g., city, municipality, county, district, public authority or other political subdivision) may procure services for fees and other terms and conditions that are substantially similar to any of the Services, Fees and other terms and conditions set forth in this Agreement, provided that such other public agency executes a separate agreement with Consultant wherein the services rendered to such other public agency, the fees payable by such other public agency, and the other terms and conditions of such separate agreement are the responsibility of Consultant and such other public agency and not Client.
1.3 This Agreement does not limit the right of Consultant to enter into additional contracts with Client or to contract with third parties to provide them with merchandise or services of any kind whatsoever, including, but not limited to, services similar to the Services. During the Term of this Agreement, Client will not, directly or indirectly (except through Consultant), engage any third party to provide the Services or any services similar to the Services.
Item 13
2. Fees. As compensation for performing the Services, Client will pay Consultant the fees, costs and expenses as described in the Schedules (individually and collectively these fees and costs are, the “Fees”). Consultant may perform the Services using professionals from its staff or Consultant’s affiliated entities, and such Services will be invoiced to Client under the same terms applicable to Consultant’s staff. Consultant may increase the Fees from time to time (including, without limitation, as may be described in any of the Schedules). Other than a Fee increase as described in the Schedules, Client may notify Consultant of a request that such Fee increase be modified or revoked and, if Consultant fails to do so to Client’s satisfaction within thirty (30) days after the receipt of such request , Client may terminate this Agreement without cause pursuant to Section 7.3.
3. Invoices; Payment.
3.1 Consultant will invoice Client for the Fees earned and /or incurred by Consultant pursuant to this Agreement.
3.2 Invoices are due and payable upon receipt. Interest will begin to accrue on the thirty-first (31st) day following the invoice date on all unpaid balances at a rate of one and one - half percent (1½%) per month, or the maximum rate permitted by law, whichever is less. Payments will first be credited to interest and then to principal. In the event that Client disputes an invoice, only that portion so disputed in good faith will be withheld from payment, and the undisputed portion must be timely paid. Interest will accrue on any disputed portion of the invoice not timely paid and will be payable immediately if the disputed invoice is resolved in favor of Consultant.
3.3 I f Client fails to fully pay an invoice within 30 days after the invoice date, Consultant may, after giving five (5) days’ prior written notice to Client, suspend the rendering of Services under this Agreement until said invoice is paid in full, together with all interest that has accrued thereon. In the event of such a suspension of S ervices, Consultant will have no liability to Client for any delays or damages arising therefrom.
4. Insurance. Throughout the term of this Agreement , Consultant will maintain the following insurance in not less than the referenced amounts : (a) w orkers compensation and employers liability insurance as may be required by the State ; (b) property damage liability of $1,000,000 per incident; (c) bodily injury liability of $1,000,000 per incident; and (d) professional liability for any errors or omissions of $1,000,000.
5. Client Support.
5.1 Client will promptly provide in writing to Consultant all data and other information relating to or which may be necessary for Consultant ’s performance of the Services.
Without limiting the foregoing, Client will keep Consultant informed on a timely basis in writing as to the existence and a mendments of the laws, ordinances and/or regulations under which Consultant is performing the Services (including any adopted by Client) . Consultant will be permitted to rely on the accuracy, timeliness and completeness of the information pro vided by Client, and in no event will Consultant be liable to Client or others as a result of such reliance.
5.2 Client will examine all of Consultant ’s reports, specifications, notices, proposals and other documents. In the event that Consultant asks for a decision from Client in Item 13
order for Consultant to perform the Services, Client will render such decision in writing in a timely manner.
5.3 Promptly following any request from Consultant, Client will adopt and maintain in full force and effect resolutions in forms acceptable to Client and in accordance with applicable law authorizing Consultant to examine the confidential sales tax and other r elevant records of Client throughout the Term and, for so long as any Fees are still accruing pursuant to this Agreement, after the Term.
5.4 Client will assist Consultant in obtaining such licenses, permits and approvals as may be required by law for performing the Services, and Client will pay all fees, assessments and taxes related to the application, issuance and maintenance thereof.
5.5 The Services do not include services to support, prepare, document, bring, respond to subpoenas, act as a witness, defend or otherwise assist in litigation undertaken or defended by Client, which Consultant may be required by legal process or otherwise or requested by Client to provide (collectively, “Litigation Services”). In this regard, if Consultant agrees with Client or is otherwise required to perform Litigation Services, Client will promptly pay or reimburse Consultant for all of Consultant’s costs and expenses related to Litigation Services (including, without limitation, Consultant’s attorneys’ fees and costs) at Consultant’s actual cost, plus ten percent (10%) thereof (all of which are deemed to be additional Fees).
6. Confidentiality; Software Use and Warranty; Records.
6.1 Consultant will comply with the requirements of the applicable law s, ordinances and/or regulations of which it has been informed by Client pursuant to Section 5.1 concerning the confidentiality of tax records . Consultant may publicly state that it performs Services for Client.
6.2 As used herein, the term “proprietary information” means all information, techniques, processes, services or material that has or could have commercial value or other utility for Consultant or in Consultant’s Business, including without limitation, (i) software, computer or data processing programs; (ii) data processing applications, routines, subroutines, techniques or systems; (iii) desktop or web- based software; (i v) audit, tax or fee collection/administration or business processes, methods or routines ; (v) marketing plans, analys es and strategies; (v i) materials, techniques and intellectual property used ; and (vii) the Software and the Software’s documentation. Except as otherwise required by law, Client must hold in confidence and may not use (except as expressly authorized by this Agreement) or disclose to any other party any proprietary information provided, learned of or obtained by Client in connection wi th this Agreement. The terms of this Section 6.2 do not apply to information that is public inf ormation; provided, however, that proprietary information will not qualify as public information if it became public due to Client’s (or its employees’ or agents’) disclosure.
6.3 If access to any software which Consultant owns is provided to Client as part of the Services under this Agreement (including, without limitation, if Client chooses to subscribe to such software and/or related reports as part of the Services pursuant to a Schedule to this Agreement) (such Consultant-owned software is, collectively, the “Software”), Consultant hereby Item 13
provides a limited, non- exclusive, non-transferable license to Client (including such of Client’s staff as may be designated from time to time by Client and approved by Consultant in writing) to use the Software pursuant to and during the Term of this Agreement.
6.4 The Software must only be used by such authorized Client staff, and Client must not sublicense, sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of the Software. The license granted hereunder does n ot imply ownership by Client or any of Client’s staff of the Software nor any rights of Client or any of Client’s staff to sublicense, transfer or sell the Software, or rights to use the Software for the benefit of others. Client may not create (or allow the creation of) any derivative work or product based on or derived from the Software or the Software’s documentation, nor modify (or allow the modification of) the Software or the Software’s documentation without the prior written consent of Consultant. In the event of a breach of this provision (and without limiting Consultant’s remedies), such modification, derivative work or product based on the Software or the Software’s documentation is hereby deemed assigned to Consultant. Upon termination of this Agreement or this Software license, this Software license will be deemed to have expired and Client must immediately deactivate, cease using and remove, delete and destroy all the Software (including, without limitation, from Client’s computers and network ). Consultant warrants that the Software will perform in accordance with the Software’s documentation.
6.5 Notwithstanding anything to the contrary in this Agreement (including any Schedule hereto), if access to any software which Consultant does not own is provided to Client as part of the Services pursuant to this Agreement (including pursuant to any Schedule hereto), Client hereby agrees (i) to comply with all of the terms and conditions imposed on Client’s access to such software (including, without limitation, by Consultant, such software’s owner , and pursuant to applicable law) , and (ii) Consultant has no obligation during the Term of this Agreement or thereafter to provide Client with access to such software.
6.6 All documents, preliminary drafts, communications and any and all other work product related to the Services and provided by Consultant to Client either in hard copy or electronically are the joint property of Client and Consultant. This does not include the Software or any other software, any programs, any methodologies or any systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by Consultant in the course of performing the Services that were not otherwise provided to Client in either hardcopy or electronic form, all of which may be protected by Consultant or third party copyrights or other intellectual property and remain Consultant’s or such third parties’ exclusive property (as the case may be). It is possible that any documents, drafts, communications or other work product provided to Client may be alleged to be public records under applicable law and/or may be discoverable through litigation. Well in advance of when Client may disclose such information in response to any request for public records, Client must notify Consultant in writing about the request and, if Consultant requests it, Client must apply for any potential exemption from disclosure that may exist under applicable law.
6.7 Subject to applicable law, Consultant is responsible for retaining all final documents and other final work product related to the Services for a period of not less than three (3) years from the date provided to Client. Retention of any other documents, preliminary drafts, communications and any and all other work product provided to Client by Consultant is the Item 13
responsibility of Client. Consultant has no responsibility to retain any drafts, notes, communications, emails or other writings created or received by Client in the course of performing the Services (other than the final documents and other final work pr oduct related to the Services and provided to Client for the term of years referenced above).
7. Term and Termination.
7.1 The initial term of this Agreement commences as of the Agreement Date and, unless terminated earlier pursuant to any of this Agreement's express provisions, will continue in effect for five (5) years from such date (the “Initial Term”). This Agreement may be renewed for two twelve (12) month terms unless earlier terminated as set forth in Section 7.2 or 7.3 (each a “Renewal Term” and, collectively, together with the Initial Term, the “Term”).
