Cotati City Council
June 9, 2026

Mid-Cycle Budget Update
and Proposed Amendments to
Biennial Budgets
Fiscal Years 2025/26 & 2026/27
Why Conduct a Mid-Cycle Review?
Evaluate budget
performance
• Update revenue
projections
• Adjust
expenditure
assumptions
• Review capital
project schedules
• Assess reserve
impacts
• Ensure longterm sustainability
Key Takeaways
FY 2025/26
✓ General Fund revenues exceeding budget
✓ General Fund expenditures below budget
✓ Enterprise funds remain stable
✓ Capital project schedules updated
✓ Reserve levels remain healthy
FY 2026/27 assumptions refined
General Fund Update – 2025/26
• Revenue Trends
↑ Property Tax
↑ Franchise Fees
↑ Development Activity
• Expenditure Trends
↓ Personnel Costs
↓ Vehicle Replacement Contributions
↓ Capital Transfers
General Fund Update – 2026/27
• Revenue Trends
↓ Cannabis tax
↓ Cable & gas franchise fees
↑ Ranch program revenues
↑ Updated investment
earnings
• Expenditure Trends
↓ Personnel Costs
↓ Capital Transfers
↑ Vehicle Replacement
Major Budget
Adjustments
• Capital Projects
• Street projects re-phased
• Trash implementation project removed
• Ranch Barn project delayed
• Capital "B" projects deferred
• Veronda-Falletti Barns – $2.0M
• William/George Signal – $1.37M
• 2027 Street Reconstruction – $1.5M
• Hwy 116/W. Cotati Intersection
Safety Improvements Construction
- $2.5M
• Putnam Park Phase 2 – $3.4M
Major Budget
Adjustments
• Major One Time Contract Services
• Parking Study - $115K
• Old Redwood Highway Embankment Veg. Mgmt
(Between Page & Valparaiso) - $25.5K
• City Hall Digital Lock System - $50K
• Community Polling - $30K
• IT System Replacements $155K
• Ongoing Major Contract Services
• IT Services & Licenses - $112K
• Veronda Falletti Ranch - $323K
• Legal Retainer Services - $190K
Improved Financial Tracking
Veronda-Falletti Ranch
→ New Department 26
K-9 Fund Closure
→ Activities moved into Police → → GL Project “CANINE”
• Improved transparency
• Improved budget management
FY 2026/27 Staffing
Adjustments
• Vacancy-based refinements
• Multiple departments evaluated
• Estimated Budgetary Savings:
$547,000
• No actual service reductions
proposed
Water Enterprise Fund
Fiscal Year 2025/26
↑ Connection Fee Revenue
↑ Investment Earnings
↓ Personnel Costs
↓ Vehicle Replacement
Contributions
↓ W. Sierra Tank Capital Project
Reserves Updated
Fiscal Year 2026/27
↑ Investment Earnings
↑ Contract Services Water
Model New Development – $60K
↑ Vehicle Replacement
Contributions
Continued Capital Projects
Reserves Updated
Sewer Enterprise Fund
Fiscal Year 2025/26
↑ Connection Fees
↑ $250K Reimbursement
↓ Treatment Cost Estimates
↑ RRWA Fees
✓ Lift Station Generators
Purchase Advanced
Fiscal Year 2026/27
↓ Sewer Treatment
↑ Vehicle Replacement
Contributions
↓ Postpone Capital Projects
Reserves Updated
Special
Revenue
Highlights
K-9 Fund closed Investment earnings
allocated
Higher development
impact fees
Increased tree
replacement projects
Budgeted Lower Veterans
Building Revenue
Capital and Grant Program Funds
• Project carryforwards
• New CHP Cannabis Grant
• Trash implementation project removed
•Moved Projects to “B”
• Grant timing adjusted
Fund Reserve Outlook
✓ General Fund meets policy targets
✓ Water Fund remains stable
✓ Sewer Fund improving
✓ Long-term outlook remains positive
✓ Focus on fiscal sustainability
Questions