Fiscal Year Financial Report
Un-Audited Fiscal Year July 1, 2025, to June 30, 2026
Administrative Services 9/2/26 Q4 2025/26
Fiscal Year End Report
Fiscal Year 2025/26
FISCAL YEAR FINANCIAL REPORT | PAGE 1 of 8
Introduction
This financial report provides an overview of where we are within the budget cycle, then a summary of the City’s financial position through the Fiscal Year (FY) 2025/26 (July 1, 2025, through June 30, 2026) for (1) Citywide Revenues and Expenses, (2) the General Fund, (3) Enterprise Funds, and (4) Summary of Cash and Investments. Notable cumulative year-end to year-end and preliminary amended budget to actual comparisons are included in this report.
The following factors should be taken into consideration when analyzing year-end data:
Revenues reported herein are calculated based on actual receipts through June 30, 2026, but received through August 31, 2026. Some revenues for the Fiscal year are still being received and will be properly accrued for the audited financial statements. Construction projects, specifically street improvements, have a different project cycle which is offset from the Fiscal Year. As such, major projects are typically funded across two or more Fiscal Years.
Standard Budget Process Cycle - Where We Are Now & Next Steps:
Tentative Schedule for Financial Reporting:
September 14th – Start of 2025/26 Fiscal Year end audit fieldwork. October 27th – Present the Q1 2026/27 financial summary to Council. November 10th – Present audited financial statements and community annual financial report to the Council for Fiscal Year 2025/26
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Citywide Revenues and Expenses
Other Special Revenues consist of the following funds: Gas Tax, RMRA, Public Safety, K-9 Program, Traffic Mitigation, CDBG Grants, Inclusionary Housing, Linkage Affordable Housing, MTC Streets, Measure M Parks, PEG, In-Lieu Tree Fund, and Bed Tax.
City-wide Significant Variances
Fund type variances where revenues were less than 95 % or expenditures are greater than 95% of budget as of year-end were evaluated as follows:
Capital Projects’ revenues are currently less than the budget due to the timing of the projects in place and the required transfers from other funds to cover expenditure as of the fiscal year end. Internal Services Funds had higher expenditures than budgeted primarily due to the transfer of the vehicle purchased with grant funding (budgeted under capital projects) to the Vehicle Replacement fund for financial reporting and management.
Overall actual revenues and expenditures for all funds are anticipated to be aligned with the adopted budget, with the proposed adjustments, for the fiscal year ending June 30, 2026.
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General Fund: Operating Revenues
The following table includes cumulative revenue comparisons of Fiscal Year 2024/25 and Fiscal Year 2025/26, and revenue budget to actual comparison for Fiscal Year 2025/26.
General Fund operating current revenues are $252,445, or 2.2% above the same period in FY 2024/25.
The most significant reason for this increase was due to the increase in Property Taxes, Sales Taxes and Community Development Charges for Services offset by decreases in Other Taxes, Other Revenues, Investment Earnings, and Transfers In.
The Community Development significant changes include an increase of $174K and $272K for building permit revenues and code enforcement orders respectively. It is important to note that building permit revenue fluctuates primarily based on when development activity occurs, while code enforcement revenue can fluctuate based on when previously established receivables are actually collectible. Therefore, both revenue sources can experience significant year-to-year variations that do not necessarily reflect changes in City fees or ongoing service levels. Charges for Services are subject to building cycles which come and go and are not expected to be flat year to year.
The following is an explanation of the notable variances from budget (greater than $50K and 5%):
- Property Sales Tax revenues are approximately 6.7% or $145K greater than last year and 6.8% above budget. The City received higher-than-anticipated property tax revenue from the distribution of residual Redevelopment Property Tax Trust Fund (RPTTF) funds. These residual funds are distributed to local taxing agencies after the required obligations of the former redevelopment agency, as identified on the Recognized Obligation Payment Schedule (ROPS), have been paid. The amount available for distribution can vary from year to year based on property tax collections and the amount needed to satisfy redevelopment obligations. - Other Taxes were less than budgeted and prior year primarily due to the closure of one of the cannabis businesses which previously operated within the City. This former business had historical contributions of approximately $37K a quarter or $148K annually. - Community Development Charges varied from budget primarily related to the reasons discussed above for building permits and code enforcement orders.
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- Other Revenues decreased from prior year and the budget due to year end adjustments to build allowance for doubtful revenues pertaining to aged accounts receivable totaling $57K and a decrease of $108K related to reimbursements for administrative charges for the Community Development staff time. This staff time revenue is primarily driven by development project deposit account work and as these reimbursement projects moved into more development phases the permit charges increase, and the administrative reimbursement charges decrease. - Investment Earnings have decreased due to decreased interest earnings in the prior year we had a weighted Yield to Maturity of 4.21% and as of June 30, 2026, the same rate has declined to 4.03%.