7.2 This Agreement may be terminated by either party for cause upon not less than forty-five (45) days’ prior written notice given to and received by the other party, if the other party has materially breached this Agreement through no fault of the notifying party and fails to (i) commence correction of such material breach within thirty (30) days of receipt of the above - referenced written notice and (ii) diligently complete the correction thereafter.
7.3 In addition, either party may terminate this Agreement without cause upon not less than one hundred twenty (120) days’ prior written notice to the other party.
7.4 On termination, Client will pay Consultant for all Fees and other compensation (including for Litigation Services) earned and /or incurred through the termination date and will thereafter timely pay Consultant for all other Fees and compensation to which Consultant may be entitled pursuant to this Agreement (including the Schedules hereto).
8. Indemnification.
8.1 Consultant, on behalf of itself and its directors, officers, employees, agents, direct and indirect equity holders, and affiliates (collectively, “Consultant Group”), agrees to fully and promptly protect, indemnify, reimburse and hold harmless Client, its directors, officers, employees, agents, direct and indirect equity holders, and affiliates (collectively, “Client Group”), from and against any and all liabilities, losses, claims, damages, personal injuries, death, expenses, and costs (including, without limitation, for attorneys’ fees and costs) (each, a “Liability”, and collectively, “Liabilities”) which are the direct or indirect result of (a) any breach of any representation, warranty or covenant made by or given on behalf of Consultant under this Agreement, or (b) any gross negligence or willful misconduct on the part of any one or more of Consultant Group.
8.2 Client, on behalf of itself and the other members of Client Group, agrees to fully and promptly protect, indemnify, reimburse and hold harmless Consultant and the other members of Consultant Group from and against any and all Liabilities which are the direct or indirect result of (a) any breach of any representation, warranty or covenant made by or given on behalf of Client under this Agreement, or (b) any action or failure to act on the part of any one or more of Consultant Group where such action or failure to act was in good faith believed by any of Consultant Group at the time to be in conformity with this Agreement, or (c) otherwise related to or arising out of any act or omission by any one or more Client Group. In this regard, Client hereby acknowledges that it is Item 13
responsible for instructing Consultant regarding Consultant’s performance of Services under this Agreement, as well as the interpretation and meaning of the ordinances and/or regulations under which Consultant is performing Services under this Agreement.
8.3 P romptly after any member of Client Group or any member of Consultant Group (in each case, the “Indemnified Group”) receives notice of the commencement of any proceeding for which Client or Consultant (as the case may be) intends to make a claim for indemnification under this Agreement, it should notify the other party (the “ Indemnifying Party”), but the failure to so notify will not result in the loss of any rights of any of the Indemnified Group to indemnification hereunder except to the extent that the Indemnifying Party does not otherwise become aware of such proceeding and is actually adversely affected thereby to a material extent. The Indemnifying Party will assume the defense of the Indemnified Group (including the employment of legal counsel reasonably satisfactory to the Indemnified Group) and payment of such counsel’s fees and disbursements (including retainers). Should the Indemnified Group reasonably determine that separate counsel is necessary (whether due to the existence of different defenses, potential conflicts of interest or otherwise), or if the Indemnifying Party has not assumed the defense, then any of the Indemnified Group may employ separate legal counsel, and the Indemnifying Party will pay such counsel’s reasonable fees and disbursements as incurred (including retainers). The obligations of defense and indemnification under this Agreement apply, without limitation, to those situations where someone brings a cross claim for indemnity or contribution against any one or more of the Indemnified Group.
8.4 Neither Consultant nor Client shall, without the other party’s prior written consent, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action, or proceeding or investigation in respect of which indemnification could be sought hereunder (whether or not any of the other party or any other member of the Indemnified Group is an actual or potential party to such claim, action or proceeding or investigation), unless such settlement, compromise or consent includes an unconditional release of the other party and any other member of the Indemnified Group from all liability arising out of such claim, action , proceeding or investigation and includes an explicit disclaimer of responsibility of any kind on the part of the other party and any other member of the Indemnified Group.
9. Liability Limitations; Governing Law; Dispute Resolution.
9.1 To the maximum extent permitted by law and notwithstanding anything to the contrary in this Agreement:
9.1.1 Except for Consultant’s gross negligence or willful misconduct in connection with the performance of its obligations under this Agreement, Client’s sole and exclusive remedies for any breaches of Consultant’s obligations under this Agreement (including, without limitation, for any breaches relating to the Services or the Software, including any breaches of warranty, express or implied) (i) are limited to making reasonable and necessary repairs, replacements or corrections without additional cost to the Client, and (ii) will not exceed, under any circumstances, the amount of the Fees paid by Client to Consultant for the twelve-month period prior to the alleged breaches, calculated without reference to any payments constituting the payment of costs or expenses. All amounts paid to Consultant hereunder are deemed first to be for the reimbursement of costs or expenses and then any excess will be regarded as payments for other Item 13
portions of the Fees under this Agreement . Any references to breaches of this Agreement wi ll include any supplements, additions or amendments to this Agreement.
9.1.2 Except as may otherwise be expressly set forth in this Agreement, Consultant makes no warranty of any kind with respect to the Services or the Software, express or implied. Consultant hereby disclaims all other warranties, express or implied, including the implied warranties of merchantability, fitness for a particular purpose, title and non infringement.
Consultant disclaims all warranties and responsibility for third party software.
9.1.3 In no event will any of Consultant Group be liable for any lost revenues or lost profits, or any special, incidental, or consequential damages of any nature whatsoever, even if such restrictions deprive one or more remedies of their essential purpose. This damage exclusion is independent of any remedies provided for herein.
9.1.4 None of Consultant Group will have any Liability (whether direct or indirect, in contract or tort or otherwise) related to, arising out of, or in connection with this Agreement or to any of Client Group acting on any advice given or opinion rendered by any of Consultant Group, except to the extent that such Liability is found by a court of competent jurisdiction in a judgment which has become final and that it is no longer subject to appeal or review to have resulted solely from such Consultant Group’s willful misconduct or gross negligence.
9.1.5 No claim may be brought by Client against any one or more of Consultant Group arising out of this Agreement (including, without limitation, in connection with the Services or the Software) more than one year after the date on which such claim arose (regardless of the date when Client may have discovered a basis for the claim).
9.1.6 Client acknowledges that this Agreement is with Consultant in its capacity as a corporation or a limited liability company, and Client agrees that in no event will it seek to hold any of the Consultant Group (other than Consultant) responsible for any Liabilities.
9.2 The law of the State will govern the validity of this Agreement, its interpretation and performance, and any other claims related to it, without regard to the State’s conflict of laws rules. Venue for any legal action arising out of this Agreement will be proper only in the State courts or the federal courts located within the State. The parties hereby submit to the exclusive jurisdiction of such courts and waive any other venue to which either party might be entitled by domicile or otherwise.
9.3 If either party is required to bring legal action to enforce its rights under this Agreement or as the result of a breach of this Agreement, the costs and expenses of the prevailing party, including reasonable attorneys’ fees, will be paid by the non-prevailing party.
9.4 A breach of this Agreement by either party may cause the other party hereto irreparable harm, the amount of which may be difficult to ascertain, and therefore such other party will have the right to apply to a court of competent jurisdiction for specific performance and/or an order restraining and enjoining any further breach and for such other relief as such other party may deem appropriate. Such right is in addition to the remedies otherwise available to such other party at law or in equity. The parties hereto expressly waive the defense that a remedy in damages will Item 13
be adequate and any requirement in an action for specific performance or injunction hereunder for the posting of a bond.
10. General Legal Provisions.
10.1 Authorization to Proceed. Each Schedule must be signed by both Client and Consultant before such Schedule will be binding on the parties hereto.
10.2 Force Majeure. Consultant is not responsible for damages or delay in performance caused by acts of God, strikes, lockouts, accidents, epidemics, pandemics or other health emergencies, or other events beyond the control of Consultant.
10.3 Amendment; Waiver. Any provisions of this Agreement (including, without limitation, any Schedules or provisions within any Schedules) may be amended or terminated if in writing and signed by both Client and Consultant. No waiver by any party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, will be deemed to be valid unless acknowledged by such party in writing, and such waiver will not extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
10.4 Severability and Survival. If any provision in this Agreement is held illegal, invalid or unenforceable, the enforceability of the remaining provisions will not be impaired thereby. Notwithstanding any other provisions of this Agreement (including, without limitation, Section 7), Sections 3, 5.5, 6, 7, 8, 9 and 10 will survive the termination of this Agreement.
10.5 No Third-Party Beneficiaries; Services Limited to Agreement. Except as set forth in Section 8, this Agreement gives no rights or benefits to anyone other than Client and Consultant and has no third-party beneficiaries. The Services to be performed for Client by Consultant are defined solely by this Agreement (including the Schedules), and not by any other contract or agreement that may be associated with performing the Services.
