Agenda packet — Lakeport City Council, June 30, 2026

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AGENDA

NOTICE AND CALL OF SPECIAL MEETING

OF THE LAKEPORT CITY COUNCIL
Tuesday, June 30, 2026, at 6:00 p.m.

City Council Chambers, 225 Park Street, Lakeport, California 95453 See Teleconferencing Instructions Below

1. Call to Order and
Roll Call:
6:00 pm

2. Lakeport Police
Officers
Association:

Authorize the City Manager to execute a Side Letter Agreement between the City of Lakeport and the Lakeport Police Officers' Association (LPOA) clarifying the application of Article 6.3.1 in the Memorandum of Understanding regarding uniform allowance payments for newly hired employees.

3. FY 2026-27
Budget Adoption:

Approve the operating and capital expenditure budget for the 2026-27 fiscal year and adopt the associated resolution.

4. FY 2026-27
Appropriations
Limit:

Approve the annual appropriations limit for the City of Lakeport and adopt the associated resolution.

Adjournment:
____________________________________
Hilary Britton, Deputy City Clerk
AGENDA

NOTICE AND CALL OF SPECIAL MEETING

OF THE LAKEPORT CITY COUNCIL
Tuesday, June 30, 2026 at 6:00 p.m.

City Council Chambers, 225 Park Street, Lakeport, California 95453 Meeting Date: 06/30/2026 Page 1 Agenda Item #2.0
448411.1

CITY OF LAKEPORT
City Council ☒
City of Lakeport Municipal Sewer District ☐
Lakeport Industrial Development Authority ☐
Municipal Financing Agency of Lakeport ☐

STAFF REPORT
RE: Side Letter Agreement Clarifying Uniform Allowance Provisions in the Lakeport Police Officers' Association Memorandum of Understanding
MEETING DATE: 6/30/2026
SUBMITTED BY: Kelly Buendia, Administrative Services Director PURPOSE OF REPORT: ☐Information only ☐ Discussion ☒Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

Adopt a Side Letter Agreement between the City of Lakeport and the Lakeport Police Officers' Association (LPOA) clarifying the application of Article 6.3.1 regarding uniform allowance payments for newly hired employees.

BACKGROUND/DISCUSSION:

The City and the Lakeport Police Officers' Association are parties to a Memorandum of Understanding effective September 16, 2025, through June 30, 2028. During implementation of this recently adopted MOU, staff identified that language addressing the payment of the uniform allowance to newly hired employees was omitted from Article 6.3.1. As written, the provision does not expressly address how newly hired employees receive funds necessary to purchase required uniforms upon commencement of employment.

The proposed Side Letter Agreement clarifies the administration of the uniform allowance by specifying that newly hired employees will receive an upfront payment and thereafter receive the uniform allowance in accordance with Article 6.3.1. The proposed amendment adds the following sentence to Article 6.3.1:
“Effective July 1, 2025, new hires will receive payment upfront and will then begin receiving the uniform allowance in accordance with Article 6.3.1."
The amendment does not increase the uniform allowance benefit established in the MOU. Rather, it clarifies the timing and administration of the allowance for newly hired employees and reflects the City's understanding of how the provision was intended to operate.

Staff discussed the proposed Side Letter with representatives of the Lakeport Police Officers' Association. The Association has indicated that the proposed language accurately reflects the parties' intent during negotiations and does not object to the clarification.

OPTIONS:

1. Authorize the City Manager to execute the Side Letter Agreement.

Meeting Date: 06/30/2026 Page 2 Agenda Item #2.0
448411.1

2. Provide alternative direction.

FISCAL IMPACT:
☐ None ☐ Budgeted Item? ☐Yes ☒ No
Budget Adjustment Needed? ☐Yes ☒ No If yes, amount of appropriation increase: $ Affected fund(s): ☐ General Fund ☐ Water OM Fund ☐ Sewer OM Fund ☐ Other:

Comments: None
COUNCIL PRIORITIES:
☒ Priority #1: Public Safety & Crisis Response
☒ Priority #2: Disaster Resiliency
☒ Priority #3: Good Governance & Fiscal Stability
☐ Priority #4: Capital Infrastructure Improvement
☒ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☐ Priority #6: Economic Development
SUGGESTED MOTIONS:

Move to authorize the City Manager to execute a Side Letter Agreement between the City of Lakeport and the Lakeport Police Officers' Association (LPOA) clarifying the application of Article 6.3.1 in the Memorandum of Understanding regarding uniform allowance payments for newly hired employees. ☒ Attachments: 1. Side Letter Agreement
448410.1

SIDE LETTER AGREEMENT

UNIFORM ALLOWANCE
This Side Letter Agreement ("Agreement") is entered into by and between the City of Lakeport ("CITY") and the Lakeport Police Officers' Association ("ASSOCIATION").

WHEREAS, the CITY and the ASSOCIATION are parties to a Memorandum of Understanding ("MOU") effective September 16, 2025, through June 30, 2028; and WHEREAS, during negotiations for said MOU, the ASSOCIATION proposed an increase to the uniform allowance; and
WHEREAS, the parties met and conferred in good faith regarding the amount of the uniform allowance, the timing of payment, and the method of payment; and WHEREAS, following adoption of the MOU, the parties identified that language addressing the payment of a uniform allowance to newly hired employees was omitted from Article 6.3.1; and WHEREAS, the parties agree that the omission does not reflect their mutual intent during negotiations and desire to clarify Article 6.3.1 accordingly; NOW, THEREFORE, the CITY and the ASSOCIATION agree as follows:

1. Article 6.3.1 of the Memorandum of Understanding shall be amended by adding the following sentence at the end of the article:
"Effective July 1, 2025, new hires will receive payment upfront and will then begin receiving the uniform allowance in accordance with Article 6.3.1."

2. Except as expressly modified herein, all other provisions of the Memorandum of Understanding shall remain in full force and effect.

3. This Side Letter Agreement shall become effective upon execution by both parties and approval by the Lakeport City Council.

City of Lakeport Lakeport Police Officers’ Association
____________________________ ____________________________ Kevin M. Ingram, City Manager Shaun Johnson, LPOA President Date: _______________________ Date: _______________________ Meeting Date: 06/30/2026 Page 1 Agenda Item # 3.0

CITY OF LAKEPORT
City Council ☒
City of Lakeport Municipal Sewer District ☒
Successor Agency to the Lakeport Redevelopment Agency ☒ Municipal Financing Agency of Lakeport ☒

STAFF REPORT
RE: 2026-27 Budget Adoption MEETING DATE: 6/30/2026
SUBMITTED BY: Kevin Ingram City Manager
Danielle Dizon, Finance Director
PURPOSE OF REPORT: ☐Information only ☐ Discussion ☒Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

The City Council is being asked to approve the operating and capital expenditure budget for the 2026-27 fiscal year and adopt the associated resolution.

BACKGROUND/DISCUSSION:

City Manager’s Budget Message
The Fiscal Year 2026/27 budget reflects both the opportunities and challenges facing the City of Lakeport as we continue working to provide high-quality services, maintain critical infrastructure, and invest in our community's future. While the City remains fiscally stable and well-positioned to meet its current obligations, the long-term financial outlook continues to require careful planning, disciplined decision-making, and a relentless focus on maximizing every available public dollar.

A central theme of this budget is the growing disconnect between revenue growth and the cost of providing public services.

Lakeport remains heavily dependent upon sales tax revenue, which accounts for approximately two-thirds of the General Fund and remains highly vulnerable to economic fluctuations, changing consumer spending patterns, and long-term structural shifts in California's economy. This reality reinforces the importance of supporting local businesses and encouraging residents to shop locally whenever possible, as local spending directly supports the public services residents rely upon every day.

At the same time, the City continues to experience significant increases in operating costs. Over the past five years, expenses related to pensions, healthcare, insurance, and employee compensation have increased substantially, often at rates that far exceed revenue growth. While these investments are necessary to attract and retain qualified employees and maintain essential services, they create increasing pressure on the City's ability to fund new initiatives and maintain longterm financial sustainability.

The practical result is that the General Fund is increasingly focused on supporting the core services residents expect from local government, including public safety, parks, streets, planning, and administrative functions. Large-scale infrastructure improvements can no longer rely solely on local revenues and instead require a combination of grants, partnerships, borrowing, and other external funding sources. For this reason, one of the primary themes of Fiscal Year 2026/27 is project readiness. Following the completion of several major water, sewer, and roadway improvement projects over the past several years, the City is now focused on preparing the next generation of projects through planning, engineering, Meeting Date: 06/30/2026 Page 2 Agenda Item # 3.0
environmental review, and design. Communities that have completed this foundational work are often best positioned to secure highly competitive state and federal funding opportunities.

Another significant focus for the coming year is workforce stability and succession planning. Like many local governments, Lakeport faces the prospect of several key retirements within the next few years. Ensuring continuity of service requires thoughtful investments in recruitment, leadership development, training, and preservation of institutional knowledge so that the organization remains strong regardless of personnel changes.

The pages that follow highlight the accomplishments of the past year, identify the City's key goals for Fiscal Year 2026/27, and outline how departmental work plans support the City Council's adopted policy priorities. Collectively, they reflect a commitment to responsible stewardship, long-term planning, and continued investment in the people, infrastructure, and partnerships that make Lakeport a strong and resilient community.

KEY GOALS FOR FISCAL YEAR 2026/27
• South Lakeport Water Resiliency & Fire Suppression Project: Continue advancing design, annexation processing, and funding strategies for the South Lakeport Water Resiliency and Fire Suppression Project in partnership with the County of Lake. This critical regional infrastructure project will extend municipal water service and fire protection capabilities to the South Main Street and Soda Bay Road corridor, improving emergency response, supporting existing businesses and residents, and strengthening long-term community resiliency. • Succession Planning, Workforce Stability & Public Safety Staffing: Implement a coordinated citywide succession planning strategy to prepare for anticipated retirements in key leadership and operational positions while preserving institutional knowledge and maintaining service levels. Particular emphasis will be placed on maintaining a strong recruitment pipeline within the Police Department through academy sponsorships, lateral recruitment efforts, leadership development, and continued implementation of a budgeted overstaffing strategy designed to reduce vacancy lag times and ensure consistent patrol readiness. • Rebuilding Capital Improvement Program Capacity & Project Readiness: Following several years of significant investment in roadway, utility, and public facility infrastructure, focus on rebuilding capital reserves while advancing engineering, environmental review, design, and planning efforts necessary to position future projects for implementation. Maintaining project readiness remains essential to competing successfully for state and federal grant funding and addressing long-term infrastructure needs that exceed available local resources. • Revenue Sustainability & Financial Resiliency: Continue implementing a long-term strategy focused on maintaining the City’s financial health and organizational sustainability. Recognizing that the cost of providing public services continues to outpace revenue growth, the City will pursue a combination of revenue enhancement opportunities, operational efficiencies, risk management initiatives, and long-range financial planning efforts. This work is not defined by any single solution, but rather by the continual evaluation of opportunities to strengthen revenues, control costs, and avoid future service reductions.
• General Plan and Housing Element Updates: Begin preparation for the next cycle of General Plan and Housing Element updates, two of the most significant planning efforts required under State law. Early preparation will allow the City to better manage future workload demands, budget impacts, consultant needs, and public outreach requirements while ensuring compliance with evolving state mandates and positioning the community for future growth and investment opportunities.

These key goals reflect the City’s focus on balancing immediate service delivery needs with long-term organizational sustainability. By investing in critical infrastructure, maintaining workforce stability, strengthening financial resiliency, and preparing for future planning and development opportunities, Lakeport will continue building upon recent accomplishments while positioning itself to successfully address future challenges and opportunities. 2025-26 FISCAL YEAR IN REVIEW
As we reflect on Fiscal Year 2025/26, the City of Lakeport continued to demonstrate that small communities can accomplish extraordinary things when guided by a clear vision, strong partnerships, and a commitment to long-term planning. Guided by the City Council’s priorities and supported by a dedicated staff, the City advanced major infrastructure projects, strengthened public safety services, expanded community partnerships, supported economic development and housing opportunities, and Meeting Date: 06/30/2026 Page 3 Agenda Item # 3.0
completed numerous planning initiatives that will help position Lakeport for future investment and grant funding opportunities.

One of the most significant accomplishments of the year was the completion of the City’s $8 million Water and Sewer Main Replacement Project. This effort replaced approximately two miles of aging water main and one mile of sewer main, modernizing critical infrastructure that will serve the community for decades to come. The utility improvements were coordinated with roadway rehabilitation along Martin Street and Lakeshore Boulevard, maximizing the value of public investment while restoring critical transportation corridors impacted by construction activities. Additional progress was made on utility modernization initiatives, including continued advancement of the Green Ranch Well Project and conversion of treatment facilities to safer sodium hypochlorite disinfection systems.

Together, these projects represent one of the largest infrastructure investment periods in the City’s recent history and reflect the City’s ongoing commitment to maintaining and modernizing essential public infrastructure.

The City also made important progress in public safety. The Lakeport Police Department successfully maintained service levels despite ongoing recruitment challenges while continuing to strengthen its leadership team through the promotions of Lieutenant Cooley, Sergeant Freitas, and Sergeant Johnson. Investments in technology and innovation further enhanced the effectiveness of the Department’s small but highly capable workforce. New AI-assisted public safety camera systems were deployed at Library Park, Xabatin Park, and Westside Park, while additional technology tools were implemented to support crime analysis, report writing, and evidence-based policing strategies. Combined with the continued expansion of the Behavioral Health Co-Responder Program and strong community policing efforts, these investments have helped improve service delivery while strengthening community safety.

Significant progress was also made on several projects that will shape Lakeport’s future. Design efforts advanced on the South Lakeport Water Resiliency and Fire Suppression Project, a transformative regional initiative that will extend municipal water infrastructure and fire protection capabilities into the South Main Street and Soda Bay Road corridor. Coordination with the County of Lake continued to ensure integration with the County’s planned roadway improvements while positioning the project for future funding opportunities and implementation.

Housing and community development efforts also gained considerable momentum. Construction moved into the vertical phase on the Parkside Apartments project, bringing the community one step closer to the addition of 64 new affordable housing units. At the same time, the City continued supporting several major development projects, including the Vista Point Healthcare and Retail Campus, Justice-Involved Housing Project, Lake County Head Start Center, Mental Health Assistive Care Facility, Disney Boat Rentals project, and the new Lakeport Courthouse. Collectively, these investments represent millions of dollars in public and private investment and will help expand housing, healthcare, childcare, recreation, and employment opportunities throughout the community.

Partnerships continued to play a critical role in expanding services and opportunities for residents. Through a new partnership with the Lake County Arts Council, the Silveira Community Center has become increasingly available for community programming, educational activities, and public events during evenings and weekends, greatly expanding utilization of this important community asset. The City also continued its partnership with the Westside Community Park Committee to advance the Westside Community Trails Park project, a visionary effort that will ultimately create more than 300 acres of multi-use trails on City-owned property. Additional collaborative efforts through the Lakeport Community Council, Clear Lake Environmental Research Center, Lake County Recreation Agency, and numerous community organizations further demonstrated the value of leveraging partnerships to expand community capacity beyond what City resources alone could provide.

Economic development efforts focused on supporting local businesses, reducing commercial vacancies, and positioning Lakeport for future growth. A notable accomplishment was the formation of the Business Outreach Working Group through the Lakeport Economic Development Advisory Committee. Developed as a grassroots initiative by committee members, the group was created to strengthen direct engagement with local businesses, better understand their challenges and opportunities, and identify practical ways the City and community partners can support their success. Building upon this effort, the City expanded analysis of retail leakage and visitor spending patterns, supported ongoing reinvestment at local lodging properties, and continued efforts to attract investment to key commercial sites throughout the community. At the Meeting Date: 06/30/2026 Page 4 Agenda Item # 3.0
same time, development activity remained strong with numerous public and private projects moving through the entitlement and permitting process.

Fiscal Year 2025/26 was a year defined by implementation, partnership, and progress. From major infrastructure investments and public safety enhancements to housing development, community partnerships, and economic development initiatives, the City continued to deliver meaningful results for residents while laying the foundation for future opportunities. Despite ongoing fiscal challenges and increasing service demands, Lakeport remains well-positioned to build upon this momentum through thoughtful planning, strategic investment, and continued collaboration with our regional partners and community stakeholders. We thank the City Council, City staff, community partners, and residents for their continued support and dedication as we work together to shape Lakeport’s future.

BUDGET YEAR 2025/26 FINANCIAL HIGHLIGHTS
I am pleased to present a Fiscal Year 2026/27 budget that remains structurally balanced while continuing to support the City Council’s priorities and maintain the high level of service residents have come to expect. The budget reflects a thoughtful approach to balancing current operational needs with long-term financial sustainability and positions the City to continue investing in infrastructure, public safety, and community priorities despite an increasingly challenging fiscal environment.

The most significant financial challenge facing the City continues to be the growing gap between revenue growth and the cost of providing public services. While General Fund revenues have remained relatively stable over the past several years, expenditures associated with pensions, employee compensation, healthcare, and insurance continue to rise at rates that significantly outpace revenue growth. Pension costs alone have increased General Fund Long-Term Fiscal Analysis
While the City remains financially stable, long-term projections demonstrate the importance of continued fiscal discipline, revenue diversification, and careful management of rising operating costs.
dramatically in recent years, with Unfunded Accrued Liability payments rising from approximately $171,000 in FY 2024/25 to more than $500,000 budgeted in FY 2026/27. Medical insurance premiums increased 23% this year, while property and liability insurance costs have experienced multiple years of substantial increases. These trends are not unique to Lakeport, but they do place increasing pressure on the City's ability to maintain services and fund new initiatives.

Meeting Date: 06/30/2026 Page 5 Agenda Item # 3.0
The City remains heavily dependent upon sales tax revenue, which accounts for approximately 70% of General Fund tax revenues and continues to be influenced by broader economic conditions, consumer spending habits, and fluctuations within key sectors such as fuel sales and automobile purchases. While recent investments by businesses such as Marshall’s and Tractor Supply have strengthened portions of the local retail market, sales tax performance remains volatile and highlights the importance of both supporting local businesses and maintaining a diversified revenue base. As demonstrated throughout this budget document, the continued growth of local revenues alone is unlikely to keep pace with rising operating costs over the long term.

General Fund Revenue Composition Since Measure Z
General Fund revenues have remained relatively stable over the past five years; however, the City's continued reliance on sales tax highlights the importance of supporting local businesses and maintaining a diversified revenue base.

Despite these challenges, the City remains in a strong financial position. Through years of prudent financial management, General Fund reserves remain at approximately 95% of annual operating expenditures, providing an important safeguard against economic uncertainty and unforeseen challenges. Current projections indicate that FY 2026/27 will be supported by available fund balance carryover from the prior fiscal year while maintaining healthy General Fund Balance Analysis
Caption: General Fund reserves remain at historically strong levels, providing the City with financial stability and flexibility to respond to economic uncertainty, unforeseen emergencies, and strategic one-time investment opportunities. reserve levels. These reserves provide flexibility for one-time investments and strategic opportunities while ensuring the City remains prepared for future economic fluctuations.

While important capital projects will continue in FY 2026/27, including Lakeport Boulevard corridor improvements, ADA upgrades at the Silveira Community Center, emergency drainage repairs, fleet replacement, and continued design of the South Lakeport Water Resiliency and Fire Suppression Project, much of the City's capital investment strategy is now focused on engineering, environmental review, and design work necessary to develop shovel-ready projects. This approach Meeting Date: 06/30/2026 Page 6 Agenda Item # 3.0
recognizes that the General Fund alone cannot support the community's long-term infrastructure needs and that future success will depend upon maintaining readiness for state and federal grant opportunities, partnerships, and other alternative funding sources.

The City's enterprise funds remain stable, benefiting from recent infrastructure investments and prior rate adjustments.

However, both the Water and Sewer Funds are approaching the conclusion of their current rate study cycles, and ongoing utility rate analyses are underway to ensure these systems remain financially sustainable while continuing to provide reliable service and support future capital needs. Current projections indicate both funds will end FY 2026/27 in a positive position, supported by stronger-than-anticipated results from the current fiscal year.

