Long-Range
Financial
Forecast
Fiscal Years 2026-2036
Why the Forecast Matters
Long-term
planning tool
Helps identify
fiscal risks early
Supports
sustainable
services
Not a budget, but
a planning forecast
General Fund
Current Financial
Snapshot & Major
Revenue Sources
Property Tax, $1,231,619
Sales Tax, $3,350,146
Other
Taxes,
$521,685
Licenses,
Permits &
Franchises,
$452,707
Rent,
$11…
Othe
r
Agen
cies,
$1…
Other
Revenues,
$257,944
Community
Development
Charges, … Pub… P…
Inves
tm…
Transf
ers In,
$174…
Forecast Assumptions
• Cotati is subject to the similar economic factors as the region and across the State • Based on best available information today.
• Less certain farther into the future
• Timing of future possible economic recessions are unknown • State or Regional legislative or tax changes
• Three Scenarios
• Base Line with Gradual Growth (Status Quo)
• New Hotel Development (New Revenue Source)
• Recession in 2026/27 (Worse Case)
Base Revenue Assumptions
Sales Tax Moderate Growth averaging 2.6% for next four years Increasing to 3.4% after 2030
Property Tax Slow growth of 3% per year for first 5 years Increasing to 5.3% thereafter
Other Tax Decline 15% then 2.5% growth per year
License and Franchises, Rents, Revenue from Other
Agencies, Other Revenue Average 5.0% increase per year
Charges for Services
Continuous average increase of 1% per year for Police
Services and 2% for Public Works and Community
Development
Investment Earnings Estimated returns based on laddered investments for next three years, followed by continuing 15% decreases
Average Revenue Growth of 2.9% over 10 years
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Millions Top Revenue Historical Trends
Property Tax Sales Tax Bradley Burns Sales Tax Measure A/G/S Forecast
Assumptions
Operating
Expenses
• Based on FY 2025-26 budget allocation
• Salaries and Benefits
• No new positions added
• Existing MOU’s
• Approximate change in personnel costs: of 2.5% per
year
• Pension Unfunded Liability Based on Last Available
Pension Analysis
• Payout Decrease of 17% in first year then increasing 2.5% going forward
• Health Insurance increases by 15% in first year, 5% for next two, then decreasing to 3.5% going forward
• Insurance includes 5% increases going forward
• Utilities 7% increase in first year then 3.5% going forward • Other expenses: 2.50% growth per year
• Combined average total expense growth: 4.7% per year
• Does not include Equipment Purchases or Capital
Investments
General Fund Baseline
$(2.0)
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
FY 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 Millions
TOTAL REVENUES TOTAL EXPENSES ANNUAL SURPLUS OR (DEFICIT) Hotel Development Scenario
Sales Tax Increases additional 1%
Property Tax Small One-Time Increase in 2027/28 then
constant increase forward
Transient Occupancy Tax (TOT) Added New Revenue Source in Based on Provided Projections
Investment Earnings Increasing back to investment levels in 2025/26.
Expenditures Same as Baseline
General Fund - Hotel
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
FY 2025/262026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 Millions
TOTAL REVENUES TOTAL EXPENSES ANNUAL SURPLUS OR (DEFICIT) Recession in 2026/27 Scenario
(Worst Case Scenario)
Sales Tax
Decrease 35% in first
year and trending
down or flat until
2031/32
Property Tax
Lagging decrease in
27/28
Other Tax, Licenses,
Franchises and
Other Revenues
Added New Revenue
Source in Based on
Provided Projections
Investment Earnings
Decreased to Zero as
Cash on Hand is
Utilized for
Operations
Expenditures
Same as Baseline
Not Realistic
Shows Magnitude of
Cuts required
Addressed By Fiscal
Resilience Policy
General Fund - Recession
$(10.0)
$(5.0)
$-
$5.0
$10.0
$15.0
$20.0
FY
2025/26
2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/35 2035/36 Millions
TOTAL REVENUES TOTAL EXPENSES ANNUAL SURPLUS OR (DEFICIT) Comparative Operating
Surplus/(Deficit)
(7.0)
(6.0)
(5.0)
(4.0)
(3.0)
(2.0)
(1.0)
-
1.0 2.0
3.0 4.0
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Millions Hotel Baseline Recession
Summary
• Cotati’s challenges are not unique
• Forecast Remains Manageable Under Baseline Assumptions • Significant Economic Downturn Would Demand Drastic Operating Reductions – Fiscal Resilience Policy
• Economic Development and Special Revenues are Critical to Improve the Cities Long-Term Outlook.
• Measure S Continues to be Critical to Core Operations and Infrastructure Programs
• LRFP is a Management Planning Tool Only
• Continued monitoring & strategic planning are essential