10.6 Assignment. This is a bilateral personal services agreement. Neither party will have the power to or will assign any of the duties or rights or any claim arising out of or related to this Agreement, whether arising in tort, contract or otherwise, without the written consent of the other party. Any unauthorized assignment is void and unenforceable. Th is Agreement is binding on the Item 13
successors and assigns of the parties hereto. Notwithstanding anything to the contrary, Consultant may, from time to time, utilize one or more third parties to provide certain of the Services (including, but not limited to, as may be set forth in one or more of the Schedules).
10.7 Notices. All notices under this Agreement must be in writing and will be deemed to have been given when such notice is received (i) from United States Postal Service First Class Certified Mail, Return Receipt Requested, (ii) by courier service, or (iii) by email; provided, however, that notices received on a weekend or holiday or on a business day after 4:00 p.m. local time will be deemed to have been received on the next business day. Notices will, unless another address is specified in writing, be sent to the addresses indicated below (each of which must include a street address and an email address): Consultant: 120 S. State College Blvd.#200, Brea, CA 92821, Attn: Contracts , Email: [email protected] ; and Client: 6360 Fountain Square Dr. Citrus Heights, CA 95621, Attn: Administrative Services Director, Email:
[email protected]
10.8 Entire Agreement; Conflict. This Agreement ( which includes any Schedules or amendments dated as of the Agreement Date or hereafter, including without limitation, amendments of the main body of this Agreement or the Schedules that may add to, subtract from, modify or clarify the Term, the scope of Services and/or the amount of Fees) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they relate in any way to the subject matter hereof. Should there ever be a conflict between the terms and conditions of any Schedules and the remainder of this Agreement as set forth in the main body of this Agreement, the terms and conditions of the remainder of this Agreement as set forth in the main body of this Agreement will prevail and be controlling; provided, however, that should there ever be a conflict between the terms and conditions of this Agreement (including any Schedules ) and (i) any amendments hereof, the terms and conditions of the amendments hereof will prevail and be controlling, and (ii) the terms and conditions of any Schedule that expressly provides for them to supersede any terms and conditions of the main body of this Agreement, such terms and conditions of such Schedule will prevail and be controlling.
10.9 Counterparts; Electronic Signatures; Authority . This Agreement may be signed in any number of counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement. Any signed signature pages of this Agreement transmitted by email or other electronic means in a portable document format (PDF) or other clear and visible electronic format will have the same legal effect as an original. Each of the persons signing on behalf of a party hereto represents that he or she has the authority to sign this Agreement on such party’s behalf.
10.10 No Adverse Construction. Both parties acknowledge having had the opportunity to participate in the drafting of this Agreement. This Agreement will not be construed against either party based upon authorship. The section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.
Item 13
[Signatures are on the next page]
Item 13
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement through their duly authorized representatives as of the Agreement Date.
CONSULTANT:
Hinderliter de Llamas and Associates
By:
Andrew Nickerson, President/CEO
CLIENT:
City of Citrus Heights
By:
[Any Schedule or Schedules may (but is/are not required to) be attached hereto]
Item 13
SCHEDULE A
PREMIUM SERVICES – Sales and Use Tax
1. Sales and Use Tax and Economic Analysis/Reports
1.1. Establish a special database with California Department of Tax and Fee Administration (“CDTFA”) registration data for businesses within applicable district boundaries holding seller’s permit accounts.
1.2. Consultant shall make available to CITY the HdL proprietary software program and database containing all applicable registration and quarterly allocation information for CITY business outlets registered with the Department of Tax and Fee Administration. The database will be updated quarterly.
1.3. Consultant shall provide updated reports each quarter identifying changes in allocation totals by individual businesses, business groups and by categories. Quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, will also be identified.
1.4. Following each calendar quarter shall provide a summary analysis for City to share with Council Members, Chamber of Commerce, other economic development interest groups and the public that analyze City’s sales tax trends by major groups without disclosing confidential individual tax records.
1.5. Provide periodic updated reports endeavoring to identify and assist with budget forecasting including (i) changes in allocation totals by individual businesses, business groups and categories, and (ii) aberrations due to State audits, fund transfers, and receivables, along with late or double payments.
1.6. Consultant shall provide a presentation led by an HdL Sales Tax Principal discussing latest sales tax results, emerging retail trends, business retention needs, leveraging of economic clusters and reviewing successes in client jurisdictions with similar characteristics. This presentation will occur following each calendar quarter.
2. Allocation and Audit Recovery Services
2.1. Conduct (when mutually agreed with City) initial and on-going sales and use tax audits of businesses to help identify and correct allocation errors, and to proactively affect favorable registration, reporting or formula changes thereby generating previousl y unrealized sales and use tax income for the City and/or recovering misallocated tax from registered taxpayers. Common errors that will be monitored and corrected include but are not limited to: transposition errors resulting in misallocations; erroneous consolidation of multiple outlets; misreporting of “point of sale” to the wrong location; delays in reporting new outlets; misallocating use tax payments to the allocation pools or wrong jurisdiction; and erroneous fund transfers and adjustments.
2.2. Initiate contacts with sales, management and accounting officials in companies that have businesses where a probability of error exists to endeavor to help verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner.
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2.3. Prepare and submit to the CDTFA information for the purpose of correcting any identified allocation errors, and follow -up with individual businesses and the CDTFA to promote recovery by the City of back or prospective quarterly payments that may be owing.
2.4. If, during the course of its audit, Consultant finds businesses located in the City’s jurisdiction that are properly reporting sales and use tax but have the potential for modifying their operation to provide an even greater share to City, Consultant may s o advise City and collaborate with those businesses and City to encourage such changes.
3. Consulting and Other Optional Services
Consultant may from time to time in its sole discretion, consult with City’s staff, including without limitation, regarding (i) technical questions and other issues related to sales, use and transactions tax, (ii) utilization of reports to enhance business license collection efforts, (iii) sales tax projections for proposed annexations, economic development projects and budget planning, (iv) negotiating/review of tax sharing agreements, (v) establishing purchasing corporations, (vi) meeting with taxpayers t o encourage self-assessment of tax obligations, and (vii) other sales, use or transactions tax revenue- related matters.
FEES – Sales and Use Tax Services
4. Sales and Use Tax and Economic Analysis/ Reports
4.1. Fees for performing the sales tax and economic analysis Services as described above shall initially be $900 per month, commencing with the month of the Effective Date (hereafter referred to as “monthly fee”). The monthly fee shall be invoiced quarterly in arrears, and shall be paid by City no later than 30 days after the invoice date.
4.2. Consultant will increase the non-hourly Fees established above once a year with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”).
5. Allocation and Audit Recovery Services
5.1. Fees for performing the allocation and audit recovery Services described above shall be 18% of all new, increased and recovered sales and use tax revenue received by the City as a result, in whole or in part, of the allocation audit and recovery services (hereafter referred to as “audit fee”).
The fee shall be paid notwithstanding any related C ity assistance, work in parallel, and/or incurrence of attorneys’ fees or other costs or expenses in connection, with the relevant Services.
5.2. The Fee described above include, without limitation, State fund transfers received for back quarter reallocations and monies received in the second eight (8) consecutive reporting quarters following completion of Consultant’s allocation audit and confirmation of the corrections by the CDTFA.
5.3. These Fees shall be paid by City upon Consultant’s submittal of evidence of Consultant’s relevant Services in support thereof, including, without limitation, copies of relevant communications between Consultant and the CDTFA and/or taxpayers.
ADDITIONAL TERMS – Sales, Use and Transactions Tax Services
6. Consulting and Other Optional Services
6.1. Fees for performing other optional services are described below:
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6.1.1. Fees for performing City Staff training, public representation, or technical seminars for elected officials shall be $3,000 for one -time service and $2,000 for recurring service
6.1.2. Fees for performing transactional tax ballot measure estimates shall be $2,600 per report.
6.1.3. On-site travel to the city shall be $2,600 plus any associated travel expenses per visit
6.1.4. Incremental non-core packet reporting shall be $2,600 for a one -time report and $700 for recurring reporting service
6.2. Any other consulting and optional Services not listed shall be based on the following initial hourly rates: (i) Principal - $325; (ii) Programmer - $295; (iii) Senior Analyst - $245; and (iv) Analyst - $195
7. General Provisions Relating to Fees
7.1. Fees for travel and lodging expenses will be invoiced at cost and applied to all meetings (including implementation, training, operations and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by City.
7.2. Fees will be invoiced monthly to City for Services performed during the prior month. To the extent that Consultant has commercially reasonable means to do so, Fees will be netted out of City’s monthly revenue disbursement.
8. Confidentiality Information
Section 7056 of the State of California Revenue and Taxation Code (“R&T Code”) specifically limits the disclosure of confidential taxpayer information contained in the records of the CDTFA. Section 7056 specifies the conditions under which a city, county or district may authorize persons other than such city, county or district’s officers and employees to examine state sales and use tax records.
The following conditions specified in Section 7056-(b)(1) of the State of California R&T Code are hereby made part of this Agreement:
8.1. Consultant is authorized by this Agreement to examine sales, use or transactions and use tax records of the CDTFA provided to City pursuant to contract under the Bradley-Burns Uniform Local Sales and Use Tax Law R&T Code Section 7200 et.seq.