Overall, the Fiscal Year 2026/27 budget reflects a commitment to fiscal responsibility, long-term planning, and strategic investment. While the challenges associated with rising costs and stagnant revenues are real, the City remains wellpositioned to navigate those pressures through disciplined financial management, strong reserve policies, aggressive pursuit of external funding, and a continued focus on delivering efficient and effective public services.

FISCAL YEAR 2026/27 PROJECTS AND GOALS
As highlighted throughout this budget document, the City continues to face a challenging fiscal environment in which the cost of providing services, maintaining infrastructure, and supporting a quality workforce continues to outpace revenue growth. While many major revenue sources have remained relatively flat, inflationary pressures, rising insurance and healthcare costs, pension obligations, and increasing construction expenses continue to place significant demands on limited financial resources.

Over the past several years, the City has successfully completed an unprecedented number of major capital improvement projects, including significant investments in water, sewer, roadway, and public facility infrastructure. As a result, Fiscal Year 2026/27 represents a transition year focused on rebuilding capital reserves, strengthening long-term financial sustainability, and preparing the next generation of projects for implementation. Rather than emphasizing numerous large-scale construction projects, this year’s work program places a strong emphasis on project readiness through planning, design, engineering, environmental review, and other activities necessary to position projects competitively for future state and federal funding opportunities.

The continued pursuit of grants and external funding sources remains essential to addressing long-term infrastructure needs and advancing community priorities. Communities that have completed the necessary planning and technical work are often best positioned to secure these highly competitive funding opportunities. Consequently, many of the goals outlined in this budget emphasize the foundational work required to move projects efficiently from concept to construction when funding opportunities become available.

Another significant theme reflected throughout this year’s goals is workforce stability and succession planning. The City anticipates several key retirements within leadership and operational positions over the next several years. Ensuring continuity of service requires proactive efforts to recruit and retain talented employees, develop future leaders, preserve institutional knowledge, and maintain the organizational capacity necessary to provide high-quality public services.

The City Council has developed six (6) key priority areas to further focus monetary and staff resources. These priority areas are outlined more comprehensively elsewhere within this document and are listed here:
• Public Safety and Crisis Response
• Disaster Resiliency
• Good Governance and Fiscal Responsibility
• Capital Infrastructure Improvement
• Safe, Sustainable & Attractive Neighborhoods
• Economic Development
My job as City Manager is to implement programs, activities, and directives that further progress within these established City Council priority areas. Department heads have tailored their goals and work plans with these priorities in mind and structured their budget requests accordingly. While many of the proposed projects and initiatives build upon efforts already underway, each has been selected because it advances one or more of the City Council’s identified priorities. The following Meeting Date: 06/30/2026 Page 7 Agenda Item # 3.0
sections summarize how departmental goals and activities support these policy priorities and help move the City toward its long-term vision for Lakeport’s future.

Public Safety and Crisis Response. The Lakeport City Council’s adopted Public Safety and Crisis Response objectives emphasize maintaining a highly trained and responsive law enforcement organization, advancing compassionate approaches to homelessness and behavioral health challenges, strengthening community policing, and supporting prevention and education efforts that contribute to long-term community safety. The City’s FY 2026/27 goals further these objectives through a coordinated focus on staffing stability, community partnerships, crisis response initiatives, and strategic investments in public safety equipment and infrastructure.

Building a Sustainable Police Workforce
The most significant public safety challenge facing the City continues to be the attraction and retention of qualified law enforcement personnel. Like many small rural agencies, the Lakeport Police Department provides officers with broad experience across all facets of policing, creating highly capable professionals who are often attractive candidates for larger agencies offering higher compensation and expanded career opportunities. While the City takes pride in developing wellrounded law enforcement professionals, this reality creates an ongoing challenge in maintaining full staffing levels.

Although the Department has been successful in recruiting new officers, the process of background investigations, academy training, and field training often requires 12 to 18 months before a new officer becomes fully deployable. In contrast, experienced officers leaving for other agencies can transition in a matter of weeks. To address this challenge, the City’s primary focus this year is the development of a permanent budgeted overstaffing program. Building upon a Councilsupported practice utilized over the past several years, the City intends to permanently budget for two additional officer positions beyond the Department’s standard authorized staffing level. This strategy will allow the Department to continuously recruit and train personnel, reducing vacancy lag times and helping ensure consistent patrol readiness.

Maintaining a stronger staffing cushion also helps reduce overtime demands and employee fatigue while supporting officer wellness, retention, and the Department’s ability to maintain proactive community policing efforts. These efforts will be complemented by continued investments in leadership development, succession planning, and professional growth opportunities that support long-term organizational stability.

Community Policing and Crisis Response Partnerships
The City will continue to maintain and expand programs that strengthen connections between law enforcement and the community. These include the School Resource Officer program, investigative functions, and community policing initiatives that promote visibility, trust, and collaborative problem-solving. These programs directly support the Council’s objective of fostering meaningful relationships between officers and residents while helping address public safety concerns proactively rather than reactively.

Recognizing that many calls for service involve behavioral health, homelessness, or substance abuse concerns, the City will also continue strengthening its co-responder partnership with behavioral health professionals. This collaborative model allows trained mental health practitioners to work alongside law enforcement personnel during crisis situations, improving outcomes for individuals in need while allowing officers to focus on core public safety responsibilities. The partnership reflects the Council’s commitment to compassionate, coordinated, and effective responses to complex community challenges.

Investing in Public Safety Infrastructure
The City will continue investing in the tools and infrastructure necessary to support modern policing. This includes completing planned replacement cycles for patrol vehicles, in-car camera systems, patrol rifles, and other essential equipment, including the purchase of two new police vehicles during FY 2026/27. The City will also continue developing a long-term strategy for maintaining and expanding public safety camera systems in parks and other key public spaces. These investments improve officer safety, enhance investigative capabilities, increase accountability, and contribute to a safer environment for residents and visitors alike.

Together, these initiatives advance the Council’s Public Safety and Crisis Response priorities by strengthening workforce stability, expanding community partnerships, enhancing crisis intervention capabilities, and ensuring the Department has the personnel and equipment necessary to provide professional, responsive, and community-centered public safety services.

Disaster Resiliency. The Lakeport City Council’s adopted Disaster Resiliency objectives emphasize reducing hazard risks, enhancing preparedness, strengthening emergency response capabilities, and supporting effective recovery efforts following disasters. The Fiscal Year 2026/27 goals advance these objectives through strategic infrastructure investments, regional Meeting Date: 06/30/2026 Page 8 Agenda Item # 3.0
collaboration, facility improvements, and continued implementation of disaster preparedness and hazard mitigation programs designed to strengthen the community’s ability to withstand, respond to, and recover from emergencies.

South Lakeport Regional Water Resiliency and Fire Suppression Project The South Lakeport Regional Water Resiliency and Fire Suppression Project remains one of the City’s highest disaster mitigation priorities. Working closely with the County of Lake, the City continues advancing the design of a new municipal water system extension serving the South Main Street and Soda Bay Road corridor while coordinating implementation with the County’s planned roadway improvement project. This critical regional infrastructure investment will provide municipal water service, fire hydrants, and improved fire suppression capabilities to an area currently underserved by public water infrastructure and increasingly vulnerable to wildfire threats.

The City will also continue processing a revised annexation application through Lake LAFCo focused on properties seeking municipal water service. By integrating land use planning, infrastructure development, and regional cooperation, the project significantly advances the Council’s goals of reducing hazard exposure, improving emergency response capabilities, and strengthening long-term community resiliency. Staff will continue pursuing grant and funding opportunities necessary to move the project toward construction while maximizing coordination with the County’s corridor improvements.

Preparedness, Recovery, and Regional Coordination
Lakeport’s disaster resiliency efforts are strengthened through ongoing collaboration with regional partners, including the County of Lake and the City of Clearlake. The City will continue implementing priorities identified in the Local Hazard Mitigation Plan, Emergency Operations Plan, and Countywide Evacuation Plan while integrating disaster preparedness and hazard mitigation principles into long-range planning activities. These efforts improve emergency readiness, strengthen interagency coordination, and position the City to remain competitive for future state and federal resilience funding opportunities.

The City will also continue maintaining and updating emergency response procedures, training programs, and resource coordination efforts to ensure preparedness for a wide range of potential hazards, including wildfire, flood, severe weather, utility disruptions, and other emergencies. Through continued planning and regional cooperation, the City seeks to enhance both immediate response capabilities and long-term recovery capacity.

Community Facilities and Resiliency Infrastructure
The revitalization of the Silveira Community Center further contributes to the City’s resiliency objectives. Through implementation of ADA improvements funded by Community Development Block Grant resources, the facility will become more accessible, functional, and sustainable as a year-round community asset. In addition to serving everyday community needs, the facility provides a valuable resource that can support emergency operations, community recovery efforts, sheltering functions, and neighborhood-level response activities during future disasters.

Together, these initiatives reflect a practical and comprehensive approach to disaster resiliency. Through investments in critical infrastructure, emergency preparedness, regional coordination, and community facilities, the City of Lakeport continues to strengthen its ability to withstand, respond to, and recover from future emergencies while protecting residents, businesses, and essential public services.

Good Governance & Fiscal Responsibility. The Lakeport City Council’s adopted Good Governance & Fiscal Responsibility objectives emphasize transparent decision-making, responsible stewardship of public resources, efficient service delivery, proactive risk management, and long-term organizational stability. While many of the City’s most visible accomplishments are represented by completed infrastructure projects and public services, those outcomes are only possible when supported by strong planning, sound financial management, and effective organizational systems. The Fiscal Year 2026/27 goals reflect a continued commitment to strengthening these foundational elements of government while positioning the City to meet future challenges and opportunities.

Building the Foundation for Long-Term Financial Sustainability Following several years of significant investment in roads, water, wastewater, and other public infrastructure, the City’s focus will shift toward rebuilding capital reserves, strengthening long-term financial sustainability, and ensuring that future investments remain aligned with available resources. A key component of this effort will be maintaining a disciplined approach to project planning and capital budgeting while continuing to position priority projects for future grant funding opportunities.

Meeting Date: 06/30/2026 Page 9 Agenda Item # 3.0
The City will undertake several important financial planning initiatives designed to ensure long-term sustainability and transparency. These include completion of a utility rate study and Proposition 218 process, implementation of a citywide cost-of-service fee study, and continued development of Finance Department capabilities related to long-range forecasting and strategic financial planning. In addition, staff will continue updating long-range capital planning documents, including the Water and Sewer Capital Improvement Program, to better align infrastructure needs with available financial resources.

Together, these efforts help ensure that revenues remain aligned with service delivery costs while providing a sustainable framework for future public investments.

Strengthening Organizational Stability and Workforce Readiness Good governance depends upon strong institutions and knowledgeable employees. Over the next several years, the City anticipates a number of retirements among key leadership and operational positions. In response, the City will implement a coordinated succession planning strategy focused on leadership development, recruitment, workforce retention, and preservation of institutional knowledge.

This effort extends beyond simply filling future vacancies. Departments will document critical procedures, improve workflow efficiencies, establish structured knowledge-transfer processes, and expand professional development opportunities to ensure organizational continuity. The City will also conduct a comprehensive market assessment of employee compensation and benefits to better understand recruitment and retention challenges while supporting informed labor negotiations and workforce planning decisions. These initiatives help ensure that Lakeport remains capable of delivering high-quality public services despite increasing competition for qualified employees and an evolving labor market.

Managing Risk and Modernizing Government Operations
Another significant priority is strengthening the City’s risk management framework. Rising insurance costs, healthcare expenses, and liability exposures continue to create challenges for local governments throughout California. Through continued participation in the California Intergovernmental Risk Authority (CIRA), modernization of personnel policies, updating employee job descriptions, and completion of ADA accessibility improvements, the City is working to reduce organizational risk exposure while enhancing regulatory compliance and operational resilience.

The City will also continue investing in systems and processes that improve efficiency, accountability, and service delivery.

Implementation of a comprehensive grant management and monitoring database will improve oversight of the City’s growing portfolio of grant-funded projects while strengthening compliance, reporting, and strategic resource allocation. Similarly, early preparation for future updates to the General Plan and Housing Element will position the City to address state planning requirements in a thoughtful and fiscally responsible manner.

Together, these initiatives represent a comprehensive approach to good governance and fiscal responsibility. By focusing on financial sustainability, workforce stability, risk management, and organizational effectiveness, the City of Lakeport is strengthening the systems and processes that support effective government operations and responsible stewardship of public resources. While these efforts may not always be the most visible to the public, they are essential to maintaining a resilient, responsive, and financially sustainable organization capable of serving the community for years to come.

Capital Infrastructure Improvement. The Lakeport City Council’s adopted objectives for Capital Infrastructure Improvement emphasize establishing clear infrastructure priorities, pursuing diverse funding opportunities, and ensuring projects are thoughtfully planned and positioned for successful implementation. The Fiscal Year 2026/27 Capital Improvement Program reflects these priorities through a balanced approach that combines continued investment in critical infrastructure with a strong emphasis on project readiness and long-term asset management.

Over the past several years, the City has completed an unprecedented level of capital investment, including approximately $8 million in water and sewer infrastructure improvements and major roadway rehabilitation projects along South Main Street, Martin Street, and Lakeshore Boulevard. These projects have significantly improved the reliability of critical infrastructure systems while addressing long-standing maintenance needs throughout the community. As a result, the coming fiscal year represents a transition period focused on rebuilding capital reserves, advancing project planning efforts, and positioning future projects for construction as funding opportunities become available.

Advancing Strategic Infrastructure Investments
One of the City’s highest-priority capital projects remains the South Lakeport Water Resiliency and Fire Suppression Project.

Working in partnership with the County of Lake, the City continues to advance the design of a new municipal water system extension serving the South Main Street and Soda Bay Road corridor. This critical infrastructure project will provide public Meeting Date: 06/30/2026 Page 10 Agenda Item # 3.0
water service, fire hydrants, and enhanced fire suppression capabilities to an area that currently lacks adequate public water infrastructure while supporting future annexation and economic development objectives.

Additional capital investments scheduled for FY 2026/27 include construction of the Hartley Culvert and Forbes Creek Emergency Repair Projects, completion of the 10th Street Culvert and Sidewalk Project, expansion of the concrete area surrounding the City’s splash pad facility, and continued implementation of utility system improvements identified through the City’s Capital Improvement Program. Water system projects include advancement of a new municipal well and continued conversion of treatment facilities to sodium hypochlorite disinfection systems, improving both reliability and operational efficiency throughout the utility network.

Project Readiness and Funding Strategy
A major focus of the upcoming fiscal year will be advancing project readiness through completion of design, engineering, environmental review, and funding strategies necessary to move projects efficiently into construction. As state and federal grant programs become increasingly competitive, maintaining a portfolio of shovel-ready projects remains essential to addressing the City’s long-term infrastructure needs.

A key example of this strategy is completion of the design phase for Lakeport Boulevard Phase I and continued coordination with the California Transportation Commission regarding future construction funding opportunities. The City will also continue rebuilding and updating its Capital Improvement Program to ensure infrastructure priorities remain aligned with available resources while positioning projects to compete successfully for outside funding.

Maintaining Existing Infrastructure and Public Assets
The City will continue implementing a strategic, data-driven pavement management program focused on improving roadway conditions while maximizing the useful life of existing infrastructure. Building upon significant corridor improvements completed over the past decade, the City will balance investments between major roadway rehabilitation projects and preventative maintenance strategies such as chip sealing and microsurfacing. This “keep good roads good” philosophy allows the City to preserve infrastructure investments while reducing future reconstruction costs.

This balanced approach supports both economic activity and neighborhood quality of life while improving the City’s overall Pavement Condition Index.

The City will also continue implementing a structured replacement cycle for critical fleet and equipment assets. This includes funding for the purchase of two new police vehicles, replacement of in-car camera systems, patrol rifles, and other essential public safety equipment. A proactive replacement strategy helps avoid the higher costs associated with deferred maintenance while ensuring employees have the tools necessary to safely and effectively serve the community.

Together, these initiatives reflect a practical and forward-looking approach to capital infrastructure improvement. By balancing immediate infrastructure needs with long-term planning, maintaining critical public assets, and aggressively pursuing funding opportunities, the City of Lakeport is creating a strong foundation for future investment while ensuring that essential infrastructure systems continue to serve the community safely and efficiently for years to come.

Safe, Sustainable & Attractive Neighborhoods. The Lakeport City Council’s policy priority area of Safe, Sustainable, and Attractive Neighborhoods focuses on creating a community where residents have access to quality housing, recreational opportunities, public spaces, and services that support overall well-being. The Fiscal Year 2026/27 goals continue the City’s long-term commitment to enhancing neighborhood livability through strategic housing development, expanded recreation opportunities, strengthened community partnerships, improved public engagement, and coordinated efforts to address behavioral health and homelessness challenges.

Strengthening Community Identity Through Partnerships and Civic Engagement A strong community is built upon meaningful connections between residents, civic organizations, businesses, and local government. During the coming fiscal year, the City will continue advancing the development of the Lakeport Community Council as a collaborative framework that brings together nonprofits, service clubs, youth organizations, community groups, and local businesses to activate public spaces and coordinate community events. Building on the success of recent community celebrations and special events, efforts will focus on establishing a sustainable organizational structure capable of supporting expanded programming and volunteer engagement throughout the year.

Meeting Date: 06/30/2026 Page 11 Agenda Item # 3.0
The City will also continue implementing its Communications Strategic Plan with an emphasis on helping residents better understand local government operations, public finance, and how community projects are funded and delivered. By providing clearer information regarding City revenues, grant funding, and budgeting decisions, the City seeks to strengthen public understanding of how local resources are leveraged to accomplish community goals. These efforts support transparency, build trust, and encourage more informed civic participation.

Together, these initiatives strengthen community identity and create opportunities for residents to become more engaged in shaping Lakeport’s future.

Expanding Recreation, Community Spaces, and Quality of Life Opportunities The continued revitalization of the Silveira Community Center represents an important investment in neighborhood quality of life and community connectivity. As ADA-funded restroom and accessibility upgrades move forward, the City’s focus will shift toward establishing the center as a fully activated community resource with expanded programming, increased utilization, improved management systems, and enhanced access for residents of all ages and abilities.

The City will also continue development of a Recreation Program Master Plan designed to maximize the use of existing parks and recreational facilities while identifying opportunities to expand youth-oriented programming. Through collaboration with the Lake County Recreation Agency and other community partners, the City will explore sustainable funding, staffing, and programming models that support long-term recreation services and increased community participation.

In support of active lifestyles and improved mobility, the City will continue advancing bicycle and pedestrian improvements identified in the Active Transportation Plan. This includes preparation of an Active Transportation Program grant application for the Lakeshore to Hartley corridor and continued pursuit of projects that improve walking and bicycling connectivity throughout the community.

Supporting Housing Opportunities and Community Well-Being Expanding housing opportunities remains a critical component of creating safe and sustainable neighborhoods. During FY 2026/27, the City will continue providing land use, entitlement, and permitting support for several significant development projects that address a range of community needs. These include ongoing coordination for the Parkside Apartments affordable housing development, support for the Justice Involved Housing Project, permitting assistance for the Tribal Health Vista Point Healthcare Campus, review of a proposed mental health rehabilitation facility, and support for the Lake Family Resource Center Head Start expansion. Collectively, these projects expand housing options, improve access to services, and strengthen community resources that support long-term neighborhood stability.

The City will also continue strengthening partnerships between law enforcement and behavioral health providers through its co-responder program. By connecting individuals experiencing mental health crises, homelessness, and substance use disorders with appropriate services and resources, this collaborative approach improves outcomes for vulnerable individuals while helping address challenges that impact neighborhoods and public spaces throughout the community.

Together, these initiatives reflect a comprehensive approach to creating neighborhoods that are safe, welcoming, and resilient. By investing in community gathering spaces, recreation opportunities, housing, active transportation infrastructure, and behavioral health partnerships, the City of Lakeport continues to enhance quality of life while preserving the unique character and sense of community that make Lakeport a special place to live, work, and visit.