Additionally, as the City continues to utilize general fund balances towards capital work, the fund balance has decreased and the proportionate allocation of the interest earnings across all funds has decreased.
- Transfers-In are decreased due to prior years one time transferred back to the general fund for one time grant project reimbursements from the compensated absences (502) fund back to the General Fund as it had collected excess funds above what was sufficient for funding continuing support of expected future distributions.
General Fund: Operating Expenditures
The following table includes cumulative actual expenditure comparisons by department and again by expenditure type for Fiscal Year 2024/25 and Fiscal Year 2025/26 and an expenditure budget to actual comparison for Fiscal Year 2025/26.
Expenditures by Type
Salaries & Benefits
Contract Services
Legal
Insurance
Materials & Supplies
Utilities
Repairs & Maintenance
Other Expenses
Reimbursable Expenses
Transfers Out
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Expenditures by Department
Expenditures by General Fund Departments have decreased in the Public Works Department as well as a small decrease in the City Council Department these decreases were due to decreased contract services for one-time special projects primarily for the street’s public works department. The City Council decrease was primarily due to decreased health insurance charges as the Council membership changed.
These decreases were offset by increases in City Managers Department for one time project costs for the EFID evaluation (which has partial refunds from Rohnert Park) as well as increased salary increases both under the MOU’s and with the advancement of the City Clerk during the fiscal year. Community Development increased due to increased permit expenses for inspections. and legal charges for code enforcement. The Police Department had increases primarily related to salaries and benefits due to regular MOU increases as well as increased Field Training Hours (FTO) for training new employees in the current year compared to the prior year. the contributions for vehicle replacements which were postponed in prior year. The Recreation and VF Ranch is primarily increased due to the incorporation of the ranch operations which were reported within parks in the prior year. This increase was approximately $255K for FY 25/26.
See below for details based on the Costs for all other departments were primarily driven by the following:
- Contract Services and Legal have increased by more than $260K from the prior year. This increase is due to continued insurance costs for the City’s general liability and workers comp. insurance premiums. Additionally, the City Manager’s office includes the legal costs pertaining to the mobile home park litigation and Community Development has legal costs for code enforcement. - Repairs & Maintenance primarily increased due to the police department required contribution to the vehicle replacement fund of $156K for FY 25/26.
- Other Expenses increased related to increasing charges for the following, dues and subscription charges for technology services, bank and merchant fees with increased adaption for payments by credit card for more city services, and payments for the lease agreement for the downtown parking lot.
$- $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15
FY 2024/25
Actual
FY 2025/26
Actual
FY 2025/26
Budget
City Council
City Manager Admin Services Community Development Public Works Police Recreation & VF Ranch Transfers Out
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- Reimbursable Expenses have increased due to continued tracking of insurance claim reimbursable expenses within this new department.
Reviewing the costs by comparison to budget for the General Fund, by department and by type, most expenditures are aligned with expectations and the fund in total remains well within the fiscal year budget.
Enterprise Funds: Operating and Capital Revenues and Expenses The following table includes cumulative revenue and expenses comparisons of Fiscal Year 2024/25 and Fiscal Year 2025/26, and a revenue budget to actual comparison for Fiscal Year 2025/26 for the Enterprise Funds.
The Water and Wastewater Fund revenues are made up of charges for services, connection fees other revenues, and development fees. The revenues for the Water Funds have increased in the current year to increase in rates offset by decreases in consumption. This is consistent with the Wastewater fund, which also has an increase in revenue due to re-averaging consumption from the prior year’s higher water use and increased utility rates. Total revenues for Water and Wastewater funds increased $224K or 8.0% and $436K or 11.9% respectively over the prior year.
For Fiscal Year 2025/26, most of the expenses are in line with the budget at year-end. Significant differences between fiscal years are primarily related to one-time capital outlay for projects and slight increases in Wastewater Treatment. Salaries & Benefits decreased during the current fiscal year primarily due to actuarial calculations for the pension gains which are realized for the purposes of financial reporting with a decrease in unfunded pension liability.
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Cash and Investments
The tables below show the cash and investments held by the City as of June 30, 2025. The current cash and investment balances are in line with the City adopted investment policy and as budgeted are enough to meet the City’s expenditure requirements for the next six months.
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Cash and Investment Detail by Composition
Conclusion
Except for identified variances, expenditures and revenues are mostly in line with budget. Continued budgetary strategic planning for future years along with capital project planning and focus on economic development will continue to improve the City’s financial position going forward. Staff look forward to providing Council and community our audited Fiscal Year 2025/26 annual comprehensive financial report (ACFR) and the community focused popular annual financial report (PAFR).