8.2. Consultant is required to disclose information contained in, or derived from, those sales or transactions and use tax records only to an officer or employee of City who is authorized by City resolution provided to the CDTFA to examine the information.
8.3. Consultant is prohibited from performing consulting services for a retailer (as defined in R&T Code Section 6015), during the term of this agreement.
8.4. Consultant is prohibited from retaining the information contained in or derived from those sales , use or transactions and use tax records after this agreement has expired.
Information obtained by examination of the CDTFA records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the City as set forth by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution shall designate the Consultant as a person authorized to examine sales and use tax records and certify that this agreement meets the requirements set forth above and in Section 7056 (b), (1) of the Revenue and Taxation Code.
Item 13
CITY OF CITRUS HEIGHTS
CITY COUNCIL STAFF REPORT
MEMORANDUM
DATE
: June 24, 2026
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FR
OM: Susan Talwar, Administrative Services Director
Melissa Rojas, Human Resources Manager
SU
BJECT: Compliance with Assembly Bill 2561/Government Code Section 3502.3 regarding Vacancies, Recruitment and Retention Efforts
Recommendation
Ef
fective January 1, 2025, AB 2561 requires public agencies, including the City, to hold at least one (1) public hearing per fiscal year to discuss vacancies, recruitment and retention efforts. This staff report, along with the public hearing presentation, satisfies the City's legal obligations under the law. This presentation is for informational purposes only regarding the status of the City’s vacancies, recruitment and retention efforts.
St
aff recommend that the City Council receive the presentation for information purposes only during the public hearing at which time staff will report on workforce vacancies, recruitment, and retention efforts. The City's recognized employee organizations will be provided with an opportunity to make a presentation.
St
rategic Plan Alignment
This ite
m is in alignment with the following City Council priority:
Goal
: Maintain and Enhance Fiscal Stability while Supporting Operational Excellence Fi
scal Impact
Th
ere is no fiscal impact associated with this public hearing presentation.
Ba
ckground and Analysis
AB
2561 was introduced to address the issue of job vacancies in local government, which adversely affects the delivery of public services and employee workload. Among other Item 14
requirements, the bill mandates that public agencies present the status of vacancies, recruitment, and retention efforts during a public hearing before the agency’s governing body at least once per fiscal year prior to the adoption of the next fiscal year’s budget and identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process. The bill was enacted into law and is codified as Government Code section 3502.3, effective January 1, 2025.
In compliance with the new legal obligations, the City is required to do the following:
1. Public Hearing – Report on Vacancies: Report the City’s annual average percentage of vacancies (i.e., regular, full-time equivalent) for the previous year. For calendar year 2025, the average vacancy rate is 10.47%. Table 1 and Table 2 illustrate a breakdown of the percentage of vacancies (regular full-time equivalent) each month:
Table 1: Citywide Position Vacancy Data by Month (1/1/2025 – 6/30/2025) Jan Feb Mar Apr May Jun
Starting Employee Count 187 185 185 190 192 193
Separations 3 1 1 2 1
New Hires 1 1 6 2 3 2
Ending Employee Count 185 185 190 192 193 194
Authorized Positions (FTE) 210.75 210.75 210.75 210.75 210.75 210.75 Vacancies 25.75 25.75 20.75 18.75 17.75 16.75
Vacancy Rate 12.22% 12.22% 9.85% 8.90% 8.42% 7.95%
Table 2: Citywide Position Vacancy Data by Month (7/1/2025 – 12/31/2025) Jul Aug Sep Oct Nov Dec
Starting Employee Count 194 194 193 193 191 191
Separations 1 1 2 2 1 5
New Hires 1 2 1
Ending Employee Count 194 193 193 191 191 186
‘
Authorized Positions (FTE) 215 215 215 215 215 215
Vacancies 21 22 22 24 24 29
Vacancy Rate 9.77% 10.23% 10.23% 11.16% 11.16% 13.49%
2. Employee Organization Participation: Allow the recognized employee organization for each bargaining unit at the City to make presentations during the public hearing concerning vacancies and recruitment and retention efforts. The Human Resources Department notified the two (2) represented bargaining units at the City of the opportunity to present. (Gov. Code § 3502.3(b).)
3. Additional Reporting for High Vacancy Rates : If vacancies within a single bargaining unit meet or exceed 20% of authorized full-time positions in that bargaining unit, upon request of the recognized employee organization for that bargaining unit, the City must provide additional information during the public hearing, including the following: (1) the Item 14
total number of vacancies within the bargaining unit; (2) the number of applicants; (3) the average number of days to fill positions; and (4) opportunities to improve compensation and working conditions for employees in the bargaining unit. (Gov. Code § 3502.3(c).)
For the calendar year 2025, within the City’s bargaining units with recognized employee organizations, all were under the 20% vacancy rate, which is summarized below:
Bargaining Unit Average Annual Vacancy Rate
Police Officers’ Association 14.61%
Police Employees’ Association 5.75%
Citywide 10.47%
Item 14
CITY OF CITRUS HEIGHTS
CITY COUNCIL STAFF REPORT
MEMORANDUM
DATE: June 24, 2026
TO: M
ayor and City Council Members
Ashley J. Feeney, City Manager
FR
OM: Susan Talwar, Administrative Services Director
Dena Jenkins, Finance Manager
SU
BJECT: Fiscal Years 25/26 and 26/27 Mid-Cycle Budget Review, Financial Forecast Update and Appropriations Limit for Fiscal Year 26/27
Reco
mmendation
St
aff recommends that the City Council:
1) Review updated revenue and expenditure projections for the General Fund and other City funds for Fiscal Year 25/26 and Fiscal Year 26/27; and
2) Review the updated Ten -Year Financial Forecast; and 3) Adopt Resolution No. 2026-__ Resolution of the City Council of the City of Citrus Heights, California, Approving Amendments to the Fiscal Year 26/27 Budget; and 4) Adopt Resolution No. 2024-__ Resolution of the City Council of the City of Citrus Heights, California, Establishing an Appropriation Limit for Fiscal Year 26/27.
Fi
scal Impact
Upda
ted projections for Fiscal Year 26/27 reflect General Fund revenues of $47.1 million available to fund expenditures of $46.1 million with a projected year-end increase to General Fund reserves totaling $1 million.
The
proposed budget amendments for Fiscal Year 26/27 will increase General Fund revenue appropriations by $172,000 and will increase General Fund expenditure appropriations by $347,000.
Ba
ckground and Analysis
CIT
Y MANAGER’S MID-CYCLE BUDGET MESSAGE
The
City of Citrus Heights is committed to fiscal prudence, recognizing that a budget is more than a financial document; it is a reflection of community priorities and values. The City's biennial budget and mid-cycle review process help ensure resources remain aligned with the services, infrastructure investments, and initiatives that matter most to residents while allowing Item 15
the organization to respond to changing conditions and emerging needs. The mid-cycle review provides an opportunity to assess financial performance, evaluate evolving circumstances, and make adjustments as needed to ensure resources remain aligned with community priorities and organizational goals.
Like many local governments, Citrus Heights faces rising costs and increasing demands on public resources. At the same time, many revenue sources remain constrained, stagnant, or vulnerable to economic fluctuations. Economic conditions can change quickly, making ongoing monitoring and regular reassessment essential components of responsible financial management.
These realities require thoughtful prioritization and a commitment to directing limited resources toward the investments that deliver the greatest value to the community.
Citrus Heights is better positioned than many local agencies to navigate these challenges because of deliberate decisions. By maintaining healthy reserves, avoiding temporary solutions to ongoing costs, and taking a measured approach to growth and investment, the City has built a strong financial foundation that provides flexibility when conditions change. Prioritization nevertheless remains essential. Resources are finite, and every investment must be evaluated based on the value it delivers to residents and the community as a whole.
Fiscal stewardship is not simply about balancing a budget. It is about ensuring public resources are invested where they can produce the greatest value. The City regularly reviews expenditures, revenue performance, and emerging trends to ensure decisions are informed by current conditions rather than assumptions. Rather than relying on automatic year-over-year increases, the City evaluates actual performance and adjusts forecasts and spending plans as conditions evolve. While forecasts provide an important planning framework, the City recognizes that economic conditions can change and remains committed to monitoring performance and adjusting course when necessary. This approach allows the organization to adapt as circumstances change, remain responsive to community needs, and focus resources where they can have the greatest impact.
By working with regional partners and contracted service providers, Citrus Heights is able to expand its capacity, access specialized expertise, and pursue opportunities that would be difficult to achieve independently. Fiscal stewardship is also supported by a culture of continuous improvement, where departments regularly evaluate processes, identify efficiencies, and seek opportunities to improve service delivery. The City also aggressively pursues grant funding and other external resources to accelerate community investments, reduce reliance on local funding sources, and maximize the return on taxpayer dollars.
Fiscal stewardship is not an end in itself. Its purpose is to ensure the City can continue investing in the priorities that matter most to the community. The Fiscal Year 2026-2027 Budget advances the City Council's Strategic Plan and serves as the primary implementation tool for achieving the City's long-term goals: maintaining and enhancing fiscal stability while supporting operational excellence; maintaining public infrastructure and enhancing all modes of transportation; diversifying for a vibrant economy; preserving and enhancing public safety; and enhancing community vibrancy and engagement. Budget decisions are informed by community priorities, strategic planning, financial forecasting, and ongoing assessment of community needs to ensure resources remain focused on investments that provide the greatest return on investment and best advance the community's long-term priorities.