Economic Development. The Lakeport City Council’s Economic Development objectives emphasize strengthening regional partnerships, supporting business retention and expansion, attracting strategic investment, and enhancing the downtown and waterfront as key economic and community assets. The Fiscal Year 2026/27 goals advance these priorities through a balanced approach focused on revitalizing commercial districts, supporting existing businesses, improving the visitor experience, and positioning the community for long-term economic growth. While the City remains committed to pursuing new economic opportunities, a central theme for the coming year is helping existing businesses thrive, expand, and succeed as the foundation of a healthy local economy.

Downtown Revitalization and Vacant Building Activation
A primary economic development priority for the coming year will be addressing vacancies and underutilized properties within Lakeport’s historic downtown district. The City will develop a comprehensive Downtown Vacant Building Inventory and Activation Strategy that establishes an up-to-date inventory of vacant commercial properties and creates a centralized database of property owners and managers. This effort will improve communication among property owners, prospective tenants, and economic development partners while helping identify barriers to occupancy and reinvestment.

Meeting Date: 06/30/2026 Page 12 Agenda Item # 3.0
The City will also evaluate the feasibility of a Vacant Building Registry Ordinance as a tool to encourage proactive property management, reduce long-term vacancies, and support downtown revitalization efforts. By improving awareness of available spaces and identifying opportunities to return key properties to productive use, the City seeks to strengthen the downtown business environment and encourage new investment in the community’s historic commercial core.

Strengthening the Downtown-Waterfront Connection
The City will prioritize the development of a Downtown and Waterfront Wayfinding and Signage Plan to better connect two of Lakeport’s most important economic assets. While downtown and the waterfront are located within easy walking distance of one another, visitors often experience them as separate destinations. The City will develop a cohesive wayfinding system that improves navigation, highlights public amenities, and creates a stronger sense of connection between these complementary areas.

The plan will include directional signage, downtown directories, waterfront design standards, and opportunities for interpretive and storytelling elements that celebrate Lakeport’s history, culture, and relationship with Clear Lake. These improvements will encourage pedestrian activity, support local businesses, and reinforce Lakeport’s identity as a vibrant lakefront destination.

Beyond its economic benefits, the wayfinding program also serves as an important community identity initiative. Consistent signage, branding elements, and storytelling features will help communicate a shared sense of place while creating stronger visual connections between the downtown, waterfront, parks, and other community assets. These improvements will help residents and visitors better understand what makes Lakeport unique while reinforcing community pride and strengthening the City’s image as the civic, cultural, and commercial heart of Lake County.

Supporting Existing Businesses and Local Investment
Consistent with priorities identified by the Lakeport Economic Development Advisory Committee, FY 2026/27 efforts will place significant emphasis on business retention and expansion. The City will develop a Business Retention and Expansion Toolkit that transforms retail leakage studies, visitor spending trends, demographic information, and market data into practical resources that help local businesses identify opportunities for growth and make informed investment decisions.

This effort will be complemented by a coordinated “Shop Local” campaign designed to encourage local spending and strengthen community support for Lakeport businesses. By focusing on the businesses that have already chosen to invest in Lakeport, the City can build upon existing strengths while creating conditions that naturally attract additional investment over time.

Strategic Retail Recruitment and Commercial Revitalization The City will continue building upon recent retail recruitment successes through its partnership with The Retail Coach. Priority efforts include filling remaining vacancies within the Marshall’s and Tractor Supply shopping center, supporting Lake County Tribal Health’s redevelopment of Vista Point into a regional healthcare and commercial destination, and providing market support for the Lakeport Hub development. These projects strengthen Lakeport’s position as a regional commercial center while expanding shopping, dining, healthcare, and service options available to residents and visitors.

The City will continue working closely with regional partners, property owners, developers, and business leaders to identify opportunities for strategic commercial infill and redevelopment. These efforts support both economic growth and the efficient use of existing commercial infrastructure while helping reduce vacancies throughout the community.

Tourism Development and Lodging Investment
Lakeport will continue efforts to strengthen tourism infrastructure and improve lodging quality throughout the community.

Tourism remains an important component of the local economy, generating visitor spending that supports local businesses, restaurants, retail establishments, and community events.

Staff will continue outreach regarding the Dutch Harbor site, monitor market conditions, and maintain project readiness so the community is positioned to respond when economic conditions become more favorable.

At the same time, the City will work collaboratively with existing lodging operators to encourage property improvements, reinvestment, and enhanced visitor experiences. Improving the quality and competitiveness of Lakeport’s existing lodging inventory remains an important economic development strategy that can generate near-term benefits while larger development opportunities continue to evolve.

Meeting Date: 06/30/2026 Page 13 Agenda Item # 3.0
Together, these initiatives reflect a practical and balanced approach to economic development. By addressing downtown vacancies, strengthening the connection between downtown and the waterfront, supporting existing businesses, pursuing strategic retail recruitment, and positioning the community for future tourism investment, the City of Lakeport continues to build a resilient local economy while preserving the unique character and charm that make the community an attractive place to live, work, shop, and visit.

CAPITAL PROJECTS AND STUDIES
Several of the large scheduled projects for this upcoming year have been discussed in the previous section but many others are also budgeted this year. A comprehensive listing of background projects is listed here:

Capital Projects:
• Lakeport Blvd. Corridor Pavement & Pedestrian Improvements • Public Safety Camera Program (Library, Xabatin & Westside Parks) • Purchase & Outfit Marked Police Vehicles (x2)
• Silveira Community Center ADA Upgrades (Design & Construction) • Completion of the 64-unit Parkside Affordable Housing Apartments [50% Complete] • Completion of Sodium Hypochlorite Conversion (Water & Sewer Facilities) [50% Complete] • Forbes Creek Headwall Emergency Repair Project (South Main & Armstrong) • Hartley Culvert Emergency Repair (near City Limits)
• Pedestrian Lighted Crosswalk Enhancements (South Main near Dollar General) • Upsize Water Main (Seventeenth St. Alley)
• Upside Water Main (Forbes St. – Seventh to Ninth Streets) • Mobile RIMS and RIPPA software and equipment upgrades for Police Department • Green Ranch Well Rehabilitation
• Storm Water Slipline Rehabilitation (South Main St. at C St.) • Storm Water Slipline Rehabilitation Project (Industrial Ave.) • Bank Preservation (Shoreline – Third to Fifth Streets) • Bank Preservation (Shoreline -- Fifth Street to Xabatin Park) • Roof Replacement (various Corp Yard facilities)
• Roof Replacement (Water Tank Site Control Building)
• Replace Perimeter Fencing (K St. Lake Water Intake Facility) • Water Master Meter Install (Royale Shores)
• Water Master Meter Install (Willow Tree Shopping Center) • Chlorination Odor Mitigation System Installation (Larrecou H2S Control) • Sewer Lift Station Pump Replacements (various stations Citywide) • SCADA Upgrades (various water and sewer facility locations Citywide In addition to capital improvement projects, the 2025/26 fiscal year budget includes investment in several project studies and other endeavors that are critical to the achievement of the City’s goals and broader quality of life improvement objectives. Many represent the starting point for future capital projects. Some of these projects are noted here:

Meeting Date: 06/30/2026 Page 14 Agenda Item # 3.0
o Harry St. (Fifth to Central Park & Central Park to Eleventh St.) • Scotts Creek Well Replacement Design
• 7th Cycle Housing Element Update
• Utility Rate Study Update
• Comprehensive Citywide Fee Study [50% Complete]
• Wayfinding Signage Program for Downtown & Waterfront
• Citywide ADA Facility & Sidewalk Study Update
• Retail Attraction and Retention Study
• General Plan Update
• Storm Water Master Plan
• City Standards Master Plan
• Assist non-profit formation for the Lakeport Community Council • Silveira Community Center Operations Funding to facilitate upgrades for wider community access and rental opportunities
• Funding to augment recreational programming by Lake County Public Services and facilitate greater recreational program offerings in the City of Lakeport
• Enhanced community communications support
• Ordinance Updates: establish a vacant building registry, sidewalk vending, business license modernization, streamline short-term rental process, modify nuisance abatement procedures, and ADU regulation updates.

LOOKING AHEAD
The Fiscal Year 2026/27 budget reflects a City that is both realistic about the challenges ahead and confident in its ability to meet them. Rising operating costs, a highly volatile sales tax base, and increasing demands on local government will require continued discipline, innovation, and careful stewardship of public resources. Yet these same challenges also reinforce the importance of thoughtful planning, strong partnerships, and a long-term commitment to investing in Lakeport’s future.

Over the past several years, the City has completed an unprecedented level of investment in roads, water, sewer, public safety, housing, and community facilities. The coming year represents an important transition from construction to preparation—focusing on project readiness, workforce stability, and the planning efforts necessary to position Lakeport for the next generation of infrastructure and community improvements. The reality is that the City’s General Fund alone cannot support all of Lakeport’s long-term capital infrastructure needs. As a result, maintaining a pipeline of well-planned, shovel-ready projects is more important than ever. By advancing engineering, environmental review, design, and other preconstruction activities today, the City will be better positioned to compete for state and federal grants, leverage alternative funding sources, and capitalize on future opportunities to deliver projects that would otherwise remain beyond the reach of local resources alone.

Most importantly, none of this work happens in isolation. The progress reflected throughout this budget is the result of dedicated City employees, engaged residents, community volunteers, local businesses, nonprofit partners, and regional agencies working toward shared goals. I extend my sincere appreciation to the Lakeport City Council for its leadership and policy direction, to City staff for their professionalism and commitment to public service, and to the many community members and partners who continue to invest their time, energy, and ideas into making Lakeport a stronger community.

Together, we will continue building a city that is resilient, welcoming, and well-positioned for future generations.

Respectfully Submitted,
Meeting Date: 06/30/2026 Page 15 Agenda Item # 3.0
Kevin M. Ingram
City Manager
OPTIONS:

1. Approve the operating and capital expenditure budget for the 2026-27 fiscal year and adopt the associated resolution.

2. Provide alternative direction.

FISCAL IMPACT:
☐ None ☒ $25,735,848 Budgeted Item? ☐Yes ☐ No
Budget Adjustment Needed? ☐Yes ☐ No If yes, amount of appropriation increase: $ Affected fund(s): ☒ General Fund ☒ Water OM Fund ☒ Sewer OM Fund ☒ Other: All Comments:

COUNCIL PRIORITIES:
☒ Priority #1: Public Safety & Crisis Response
☒ Priority #2: Disaster Resiliency
☒ Priority #3: Good Governance & Fiscal Stability
☒ Priority #4: Capital Infrastructure Improvement
☒ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☒ Priority #6: Economic Development
SUGGESTED MOTIONS:

Move to approve the operating and capital expenditure budget for the 2026-27 fiscal year and adopt the associated resolution.
☒ Attachments: 1. Adopting Budget Resolution

2. 2026-27 Recommended Budget
RESOLUTION NO. XXXX (2026)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF LAKEPORT, THE SUCCESSOR AGENCY TO THE LAKEPORT

REDEVELOPMENT AGENCY, AND THE BOARD OF THE CITY

OF LAKEPORT MUNICIPAL SEWER DISTRICT
ADOPTING THE ANNUAL BUDGET FOR FISCAL YEAR 2026-27
WHEREAS, the City Council of the City of Lakeport, the Successor Agency to the Lakeport Redevelopment Agency, and Board of the City of Lakeport Municipal Sewer District has reviewed the Annual Budget for the Fiscal Year 2026-27; and WHEREAS, included in said budget are the necessary estimates of anticipated revenues and assessed valuations for the properties subject to taxation by the City.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lakeport hereby adopts the budget for the City of Lakeport, the Successor Agency to the Lakeport Redevelopment Agency, and City of Lakeport Municipal Sewer District, including the recommended personnel schedules found therein, for the fiscal year beginning July 1, 2026, and ending June 30, 2027; and
THIS RESOLUTION was passed by the City Council of the City of Lakeport at a special meeting thereof on the 30th day of June, 2026, by the following vote:

AYES:

NOES:

ABSTAINING:

ABSENT:
_________________________________
BRANDON DISNEY, Mayor
ATTEST:
_______________________________
KELLY BUENDIA, City Clerk
Lakeport, California

CITY OF LAKEPORT
Annual Budget (RECOMMENDED)
Fiscal Year 2026-27

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CITY OF LAKEPORT, CALIFORNIA

ANNUAL BUDGET
FISCAL YEAR 2026-27
Brandon Disney
Mayor and Boards Chair
Stacey Mattina
Mayor Pro Tem
Boards Vice Chair
Kenny Parlet
Council Member
Kim Costa
Council Member
Christina Price
Council Member
City Council
Redevelopment Successor Agency Board of
Directors
Sewer District Board of Directors
Municipal Financing Authority of Lakeport Board
of Directors

GOVERNING BODY ADVISORY COMMITTEES/COMMISSIONS
Lakeport Planning Commission
Lakeport Economic Development Advisory Committee
(LEDAC)
Measure Z Advisory Committee
Kevin Ingram
City Manager
Mackenzie Anderson
Assistant City Attorney
Dale Stoebe
Chief of Police
Danielle Dizon
Finance & IT Director
Ron Ladd
Public Works Director
Paul Harris
Utilities Director
Joey Hejnowicz
Community Development Director
Kelly Buendia
Administrative Services Director/City Clerk

EXECUTIVE MANAGEMENT TEAM

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1. TABLE OF CONTENTS
City Organizational Chart ....................................................................................................................................... i Mission and Vision ................................................................................................................................................ ii City Manager’s Budget Message .......................................................................................................................... 2 Lakeport City Council Priority Areas ...................................................................................................................18 PUBLIC SAFETY & CRISIS RESPONSE....................................................................................................................18 DISASTER RESILIENCY ...................................................................................................................................18 GOOD GOVERNANCE & FISCAL STABILITY ....................................................................................................18 CAPITAL INFRASTRUCTURE IMPROVEMENT..................................................................................................18 SAFE, SUSTAINABLE & ATTRACTIVE NEIGHBORHOODS ...............................................................................18 ECONOMIC DEVELOPMENT ...........................................................................................................................19 Community Profile...............................................................................................................................................20 Budget in Brief.....................................................................................................................................................24 City-Wide Compared...................................................................................................................................24 General Fund Compared ............................................................................................................................25 Historical Revenue Summary......................................................................................................................26 Expenditures by Department.......................................................................................................................28 Department Expenditure Detail ...................................................................................................................29 Sources and Uses for Fiscal Year 2025-26 ................................................................................................30 Sources .......................................................................................................................................................31 Uses ............................................................................................................................................................32 Property Tax Distribution.............................................................................................................................33 Sales Tax Distribution .................................................................................................................................34 Measure I ....................................................................................................................................................35 Measure Z ...................................................................................................................................................36 Other Major Revenues ................................................................................................................................37 Capital Improvement Program (CIP)...................................................................................................................38 Capital Expenditures ...................................................................................................................................39 Charts and Graphs ..............................................................................................................................................43 Trends and Analysis............................................................................................................................................46 Long-Term Financial Plan ...................................................................................................................................48 Jurisdiction Comparison......................................................................................................................................51 Fund Summaries .................................................................................................................................................53 Governmental Funds.......................................................................................................................................49 General Fund ..............................................................................................................................................52 Capital Projects ...........................................................................................................................................53 2017 Storm Capital Projects .......................................................................................................................54 Debt Service................................................................................................................................................55 Parkland Dedication Fund...........................................................................................................................56 Roads Fund.................................................................................................................................................57 Prop 172 Public Safety................................................................................................................................58 Lakeport Housing Program .........................................................................................................................59 PLHA Navigation Center Fund....................................................................................................................60 Police K-9 Fund...........................................................................................................................................61 C-PLHA (Permanent Local Housing Alloc) Fund ........................................................................................62 APC 10th St Bike and Pedestrian ...............................................................................................................63 Department of Boating and Waterways Bathroom Grant............................................................................64 CDBG 18-MIT-RIP Grant Fund ...................................................................................................................65 ATP Sidewalk Planning Grant.....................................................................................................................66 2018 CDBG DR Grant Fund .......................................................................................................................67 2021 CDBG Grant Fund..............................................................................................................................68 2020 CDBG CV Grant Fund........................................................................................................................69 2018 CDBG Grant Fund..............................................................................................................................70 2017 CDBG Grant Fund..............................................................................................................................71 2022 CDBG Grant Fund..............................................................................................................................72 HOME Grant PI ...........................................................................................................................................73 CDBG PI......................................................................................................................................................74 Tenth Street Drainage.................................................................................................................................75 Parkside Traffic Mitigation...........................................................................................................................76 Parallel/Bevins Storm Water Maintenance..................................................................................................77 ER Storm Damage Repair ..........................................................................................................................78 Lakeside Park Fund ....................................................................................................................................79 Storm Drainage ...........................................................................................................................................80 Proprietary.......................................................................................................................................................83 Water O&M..................................................................................................................................................84 Water Expansion.........................................................................................................................................85 Sewer O&M .................................................................................................................................................86 Sewer Expansion ........................................................................................................................................87 2017-1 CLMSD Sewer Assessment District ...............................................................................................88 Internal Service Fund – Risk Management and Insurance.........................................................................89 Fiduciary..........................................................................................................................................................90 OPEB Agency Fund ....................................................................................................................................91 Redevelopment Obligation Retirement Fund..............................................................................................92 Operating Budgets ..............................................................................................................................................93 Non-Departmental...........................................................................................................................................94 Legislative .......................................................................................................................................................95 Administration..................................................................................................................................................97 City Manager...............................................................................................................................................97 City Clerk...................................................................................................................................................102 Administrative Services – Human Resources...........................................................................................103 Economic Development ............................................................................................................................109 City Attorney..................................................................................................................................................114 Finance & it ...................................................................................................................................................115 Community Development..............................................................................................................................119 Planning ....................................................................................................................................................123 Building......................................................................................................................................................125 Housing .....................................................................................................................................................127 Police.............................................................................................................................................................129 Public Works .................................................................................................................................................133 Administration and Compliance ................................................................................................................136 Engineering ...............................................................................................................................................137 Roads and Infrastructure...........................................................................................................................138 Parks, Buildings and Grounds...................................................................................................................139 Utilities...........................................................................................................................................................141 Water Operations and Maintenance .........................................................................................................143 Sewer Operations & Maintenance ............................................................................................................144 Attachments ......................................................................................................................................................140 Budget Resolution.........................................................................................................................................141 Gann Limit Resolution...................................................................................................................................142 Gann Limit Calculation ..................................................................................................................................143 Appendices........................................................................................................................................................144 Transfers Schedule .......................................................................................................................................145 Debt Schedules .............................................................................................................................................146 Personnel Schedules ....................................................................................................................................148 Position Summary .....................................................................................................................................148 Salary Schedule ........................................................................................................................................149 Salary Schedule (cont’d) ...........................................................................................................................150 City Benefit Plans ......................................................................................................................................151 Glossary of Terms .........................................................................................................................................153 Accounting Structure.....................................................................................................................................158 Financial/Budget Policies ..............................................................................................................................159 Financial Management Policies ....................................................................................................................161 Budget Schedule...........................................................................................................................................165 Page | i

CITY ORGANIZATIONAL CHART
Page | ii

MISSION AND VISION

MISSION
Lakeport is a beautiful and welcoming community. We are dedicated to preserving its small-town charm while ensuring it remains a wonderful place to raise a family, enjoy retirement, explore the outdoors, foster a climate for business success and live a healthy, fulfilling life.

COMMUNITY VISION
Lakeport’s unique character and community values are the foundation of our future. These treasured qualities will be preserved and enhanced through the effective, responsive, and forward-thinking delivery of municipal services.

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2 | Page
CITY MANAGER’S BUDGET MESSAGE
The Fiscal Year 2026/27 budget reflects both the opportunities and challenges facing the City of Lakeport as we continue working to provide high-quality services, maintain critical infrastructure, and invest in our community's future. While the City remains fiscally stable and well-positioned to meet its current obligations, the long-term financial outlook continues to require careful planning, disciplined decision-making, and a relentless focus on maximizing every available public dollar.

A central theme of this budget is the growing disconnect between revenue growth and the cost of providing public services. Lakeport remains heavily dependent upon sales tax revenue, which accounts for approximately two-thirds of the General Fund and remains highly vulnerable to economic fluctuations, changing consumer spending patterns, and long-term structural shifts in California's economy. This reality reinforces the importance of supporting local businesses and encouraging residents to shop locally whenever possible, as local spending directly supports the public services residents rely upon every day.