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To support these goals, the City applies a consistent approach to fiscal stewardship throughout budget development, implementation, and ongoing evaluation. This approach helps guide resource allocation decisions and ensures public resources are managed responsibly, transparently, and with a focus on long-term value.
How Citrus Heights Approaches Fiscal Stewardship
• Align resources with community priorities and City Council strategic goals. • Maintain structurally balanced and sustainable budgets. • Preserve reserves and organizational resilience.
• Invest in infrastructure and community assets.
• Aggressively pursue grants and external funding opportunities. • Maximize resources through partnerships, innovation, and operational efficiencies. • Promote transparency, accountability, and measurable results.
Responsible stewardship of public resources is fundamental to maintaining public trust and ensuring the City remains well-positioned to meet both current and future community needs.
Ultimately, fiscal stewardship is about creating the conditions for a safe, well-maintained, economically vibrant, and connected community.
The challenges facing local government will continue to evolve, but the City's commitment to responsible stewardship remains unchanged. Through thoughtful planning, ongoing evaluation, and disciplined investment, Citrus Heights will continue to make decisions that meet today's needs while keeping the community's long-term future firmly in view.
FISCAL YEAR 25/26 BUDGET YEAR END PROJECTION REVIEW
The City’s budget for Fiscal Years 25/26 and 26/27 was adopted by the City Council on June 11, 2025. The City Council received a mid-year budget update on March 11, 2026, and adopted a resolution amending the Fiscal Year 25/26 General Fund budget to incorporate updated revenue and expenditure projections. The FY25/26 revenue and expenditure projections are presented for informational purposes only and no budget adjustment is requested for this fiscal year.
The Fiscal Year 25/26 adopted budget for all City funds, as amended to date, anticipates revenue of $99.7 million and expenditures of $98.26 million with the difference of $1.5 million budgeted from the accumulated fund balances. As of May 31, 2026, $71.5 million (72 percent) of the total budgeted revenue had been received and $72.9 million (74 percent) of the budgeted expenditures had been incurred. It should be noted that although the City’s fiscal year ends on June 30th, revenues and expenditures for the current fiscal year will continue to be recorded during a sixty- day accrual period – through the end of August.
The City’s main operating fund is the General Fund. The General Fund budget for Fiscal Year 25/26 identifies revenue of $47.3 million to fund expenditures of $43 million. As of April 30, 2026, General Fund revenues totaled $42.5 million (89 percent of the budgeted amount) and General Fund expenditures totaled $33.7 million (77 percent of the annual budgeted amount).
GENERAL FUND REVENUE
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The Fiscal Year 25/26 General Fund budget includes anticipated revenue of $47.8 million. Based upon actual revenue received, it is projected that General Fund revenue will total $536,400 more than the budgeted amount by the end of the fiscal year.
Taxes and Franchises
The largest source of revenue for the General Fund is sales tax. Citrus Heights’ sales tax revenues continue to face pressure as local receipts for the October–December period fell 4.7% from the prior year, or 1.6% after excluding reporting anomalies, reflecting broader economic headwinds including higher-than-expected inflation, tariff-driven pricing pressures, and rising household cost burdens. Sales tax was amended on March 11, 2026, due to lower than anticipated projections to total $13.9 million.
Property tax revenue was budgeted at $8 million. The City’s property tax consultant had lowered its projection for property tax revenue mainly as a result of slowing home sales from high mortgage interest rates.
Licenses and Permits
Revenue from licenses and permits was budgeted at $1.5 million. Updated projections indicate that revenues in this category will exceed the budget amount by $500,000. This is due to continued strong building activity.
Intergovernmental Revenue
The second largest source of General Fund revenue is motor vehicle-in-lieu fees which is paid by Sacramento County in two installments: 50 percent in January and the remaining 50 percent in May of each year. The City has been notified that the Fiscal Year 2025-26 vehicle-in-lieu fee revenue is projected to total $11.97 million which is $19,000 more than the budgeted amount.
Other reimbursement revenues are cost recovery on mandated programs totaling $333,000.
A summary of General Fund revenues as of May 31, 2026, is provided on the following page.
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GENERAL FUND EXPENDITURES
FY 2024-25
Actual
FY 2025-26
Amended
FY 2025-26
Projection
Projected
Over/(Under)
Budget
TAXES AND FRANCHISES
Property Tax 7,876,660 8,047, 022 8,047,022 Sales and Use Tax 13,778,642 13,901,594 13,938,000 36,406 Utility Users Tax 3,077,576 2,650,000 2,650,000 Franchise Fees 490,042 617,500 617,500 Franchise Fees Solid Waste 896,369 650,000 650,000 Property Transfer Tax 263,107 245,000 245,000 Transient Occupancy Tax 90,445 110,000 110,000 Total Taxes and Franchises 26,472,839 26,221,116 26,257,522 36,406
LICENSES AND PERMITS
Business License 352,807 300,000 300,000 Building Plan Check 358,591 230,129 230,129 Engineering Fees Private Dev 194,337 20,000 20,000 Zone Check 17,849 13,000 13,000 Building Permits 1,785,527 1,000,000 1,500,000 500,000 Engineering Fees Utilities 347,752 175,000 175,000 Tree Permit 1,667 1,500 1,500 Transportation Permits 12,628 12,000 12,000 Records Processing/Strong Motion 4,394 8,315 8,315 Other Licenses and Permits 53,204 56,720 56,720 Total Licenses and Permits 3,128,756 1,816,664 2,316,664 500,000
FINES AND FORFEITURES
Non-Sufficient Funds Penalty 248 300 300 Vehicle Fines 131,778 152,000 152,000 Red Light Camera Fines 1,068,370 960,000 960,000 Total Fines and Forfeitures 1,200,396 1,112,300 1,112,300
INTERGOVERNMENTAL
State Mandated Reimbursements 482 165,000 165,000 Federal Grants/ Reimbursements - 193,000 193,000 Motor Vehicle-in-Lieu Fee 11,676,534 11,973,783 11,973,783 Total Intergovernmental 11,677,016 12,331,783 12,331,783
USE OF MONEY
Investment Revenue 2,111,186 1,900,000 1,900,000 Total Use of Money 2,111,186 1,900,000 1,900,000
CHARGES FOR SERVICES
Lease Payments 337,238 337,238 337,238 Administrative Fees 36,304 23,760 23,760 Police - Reimbursement Contract Overtime 145,826 150,000 150,000 False Alarm/Alarm Permit Fees 97,946 35,000 35,000 Vehicle Release / Towing 79,655 80,000 80,000 Event Center Rentals 513,629 500,000 500,000 Planning Fees 46,488 45,000 45,000 Animal Control Fees and Charges 12,895 55,000 55,000 Total Charges for Services 1,269,981 1,225,998 1,225,998
CONTRIBUTIONS
Donations / Sponsorships 27,420 25,000
25,000
Developer Contributions - - - Total Contributions 27,420 25,000 25,000 OTHER
Miscellaneous Revenue 474,677 65,000 65,000 Reimbursement Revenue 219,120 654,500 654,500 Internal Service Fund Charges/Cost Allocations 1,666,448 1,633,240 1,633,240 Recovery of Labor & Benefits - 260,000 260,000 Restitution/Public Property Damage Recovery 126,618 70,000 70,000 Police Department Sales 1,550 5,000 5,000 Line of Credit Draw -
Unknown Revenue to tie to ACFR -
Transfers In -
Total Other 2,488,413 2,687,740 2,687,740 Total General Fund Revenue 48,376,007$ 47,320,601$ 47,857,007 536,406$
CITY OF CITRUS HEIGHTS
FY 2026-27 General Fund Revenue
24-Jun-26
Item 15
The Fiscal Year 25/26 budget includes General Fund expenditure appropriations of $45.1 million, with $33.7 million (77 percent) expended as of April 30, 2026. Preliminary projections indicate that General Fund expenditures will total $44.05 million by the end of the fiscal year, which represents savings of $1.09 million.
Salary & Benefits
Overall expenditure is currently trending below budget. The adopted budget incorporated a vacancy factor of $1.5 million to offset projected salary and benefit savings. Based on year-to- date activity, staff anticipate vacancy savings may exceed the budgeted factor largely attributable to personnel vacancies in the Administrative Services, Police, and General Services Departments.
Other Operating Expenditures
Overall operating expenditures have remained low across departments due to staff’s continued commitment to fiscal prudence, careful cost management, and consistent evaluation of operational needs. Departments have effectively contained spending, resulting in projected savings in multiple areas of the General Fund. Where increases have been necessary, the mid-year amended budget request on March 11, 2026 covered the rising software licensing, maintenance, and technology-driven cost adjustments, particularly within Information Technology and other service-supporting divisions.
Projected General Fund expenditure information for each City department is provided in the table below.
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CITY OF CITRUS HEIGHTS
Fiscal Year 2025-26 & 2026-27 General Fund Expenditures By Department - Mid Cycle 24-Jun-26
Department FY 2024-25
Actual
FY 2025-26
Amended
YTD
(04/30/2026)
Year-End
Projection
Projected
Over/(Under)
Budget
City Council 185,688 323,509 178,912 305,250 (18,259) City Manager 427,720 581,120 397,090 513,640 (67,479) City Attorney 341,965 424,000 293,592 424,000 - City Clerk 261,135 362,884 322,550 349,196 (13,688) Elections 54,725 - - - - City Manager's Office 1,271,233 1,691,513 1,192,144 1,592,086 (99,427) -
Economic Development 1,039,437 475,357 421,659 459,952 (15,406) Community Engagement - 700,082 400,746 564,054 (136,029) Economic Development & Community
Engagement 1,039,437 1,175,440 822,405 1,024,005 (151,434) Human Resources 754,452 897,240 410,488 502,305 (394,935) Information Services 1,615,837 2,215,902 1,719,728 2,215,000 (902) Risk Management 2,561,063 2,940,792 2,079,568 2,681,001 (259,791) Finance 920,574 1,009,007 865,316 1,046,276 37,269 Non Departmental 4,260,759 3,470,739 2,643,989 3,263,958 (206,781) Administrative Services 10,112,685 10,533,680 7,719,089 9,708,539 (825,141) Law Enforcement 23,027,408 25,138,753 18,760,163 24,470,294 (668,459) Animal Control 801,145 1,119,725 608,489 749,639 (370,086) Police 23,828,554 26,258,478 19,368,652 25,219,933 (1,038,544) Community Events 330,002 420,091 242,249 294,720 (125,371) Event Center Operations 760,773 629,662 605,771 709,098 79,437 Sylvan Community Center 24,491 23,500 18,774 21,507 (1,993) Sayonara Community Center 14,827 24,000 17,923 23,775 (225) Engineering 1,325,853 959,004 903,893 950,000 (9,004) Facility Management 893,238 911,842 717,540 854,574 (57,268) Fleet Management 1,103,005 1,023,881 653,936 763,308 (260,573) General Services 4,452,189 3,991,979 3,160,086 3,616,982 (374,997) Housing 169,955 273,903 123,993 166,387 (107,515) Planning 588,478 581,771 467,425 570,187 (11,584) Building Inspection 1,051,980 1,084,045 877,610 1,083,045 (1,000) Planning Commission 21,855 12,400 2,986 3,094 (9,306) Community Development 1,832,269 1,952,119 1,472,014 1,822,713 (129,406) - -
Vacancy Factor (1,527,255) - - 1,527,255 Use of/Transfers to Non-General Fund Reser 1,390,369 1,068,000 1,068,000 - General Fund Expenditures 43,926,736$ 45,143,953$ 33,734,390$ 44,052,258$ (1,091,694)$ Item 15
The amended Fiscal Year 25/26 General Fund budget provided for an operating surplus of $2.2 million. Based upon actual revenues and expenditures during the first eleven months of the fiscal year and updated projections for the remainder of the year, staff are now forecasting a budget surplus of $3.8 million.
Unless other direction is specifically provided by the City Council, any operating surplus/(shortfall) at the end of a fiscal year is added/(deducted from) that fund’s available fund balance. For Fiscal Year 25/26, the projected operating surplus of $3.8 million (less planned capital expenditures) will increase the General Fund reserves from $35.3 million to a projected ending balance of $36.5 million. A healthy reserve fund provides opportunities to minimize service disruptions during periods of economic uncertainty, to fund one time expenditures that are consistent with City Council and community priorities and be opportunistic on pursuing grants that require a match to achieve a strategic infrastructure objective.
FISCAL YEAR 26/27 BUDGET MID-CYCLE ADJUSTMENT REQUEST
GENERAL FUND REVENUE
The Fiscal Year 26/27 budget includes anticipated revenue of $46.9 million. This projection was based upon information available at the time the budget was prepared in early 2025. Based upon information currently available, staff are recommending adjustments to the Fiscal Year 26/27 General Fund revenue budget which will increase budgeted revenue by $172,000. The proposed adjustments to General Fund budgeted revenue include:
Taxes and Franchises
The Fiscal Year 26/27 budget projected sales tax revenue of $14.3 million. Based upon the projected sales tax revenue reported from the City’s tax consultant, it is projected that sales tax revenue will total $14 million in Fiscal Year 26/27, a decrease of $307,000 to the budgeted amount. The City has been notified that property tax revenue will total $8.4 million which is $170,000 under the amount originally budgeted. Revenue from the transient occupancy tax are projected to total $100,000.
Intergovernmental
The second largest source of General Fund revenue (behind sales tax) is motor vehicle-in-lieu fees. Motor vehicle-in-lieu fee revenue estimates are provided by the State and updated periodically. Total revenue from the City’s intergovernmental was budgeted at $12.39 million.
Updated projections reflect revenue in this category will total $12.36 million, which is a decrease of $34,000 in the amount currently budgeted.
Use of Money
The increase in interest rates has had a positive impact on investment revenue during FY25/26.
Based upon actual revenue received during FY25/26, the projections for FY26/27 indicate similar revenues which will increase investment revenue by $700,000 to $1.9 million.
A summary of General Fund revenues for Fiscal Year 26/27 is provided on the following page.
Item 15
FY 2026-27
Adopted
FY 2026-27
Projected
Projected
Over/(Under)
Bud
get
TAXES AND FRANCHISES
Property Tax 8,476,031 8,306,025 (170,006) Sales and Use Tax 14,381,592 14,074,132 (307,460) Utility Users Tax 2,650,000 2,650,000 - Franchise Fees 586,625 586,625 - Franchise Fees Solid Waste 650,000 650,000 - Property Transfer Tax 245,000 245,000 - Transient Occupancy Tax 115,500 100,000 (15,500) Total Taxes and Franchises 27,104,748 26,611,782 (492,966)
LICENSES AND PERMITS
Business License 300,000 300,000 - Building Plan Check 211,470 211,470 - Engineering Fees Private Dev 18,000 18,000 - Zone Check 7,600 7,600 -
Building Permits 983,247 983,247 - Engineering Fees Utilities 180,000 180,000 - Tree Permit 1,500 1,500 - Transportation Permits 12,000 12,000 - Records Processing/Strong Motion 8,315 8,315 - Other Licenses and Permits 58,465 58,465 - Total Licenses and Permits 1,780,597 1,780,597 -
FINES AND FORFEITURES
Non-Sufficient Funds Penalty 100 100 - Vehicle Fines 152,000 152,000 -
Red Light Camera Fines 960,000 960,000 - Total Fines and Forfeitures 1,112,100 1,112,100 -
INTERGOVERNMENTAL
State Mandated Reimbursements 25,000 25,000 - Federal Grants/ Reimbursements - - - Motor Vehicle-in-Lieu Fee 12,395,883 12,361,840 (34,043) Total Intergovernmental 12,420,883 12,386,840 (34,043)
USE OF MONEY
Investment Revenue 1,200,000 1,900,000 700,000 Total Use of Money 1,200,000 1,900,000 700,000
CHARGES FOR SERVICES
Lease Payments 337,238 337,238 - Administrative Fees 23,760 23,760 - Police - Reimbursement Contract Overtime 150,000 150,000 - False Alarm/Alarm Permit Fees 35,000 35,000 - Vehicle Release / Towing 80,000 80,000 - Event Center Rentals 535,000 535,000 - Planning Fees 45,000 45,000 - Animal Control Fees and Charges 55,000 55,000 - Total Charges for Services 1,260,998 1,260,998 -
CONTRIBUTIONS
Donations / Sponsorships 25,000 25,000 - Developer Contributions - - - T
otal Contributions 25,000 25,000 - OTHER
Miscellaneous Revenue 18,000 18,000 - Reimbursement Revenue 35,000 35,000 - Internal Service Fund Charges/Cost Allocations 1,674,071 1,674,071 - Recovery of Labor & Benefits 260,000 260,000 - Restitution/Public Property Damage Recovery 26,000 26,000 - Police Department Sales 5,000 5,000 - Line of Credit Draw - - - Unknown Revenue to tie to ACFR - - - Transfers In - - - Total Other 2,018,071 2,018,071 -
Total General Fund Revenue 46,922,397 47,095,388 172,991
CITY OF CITRUS HEIGHTS
FY 2026-27 General Fund Revenue
24-Jun-26
Item 15
GENERAL FUND EXPENDITURES
The Fiscal Year 26/27 budget includes General Fund expenditure appropriations of $45.7 million. Based upon a review of each departmental budget, several adjustments are proposed to align the budget with current projected cost estimates. The net impact of these adjustments would be to increase the General Fund budget by $347,000. These increases reflect market-wide pricing shifts rather than expanded operational activity.
The Fiscal Year 2026-2027 General Fund Expenditures table that follows the explanations in this section includes a column titled “Projected over/(under) budget”. The Adjustment column represents a combination of operating expenses along with salary and benefit adjustments. An explanation of the proposed budget adjustments are provided as follows:
Operating Expenditures (Non-Salary & Benefits) - $347,000 The proposed budget adjustments listed below, by department, reflect operating expenditures (Non-Salary & Benefits) requests:
Administrative Services Department
Information Technology - $184,681 is requested to fund increased software licensing costs. The City is required to pay annual licensing fees for the various software utilized for daily business and citizen support activities. The annual license costs have increased with additional increases anticipated next fiscal year.