Large-scale infrastructure improvements can no longer rely solely on local revenues and instead require a combination of grants, partnerships, borrowing, and other external funding sources. For this reason, one of the primary themes of Fiscal Year 2026/27 is project readiness. Following the completion of several major water, sewer, and roadway improvement projects over the past several years, the City is now focused on preparing the next generation of projects through planning, engineering, environmental review, and design. Communities that have completed this foundational work are often best positioned to secure highly competitive state and federal funding opportunities.

Collectively, they reflect a commitment to responsible stewardship, long-term planning, and continued investment in the people, infrastructure, and partnerships that make Lakeport a strong and resilient community.

KEY GOALS FOR FISCAL YEAR 2026/27
• South Lakeport Water Resiliency & Fire Suppression Project: Continue advancing design, annexation processing, and funding strategies for the South Lakeport Water Resiliency and Fire Suppression Project in partnership with the County of Lake. This critical regional infrastructure project will extend municipal water service and fire protection capabilities to the South Main Street and Soda Bay Road corridor, improving emergency response, supporting existing businesses and residents, and strengthening longterm community resiliency. • Succession Planning, Workforce Stability & Public Safety Staffing: Implement a coordinated citywide succession planning strategy to prepare for anticipated retirements in key leadership and operational positions while preserving institutional knowledge and maintaining service levels. Particular emphasis will 3 | Page
be placed on maintaining a strong recruitment pipeline within the Police Department through academy sponsorships, lateral recruitment efforts, leadership development, and continued implementation of a budgeted overstaffing strategy designed to reduce vacancy lag times and ensure consistent patrol readiness.
• Rebuilding Capital Improvement Program Capacity & Project Readiness: Following several years of significant investment in roadway, utility, and public facility infrastructure, focus on rebuilding capital reserves while advancing engineering, environmental review, design, and planning efforts necessary to position future projects for implementation. Maintaining project readiness remains essential to competing successfully for state and federal grant funding and addressing long-term infrastructure needs that exceed available local resources.
• Revenue Sustainability & Financial Resiliency: Continue implementing a long-term strategy focused on maintaining the City’s financial health and organizational sustainability. Recognizing that the cost of providing public services continues to outpace revenue growth, the City will pursue a combination of revenue enhancement opportunities, operational efficiencies, risk management initiatives, and long-range financial planning efforts. This work is not defined by any single solution, but rather by the continual evaluation of opportunities to strengthen revenues, control costs, and avoid future service reductions. • General Plan and Housing Element Updates: Begin preparation for the next cycle of General Plan and Housing Element updates, two of the most significant planning efforts required under State law. Early preparation will allow the City to better manage future workload demands, budget impacts, consultant needs, and public outreach requirements while ensuring compliance with evolving state mandates and positioning the community for future growth and investment opportunities.

These key goals reflect the City’s focus on balancing immediate service delivery needs with long-term organizational sustainability. By investing in critical infrastructure, maintaining workforce stability, strengthening financial resiliency, and preparing for future planning and development opportunities, Lakeport will continue building upon recent accomplishments while positioning itself to successfully address future challenges and opportunities.
2025-26 FISCAL YEAR IN REVIEW
As we reflect on Fiscal Year 2025/26, the City of Lakeport continued to demonstrate that small communities can accomplish extraordinary things when guided by a clear vision, strong partnerships, and a commitment to longterm planning. Guided by the City Council’s priorities and supported by a dedicated staff, the City advanced major infrastructure projects, strengthened public safety services, expanded community partnerships, supported economic development and housing opportunities, and completed numerous planning initiatives that will help position Lakeport for future investment and grant funding opportunities.

Separate from the utility replacement effort, the City also completed a major rehabilitation of the South Main Street corridor between First Street and Lakeport Boulevard. In addition to roadway improvements, the project included the construction of several new sidewalk segments in areas where pedestrian facilities previously did not exist, improving accessibility, connectivity, and pedestrian safety along one of the community’s most important transportation corridors. Together, these projects represent one of the largest infrastructure investment 4 | Page
periods in the City’s recent history and reflect the City’s ongoing commitment to maintaining and modernizing essential public infrastructure.

The City also made important progress in public safety. The Lakeport Police Department successfully maintained service levels despite ongoing recruitment challenges while continuing to strengthen its leadership team through the promotions of Lieutenant Cooley, Sergeant Freitas, and Sergeant Johnson. Investments in technology and innovation further enhanced the effectiveness of the Department’s small but highly capable workforce. New AIassisted public safety camera systems were deployed at Library Park, Xabatin Park, and Westside Park, while additional technology tools were implemented to support crime analysis, report writing, and evidence-based policing strategies. Combined with the continued expansion of the Behavioral Health Co-Responder Program and strong community policing efforts, these investments have helped improve service delivery while strengthening community safety.

Economic development efforts focused on supporting local businesses, reducing commercial vacancies, and positioning Lakeport for future growth. A notable accomplishment was the formation of the Business Outreach Working Group through the Lakeport Economic Development Advisory Committee. Developed as a grassroots initiative by committee members, the group was created to strengthen direct engagement with local businesses, better understand their challenges and opportunities, and identify practical ways the City and community partners can support their success. Building upon this effort, the City expanded analysis of retail leakage and visitor spending patterns, supported ongoing reinvestment at local lodging properties, and continued efforts to attract investment to key commercial sites throughout the community. At the same time, development activity remained strong with numerous public and private projects moving through the entitlement and permitting process.

Perhaps most importantly, the City continued investing in the planning and technical studies necessary to compete for outside funding and prepare future projects for implementation. During the year, the City completed or advanced numerous planning efforts, including the Water and Sewer System Master Plan, Local Hazard Mitigation Plan, Active Transportation Plan, Countywide Evacuation Plan, Housing Conditions Survey, Fee Study, and Dutch Harbor Hotel Feasibility Update. While these studies may not always receive the same attention as visible construction projects, they are essential tools that position Lakeport to pursue grants and alternative funding sources. In an era when local revenues alone are insufficient to meet growing infrastructure and service demands, maintaining project readiness and aggressively pursuing outside funding opportunities remain critical to the City’s long-term success.
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Fiscal Year 2025/26 was a year defined by implementation, partnership, and progress. From major infrastructure investments and public safety enhancements to housing development, community partnerships, and economic development initiatives, the City continued to deliver meaningful results for residents while laying the foundation for future opportunities. Despite ongoing fiscal challenges and increasing service demands, Lakeport remains well-positioned to build upon this momentum through thoughtful planning, strategic investment, and continued collaboration with our regional partners and community stakeholders. We thank the City Council, City staff, community partners, and residents for their continued support and dedication as we work together to shape Lakeport’s future.

The most significant financial challenge facing the City continues to be the growing gap between revenue growth and the cost of providing public services. While General Fund revenues have remained relatively stable over the past several years, expenditures associated with pensions, employee compensation, healthcare, and insurance continue to rise at rates that significantly outpace revenue growth. Pension costs alone have increased dramatically in recent years, with Unfunded Accrued Liability payments rising from approximately $171,000 in FY 2024/25 to more than $500,000 budgeted in FY 2026/27. Medical insurance premiums increased 23% this year, while property and liability insurance costs have experienced multiple years of substantial increases. These trends are not unique to Lakeport, but they do place increasing pressure on the City's ability to maintain services and fund new initiatives.

General Fund Long-Term Fiscal Analysis
While the City remains financially stable, long-term projections demonstrate the importance of continued fiscal discipline, revenue diversification, and careful management of rising operating costs.

The City remains heavily dependent upon sales tax revenue, which accounts for approximately 70% of General Fund tax revenues and continues to be influenced by broader economic conditions, consumer spending habits, and fluctuations within key sectors such as fuel sales and automobile purchases. While recent investments by businesses such as Marshall’s and Tractor Supply have strengthened portions of the local retail market, sales tax performance remains volatile and highlights the importance of both supporting local businesses and 6 | Page
maintaining a diversified revenue base. As demonstrated throughout this budget document, the continued growth of local revenues alone is unlikely to keep pace with rising operating costs over the long term.

General Fund Balance Analysis
Caption: General Fund reserves remain at historically strong levels, providing the City with financial stability and flexibility to respond to economic uncertainty, unforeseen emergencies, and strategic one-time investment opportunities.

A key theme of this year's budget is the transition from major project construction to project readiness. Over the past several years, the City has completed substantial investments in water, sewer, roadway, and public facility infrastructure. While important capital projects will continue in FY 2026/27, including Lakeport Boulevard corridor improvements, ADA upgrades at the Silveira Community Center, emergency drainage repairs, fleet replacement, and continued design of the South Lakeport Water Resiliency and Fire Suppression Project, much of the City's capital investment strategy is now focused on engineering, environmental review, and design work necessary to develop shovel-ready projects. This approach recognizes that the General Fund alone cannot support the 7 | Page
community's long-term infrastructure needs and that future success will depend upon maintaining readiness for state and federal grant opportunities, partnerships, and other alternative funding sources.

The City's enterprise funds remain stable, benefiting from recent infrastructure investments and prior rate adjustments. However, both the Water and Sewer Funds are approaching the conclusion of their current rate study cycles, and ongoing utility rate analyses are underway to ensure these systems remain financially sustainable while continuing to provide reliable service and support future capital needs. Current projections indicate both funds will end FY 2026/27 in a positive position, supported by stronger-than-anticipated results from the current fiscal year.

Overall, the Fiscal Year 2026/27 budget reflects a commitment to fiscal responsibility, long-term planning, and strategic investment. While the challenges associated with rising costs and stagnant revenues are real, the City remains well-positioned to navigate those pressures through disciplined financial management, strong reserve policies, aggressive pursuit of external funding, and a continued focus on delivering efficient and effective public services.

Consequently, many of the goals outlined in this budget emphasize the foundational work required to move projects efficiently from concept to construction when funding opportunities become available.

Another significant theme reflected throughout this year’s goals is workforce stability and succession planning.

The City anticipates several key retirements within leadership and operational positions over the next several years. Ensuring continuity of service requires proactive efforts to recruit and retain talented employees, develop future leaders, preserve institutional knowledge, and maintain the organizational capacity necessary to provide high-quality public services.

The City Council has developed six (6) key priority areas to further focus monetary and staff resources. These priority areas are outlined more comprehensively elsewhere within this document and are listed here:
• Public Safety and Crisis Response
• Disaster Resiliency
• Good Governance and Fiscal Responsibility
• Capital Infrastructure Improvement
• Safe, Sustainable & Attractive Neighborhoods
• Economic Development
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My job as City Manager is to implement programs, activities, and directives that further progress within these established City Council priority areas. Department heads have tailored their goals and work plans with these priorities in mind and structured their budget requests accordingly. While many of the proposed projects and initiatives build upon efforts already underway, each has been selected because it advances one or more of the City Council’s identified priorities. The following sections summarize how departmental goals and activities support these policy priorities and help move the City toward its long-term vision for Lakeport’s future.

Building a Sustainable Police Workforce
The most significant public safety challenge facing the City continues to be the attraction and retention of qualified law enforcement personnel. Like many small rural agencies, the Lakeport Police Department provides officers with broad experience across all facets of policing, creating highly capable professionals who are often attractive candidates for larger agencies offering higher compensation and expanded career opportunities. While the City takes pride in developing well-rounded law enforcement professionals, this reality creates an ongoing challenge in maintaining full staffing levels.

To address this challenge, the City’s primary focus this year is the development of a permanent budgeted overstaffing program. Building upon a Council-supported practice utilized over the past several years, the City intends to permanently budget for two additional officer positions beyond the Department’s standard authorized staffing level. This strategy will allow the Department to continuously recruit and train personnel, reducing vacancy lag times and helping ensure consistent patrol readiness.

Investing in Public Safety Infrastructure
The City will continue investing in the tools and infrastructure necessary to support modern policing. This includes completing planned replacement cycles for patrol vehicles, in-car camera systems, patrol rifles, and other essential equipment, including the purchase of two new police vehicles during FY 2026/27. The City will also continue developing a long-term strategy for maintaining and expanding public safety camera systems in parks 9 | Page
and other key public spaces. These investments improve officer safety, enhance investigative capabilities, increase accountability, and contribute to a safer environment for residents and visitors alike.

Disaster Resiliency. The Lakeport City Council’s adopted Disaster Resiliency objectives emphasize reducing hazard risks, enhancing preparedness, strengthening emergency response capabilities, and supporting effective recovery efforts following disasters. The Fiscal Year 2026/27 goals advance these objectives through strategic infrastructure investments, regional collaboration, facility improvements, and continued implementation of disaster preparedness and hazard mitigation programs designed to strengthen the community’s ability to withstand, respond to, and recover from emergencies.

Together, these initiatives reflect a practical and comprehensive approach to disaster resiliency. Through investments in critical infrastructure, emergency preparedness, regional coordination, and community facilities, 10 | Page
the City of Lakeport continues to strengthen its ability to withstand, respond to, and recover from future emergencies while protecting residents, businesses, and essential public services.

The City will undertake several important financial planning initiatives designed to ensure long-term sustainability and transparency. These include completion of a utility rate study and Proposition 218 process, implementation of a citywide cost-of-service fee study, and continued development of Finance Department capabilities related to long-range forecasting and strategic financial planning. In addition, staff will continue updating long-range capital planning documents, including the Water and Sewer Capital Improvement Program, to better align infrastructure needs with available financial resources. Together, these efforts help ensure that revenues remain aligned with service delivery costs while providing a sustainable framework for future public investments.

The City will also continue investing in systems and processes that improve efficiency, accountability, and service delivery. Implementation of a comprehensive grant management and monitoring database will improve oversight of the City’s growing portfolio of grant-funded projects while strengthening compliance, reporting, and strategic resource allocation. Similarly, early preparation for future updates to the General Plan and Housing Element will position the City to address state planning requirements in a thoughtful and fiscally responsible manner. 11 | Page
Together, these initiatives represent a comprehensive approach to good governance and fiscal responsibility.

By focusing on financial sustainability, workforce stability, risk management, and organizational effectiveness, the City of Lakeport is strengthening the systems and processes that support effective government operations and responsible stewardship of public resources. While these efforts may not always be the most visible to the public, they are essential to maintaining a resilient, responsive, and financially sustainable organization capable of serving the community for years to come.

Advancing Strategic Infrastructure Investments
One of the City’s highest-priority capital projects remains the South Lakeport Water Resiliency and Fire Suppression Project. Working in partnership with the County of Lake, the City continues to advance the design of a new municipal water system extension serving the South Main Street and Soda Bay Road corridor. This critical infrastructure project will provide public water service, fire hydrants, and enhanced fire suppression capabilities to an area that currently lacks adequate public water infrastructure while supporting future annexation and economic development objectives.

The City will also continue rebuilding and updating its Capital Improvement Program to ensure infrastructure priorities remain aligned with available resources while positioning projects to compete successfully for outside funding.

Maintaining Existing Infrastructure and Public Assets
The City will continue implementing a strategic, data-driven pavement management program focused on improving roadway conditions while maximizing the useful life of existing infrastructure. Building upon significant corridor improvements completed over the past decade, the City will balance investments between major roadway rehabilitation projects and preventative maintenance strategies such as chip sealing and 12 | Page
microsurfacing. This “keep good roads good” philosophy allows the City to preserve infrastructure investments while reducing future reconstruction costs.

Roadway maintenance priorities will continue to be evaluated based on available funding and staffing resources, with increasing opportunities to expand investment into neighborhood streets as major corridor improvements reach completion. This balanced approach supports both economic activity and neighborhood quality of life while improving the City’s overall Pavement Condition Index.

The City will also continue implementing a structured replacement cycle for critical fleet and equipment assets.

This includes funding for the purchase of two new police vehicles, replacement of in-car camera systems, patrol rifles, and other essential public safety equipment. A proactive replacement strategy helps avoid the higher costs associated with deferred maintenance while ensuring employees have the tools necessary to safely and effectively serve the community.

Together, these initiatives reflect a practical and forward-looking approach to capital infrastructure improvement.

By balancing immediate infrastructure needs with long-term planning, maintaining critical public assets, and aggressively pursuing funding opportunities, the City of Lakeport is creating a strong foundation for future investment while ensuring that essential infrastructure systems continue to serve the community safely and efficiently for years to come.

The City will also continue implementing its Communications Strategic Plan with an emphasis on helping residents better understand local government operations, public finance, and how community projects are funded and delivered. By providing clearer information regarding City revenues, grant funding, and budgeting decisions, the City seeks to strengthen public understanding of how local resources are leveraged to accomplish community goals. These efforts support transparency, build trust, and encourage more informed civic participation.

Together, these initiatives strengthen community identity and create opportunities for residents to become more engaged in shaping Lakeport’s future.

The City will also continue development of a Recreation Program Master Plan designed to maximize the use of existing parks and recreational facilities while identifying opportunities to expand youth-oriented programming. 13 | Page
Through collaboration with the Lake County Recreation Agency and other community partners, the City will explore sustainable funding, staffing, and programming models that support long-term recreation services and increased community participation.

Supporting Housing Opportunities and Community Well-Being Expanding housing opportunities remains a critical component of creating safe and sustainable neighborhoods.

During FY 2026/27, the City will continue providing land use, entitlement, and permitting support for several significant development projects that address a range of community needs. These include ongoing coordination for the Parkside Apartments affordable housing development, support for the Justice Involved Housing Project, permitting assistance for the Tribal Health Vista Point Healthcare Campus, review of a proposed mental health rehabilitation facility, and support for the Lake Family Resource Center Head Start expansion. Collectively, these projects expand housing options, improve access to services, and strengthen community resources that support long-term neighborhood stability.

The City will also evaluate the feasibility of a Vacant Building Registry Ordinance as a tool to encourage proactive property management, reduce long-term vacancies, and support downtown revitalization efforts. By improving awareness of available spaces and identifying opportunities to return key properties to productive use, the City seeks to strengthen the downtown business environment and encourage new investment in the community’s historic commercial core.
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Strengthening the Downtown-Waterfront Connection
The City will prioritize the development of a Downtown and Waterfront Wayfinding and Signage Plan to better connect two of Lakeport’s most important economic assets. While downtown and the waterfront are located within easy walking distance of one another, visitors often experience them as separate destinations. The City will develop a cohesive wayfinding system that improves navigation, highlights public amenities, and creates a stronger sense of connection between these complementary areas.

Beyond its economic benefits, the wayfinding program also serves as an important community identity initiative.

Consistent signage, branding elements, and storytelling features will help communicate a shared sense of place while creating stronger visual connections between the downtown, waterfront, parks, and other community assets. These improvements will help residents and visitors better understand what makes Lakeport unique while reinforcing community pride and strengthening the City’s image as the civic, cultural, and commercial heart of Lake County.

Tourism Development and Lodging Investment
Lakeport will continue efforts to strengthen tourism infrastructure and improve lodging quality throughout the community. Tourism remains an important component of the local economy, generating visitor spending that supports local businesses, restaurants, retail establishments, and community events.

While current economic conditions and financing markets have created challenges for new hotel development projects throughout California, the City remains committed to advancing long-term opportunities for expanded lodging investment. Staff will continue outreach regarding the Dutch Harbor site, monitor market conditions, and maintain project readiness so the community is positioned to respond when economic conditions become more favorable.

At the same time, the City will work collaboratively with existing lodging operators to encourage property improvements, reinvestment, and enhanced visitor experiences. Improving the quality and competitiveness of 15 | Page
Lakeport’s existing lodging inventory remains an important economic development strategy that can generate near-term benefits while larger development opportunities continue to evolve.

Together, these initiatives reflect a practical and balanced approach to economic development. By addressing downtown vacancies, strengthening the connection between downtown and the waterfront, supporting existing businesses, pursuing strategic retail recruitment, and positioning the community for future tourism investment, the City of Lakeport continues to build a resilient local economy while preserving the unique character and charm that make the community an attractive place to live, work, shop, and visit.

General Projects/Studies, Engineering and Support for City Council Objectives:
• South Lakeport Regional Water Resiliency & Fire Suppression Project Design [30% Complete] • Roadway Engineering & Project Design:
o Local Roads Chip Seal Program Development
o Parallel Ave. (Lakeport Blvd. to North-end)
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o Parallel Ave. (175 to Lakeport Blvd.)
o Clear Lake Ave./High St./Lakeshore Blvd. (North Main to Giselman) o Charlie Jolin Way
o Eleventh St. (North Main to City Limits)
o South Main St. (Lakeport Blvd to Peckham St.
o Harry St. (Fifth to Central Park & Central Park to Eleventh St.) • Scotts Creek Well Replacement Design
• 7th Cycle Housing Element Update
• Utility Rate Study Update
• Comprehensive Citywide Fee Study [50% Complete]
• Wayfinding Signage Program for Downtown & Waterfront
• Citywide ADA Facility & Sidewalk Study Update
• Retail Attraction and Retention Study
• General Plan Update
• Storm Water Master Plan
• City Standards Master Plan
• Assist non-profit formation for the Lakeport Community Council • Silveira Community Center Operations Funding to facilitate upgrades for wider community access and rental opportunities
• Funding to augment recreational programming by Lake County Public Services and facilitate greater recreational program offerings in the City of Lakeport
• Enhanced community communications support
• Ordinance Updates: establish a vacant building registry, sidewalk vending, business license modernization, streamline short-term rental process, modify nuisance abatement procedures, and ADU regulation updates.

Over the past several years, the City has completed an unprecedented level of investment in roads, water, sewer, public safety, housing, and community facilities. The coming year represents an important transition from construction to preparation—focusing on project readiness, workforce stability, and the planning efforts necessary to position Lakeport for the next generation of infrastructure and community improvements. The reality is that the City’s General Fund alone cannot support all of Lakeport’s long-term capital infrastructure needs. As a result, maintaining a pipeline of well-planned, shovel-ready projects is more important than ever. By advancing engineering, environmental review, design, and other pre-construction activities today, the City will be better positioned to compete for state and federal grants, leverage alternative funding sources, and capitalize on future opportunities to deliver projects that would otherwise remain beyond the reach of local resources alone.

Lakeport’s future success will not be defined by any single project or funding source. Rather, it will be the result of many deliberate decisions made over time—supporting local businesses, maintaining critical infrastructure, investing in employees, pursuing outside funding, and preserving the strong sense of community that makes Lakeport strong. The goals outlined in this budget are intended to build upon recent accomplishments while ensuring the City remains resilient, adaptable, and prepared for the opportunities ahead. 17 | Page
Most importantly, none of this work happens in isolation. The progress reflected throughout this budget is the result of dedicated City employees, engaged residents, community volunteers, local businesses, nonprofit partners, and regional agencies working toward shared goals. I extend my sincere appreciation to the Lakeport City Council for its leadership and policy direction, to City staff for their professionalism and commitment to public service, and to the many community members and partners who continue to invest their time, energy, and ideas into making Lakeport a stronger community. Together, we will continue building a city that is resilient, welcoming, and well-positioned for future generations.

Respectfully Submitted,
Kevin M. Ingram
City Manager
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LAKEPORT CITY COUNCIL PRIORITY AREAS

PUBLIC SAFETY & CRISIS RESPONSE
The Lakeport City Council is committed to ensuring the safety and well-being of our community by prioritizing a strong, well-trained, and responsive public safety system. We will:
• Support the attraction, retention, and ongoing training of high-quality law enforcement personnel • Set direction for collaborative, compassionate, and effective approaches to homelessness, mental health, and substance abuse challenges
• Champion community policing strategies that build trust, visibility, and meaningful relationships between officers and residents
• Support and promote youth education and prevention efforts focused on the dangers of drug use and the importance of early awareness and avoidance

DISASTER RESILIENCY
Recognizing Lakeport’s vulnerability to natural hazards, the City Council prioritizes a proactive and coordinated approach to disaster resiliency. We will:
• Advance policies that reduce risk and strengthen long-term hazard mitigation • Ensure preparedness through planning, training, and resource allocation • Promote coordinated and effective emergency response efforts • Support timely and strategic recovery to restore and strengthen our community after disasters

GOOD GOVERNANCE & FISCAL STABILITY
The City Council is dedicated to transparent, accountable governance and responsible stewardship of public resources. We will:
• Uphold fiscal discipline while aligning investments with community priorities • Guide the adoption of efficient processes and modern technology to enhance service delivery • Set expectations for high-quality, responsive public services • Promote transparency through clear, timely communication with residents • Encourage meaningful community engagement in civic decision-making • Prioritize risk management and long-term organizational stability • Support initiatives that advance diversity, equity, and inclusion throughout the community

CAPITAL INFRASTRUCTURE IMPROVEMENT
The City Council recognizes that strategic infrastructure investment is essential to Lakeport’s future. We will:
• Establish clear priorities for capital improvement projects that reflect community needs • Advocate for and pursue diverse funding opportunities • Ensure projects are thoughtfully planned and positioned for successful implementation

SAFE, SUSTAINABLE & ATTRACTIVE NEIGHBORHOODS
The City Council is committed to fostering neighborhoods that are vibrant, healthy, and reflective of Lakeport’s unique character. We will:
• Promote a range of housing opportunities to meet the needs of current and future residents • Support policies and programs that improve and preserve existing housing • Prioritize access to parks, recreation, and open space • Advance initiatives that improve overall community health and well-being • Encourage community events and programs that strengthen connection and quality of life • Lead efforts to strengthen Lakeport’s identity through thoughtful city branding and signature community events that celebrate our culture, waterfront, and shared sense of place • Protect Lakeport’s natural beauty while recognizing its value to residents and the local economy 19 | Page

ECONOMIC DEVELOPMENT
The City Council is focused on strengthening Lakeport’s economic vitality while preserving its charm and identity.

We will:
• Support regional partnerships that drive sustainable economic growth • Encourage business retention, expansion, and attraction • Prioritize the continued enhancement of our historic downtown and lakefront as key economic and community assets
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COMMUNITY PROFILE

LAKEPORT, CALIFORNIA
Incorporated
April 30, 1888
Government
Lakeport is a general law city operated under a
council-manager form of government.

Location
Lakeport is located on the western shore of Clear
Lake, 120 miles north of San Francisco and 125
miles northwest of Sacramento, the state capital.

County
Lake (Lakeport is the county seat)
Area

2.7 square miles
Elevation
Lakeport lies 1,335 feet above sea level.

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The City
The City of Lakeport was incorporated on April
30, 1888 as a general law city. As the
administrative seat for the County of Lake, and
with a residential population of about 5,000 in a

3.1 square-mile area, Lakeport is graced with a
strong business base and a well-established
residential community.

The City of Lakeport is a partial service city (as
opposed to full service) in that it provides most
typical municipal functions, including public
safety, public works, community development
and parks and recreation. In addition, the City
provides water and wastewater services. It
does not provide library or fire protection
services, as those are activities of the County of
Lake and the Lakeport Fire Protection District,
respectively. Lakeport operates under a
council-manager form of government, whereby
the council serves as the legislative body and
the City Manager its executive.

Governance
The Lakeport City Council consists of five
members, elected at-large to four-year
overlapping terms. Council members must be
residents of the City. The positions of Mayor
and Mayor Pro Tem are chosen by the Council
through its own policy. The Mayor conducts the
Council meetings and represents the City in ceremonial
occasions.

The City Council serves as the policy board for the
municipality. It provides policy direction, establishes goals, and sets priorities for the City government. In
addition to serving as the policy makers for the
community, the City Council also is responsible for
numerous land use decisions within its borders, including the General Plan. The City Council appoints the City
Manager, City Attorney, City Clerk, and all members of
advisory boards and commissions.

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Local Economy
Lakeport is a travel and recreation-oriented
community fortunate to have a large area
serving as a hub for recreational activities in
Lake County.

The Lakeport business community is engaged
with the Lake County Chamber of Commerce
and the Lakeport Main Street Association, as
well as the Lake County Economic
Development Corporation and other partners,
to encourage sustainable business growth.

The City’s daily retail trade population is over
55,000 people. Commercial areas are located
in the historic downtown and along Lakeport
Boulevard, Parallel Drive, Eleventh Street,
North High Street, and South Main Street.

Small Town Charm
Lakeport is located on the west shore of Clear
Lake about two hours north of San Francisco
and west of Sacramento. The City has a
distinctive, small-town character with strong
community values. As a visitor and
recreational destination, Lakeport hosts
numerous activities and events year-round,
including world-class bass fishing tournaments,
wine festivals, parades and street fairs, car
shows, concerts in the park, bicycling, water
sports, fine dining, and the home of the Lake
County Historic Courthouse Museum and the
Lake County Fair.

Lakeport is known for its historic downtown
with Victorian architecture, inviting lakeside
park, quiet residential neighborhoods and
friendly people. Free public boat ramps, water
sports equipment rentals, and a lively mix of
restaurants, shops and lodging make the town
an ideal place to visit.

As the oldest incorporated community in Lake
County (1888) and as the county seat, the city
is the regional center of commerce and
government for the area. State Highways 29,
20 and 175 provide scenic access. Lampson
Field Airport is located three miles to the south.

Recreation and Entertainment
A year-round schedule of special events
include summer concerts at the lakeside park,
annual seaplane splash-in attracting pilots from around the country, Shakespeare at the Lake performed
outdoors, music and movies at the historic community
theatre, and fireworks displays over Clear Lake on the
Fourth of July.

Annual Taste of Lake County
Cardboard Boat Races in Library Park
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Resident Labor Force
Approximately 2,510
Largest Employment Sectors
Local government
Healthcare
Education
Recreation
Energy
Employment
Within ten miles, there is a diverse labor force specializing in such occupations as sales, technical and professional
services, education and government services, and other
specialties. The largest employment sectors in the Lakeport area are: government (federal, state, and local); education; and the service and retail trades. The agricultural and construction sectors are important and the
transportation/public utilities, wholesale trade,
finance/insurance/real estate and manufacturing sectors round out the employment picture.

Approximately 45% of all jobs in the county are located in the Lakeport area.

Live, Work, Play
Lakeport offers great access to Clear Lake – the largest natural freshwater lake located entirely within California – with several free public boat launching ramps, making it popular for fishing, bird watching, sailing and kayaking. Motels, bedand-breakfast inns, campgrounds and vacation rental accommodations are available. Westside Community Park
offers soccer, baseball and softball fields along with a dog park, pump track, and the Forbes Creek walking trail and ten horseshoe pits in its 60-acre development. A Horse Park is in development nearby as an extension of the park.

Development of a new Lakefront Park is also underway in downtown Lakeport.

With a broad array of entertainment, quality housing and accommodations, unique events, and friendly people,
Lakeport offers plenty to all ages while maintaining the quintessential charm of a small town. Parents enjoy excellent schools and many extracurricular activities, including youth sports. Additionally, Mendocino College offers classes yearround at its Lake Center campus. Lakeport’s wonderful weather and exceptional environment make it quite simply a great place to live, work and play.

Quality of Life
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BUDGET IN BRIEF
This is an introductory section meant to summarize information for the reader in a succinct and more readily comprehensible way.

CITY-WIDE COMPARED
This is a comprehensive summary of the City Budget, as recommended in fiscal year 2026-27. All budgeted funds are included in this synopsis.

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GENERAL FUND COMPARED
This is a comprehensive summary of the general fund, as proposed in fiscal year 2026-27.

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HISTORICAL REVENUE SUMMARY
This table illustrates from where and by how much revenues have come into the City over the last four years compared to fiscal year 2026-27.

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Historical Expenditure Summary
This table illustrates where and by how much resources have been used by the City over the last four years compared to fiscal year 2026-27.

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EXPENDITURES BY DEPARTMENT
This table illustrates how individual departments have been funded over the last four years as compared to fiscal year 2026-27. Non-Departmental accounts for all activities unrelated to a specific department, which typically include debt service for the water and sewer enterprises as well as the former redevelopment agency.

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DEPARTMENT EXPENDITURE DETAIL
This table illustrates how departments have used resources in the performance of their appropriated functions over time, compared the proposed appropriations for fiscal year 2026-27.

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SOURCES AND USES FOR FISCAL YEAR 2025-26
The following two tables illustrate where revenues are estimated to derive for each budgeted City fund and where those financial resources are recommended be applied, allocated by broad categories, such as salaries and benefits, operations, loans and grants, debt service, and capital improvements.

Such categories are characterized further as follows:
• Salaries and benefits include salaries and wages of full and part-time employees, healthcare premiums, City retirement contributions, overtime and standby costs, etc. • Operations include costs associated with day-to-day activities, professional services, insurance costs, and travel and training.
• Debt service pertains to any regular payments on bonds, loans, leases, or other long-term obligations.

Generally, all debt service is managed in non-departmental. • Housing loans/grants are issued by the City through grant funding received from the state and federal governments. They typically are found only in the economic and housing divisions of the City Manager’s Office and Community Development Department, respectively. • Capital outlay typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

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SOURCES

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USES

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PROPERTY TAX DISTRIBUTION
A property tax is a levy on the assessed value of a property. The general property tax is levied by the county, equal to 1% of the assessed value, often called the 1 percent general tax levy or countywide rate. Under Proposition 13, a law approved by California voters in 1978, general property taxes (not including those collected for special purposes) are limited to 1% of a property’s market value and increases in assessed value are restricted to 2% per year. California property taxes are collected by the County Tax Collector and are then transferred to the County Auditor for distribution to the multiple local governments. The graph above shows where each property tax dollar paid by City property owners is allocated. While the property tax growth in Lake County is slow, we are anticipating this revenue source to be consistent with the previous year.

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SALES TAX DISTRIBUTION
Sales tax is a tax paid on the sales of certain goods and services. Currently, the total sales tax rate in the City of Lakeport is 8.75%. The City receives 2.5% in sales tax, with 1% Bradley-Burns, 1% Measure Z and .5% Measure I. Sales tax from the Bradley-Burns levy is allocated back to the City where the sale was negotiated, or the order was taken. On the other hand, the transactions and use tax, or Measure Z and I, is allocated to the City where the goods are delivered or placed into use. The graph above shows the breakdown of the City’s sales tax. Over fiscal years 2024-25 and 2025-26 sales tax collections in Lakeport have remained stable for several quarters. We project sales tax in 2026-27 and into the future to be very flat with growth rates that do not exceed 2% annually.

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MEASURE I

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MEASURE Z

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OTHER MAJOR REVENUES
Other Taxes
Transfer tax is a transaction fee imposed on the transfer of land or real property from one person (or entity) to another. The total transfer tax for the County and City is $1.10 ($0.55 County / $0.55 City) per $1,000 of property value, minus any loans assumed in the sale. We are anticipating this revenue source to be consistent with the previous year.

Transient occupancy tax (TOT) is a levy placed on tourists to the City, which is intended to compensate local government for the increased public service costs incurred by serving tourists. This tax is common in most of the United States, including California, and is applied to travelers when they rent accommodations (a room, rooms, entire home, or other living space) in a hotel, inn, tourist home or house, motel, or other lodging. The TOT rate in the City of Lakeport is 10% and an additional 1.5% is collected by the city and remitted to the Lake County Tourism Improvement District. We expect these revenues to remain strong with ideal conditions for a strong tourist season. However, the looming recession discussion could impact tourism if tourist discretionary income continues to be stressed further.

Licenses, Permits and Franchises
A business license is a tax payment to the city for doing business in that city. Cities collect fees from the business license applicants and place the majority of the fees into its general fund for the administration of city services, such as police, road work, parks and recreation and other community services that benefit citizens and businesses. While the business growth in Lake County is slow, we are anticipating this revenue source to be consistent with the previous year.

A utility franchise is a contract between a city and a utility or garbage company that outlines certain requirements for the utility to use the city’s public rights of way and for the garbage company to have exclusive rights to provide garbage service. The establishment of franchise agreements between cities and utilities or garbage companies is a customary business practice and legal process outlined by the state constitution. We are expecting this revenue source to be consistent with the previous year.

Charges for Services
Charges for Services at the City of Lakeport are primarily received in exchange for water and wastewater services and are accounted for in enterprise funds. Water and wastewater rates are determined by the cost of maintaining, operating, distributing and treating water and wastewater. The City conducted a new rate study which evaluated the appropriateness of the current billings to customers. We have budgeted for increases in revenues according to the rate increases developed in the study.

Revenue from Other Agencies
State and federal grants fluctuate significantly from year to year depending on legislative policy and the City’s ability to secure, administer and complete projects. In 2026-27, the City will be performing work on several CDBG projects, including $1.27 million for ADA improvements at the Silviera Community Center, and $1.19 million in for the completion of the Parkside Affordable Housing development. The City also plans to complete storm damage repair projects using approximately $400k in Federal grants.

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CAPITAL IMPROVEMENT PROGRAM (CIP)
The City of Lakeport Capital Improvement Program involves fiscal oversight of various City financial resources to be used for the acquisition, design and/or construction of major capital facilities within the City, including major projects to replace or construct portions of the City's physical infrastructure, such as its streets, buildings, parks, street lights, water treatment and distribution system, sewer collection and disposal system, and storm drains.

This section of the budget document identifies and provides an outline for major capital projects that are needed to meet City needs and City Council priorities. The program reflects long-range capital planning efforts by identifying specific projects, the timing of expenditures and the estimated impact on operating budgets for those projects needed to service infrastructure over a considerable period.

A capital project is usually considered a one-time expenditure but may be funded over several years.

Management is recommending a five-year Capital Improvement Program budget to identify funding for multi-year projects and to provide budget forecasting for capital projects according to priority and available funding. By providing the budget in this format, the City Council can provide staff with appropriations and an expectation of when projects are to be completed. It also provides staff with a planning tool to help arrange and procure resources necessary to meet City Council and the public’s expectations.

The following schedules depict the City’s Capital Improvement Plan:

CIP budget period: FYE 2027 thru 2036
Total projects: 187
Total estimated cost: $54 million
Sources of funding:

General fund: 16 million
Project Funds 11 million
Water fund : 12 million
Sewer fund : 15 million

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CAPITAL EXPENDITURES
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CHARTS AND GRAPHS
The following graph illustrates the sources of estimated revenues and uses of recommended appropriations in the general fund for fiscal year 2026-27.

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The following graphs illustrate revenues and expenditures City-wide, encompassing the various special revenue funds maintained by the City for housing, economic development, and capital improvement activities, as well as enterprise services of water and sewer.

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TRENDS AND ANALYSIS
General revenues over the last seven years have followed a path traveled by most local governments throughout the state. It has been a slow and steady climb out of the economic downturn which greatly affected the City’s budget. In 2020-21 the global pandemic significantly impacted general fund revenues which recovered in 2021-

22. The large spike in revenues and expenses in 2021-22 was the result of other financing sources and uses from the issuance of Pension Obligation Bonds. In 2022-23 revenues from sales tax adjusted back to pre-pandemic levels after economic stimulus monies dried up. This trend continued through 2025-26 and the economic growth of revenues for 2026-27 and into the future is anticipated to be limited.

The graph below illustrates revenue and expenditure trends from 2020-21. This recommended budget for 2026- 27 attempts to normalize the variance between the two and maximize available resources for specific priorities.

General Fund Balance has returned to a healthy level over the past 7 years. The 2026-27 budget maintains a reserve level which is 95% of budgeted outgo.

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Below are several additional graphs that illustrate the composition of revenues and expenditures of the general fund, as well as general revenues and expenditures by category. These graphs are intended to help the reader understand where money comes and goes in the general fund. As operating costs continue to rise and revenues struggle to keep pace the City regularly seeks to optimize operating budgets as a normal budgetary practice.

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LONG-TERM FINANCIAL PLAN
Below is a snapshot of the comprehensive tool the City uses for long-term planning. The revenue growth pattern is expected to be minimal. Salary and benefit projections include the best pension cost estimates available and known compensation and benefit changes. Other operating costs are forecasted on a trend of around three percent per year. The space between the blue and orange lines represents the City’s capacity to budget capital projects and other one-time costs. The space between the orange line and blue line in the later years where expenditures exceed revenues represents potential deficit spending. This model is continuously evaluated allowing the City to plan long-term and make decisions today that will not compromise the financial position of the future.