Non-Departmental - $100,000 will be re-budgeted from FY25/26 for consulting services on the Sunrise Tomorrow Project and other potential consulting needs.
Police Department
Police – $27,700 a one-time increase is recommended for the current fiscal year to address the uptick in Police Recruits.
Economic Development & Community Engagement Department
Economic Development - $35,000 increase to cover the cost of the grant assistance consultant and a re-budget of unused funds from FY25/26 for banners.
A summary of General Fund budgeted expenditures by department/division is provided on the following page.
Item 15
CITY OF CITRUS HEIGHTS
Fiscal Year 2026-27 General Fund Expenditures By Department - Mid Cycle 24-Jun-26
Department FY 2026-27
Budgted
FY 2026-27
Projected
Projected
Over/(Under)
Budget
City Council 325,529 325,529 -
City Manager 585,790 585,790 -
City Attorney 340,000 340,000 - City Clerk 272,885 272,885 -
Elections 76,200 76,200 -
City Manager's Office 1,600,404 1,600,404 - -
Economic Development 482,065 517,065 35,000 Community Engagement 689,519 689,519 - Economic Development & Community
Engagement 1,171,583 1,206,583 35,000 Human Resources 920,012 920,012 - Information Services 2,164,721 2,349,402 184,681 Risk Management 3,177,725 3,177,725 - Finance 1,038,690 1,038,690 -
Non Departmental 3,402,000 3,502,000 100,000 Administrative Services 10,703,148 10,987,829 284,681 Law Enforcement 25,718,857 25,746,357 27,500 Animal Control 1,146,953 1,146,953 -
Police 26,865,810 26,893,310 27,500
Community Events 435,690 435,690 - Event Center Operations 646,350 646,350 - Sylvan Community Center 23,500 23,500 - Sayonara Community Center 16,850 16,850 - Engineering 849,555 849,555 -
Facility Management 853,301 853,301 - Fleet Management 1,035,327 1,035,327 - General Services 3,860,574 3,860,574 - Housing 284,112 284,112 -
Planning 598,874 598,874 -
Building Inspection 1,111,897 1,111,897 - Planning Commission 12,400 12,400 - Community Development 2,007,284 2,007,284 - Vacancy Factor (1,573,819) (1,573,819) -
Use of/Transfers to Non-General Fund Reser 1,110,000 1,110,000 - General Fund Expenditures 45,744,984$ 46,092,165$ 347,181$ Item 15
The Fiscal Year 26/27 adopted General Fund budget provided for an operating surplus of $1.1 million. Based upon revenue and expenditure adjustments requested, staff are now forecasting a budget surplus of $1 million.
AMERICAN RESCUE PLAN ACT FUND
The City of Citrus Heights was allocated $15,676,972 in American Rescue Plan Act (ARPA) funding. The City received the first ARPA payment of $7,838,486 from the U.S. Treasury in May 2021. The final ARPA payment of $7,838,486 was received on June 6, 2022. To date, the City Council has appropriated $15.6 million of ARPA funding of which $15.2 million has been expended.
GENERAL FUND LONG RANGE FINANCIAL FORECAST
As a strategic fiscal planning tool, the City maintains a long-term financial forecast. Because this forecast is based upon data currently available, it is updated periodically to reflect new information regarding anticipated future revenues and expenditures. While the financial forecast covers a ten-year period for the City’s General Fund, Government Finance Officers Association (GFOA) standard and best practice is to cover a five-year period as inflationary and revenue assumptions are typically less predictable beyond five years. The City Council last reviewed the Ten-Year Financial Forecast on March 11, 2026. The Financial Forecast has been updated and includes the following changes:
• Fiscal Year 25/26 – year-end projections added.
• Fiscal Year 26/27 – Mid-Cycle Budget projections updated.
Total Award 15,676,972$
Completed Projects Actual
Small Business COVID Recovery Grant 281,111$
Block Party Trailer - Economic Development+ 27,794$
Patr
iotic Event+ 68,438$
Proposed Grant Strategy+ 60,000$
Police Fleet Vehicles & Equipment 1,800,000$
Community Projects Grant Program**+ 72,400$
Cares Commuinity Pride and Cleanliness Campaign+ 38,607$ Sound Wall Beautification+ 105,986$
Business Attraction Incentive Program**+ 87,363$
Public Safety Positions to PrePandemic Levels 7,749,590$ I.T. Critical, Major Projects; Execute Contract Tyler Technologies+ 1,229,601$ In Process Projects Commited
Actual thru
03/31/26
Remaining
balance
Beautification Crew Pilot Program + 875,000$ 571,045$ 303 ,955$ Public Safety Communications Center Critical Needs 600,000$ 473,283$ 126,717$ General Government Services & Critical Projects 2,681,082$ 2,681,082$ -$ Committed funds 15,676,972$
Spent 15,246,300$
Remaining Committed 430,672$
Current Balance -$ Funds to allocate/reallocate + City Council Strategic Objective
** dependent on program subscription
American Rescue Plan Act
Item 15
• Forecasting the sale of City owned property.
• Revenue projections (property tax, sales tax and vehicle in-lieu fees, and transient occupancy tax) and updated labor cost estimates updated for Fiscal Year 25/26 through Fiscal Year 32/33.
A summary of the Financial Forecast is provided below. A version demonstrating the full forecast period is attached to this report as Attachment 3.
APPROPRIATIONS LIMIT FOR FISCAL YEAR 26/27
Article XIIIB of the California State Constitution was established by the passing of Proposition 4 by California voters in 1979. This legislation, which was later amended by the passage of proposition 111 in 1990, placed limits on the amount of proceeds of taxes that State and local agencies can appropriate and spend. The appropriations limit, which is different for every agency, is calculated each year just prior to the beginning of the fiscal year. The appropriations limit is calculated using the annual change in California per capita income and the percentage change in population for the County of Sacramento.
The appropriations limit for the City of Citrus Heights for Fiscal Year 26/27 is calculated to be $77,768,468. The appropriations subject to the limit are $40,870,868. The City’s appropriations subject to the limit are well under the appropriations limit. The actual calculation is provided below.
General Fund Long Range Financial Forecast
With Partial Street Funding
6/24/2026
FY 2025-26 FY 2025-26 FY 2026-27 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 Amended Projected Adopted Projected Projected Projected Projected Beginning Reserve Balance 35,327,665 35,327,665 36,589,637 36,589,637 33,977,859 30,845,985 27,335,005 TOTAL REVENUE 47,320,601 47,857,007 46,922,397 47,095,388 47,885,092 48,713,135 49,819,773 TOTAL OPERATING EXPENDITURES (45,063,953) (44,052,258) (45,744,984) (46,092,165) (47,016,966) (48,224,116) (49,306,198) Net Operating Position 2,256,648 3,804,749 1,177,413 1,003,223 868,126 489,019 513,576 ARPA 1,957,223 1,957,223
STREET REPAIRS (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) Auburn Blvd - Phase 2 Match
Auburn Facility Improvements (500,000) (500,000) Casa Bella 385,000
Ending Reserve Balance 35,041,535 36,589,637 33,767,050 33,977,859 30,845,985 27,335,005 23,848,580 Minimum Reserve per City Council Policy - 17% 7,660,872$ 7,488,884$ 7,776,647$ 7,835,668$ 7,992,884$ 8,198,100$ 8,382,054$ Over(under) Reserve Target 27,380,663 29,100,753 25,990,403 26,142,191 22,853,101 19,136,905 15,466,527 City Manager Target Reserve - 25% 11,265,988$ 11,013,065$ 11,436,246$ 11,523,041$ 11,754,241$ 12,056,029$ 12,326,549$ Over(under) Reserve Target 23,775,547 25,576,572 22,330,804 22,454,818 19,091,744 15,278,976 11,522,031 Item 15
Finance Committee Review
The information presented in this report was reviewed by the Finance Committee on June 19, 2026.
Attachments
1. Resolution Amending Fiscal Year 26/27 Budget
The Appropriation Limit Calculation is required by Article XIIIB of the California State Constitution. It consists of the classification of appropriated revenues into proceeds and non-proceeds of taxes for the 2021-22 fiscal- year. The most favorable population and cost-of-living factors are then applied to the appropriation limit calculation from the previous fiscal year.
Appropriations Subject to the Limit
Fiscal Year 2026-27 General Fund Revenues 46,922,397
Less: Nonproceeds of Taxes 6,051,529
Plus: User Fees in excess of costs -
Total Appropriations Subject to the Limit 40,870,868
Fiscal Yea Fiscal Year 2025-26 Appropriation Limit 74,204,380 A. Cost of Living Adjustment - CPI* 1.0495
B. Population Adjustment ** 0.9986
Change Factor (A x B) 1.0480307
Increase in the appropriation limit 3,564,088
Fiscal Year 2026-27 Appropriation Limit 77,768,468
Remaining appropriation capacity 36,897,600
Available capacity as a percent of the appropriation limit 47.45% * Based on percentage change in California per capita personal income. ** Based on annual population change for the County of Sacramento.