Salary and benefit costs have the most significant impact on the General Fund and make up approximately 56% of all costs in the fund. Below is the projected trend of salary and benefit-related costs of the funds which compensate City staff. The 2026-27 budget included a 23% increase to employee health plans. These projections include a healthcare trend rate of 3% in future years and the impact of increased pension costs discussed next.

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In October of 2021, the City issued approximately $8 million in pension obligation bonds (POB). The chart below is a snapshot of the cost associated with the City’s Unfunded AccruedLiability (UAL) related to pensions. The dark blue bars account for the debt service associated with the 2021 POB’s. The purple line reflects UAL costs prior to the issuance of the POB’s. The gray and teal bars account for the increase in UAL costs as the result of CalPERS earnings being less than the discount rate in the fiscal years ended June 30, 2022 and 2023. In 2021-22 they earned -7.5% and are expected to earn 6.1% in 2022-23. Resulting in new layers of UAL that will impact on the City budget in the upcoming years. The City cost for pension UAL is significantly impacted by CalPERS’s ability to earn expected returns over time. The City has little to no control over these impacts.

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The cost of insurance for the City has nearly doubled since 2020. The 2026-27 budget anticipates these costs to be increased, by roughly 6%.

The cost to provide the health insurance to City employees, as required by the IRS, is anticipated to continue increasing in a fashion that is comparable to the overall health insurance market, which is another rising cost that the City has little to no control over. The 2026-27 budget anticipates these costs to increase by roughly 23%. Since 2020, the cost has risen around 59% overall.

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JURISDICTION COMPARISON

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FUND SUMMARIES

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GOVERNMENTAL FUNDS
Governmental funds are those that account for governmental activities funded by general revenues (i.e. taxes and fees) and special revenues (i.e. grants, subventions, special assessments, etc.). The categories of governmental funds are general fund, capital projects, special revenue, debt service, and permanent funds. The numbers in parenthesis indicate the fund number in the City’s financial management system.

GENERAL FUND (110)
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds, and the related expenditures. The major revenue sources for this fund are property taxes, sales taxes, franchise fees, business licenses, unrestricted revenues from the state, fines and forfeitures and interest income.

Expenditures are made for community development, public safety, public works, and other services.

Capital Projects Funds
GENERAL CAPITAL PROJECT FUND (130)
Used to account for funds received for capital projects. Most notably, this fund is used to track projects funded from the former redevelopment agency, consisting of unspent bond proceeds meant for the renovation of blighted areas in the redevelopment project area. In fiscal years 2014-15 through 2017-18 the fund was used to track expenditures related to the new Police Department facility and the Downtown Project. In 2024-25 The South Main Street Road Rehabilitation Project has been budgeted in this fund. There is no capital project budgeted in this fund for FY 2026-27.
2017 STORM CAPITAL PROJECT FUND (420)
Used to account for funds received for capital projects associated with damages caused by the 2017 winter storms. Insurance proceeds and FEMA/CalOES public assistance grant funds will be used for to complete these projects.

Debt Service Funds
DEBT SERVICE FUND (140)
Used to account for general obligations, most notably loan payments for the Police Department facility, proposed pension obligations bonds and energy efficiency lease financing.

Special Revenue Funds
Parkland Dedication Fund (202)
State law and General Plan provide for new development to fund expansion of park system to compensate for added demand of growth. Fees are collected at time of recordation of parcel and subdivision maps. (See Section

16.16.040 Lakeport Municipal Code).

Roads Fund (203)
Established to account for revenues and expenditures on road-related projects in the City of Lakeport. Financing is provided by the City’s share of the statewide tax on gasoline and other fuels. In FY 2025-26, this fund was renamed from “HUTA Fund” to more accurately describe the fund’s purpose and encompass all funding sources.

Prop 172 Public Safety Fund (207)
A city or county that received Prop 172 funds must place the revenues in a special revenue fund to be expended only on public safety services as defined in Government Code Section 30052. Maintenance of effort provision in the statute requires the City to maintain funding levels to public safety functions.

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Lakeport Housing Fund (209)
A special revenue fund established for the provision of affordable housing. The fund has no expenditure activity but does maintain several long-term receivable housing loans for which it collects payments.

PLHA Navigation Center Fund (210)
A special revenue fund established with Permanent Local Housing Assistance funds from California Department of Housing and Community Development which will be used to study and design a low-barrier navigation center in Lakeport.

Police K-9 Fund (211)
This fund is used to track restricted contributions funding the Lakeport Police K-9 Program and related expenditures.

C-PLHA (Permanent Local Housing Alloc) (212)
A special revenue fund established to receive the competitive portion of Permanent Local Housing Assistance funds from California Department of Housing and Community Development which will be used to fund development of affordable housing at Parkside.

APC Bike and Pedestrian 10th St Fund (219)
A special revenue fund established Ste Bike and Pedestrian from through the Lake County Area Planning Commission to develop a bike and pedestrian trail to assist with the diversion of this traffic from the 11th St Corridor.

Department of Boating and Waterways Bathrooms Fund (228) A special revenue fund established with State Boating and Waterway funding to replace restrooms at Library Park, the city’s premier lake access point for boaters.

CDBG 18-MIT-RIP Grant Fund (231)
A special revenue fund established to track activities funded by a 2018 CDBG – Mitigation Resilient Infrastructure Program grant for ADA Improvements at the Silviera Community Center.

Lake Area Planning Commission Active Transportation Planning Grant (232) Fund set up to track activities funded by the Lake County Area Planning Committee to fund planning activities for the development of a city wide active transportation master plan. 2018 CDBG DR Grant Fund (233)
Fund set up to track activities funded by a CDBG Disaster Relief Multi-Family Housing Grant in response to the Mendocino Complex fire of 2018.
2021 CDBG Grant Fund (234)
Fund set up to track activities funded by a 2020 housing grant from CDBG. Potential activities could include home rehabilitation, economic development business loans and planning and technical assistance for design of the new community center.
2020 CDBG CV Grant Fund (236)
Fund set up to track activities funded by a Corona Virus Relief funding. 2018 CDBG Grant Fund (237)
Fund set up to track activities funded by a 2018 housing grant from CDBG. Activities include off-site infrastructure improvements for the newly constructed low-income housing development. 2017 CDBG Grant Fund (238)
Fund set up to track activities funded by a 2017 housing grant from CDBG. Activities could include economic development business loans and planning and technical assistance for the Forbes Creek neighborhood.

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2022 CDBG Grant Fund (239)
Fund set up to track activities funded by a 2022 grant from CDBG. Activities could include economic development business loans and planning and technical assistance.

HOME Program Income Fund (240)
Fund to track all home loans made by the City using HOME grant awards. Income received is in this fund consists of principal and interest payments made by borrowers.

CDBG Program Income (241)
Fund to track all home loans made by the City using CDBG grant awards. Income received is in this fund consists of principal and interest payments made by borrowers.

Tenth Street Drainage Fund (401)
Restricted fund/set aside by developer of Willow Tree Shopping Center.

Lakeport Blvd Improvement Fund (402)
Special assessment of developer to mitigate traffic impacts of K-Mart (now Bruno’s) development in 1987. In FY 2025-26, this fund was combined with Roads Fund (203).

South Main Street Improvement Fund (403)
Special assessment of developer to mitigate traffic impacts of K-Mart. In FY 2025-26, this fund was combined with Roads Fund (203).

Parkside Traffic Mitigation Fund (407)
Traffic mitigation fees are required as a mitigation measure for Parkside Subdivision.

Parallel/Bevins Storm Maintenance Fund (408)
Special fee to fund storm water improvements designed to mitigate the impact of development.

ER Storm Damage Repair Fund (410)
Repairs the roadway, curb, gutter and storm water drainage system. Funds provided by the Federal government through Caltrans’ administration of the Emergency Relief (ER) program.

Safe Routes to Schools (411)
On Hartley from 20th St north to the City limits, pedestrian improvements including curb, gutter and sidewalk. This project is primarily funded by Caltrans. In FY 2025-26, this fund was combined with Roads Fund (203).

Lakeside Park Fund (413)
Fund set up to track activities funded by a Proposition 68 California Department of Parks and Recreation Grant.

Activities include the acquisition, design and construction of a new park located at the Natural High site just north of downtown Lakeport.

Storm Drainage Fund (414)
Assessments are made against larger properties to pay for prior and future storm drain projects. See Chapter 3.16 Lakeport Municipal Code.

City Wide HSIP (415)
Traffic striping and pavement marking on all major arterials and collectors throughout the City. This project is primarily funded by Caltrans. In FY 2025-26, this fund was combined with Roads Fund (203).

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GENERAL FUND
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CAPITAL PROJECTS
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2017 STORM CAPITAL PROJECTS
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DEBT SERVICE
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PARKLAND DEDICATION FUND
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ROADS FUND
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PROP 172 PUBLIC SAFETY
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LAKEPORT HOUSING PROGRAM
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PLHA NAVIGATION CENTER FUND
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POLICE K-9 FUND
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C-PLHA (PERMANENT LOCAL HOUSING ALLOC) FUND
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APC 10TH ST BIKE AND PEDESTRIAN
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DEPARTMENT OF BOATING AND WATERWAYS BATHROOM GRANT
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CDBG 18-MIT-RIP GRANT FUND
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ATP SIDEWALK PLANNING GRANT
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2018 CDBG DR GRANT FUND
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2021 CDBG GRANT FUND
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2020 CDBG CV GRANT FUND
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2018 CDBG GRANT FUND
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2017 CDBG GRANT FUND
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2022 CDBG GRANT FUND
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HOME GRANT PI
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CDBG PI
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TENTH STREET DRAINAGE
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PARKSIDE TRAFFIC MITIGATION
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ER STORM DAMAGE REPAIR
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LAKESIDE PARK FUND
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STORM DRAINAGE

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PROPRIETARY
Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise.

Enterprise Funds
The City maintains several enterprise funds responsible for budgeting and tracking expenses in the delivery of water and sewer services. The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

Water Operations and Maintenance (501)
Chapter 13.04 of the Lakeport Municipal Code provides the authority for City to operate water system. Revenues (fees and charges) are collected to pay for service (water) received.

Water Expansion Fund (502)
Assessments on new development to pay for distribution system, plant preservation and system capacity expansion.

Sewer Operations and Maintenance (601)
Chapter 13.20 of the Lakeport Municipal Code provides the authority for the City to operate sewer system.

Revenues (fees and charges) are collected to pay for availability of collection, transportation, treatment, and disposal system. In addition, grazing lease payments, LACOSAN payments for flows, tax revenues, FEMA storm damage reimbursement, OES storm damage reimbursement, and insurance rebates have been credited to this fund.

City of Lakeport Municipal Sewer District Expansion Fund (602) New construction is assessed connection fee to provide for major repair, improvement, and expansion of sewer collection, transmission, treatment, and disposal facilities. See Lakeport Municipal Code Section 13.20.030.

City of Lakeport Municipal Sewer District Assessment District 2017-1 Fund (606) A debt service fund used to track repayment of a bond secured by a land-based assessment to pay for sewer expansion project completed in 1991 and refinanced in 2017 Internal Service Fund
Internal service funds are designed to track expenses common to most, if not all, City departments. The City maintains a single internal service fund to track expenses related to risk management (liability and worker’s comp insurance).

Risk Management and Insurance Internal Service Fund (701) This fund tracks expenses related to medical, liability and workers’ comp insurance premiums; deductibles; and direct charges. The City is an associate member of the Redwood Empire Municipal Insurance Fund (REMIF), which manages its claims and other risk management activities.

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WATER O&M
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WATER EXPANSION
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SEWER EXPANSION
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2017-1 CLMSD SEWER ASSESSMENT DISTRICT
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INTERNAL SERVICE FUND – RISK MANAGEMENT AND INSURANCE
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FIDUCIARY
These funds account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the Government-wide financial statements, but are presented in the separate Fiduciary Fund financial statements.

Agency Funds
OPEB Agency Fund (801)
This fund is used to track retiree contributions and related costs associated with the City’s retiree healthcare program.

Private Purpose Trust Fund
Redevelopment Obligation Retirement Fund (705)
This fund is responsible to track expenses and debt service related to the dissolution of the former Lakeport Redevelopment Agency.

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OPEB AGENCY FUND
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REDEVELOPMENT OBLIGATION RETIREMENT FUND
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OPERATING BUDGETS

DEPARTMENTS

NON-DEPARTMENTAL

LEGISLATIVE
ADMINISTRATION:

CITY MANAGER

CITY CLERK

ADMINISTRATIVE SERVICES

ECONOMIC DEVELOPMENT

CITY ATTORNEY

FINANCE & INFORMATION TECHNOLOGY (IT)
COMMUNITY DEVELOPMENT:

PLANNING

BUILDING

HOUSING
POLICE
PUBLIC WORKS:

ADMINISTRATION & COMPLIANCE

ENGINEERING

ROADS & INFRASTRUCTURE

PARKS, BUILDINGS & GROUNDS
UTILITIES:

WATER OPERATIONS & MAINTENANCE (O&M)

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NON-DEPARTMENTAL
This activity accounts for the cost of various items, which are not directly attributable to a specific department.

These items typically include bank fees and charges, costs associated with property tax administration fees by the county, fees charged by the State Board of Equalization for administration of sales tax collection, most debt service, transfers to other funds, and certain capital project budgets.

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LEGISLATIVE
The legislative body for the City of Lakeport is the City Council. The same body acts as the governing authority for the Successor Agency to the City of Lakeport Redevelopment Agency and the City of Lakeport Municipal Sewer District (CLMSD). The City Council is advised by the following standing commissions and committees:
• Lakeport Planning Commission
• Lakeport Economic Development Advisory Committee (LEDAC) • Measure Z Advisory Committee
The City Council for the City of Lakeport, comprised of five council members, provides policy direction to the City Manager. The Council adopts ordinances to control the affairs of the City. The Council oversees the fiscal affairs of the City and approves and adopts the annual City budget. The Council also provides policy direction for the enforcement of City ordinances and may pass emergency ordinances for the immediate preservation or protection of public health, property, or safety. The Council enters contracts and cooperative or joint activities with other government bodies.

The City of Lakeport Planning Commission is a permanent committee of five people appointed by the Lakeport City Council to review matters related to planning and development. The Planning Commission meets on the second Wednesday of every month at 6:00 p.m. in the City Council Chambers at Lakeport City Hall, 225 Park Street, Lakeport, California, for the purpose of considering City land use matters. Included on the agendas are such things as the General Plan, Re-zonings, Use Permits, Subdivisions, Architectural and Design Review, planning policy matters, and interpretations.

The Lakeport Economic Development Advisory Committee (LEDAC) is a standing committee formed by the City Council in 2010. The primary function of the LEDAC is to consider issues pertaining to business retention and expansion and advise the City Council and staff on developing potential programs and strategies for economic development in the City; establishing and maintaining regular communication between the City and the business community; evaluating community needs and desires for economic development; and focusing on commerce solutions that enhance the quality of life for the Lakeport community.

The Measure Z Advisory Committee is a five-member independent citizens’ advisory committee that has been created and shall meet annually to review the expenditure of revenues generated by the tax imposed by Measure Z and to make recommendations to the city council regarding those expenditures. Members of the committee will be appointed to terms of not more than four years by the city council. The independent citizens’ advisory committee shall meet publicly on at least a quarterly basis to review all revenues and expenditures of the transactions and use tax imposed by this chapter, review annual audit reports related to the tax, and make at least one written annual report to the city council at a public meeting summarizing the independent citizens’ advisory committee’s findings and including any appropriate recommendations.

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BUDGET DETAIL
The operating budget presented here identifies expenditures and revenue sources by the department. Expenditures are detailed by character or function within the department to give the reader a fundamental understanding of where resources are planned to be used. Such functions are classified as follows:
• Salaries and benefits, which include salaries and wages of full and part-time employees, healthcare premiums, City retirement contributions, overtime and standby costs, etc. • Operations, including costs associated with day-to-day activities, professional services, insurance costs, and travel and training.
• Debt service, if the department is responsible for any regular payments on bonds, loans, leases, or other long-term obligations. Generally, all debt service is managed in non-departmental. • Housing loans/grants, which typically are found only in the economic and housing divisions of the City Manager’s Office and Community Development Department, respectively. • Capital outlay, which typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

Among the information included in this proposed budget are prior year actuals, current fiscal year budget and yearend estimates, and a projection of cost estimates for the next two years, which have been compiled based on known information to date.

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ADMINISTRATION
The Administration Department serves as the primary link between the City Council, City staff, and the community.

The Department is responsible for providing responsive, effective, and professional service to residents, businesses, employees, and elected officials while ensuring the efficient operation of City government.

The Department consists of the City Manager, Assistant City Manager, City Clerk, and Administrative Services Director. In addition to overseeing day-to-day municipal operations and implementing City Council policies and priorities, the City Manager’s Office is responsible for coordinating the City’s economic development efforts, fostering business growth, supporting investment, and promoting opportunities that enhance the community’s longterm economic vitality.

CITY MANAGER
The City Manager serves as the City’s Chief Executive Officer and is responsible for leading the organization in achieving the goals and priorities established by the City Council. By strategically leveraging the City’s fiscal, social, and organizational resources, the City Manager works to maximize benefits to the community while fostering effective relationships among the City Council, City staff, residents, businesses, and partner agencies. The office promotes transparency, accountability, professionalism, and responsive public service throughout all City operations.

The City Manager oversees the administration of all City departments and services, including enforcement of City ordinances and applicable laws, appointment of department heads, preparation and implementation of the annual budget, and successful execution of City projects and initiatives. The City Manager and staff also provide policy recommendations to the City Council, advocate for Council-adopted priorities, and represent the City’s interests at local, regional, and state levels to advance strategic goals and enhance the quality of life for the community.

The City Manager‘s Office will:
• Translate Council policy direction, vision and decisions into reality • Develop the annual operating budget and present it to the City Council for consideration • Execute the programs, projects and activities appropriated in the annual budget • Support the Council‘s policy making role by ensuring that the Council is provided with timely, accurate, and complete information based on sound research
• Drive fiscal performance to exceed citizen expectations • Provide support and guidance to City departments
• Direct evaluation aimed at increasing the responsiveness of government • Direct the development of special programs that are aligned with the priorities established by the community and the City Council
• Hire and develop City department heads and staff and ensure work performance • Coordinate an ambitious range of activities that serve Lakeport residents • Provide leadership in solving community issues and challenges • Negotiate contracts for the City, such as street maintenance, solid waste, and animal control • Provide legislative analysis, legislative relations, and coordination of National and California League of Cities events and information sharing
• Provide public education and communicate relevant information to the public, City Council and staff about goals, accomplishments, plans and activities
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OUTCOMES/ACCOMPLISHMENTS (ADMIN CONT’D)
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GOALS
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GOALS (CM CONT’D)
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CITY CLERK
The City Clerk is appointed by the City Manager and is responsible for performing duties required by the California Government Code, as well as providing administrative support to ensure the efficient delivery of City services. The City Clerk serves as the official custodian of City records and plays a key role in supporting transparent and effective local government.

The Office of the City Clerk is responsible for a broad range of functions, including records management, preparation and maintenance of official City documents, coordination of City Council meetings, administration of public notices and legal publications, election-related activities, and compliance with public records and open government requirements. Key responsibilities include the following:

City Council Support Services
• Prepares City Council Agendas (including internal distribution of agenda packets, which contain all related reports and documents)
• Provides agendas to subscribers via mail and e-mail and uploads agendas on the City's website • Prepares minutes of the City Council meetings
• Provides clerical support to the Mayor and the City Council including correspondence, reservations, expenses, proclamations and certificates
• Conducts recruitment for various City committees and commissions • Coordinates annual City Council Reorganization
• Maintains a database of all commission and committee memberships including: the Parks & Recreation Commission, the Westside Park Committee, the Traffic Safety Advisory Committee, and the ADA Committee. • Facilitates the commission and committee application process for all advisory boards City Administration Support Services
• Provides clerical support to the City Manager
• Processes applications for use of City parks and facilities • Answers citizen inquiries made by mail, telephone, or in person • Acts as Secretary to the Traffic Safety Advisory Committee and the Oversight Board to the former Lakeport Redevelopment Agency
• Acts as the City’s agent for service of process
• Receives and processes all claims filed against the city • Is responsible for the codification of city ordinances into the municipal code, including quality checks and distribution of the code
• Processes requests under the California Public Records Act Election Services
• Provides prospective City Council members with candidate filing packets • Coordinate with the County of Lake Elections Department to conduct City elections • Administers the filings for all appointed and elected officials identified in the Political Reform Act and the City's Conflict of Interest Code
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• Updates the City of Lakeport Municipal Code
• Track insurance for Council approved projects and agreements • Acts are custodian of records and of the City Seal
• Certifies the accuracy and validity of certain City documents as official records by signature and by affixing the seal of the City of Lakeport
• Develops and maintains the city's records retention schedule to ensure the proper storage, maintenance, and disposal of municipal records city-wide
ADMINISTRATIVE SERVICES – HUMAN RESOURCES
Under the management and general direction of the City Manager‘s Office, the Administrative Services Director plays a major role in creating a collaborative team of City employees and contract staff that provide high quality service to the community. The City is committed to maintaining and attracting a talented team of qualified employees.

Aside from providing the City with talented and motivated employees, the division is responsible for developing and maintaining a high-quality of work life, adhering to equitable and ethical personnel standards, updating and composing job descriptions for City positions, and providing employee development opportunities. Human Resources staff ensures that performance is appropriately rewarded and that employees receive salary and benefits competitive with the marketplace. The mission of Human Resources is to develop a staff and workforce philosophy that embraces the City Council‘s vision, citywide goals and core values in daily decision making.

Ongoing responsibilities include:
• Maintain a classification plan that contains accurate and up-to-date job descriptions for City positions • Work closely with departments to assess staffing needs and coordinate the recruitment and selection process to attract hard working, talented and engaged employees that fit within our culture • Orient new employees, prepare personnel action documentation and maintain employee records in accordance with established regulations
• Ensure that the established salary ranges for City job classes remain competitive with the marketplace • Evaluate and provide training on an effective performance management and employee development program to encourage excellence, provide valuable feedback and opportunities for professional growth and ensure superior performance is recognized and appropriately rewarded CITY OF LAKEPORT FISCAL YEAR 2026-27

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• Develop the City‘s workforce by assessing departmental training needs and delivering professional growth opportunities for staff including: skills enhancement training, management and supervisory training, safety training and mandated training
• Administer the City‘s benefit program including contract renewals and maintenance of the contract for the City‘s health insurance and retirement program with the California Public Employees Retirement System • Administer the annual benefits fair
• Provide proactive leadership and clear advice to support departments when employee relations issues arise and provide guidance on personnel policies and regulations • In support of the City culture, maintain a high level of communication, cooperation and understanding among all levels of City staff with regard to Human Resources policies and programs • Review and maintain policies, employee guidelines, procedures and forms necessary to the effective and legal operation of the organization
• Coordinates the worker‘s compensation program and administer a leave of absence program, adhering to federal and state guidelines
• Administer volunteer and student internship program
• Maintain confidential personnel and position control data in the payroll accounting software (Incode) CITY OF LAKEPORT FISCAL YEAR 2026-27

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OUTCOMES/ACCOMPLISHMENTS (ADMIN CONT’D)
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GOALS
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GOALS (ADMIN CONT’D)

BUDGET DETAIL
The operating budget presented in this section identifies revenues and expenditures for the Administration Department, which includes the City Manager, City Clerk, and Administrative Services (Human Resources) functions. Expenditures are presented by character and function to provide a clear understanding of how resources are allocated to support departmental operations and City services. Budgeted expenditures are categorized as follows:
• Salaries and benefits, which include salaries and wages of full and part-time employees, healthcare premiums, City retirement contributions, overtime and standby costs, etc. • Operations, including costs associated with day-to-day activities, professional services, insurance costs, and travel and training.
• Debt service, if the department is responsible for any regular payments on bonds, loans, leases, or other long-term obligations. Generally, all debt service is managed in non-departmental. • Housing loans/grants, which typically are found only in the economic and housing divisions of the City Manager’s Office and Community Development Department, respectively. • Capital outlay, which typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

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ECONOMIC DEVELOPMENT
The City Council and staff recognize Lakeport’s vital role as the economic center of Lake County and are committed to fostering a strong and resilient local economy. Through strategic planning, investment in public infrastructure, and implementation of effective economic development policies, the City works to support existing businesses, attract new investment, create employment opportunities, and enhance Lakeport’s position as a regional hub for commerce, services, and recreation while responding to changing local, national, and global economic conditions.

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OUTCOMES/ACCOMPLISHMENTS (ED CONT’D)
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GOALS
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GOALS (ED CONT’D)

BUDGET DETAIL
The operating budget presented in this section identifies departmental revenues and expenditures. Expenditures are organized by character and function to provide a clear understanding of how resources are allocated to support departmental operations and services. Budgeted expenditures are classified as follows:
• Salaries and benefits, which include salaries and wages of full and part-time employees, healthcare premiums, City retirement contributions, overtime and standby costs, etc. • Operations, including costs associated with day-to-day activities, professional services, insurance costs, and travel and training.
• Debt service, if the department is responsible for any regular payments on bonds, loans, leases, or other long-term obligations. Generally, all debt service is managed in non-departmental. • Housing loans/grants, which typically are found only in the economic and housing divisions of the City Manager’s Office and Community Development Department, respectively. • Capital outlay, which typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

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CITY ATTORNEY
The City Attorney provides legal counsel to the City Council and staff on matters related to the administration and operation of City government. The City Attorney advises on legal issues, reviews contracts and ordinances, and helps ensure compliance with applicable laws and regulations. The City Attorney, or special counsel retained under the Attorney’s direction, also represents and defends the City in legal proceedings and initiates legal actions on the City’s behalf when necessary to protect the City’s interests.

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FINANCE & IT
The Finance Department is responsible for safeguarding the City’s fiscal health and ensuring that public funds are collected, managed, and expended in accordance with applicable laws, regulations, and accounting standards. The Department oversees day-to-day financial operations, including accounting, budgeting, payroll, accounts payable, cash management, financial reporting, and audit coordination, while providing accurate and timely financial information to the City Council, City Manager, departments, and the public.

In addition to its operational responsibilities, the Finance Department provides strategic financial planning, analysis, and advisory services. This includes evaluating economic and revenue trends, monitoring the City’s financial condition, supporting long-term fiscal sustainability, and assisting decision-makers with data-driven recommendations that align resources with community priorities and organizational goals.

In 2015, the Department incorporated the function of information technology, providing services to City departments to ensure that technology resources function optimally.

From the analysis and advisory perspective, the Finance department is charged with the following roles and tasks:
• Primary advisor to the City Manager and City Council on fiscal and financial matters • Long range financial planning, including forecasting and budgeting • Ongoing investigation and identification of fiscal opportunities such as significant sources of new revenues or expense reductions
• Maintaining training and awareness of Industry Best Practices and identify opportunities for affecting change • Provide leadership in the development and implementation of citywide financial policies • Administer the City‘s Investment and Debt Portfolios
On the internal operations side, the Finance Department performs the following functions:
• General accounting services including recording and reporting transactions in accordance with Generally Accepted Accounting Principles (GAAP)
• Providing timely financial detail and summary reports to City management and the City Council to assist them in managing the activities of their respective departments • Design and implementation of an effective system of internal controls for the purpose of safeguarding the City‘s assets
• Annual budget analysis and document preparation
• Preparation for and management of annual independent fiscal audits • Preparation of the City’s Annual Comprehensive Financial Report (ACFR) in accordance with GAAP and GFOA accounting and financial reporting standards
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• Grant compliance and reporting
• Internal auditing of City operations
• Working with City Management to ensure fees are set at the appropriate levels to ensure the City is justly compensated for services provided
• Management support, which includes not only providing reports to departments but meeting with the various departments to discuss their performance to the budget on a regular basis throughout each fiscal year • Utility billing and customer service operations
• Housing and business loan servicing
• Redevelopment Successor Agency fiscal dissolution administration • Payroll processing
• Providing contract and basic procurement administration • Provide IT services to City staff and departments.

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GOALS
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COMMUNITY DEVELOPMENT
The Community Development Department consists of the Planning, Building, and Housing divisions and is responsible for guiding the City’s growth and development while protecting public health, safety, and quality of life.

The Department oversees land use planning, development review, building permit processing and inspections, code enforcement, nuisance abatement, and housing-related programs and services.

The Department also administers the City’s business licensing program, assists new and existing businesses with development, remodeling, and signage requirements, and collects business license fees. Through these efforts, Community Development helps ensure that growth and investment within the City are consistent with adopted plans, regulations, and community goals.

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OUTCOMES/ACCOMPLISHMENTS (CDD CONT’D)
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GOALS
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PLANNING
The Planning Division is responsible for implementing policies and regulations that guide the orderly growth and physical development of the City. This includes administering the City’s General Plan, Zoning Ordinance, Subdivision Ordinance, and other land use regulations, as well as ensuring compliance with applicable local, state, and federal environmental requirements. Through development review, long-range planning, and policy implementation, the Division works to promote sustainable growth, protect community character, and support the City’s economic and quality-of-life objectives.

Planning staff has responsibility for numerous work priorities, including:
• Answering public inquiries for information related to allowable land uses (zoning), property characteristics, availability of utilities, site history/prior permits, and other related issues. • Processing land use applications such as zoning permits, use permits, lot line adjustments, parcel mergers, architectural and design review, fencing requests, new business signs and commercial painting projects. • Coordination of Planning Commission activities including meeting agendas, public notices, staff reports, meeting minutes, minute orders and other administrative support. • General Plan updates and implementation of General Plan policies and programs. • Code Enforcement & Nuisance Abatement including nuisance vehicle abatement. • Environmental Review and Mitigation Monitoring.
• Development and enforcement of storm water regulations including working with the Lake County Clean Water Program to ensure compliance with State and Federal clean water requirements (NPDES). • Support Lakeport Main Street Association activities including membership in the Association’s Design Subcommittee.
• Maintenance and enhancement of the City’s Geographical Information System (GIS). • Maintenance and enhancement of the Community Development Department’s web pages.

The above activities are produced through the following major functions:

Advance Planning – Taking the lead in advance planning projects that guide development activities in Lakeport toward the community vision desired by the City Council and our residents.

Current Planning – Managing the development application review process effectively and efficiently to process land use applications and implement the City Council‘s vision and policies for urban growth. Current planning also includes answering public inquiries related to land use issues in a timely and thorough manner.

Environmental Review – Providing a full range of services related to complying with local, State and Federal environmental laws. When warranted, additional consultant resources are obtained to augment the Division’s limited staff resources.

General Plan Implementation – Work in conjunction with other City departments to implement the policies and programs set forth in the City‘s General Plan.

Regional Coordination – Providing ongoing representation within regional forums to promote regional coordination and to support Lakeport’s regional interests. Planning staff works with the County of Lake, the Area Planning Council and other groups to further these goals.

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BUILDING
The Building Division is responsible for enforcement of Title 24 of the California Code of Regulations, also referenced as the California Building Standards Code, and is established by state law as a code enforcement agency under the administrative and operational control of the Building Official, who is authorized and directed to administer and enforce all the provisions of the Codes with all the powers of a law enforcement officer.

Additionally, the current Building Official is designated as the Floodplain Administrator and is charged with enforcement of the City’s Floodplain Management Ordinance.

The Building Codes are state laws enacted for the purpose of establishing “the minimum requirements to safeguard the public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment and to provide safety to firefighters and first responders during emergency operations”. Numerous additional state laws enforced by the Building Division are contained in various sections of the Health and Safety Code, Government Code, Education Code, Public Resources Code, Code of Civil Procedure, Business and Professions Code, Civil Code and Water Code. Federal Laws enforced include the Americans with Disabilities Act and the Clean Water Act.

The Building Division reviews all applications for permits to ensure that submittals are complete and in compliance with the Codes and local ordinances. State law requires swift processing of permit applications. When necessary to expedite reviewing of plans, or for complex or large project applications, an outside plan-review consultant is occasionally needed. The emphasis is always to keep projects and revenues “in-house” whenever possible. Where appropriate, applications are routed to other city departments and to other agencies, including Environmental Health, the Air Quality Management District, Army Corps of Engineers and Water Resources for approvals.

The Building Official determines and calculates all building permit fee amounts, communicates with Fire Department and School District offices to establish corresponding fees, and determines amounts to be collected for utility expansion fees for sewer and water connections. All City fee amounts are set by the City Council. Historically, Building Division expenditures have typically exceeded revenues as confirmed by the fee study performed by a consultant several years ago. Additional fees enacted by state agencies are collected, reported and forwarded as required.

The Building Division reviews permit applications, drawings and specifications, and, once approved, issues the permits. Inspections of the work are made for compliance with the various codes and with any Planning Division project conditions. Upon completion of a new structure a Certificate of Occupancy is issued. When buildings have not been maintained and/or kept safe for occupancy, the Building Official initiates proceedings to order appropriate action. Records of all permits, drawings, Notices and Orders, and all related activities are maintained and kept in archives. Records of all permitted activities occurring within Special Flood Hazard Areas are maintained for FEMA/DWR review.

Other activities include updating of codes and ordinances, periodic inspections of fire-life safety equipment, responding to tenant / landlord / nuisance complaints, inquiries regarding code interpretation, flood zone determinations, property history, and related information. The Building Division’s use of the City’s GIS system is critical and essential for effective time management.

The Building Official also reviews and inspects City owned properties, reviews all improvement plans for city owned buildings and properties, occasionally prepares drawings and specifications for same, and issues no-fee permits to ensure compliance with codes.

The Building Division / Community Development Department staff continues to administer the City’s Business License Program.

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The state of the Building Division appears to be improving, as shown by latest economic reports and by substantial increases in numbers of permits issued, valuations, and building activity in general. On January 1, 2026, the new edition of Title 24 standards became effective. The latest revisions should make California’s building regulations less complicated for out-of-state designers and developers, particularly as applied to disabled access laws.

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HOUSING
Since its establishment in 1986, the City’s Housing Division has assisted dozens of low income, financially responsible residents with housing rehabilitation activities as well as home buying opportunities for first-time homebuyers.

In 2010 the Division applied for and received a $400,000 CDBG grant for the rehabilitation of dilapidated homes owned by low-income residents. This grant was successfully implemented and nearly all of the funds have been spent. Nine low-income households applied for assistance and were granted low interest, deferred loans for housing rehabilitation projects which included a wide variety of improvements such as weatherization; new roofs; ramps and other access improvements for handicapped residents; handicapped-accessible bathtubs and showers; electrical improvements and removal of electrical hazards; hot water heaters; heating and cooling systems and other improvements.

In 2012 the Division successfully applied for a $700,000 HOME grant which will provide funding for housing rehabilitation projects and a First Time Homebuyers program. Implementation of this grant will begin in 2013.

More recently, in 2022, the City of Lakeport was awarded a $208,650.00 CDBG-PL grant to prioritize the housing needs of our community through the development of a Housing Services Program Implementation Plan. The City plans to develop the following programs as part of this planning activity:

1. Owner Occupied Rehabilitation
o Description: This program aims to improve and rehabilitate owner-occupied homes within the community for qualified members of the community.
o Objectives: Enhance housing quality, safety, and accessibility for homeowners including a focus on elderly.

2. Homebuyer Program
o Description: The Homebuyer Program assists eligible individuals and families in purchasing their homes.
o Objectives: Increase homeownership rates and promote stable housing for income qualified residents.

3. Mobile Home Replacement Program
o Description: This program supports the replacement of aging mobile homes in flood prone areas to a new location with newer, energy-efficient models.
o Objectives: Improve living conditions for mobile home residents and remove units in flood prone areas that create impacts on lower income families.

4. Housing Condition Survey
o Description: Conduct a comprehensive survey of housing conditions within the community. o Objectives: Assess the state of existing housing stock, identify areas for improvement, and inform guideline and policy decisions for the owner-occupied rehabilitation program and homebuyer program.

In the 2025, $12.4 million in grants, through CDBG and PLHA, have been awarded to begin development of a 64- unit affordable housing development at Parkside
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POLICE
The Lakeport Police Department is committed to working in partnership with the community, City government, and local organizations to provide a safe environment in which residents can live, work, visit, operate businesses, and raise their families. The Department takes pride in contributing to the high quality of life enjoyed throughout the community and strives to maintain public trust through professionalism, accountability, and responsive service.

The Department provides comprehensive, 24-hour law enforcement services and is dedicated to protecting life and property while safeguarding the constitutional rights of all individuals. Services include patrol operations, traffic and parking enforcement, criminal investigations, school resource officer services, animal control, property and evidence management, records administration, crime prevention, and community outreach. Through proactive policing, community engagement, and adherence to professional standards and best practices, the Department works to preserve public safety and enhance the well-being of the Lakeport community.

The Lakeport Police Department focuses efforts on producing the following desired outcomes:
• Order and civility in public places
• Reduction of crime and victimization
• Offenders held accountable
• Efficient and effective use of resources (operational and financial) • Quality service and customer satisfaction
In an ongoing effort to reduce crime and increase public safety, the department uses community policing methods and programs which include Police Volunteers, Neighborhood Watch, DARE program and community outreach through social media, presentations and personal contacts.

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GOALS
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PUBLIC WORKS
The Public Works Department is responsible for maintaining, operating, and improving the City’s infrastructure and public facilities to support a safe, functional, and attractive community. The Department oversees the maintenance and repair of streets, storm drainage systems, parks, public buildings, and other City-owned facilities, while also providing engineering and project management services for capital improvement projects.

Committed to delivering efficient and effective public services, the Department works to enhance the quality of life for residents through responsible stewardship of public assets, proactive maintenance programs, and strategic infrastructure investments. Public Works collaborates closely with other City departments, regulatory agencies, contractors, and community stakeholders to ensure reliable public services, protect public safety, and support the City’s long-term operational and development goals.

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ADMINISTRATION AND COMPLIANCE

BUDGET DETAIL
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ENGINEERING
The City of Lakeport Engineering provides pre-development engineering information to builders and developers (the City maintains an extensive GIS system to map our utilities and infrastructure); develops and maintains standards for public facility installation by developers; reviews and recommends action on proposed subdivisions of land; provides engineering review of developer plans and specifications for public and semi-public improvements including grading, drainage, and streets, as well as inspecting such improvements when installed; and provides engineering design of projects as directed by the City Manager and the City Council. The Department supervises the maintenance of engineering drawings and files for and within the City limits, which are located at City Hall.

The primary functions of the Engineering Department are to:
• Provide various engineering services, surveying services, and technical assistance to the various City departments
• Provide timely engineering review for proposed development projects • Provide engineering review and inspection oversight for projects constructed on public property • Provide floodplain administration, solid waste disposal administration and associated public information services
• Provide consultation regarding city engineering for the City Manager and the City Council

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Among the information included in this proposed budget are prior year actuals, current fiscal year budget and yearend estimates, and a projection of cost estimates for the next two years, which have been compiled based on known information to date.

ROADS AND INFRASTRUCTURE
The Roads and Infrastructure Division of Public Works is responsible for the maintenance, repair, and improvement of the City’s transportation and storm drainage infrastructure. Division activities include maintaining City streets, curbs and gutters, drainage systems, culverts, and right-of-way improvements, as well as performing asphalt repairs and overlays, installing and maintaining street signs and pavement markings, and addressing other roadway-related maintenance needs. The Division also oversees the operation, maintenance, and improvement of the City’s stormwater collection and conveyance systems to help protect public safety and preserve critical infrastructure.

In addition to its core maintenance responsibilities, the Division supports a variety of public service functions throughout the City. These services include providing traffic control devices and logistical support for parades, community events, and other special activities; installing decorative and informational signage; assisting with capital improvement and construction projects; and providing equipment and labor support to other City departments as needed. Through these efforts, the Division helps ensure safe and reliable transportation networks, effective stormwater management, and a well-maintained public realm for residents, businesses, and visitors.

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• Capital outlay, which typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

PARKS, BUILDINGS AND GROUNDS
The Parks, Buildings, and Grounds Division is responsible for the operation, maintenance, and upkeep of the City’s parks, public facilities, and landscaped areas. The Division maintains Library Park, Xabatin Community Park, Westside Community Park, and other special-use recreational areas, as well as City Hall, the Police Department, and other City-owned facilities. Through proactive maintenance and facility improvements, the Division helps ensure that public spaces remain safe, functional, attractive, and accessible for residents and visitors.