City of Citrus Heights
Appropriation Limit Calculation
Fiscal Year 2026-27
Item 15
a. Fiscal Year 2026/27 Mid-Cycle Budget Adjustments
2. Resolution Establishing an Appropriations Limit for Fiscal Year 26/27
3. Appropriation Limit 26-27 Calculation
4. General Fund Long Range Financial Forecast
Item 15
RESOLUTION NO. 2026 - ____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS
HEIGHTS, CALIFORNIA, APPROVING AMENDMENTS TO THE
FISCAL YEAR 2026-27 BUDGET
WHEREAS, on June 11, 2025, the City Council adopted the budget for the City of Citrus Heights for Fiscal Year 2026-27; and
WHEREAS, based upon a review of revenues and expenditures, staff has recommended amendments to the Fiscal Year 2026-27 Budget; and
WHEREAS, the Finance and Administration Committee reviewed the proposed budget amendments on June 09, 2026; and
WHEREAS, the City C ouncil has reviewed information on the status of revenue s and expenditures for the 2026-27 F iscal Year which is the basis for the recommended budget amendments.
NOW, THEREFORE, BE IT RESOLVED , that the City Council of the City of Citrus Heights approves amendments to the Fiscal Year 2026-27 Budget as provided for in the attached Exhibit A.
PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 24
th day of June 2026, by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSTAIN: Council Members:
ABSENT: Council Members:
MariJane Lopez-Taff, Mayor
ATTEST:
Amy Van, City Clerk
Exhibit
a. FY 2026/27 Mid-Cycle Budget Adjustments
Item 15
Exhibit A
Fiscal Year 2026/27 Mid-Cycle Budget Adjustments
Item 15
CITY OF CITRUS HEIGHTS
Fiscal Year 2026-27 General Fund Expenditures By Department - Mid Cycle 24-Jun-26
Department FY 2026-27
Budgted
FY 2026-27
Projected
Projected
Over/(Under)
Budget
City Council 325,529 325,529 -
City Manager 585,790 585,790 -
City Attorney 340,000 340,000 - City Clerk 272,885 272,885 -
Elections 76,200 76,200 -
City Manager's Office 1,600,404 1,600,404 - -
Economic Development 482,065 517,065 35,000 Community Engagement 689,519 689,519 - Economic Development & Community
Engagement 1,171,583 1,206,583 35,000 Human Resources 920,012 920,012 - Information Services 2,164,721 2,349,402 184,681 Risk Management 3,177,725 3,177,725 - Finance 1,038,690 1,038,690 -
Non Departmental 3,402,000 3,502,000 100,000 Administrative Services 10,703,148 10,987,829 284,681 Law Enforcement 25,718,857 25,746,357 27,500 Animal Control 1,146,953 1,146,953 -
Police 26,865,810 26,893,310 27,500
Community Events 435,690 435,690 - Event Center Operations 646,350 646,350 - Sylvan Community Center 23,500 23,500 - Sayonara Community Center 16,850 16,850 - Engineering 849,555 849,555 -
Facility Management 853,301 853,301 - Fleet Management 1,035,327 1,035,327 - General Services 3,860,574 3,860,574 - Housing 284,112 284,112 -
Planning 598,874 598,874 -
Building Inspection 1,111,897 1,111,897 - Planning Commission 12,400 12,400 - Community Development 2,007,284 2,007,284 - Vacancy Factor (1,573,819) (1,573,819) -
Use of/Transfers to Non-General Fund Reser 1,110,000 1,110,000 - General Fund Expenditures 45,744,984$ 46,092,165$ 347,181$ Item 15
RESOLUTION NO. 2026 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS
HEIGHTS, CALIFORNIA, ESTABLISHING AN APPROPRIATION
LIMIT FOR FISCAL YEAR 2026-27
WHEREAS, Article XIIIB of the California Constitution provides that the total annual appropriations subject to limitation of each governmental entity, including this City, shall not exceed the appropriation limit of such entity of government for the prior year adjusted for changes in population and inflation mandated by Proposition 4 passed in November 1979 and Proposition 111 passed in June 1990 except as otherwise provided for in said Article XIIIB and implementing State statutes;
WHEREAS, pursuant to said Article XIIIB of said California Constitution, and Section 7900 et seq. of the California Government Code, the City is required to set its appropriation limit for each fiscal year. In setting said limit, the City is required to select the following factors: 1) California Per Capita Income, multiplied by 2) the greater of city or county population growth;
WHEREAS, the City of Citrus Heights reserves the right to change or revise any growth factors associated with the calculation of the Proposition 111 limit, if such changes or revisions would result in a more advantageous appropriation limit; and
WHEREAS, pursuant to Section 7910 of said California Government Code, the City Manager has made available to the public the documentation used in the determination of said appropriation limit.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Citrus Heights that the factors used in determining the 2026-27 appropriation limit will be the California Per Capita Income change and the percentage change in population for the County of Sacramento. The appropriation limit for Fiscal Year 2026-27 is $77,768,468.
PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 24th day of June, 2026, by the following vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSTAIN: Council Members:
ABSENT: Council Members:
MariJane Lopez-Taff, Mayor
ATTEST:
Amy Van, City Clerk
Item 15
The Appropriation Limit Calculation is required by Article XIIIB of the California State Constitution. It consists of the classification of appropriated revenues into proceeds and non-proceeds of taxes for the 2021-22 fiscal- year. The most favorable population and cost-of-living factors are then applied to the appropriation limit calculation from the previous fiscal year.
Appropriations Subject to the Limit
Fiscal Year 2026-27 General Fund Revenues 46,922,397
Less: Nonproceeds of Taxes 6,051,529
Plus: User Fees in excess of costs -
Total Appropriations Subject to the Limit 40,870,868
Fiscal Year Fiscal Year 2025-26 Appropriation Limit 74,204,380 A. Cost of Living Adjustment - CPI* 1.0495
B. Population Adjustment ** 0.9986
Change Factor (A x B) 1.0480307
Increase in the appropriation limit 3,564,088
Fiscal Year 2026-27 Appropriation Limit 77,768,468
Remaining appropriation capacity 36,897,600
Available capacity as a percent of the appropriation limit 47.45% * Based on percentage change in California per capita personal income. ** Based on annual population change for the County of Sacramento.
City of Citrus Heights
Appropriation Limit Calculation
Fiscal Year 2026-27
Printed on Recycled Paper
Item 15
General Fund Long Range Financial Forecast
With Partial Street Funding
6/24/2026
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2025-26 FY 2026-27 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 Actual Actual Actual Amended Projected Adopted Projected Projected Projected Projected Projected Projected Projected Beginning Reserve Balance 11,867,532 22,427,088 30,672,747 35,327,665 35,327,665 36,589,637 36,589,637 33,977,859 30,845,985 27,335,005 23,848,580 20,407,072 17,207,615 TOTAL REVENUE 44,442,810 46,170,045 48,376,007 47,320,601 47,857,007 46,922,397 47,095,388 47,885,092 48,713,135 49,819,773 50,972,301 52,388,103 53,909,430 TOTAL OPERATING EXPENDITURES (35,788,536) (41,984,301) (43,926,736) (45,063,953) (44,052,258) (45,744,984) (46,092,165) (47,016,966) (48,224,116) (49,306,198) (50,413,809) (51,587,561) (52,758,080) Net Operating Position 8,654,274 4,185,744 4,449,271 2,256,648 3,804,749 1,177,413 1,003,223 868,126 489,019 513,576 558,492 800,543 1,151,350 ARPA 3,252,312 4,059,914 4,205,647 1,957,223 1,957,223 STREET REPAIRS (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) Auburn Blvd - Phase 2 Match
Auburn Facility Improvements (500,000) (500,000) Casa Bella 385,000
Ending Reserve Balance 23,774,118 30,672,747 35,327,665 35,041,535 36,589,637 33,767,050 33,977,859 30,845,985 27,335,005 23,848,580 20,407,072 17,207,615 14,358,965 Minimum Reserve per City Council Policy - 17% 6,084,051$ 7,137,331$ 7,467,545$ 7,660,872$ 7,488,884$ 7,776,647$ 7,835,668$ 7,992,884$ 8,198,100$ 8,382,054$ 8,570,347$ 8,769,885$ 8,968,874$ Over(under) Reserve Target 17,690,067 23,535,415 27,860,120 27,380,663 29,100,753 25,990,403 26,142,191 22,853,101 19,136,905 15,466,527 11,836,725 8,437,730 5,390,091 City Manager Target Reserve - 25% 8,947,134$ 10,496,075$ 10,981,684$ 11,265,988$ 11,013,065$ 11,436,246$ 11,523,041$ 11,754,241$ 12,056,029$ 12,326,549$ 12,603,452$ 12,896,890$ 13,189,520$ Over(under) Reserve Target 14,826,984 20,176,671 24,345,981 23,775,547 25,576,572 22,330,804 22,454,818 19,091,744 15,278,976 11,522,031 7,803,620 4,310,725 1,169,445 O:\Budget\25-26 & 26-27 Annual Budget\Mid Cycle\Financial Model\Copy of DRAFT 10-Year Forecast 26-27 Mid Cycle Draft Item 15