The Division oversees and coordinates the work of maintenance staff and contract service providers responsible for landscaping, grounds maintenance, custodial services, and building upkeep. Responsibilities include irrigation system maintenance, electrical and plumbing repairs, painting, vandalism and graffiti abatement, litter control, and general facility maintenance. Through these efforts, the Division preserves the City’s public assets, enhances community spaces, and supports the delivery of high-quality public services.

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• Operations, including costs associated with day-to-day activities, professional services, insurance costs, and travel and training.
• Debt service, if the department is responsible for any regular payments on bonds, loans, leases, or other long-term obligations. Generally, all debt service is managed in non-departmental. • Housing loans/grants, which typically are found only in the economic and housing divisions of the City Manager’s Office and Community Development Department, respectively. • Capital outlay, which typically identifies any expenditures related to semi-regular purchases, such as computer and technology, office equipment, building improvements, and other items that are capitalized and depreciated.

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UTILITIES

OUTCOMES/ACCOMPLISHMENTS
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OUTCOMES/ACCOMPLISHMENTS (UTIL CONT’D)
GOALS
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WATER OPERATIONS AND MAINTENANCE
The Water Operations and Maintenance (O&M) Division is responsible for the treatment and delivery of safe, reliable drinking water to the citizens of Lakeport. It provides 24-hour service and support to the public by responding to customer concerns, emergency water breaks/repairs, and ensuring the City has high quality drinking water in adequate supply for firefighting, domestic, and commercial use. The division operates and maintains 4 ground water wells, a surface water treatment facility, and a distribution system to private meters. The division also works with developers and customers on water service issues during project design to ensure water delivery is never in short supply.

The division continuously monitors the quality of the water that it provides to its residents and proudly maintains the distinction of providing the safest, clearest, and best tasting drinking water in Lake County.

Construction is an important activity of the Water O&M Division. The construction crew installs and maintains new and existing water and sewer systems to private property and within dedicated easements throughout the City. The crew works on emergency water breaks when they happen, and schedules the repair or replacement of water distribution deficiencies.

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Among the information included in this proposed budget are prior year actuals, current fiscal year budget and yearend estimates, and a projection of cost estimates for the next two years, which have been compiled based on known information to date.

SEWER OPERATIONS & MAINTENANCE
The Sewer Operations and Maintenance (O&M) Division provides collection, treatment, and disposal of sewage in a manner compliant with the health and safety needs of the community and the environment. Delivering this service in the safest, most reliable method possible is the highest concern of the Utilities Department.

The Sewer division provides 24-hour service and support to the public by responding to customer concerns, emergency sewer stoppages, and ensures sewer system functionality. The division operates and maintains eight sewer lift stations, a secondary treatment and disposal facility, and a collection system to the customer’s property line.

The division works with developers and customers on sewer service issues during project design, service installation, and future needs. The division also inspects the collection system for Inflow and Infiltration (I&I) problems that require remediation to restore system capacity.

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ATTACHMENTS

BUDGET RESOLUTION

GANN LIMIT RESOLUTION

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GANN LIMIT RESOLUTION
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GANN LIMIT CALCULATION
Proposition 4, approved by the voters in November 1979, added California Constitution, Article XIIIB. This article limits the level of most appropriations from tax sources that the state and most local government entities are permitted to make in any given year. The limit for each year is equal to the limit for the prior year, adjusted for changes in the cost‐of‐living and population plus other various adjustments as required. The first year in which appropriations limits applied to state and local governments in California was fiscal year (FY) 1980‐81. The schedule below calculates the 2026-27 Appropriations Limit and compares it to the annual budget:

The City's appropriation limit is calculated every year and is established by resolution of the City Council as part of the Annual Operating Budget. The City's appropriations subject to the Gann Limit totals $6,656,934, which is well below the authorized spending limit of $18,317,730. Additional appropriations to the budget funded by non‐tax sources such as beginning fund balances, grants or service charges are unaffected by the appropriations limit.

Historically, the City's Annual Appropriations Limit has exceeded annual appropriations and the City projects the trend to continue.

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APPENDICES

TRANSFERS SCHEDULE

DEBT SCHEDULE

PERSONNEL SCHEDULE

GLOSSARY OF TERMS

ACCOUNTING STRUCTURE

BUDGET POLICIES

FINANCIAL MANAGEMENT POLICIES

BUDGET SCHEDULE

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DEBT SCHEDULES
For the year ended June 30, 2026 the following are the debt obligations for which the City is responsible for or is acting as a fiduciary to service.

Governmental fund activities:

USDA Police Station Bond
Police Station Bond with USDA Rural Development was issued in June 2017 to assist in the purchase and renovation of a new police station. Total issue $1,095,000. Annual principal and interest payments starting at approximately $45,000, at an interest rate of 2.38%, are due December 1 each year, semiannual interest payments are due June 1 and December 1 each year. Payments are secured by the real property. The obligation matures in the year 2056.

Balance due $ 930,000
Pension Obligation Bonds
On October 20, 2021 the City issued $7,920,000 in taxable Pension Obligation Bonds. Of the proceeds, $1,995,000 was used to refund the existing Pension Obligation Bonds while the remaining proceeds we used to pay down the majority of the outstanding UAL projected by CalPERS. Interest is payable semi-annually on June 1 and December 1 of each year, commencing June 1, 2022. The bonds mature in 2041 and principal is payable on June 1 each year, commencing June 1, 2022. The average coupon for the refunding bonds is 2.07%.

Balance due $ 6,240,000
2018 Series B Solar Bonds
On July 18, 2020, the City issued $4,770,000 revenue bonds to fund a solar and energy efficiency retrofit project.

The interest rate on the bonds is 2.0 - 3.5 and the maturity date is October 1, 2043. Interest is payable semi-annually on April 1 and October 1. The obligation is payable from revenues received from the General, Water and Sewer Funds.

Balance due $ 1,065,000
Proprietary (enterprise) fund activities:
2016 USDA Water Revenue Bonds
Water Revenue Bonds were issued with USDA Rural Development was issued in September 2016 to assist completing water infrastructure upgrade projects. Total issue $3,182,000. Annual principal and interest payments at approximately $110,000, at an interest rate of 1.63%, are due August 1, with semiannual interest payments due February 1 and August 1 each year. Payments are secured by water enterprise revenues. The obligation matures in the year 2056.

Balance due $ 2,639,200
Pinnacle Water Loan
Series 2000 COPs bond with USDA Rural Development was refunded in June 2016 and replaced with the Pinnacle Water Loan. Total issue $2,587,000. Annual principal and interest payments of approximately $175,250, at an interest rate of 2.65%, are due February 1 and August 1 each year. Payments are secured by water fund revenue. The obligation matures in the year 2035.

Balance due $ 1,524,000
2017 CLMSD Sewer District Assessment Bonds
2017-1 Sewer Assessment bonds. Total issue $2,854,000. Annual principal payments of approximately $230,000, at interest rate of 2.85%, are due March 2 and September 2 each year, secured by Municipal Sewer District No.1 revenue from the South Assessment District 91-1 area. The total obligation matures in the year 2032 Balance due $ 1,444,000
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Wastewater Revenue Bonds, 2017 Refunding
2007 Series A, total remaining balance of $2,580,000 was refinanced to 2017 Wastewater Refunding on December 1, 2018. Total issue $2,723,000. Annual principal is due on October 1 and interest payments at 2.52% are due April 1 and October 1 each year, which are secured by wastewater fund revenue. The total obligation matures in the year 2030. The reacquisition price exceeded the net carrying amount of the old debt by $143,000. The City obtained an economic gain (difference between the present value of the debt service payments on the old and new debt) of $205,069.

Balance due $ 1,101,000
2017 USDA Wastewater Revenue Bonds
Series 2017 Wastewater enterprise revenue bonds. Total issue $3,433,000. Annual principal and interest payments of approximately $127,000, at an interest rate of 2.125%, are due April 1 and October 1 each year, secured by wastewater fund revenue. The total obligation matures in the year 2057.

Balance due $ 2,944,000
2018 Series A Solar Bonds (Water and Sewer share)
On July 18, 2020, the City issued $4,770,000 revenue bonds to fund a solar and energy efficiency retrofit project.

Balance due $ 2,785,000
Banner 2022 Water Bonds
Banner 2022 Water Bonds. Total issue $5,985,000. Annual principal and interest payments of approximately between $140,000 and $530,000, at an interest rate of 3.85%, are due February 1 and August 1 each year, secured by water revenue. The total obligation matures in the year 2048.

Balance due $ 5,752,000
Fiduciary activities:
2016 Tax Allocation Bond
2016 Tax Allocation Bond, Total issue $4,120,000. Annual principal is due on September 1 and interest payments are due semi-annually, September 1 and March 1 each year. Payment are secured by redevelopment tax increment revenue, maturing in year 2034.

Balance due $ 2,920,000
2004 Series B Bonds
2004 Series B bond, total issue $1,170,000. Annual principal is due on September 1 and interest payments are due semi-annually, at an annual interest rate of 5.31%, September 1 and March 1 each year. Payments are secured by redevelopment tax increment revenue, maturing in year 2035.

Balance due $ 85,000
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PERSONNEL SCHEDULES

POSITION SUMMARY
Position changes included in the 2026-27 Budget resulted in no net change to budgeted positions as follows:

Elimination of unused Extra Help Projects Coordinator and the addition of Police Part-Time help to assist with PD operations while new officers are undergoing field training.

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SALARY SCHEDULE
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SALARY SCHEDULE (CONT’D)
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CITY BENEFIT PLANS
The City of Lakeport provides its employees with an excellent and comprehensive benefit program. Listed below is a summary of the City’s benefits for full-time employees.

Employee Benefits:
• Medical – employees pay a small percentage of the medical premium • Dental
• Vision
• Life
• Disability
• Section 125 pre-tax premiums
• Paid Vacation – Vacation leave starts at 80 hours annually, increasing to 200 hours based on time in service
• Paid Sick Leave – Sick leave accrual of 12 days per year • Paid Holiday (Typically 13)
• Paid Bereavement Leave
• Retirement plan through CalPERS
• Employee Assistance Plan (EAP)
• Job Training
• Certification Incentive Program for eligible positions • Uniform allowance for sworn personnel
• P.O.S.T. Certification Pay – 2.5% certificate pay for Intermediate Certificate and 2/5% for Advance Certificate
Employee Funded Supplemental Employee Benefits:
• Aflac
• ID Shield
• Legal Shield
• Valic 457 Deferred Compensation / Retirement Plan
• Nationwide 457 Deferred Compensation / Retirement Plan • Reach Air Lift
• Redwood Credit Union
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California Public Employees Retirement System (CalPERS) Summary The City of Lakeport eligible employees are members of CalPERS Retirement System, which provides generous retirement benefits. The California Public Employees Retirement System (CalPERS) is a defined benefit plan where retirement benefits are based on a formula, rather than contributions and earnings to a savings plan. Retirement benefits are calculated based on a member’s yeas of service credit, age at retirement, and final compensation (average salary for a defined period of employment).

CalPERS Eligibility and Funding
Your eligibility is based on part time or intermittent employment of 1,000 hours of service within a fiscal year.

Membership is mandatory for all those employees who are eligible. CalPERS vesting is 5 years.

CalPERS retirement benefits are funded from three difference sources:

1. Employer contributions

2. Employee contributions

3. Earnings from investment of these funds
Retirement Benefit Classifications and Formulas
While there are many variable in figuring your service retirement benefits, the basic formula is: Credit (years worked) X Benefit factor (percent of year) X Final Compensation (monthly dollars) = pension amount.

Classifications
Classic Miscellaneous Member: 2.5% at 55; which means you can retire at 55 and receive 2.5% X (years of service) X (average of highest 3 years’ salary).

PEPRA Miscellaneous Member: 2% at 62; which means you can retire at 62 and receive 2% X (years of service) X (average of highest t3 years’ service)
Safety Classic Member: 3% at 55; which means you can retire at 55 and receive 3% X (years of service) X (average of highest 3 years’ salary)
Safety PEPRA Member: 2.7% at 57; which means you can retire at 57 and receive 2.7% X (years of service) X (average of highest 3 years’ salary)
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GLOSSARY OF TERMS
Adopted budget
The city council approved annual budget establishing the legal authority for the expenditure of funds as set forth in the appropriation resolution.

Accrual/accrual basis of accounting
A method of accounting that recognizes the financial effect of transactions, events and inter-fund activities when they occur, regardless of the timing of related cash flows.

Annual financial report
A financial report applicable to a single fiscal year.

Appropriation
An authorization made by the city council, which permits officials to incur obligations against and to make expenditures of resources. Appropriations are usually made to fixed amounts and are typically granted for a oneyear period.

Assessed valuation
A valuation set upon real estate or other property by a government as a basis for a tax levy.

Audit
A view of the city accounts by an independent auditing firm to substantiate year-end fund, salaries, reserves and cash on hand.

Beginning/ending fund balance
Appropriated resources available in a fund from the prior/current year after payment of the prior/current year’s Expenses. This is not necessarily cash on hand.

Bond
A city may raise capital by issuing a written promise to pay a specific sum of money, called the face value or principal amount, at a specified date or dates in the future, together with periodic interest at a specified rate.

Budget
A plan of financial operation embodying an estimate of proposed appropriations for a given period of time and the Proposed means of financing them.

Budgetary basis
The method of accounting applied to the budgetary accounts and process.

Budgetary control
The control or management of a government or enterprise in accordance with an approved budget for the purpose of keeping expenditures within the limitations of appropriations and available resources.

Budget message or budget transmittal letter
A general discussion of the proposed budget as presented in writing by the city manager to the city council. The message contains an explanation of principal budget items and summaries found in the prepared budget relative to the current year adopted budget.

Budgetary basis the form of accounting utilized throughout the budget process.

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C.O.P.

Community oriented policing
Debt service
Payment of interest and repayment of principal to holders of the city’s debt instruments (bonds).

Debt service fund
Governmental fund type used to account for the accumulation of resources for, and the payment of, general longterm debt principal and interest.

Deficit an excess of expenditures or expenses over resources.

Department
An operational and budgetary unit designated by the city council to define and organize city operations.

Depreciation
The portion of the cost of a fixed-asset charged as an expense prorated over the estimated life of the asset.

Encumbrance
An amount of money committed for the payment of goods and services not yet received or paid for. A purchase order is a common encumbrance.

Estimated revenues
The budgeted, projected revenues expected to be realized during the budget (fiscal) year to finance all or part of the Planned expenditures.

Expenditure the actual payment for goods and services.

Expenses
The incurrence of liabilities or the consumption of assets arising from the delivery or production of goods, rendering Services or carrying out other activities that constitute the entity’s ongoing major or central operation. The term applies to the city’s enterprise and internal service funds.

Fiscal year (FY)
A 12-month period of time to which the budget applies. For the city of Lakeport, it is July 1 through June 30.

Fixed asset
A long-lived tangible asset obtained or controlled as a result of past transactions, events or circumstances. Fixed assets include land, buildings, equipment, improvements to other assets and infrastructure (i.e., streets, highways, bridges, etc.).

Full time equivalent (FTE) position
The amount of time a position has been budgeted for in terms of the amount of time a regular, full-time employee normally works in a year (2,080 hours).

Fund
An accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and residual equities, or balances and changes therein are recorded and segregated to carry on specific activities or attain certain objectives in accordance with special regulations, restrictions or limitations.

Fund balance
The difference between the assets (revenues and other resources) and liabilities (expenditures incurred or committed to) for a fund. It also represents the accumulated net resources of a fund available for reservation, designation or for appropriation.

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Gann
Refers to the last name of the individual who championed proposition 13 and secured the passage of the constitutional amendment that led to the property tax rollback in the 1970’s.

GASB
Governmental Accounting Standards Board.

Generally accepted accounting principles (GAAP)
Uniform minimum standards and guidelines for accounting and reporting. These standards govern the form and content of the annual financial statements of an entity. The primary authoritative body on the application of GAAP to state and local governments is the governmental accounting standards board (GASB).

General fund
The primary governmental fund used to account for all financial resources, except those required to be accounted for in another fund.

General plan
A comprehensive, long-range policy guide intended to promote efficient and desirable growth in the community.

Governmental funds
Distinguished by their measurement focus on determining financial position and changes in financial position.

Grants
Contributions of gifts or cash or other assets from another government to be used or expended for a specific purpose, activity or facility.

Infrastructure
Facilities that support the continuance and growth of a community. Examples include roads, water lines, sewers, Public buildings, parks and airports.

Interfund transfers
Monies moved from one fund to another. The money is transferred to finance the operations of another fund or to Reimburse the fund for expenses.

Line item
The description of an object of expenditure, i.e. Salaries, supplies, professional services and other operational costs.

Maintenance & operation (M&O) costs
The day-to-day operating and maintenance costs of a municipality. These costs include personnel, gas, electric utility bills, telephone expense, reproduction costs, and postage and vehicle maintenance Modified accrual
An adaptation of the accrual basis of accounting for governmental funds types. Revenues and other financing Resources are recognized when they become available to finance expenditures of the current period. Expenditures are recognized when the fund liability is incurred.

Notes
A paper that acknowledges a debt and promises payment to a specified party of a specific sum, describing a time of maturity that is either definite or will become definite.

Object an individual expenditure account.

Objective
A measurable output that an organization strives to achieve within a designated time frame. The achievement of the Objective advances an organization toward a corresponding goal.

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Operating budget
Plans of current expenditures and the proposed means of financing them. The annual operating budget, as distinguished from the capital program budget, is the primary means by which most of the financing, acquisition, spending and service delivery activities of a government are controlled.

Operating deficit the deficiency of operating revenues under expenditures.

Operating expenses
Expenditures for materials, supplies and services which are ordinarily consumed within a fiscal year and which are not included in the program inventories.

Operating surplus
The excess of operating revenues over operating expenditures.

Ordinance
A formal legislative enactment by the city council. It is the full force and effect of law within the city boundaries unless preempted by a higher form of law.

Performance measures
Measurement of service performance indicators that reflect the amount of money spent on services and the resulting outcomes at a specific level of services provided.

Program
A group of related activities performed by one or more organizational units for the purpose of accomplishing a city Responsibility.

Proposed budget
This refers to the status of an annual budget, which has been submitted to the city council by the city manager and is pending public review and city council adoption. Also referred to as the “preliminary budget”.

Reserve
An account used to indicate that a portion of a fund’s balance is legally restricted for a specific purpose and is, therefore, not available for general appropriations.

Resolution
A special order of the city council, which has a lower legal standing than an ordinance.

Resources
Total amounts available for appropriation including estimated revenues, fund transfers and beginning fund balances.

Retained earnings
An equity account reflecting the accumulated earnings of an enterprise or internal service fund.

Revenue
Income received through such sources as taxes, fines, fees, grants or service charges that can be used to finance Operations or capital assets.

Risk management
An organized attempt to protect an organization’s assets against accidental loss in the most cost-effective manner.

Self-insurance
A term often used to describe the retention by an entity of a risk of loss arising out of the ownership of property or the activity of the agency. It is distinguished from the transfer of risk to a third party (insurance company).

Service effort a measure of expected output by a budgetary program.

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Special revenue funds
A governmental fund type used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditure for specified purposes.

Subventions
Revenues collected by the state (or other level of government), which are allocated to the city on a formula Basis. The major subventions received by the city come from the state of California and include motor vehicle in-lieu and gas tax.

Tax allocation bonds
A bond issued that has a specific tax revenue source that backs the payment of the debt. In the city, these are not Issued for general fund purposes.

Transfer in/out
Movement of resources between two funds. Example: an interfund transfer would include the transfer of operating Resources from the general fund to an enterprise fund.

Transient occupancy tax (TOT)
This revenue source originates in a tax placed on lodging facilities for the occupancy of a room. Lakeport has a 10% tax for such occupancies.

Trust funds
Funds held by the city that are subject to the terms of the trust that created the source of funding.

User charges
The payment of a fee in direct receipt of a public service by the party who benefits from the service.

Workload indicators
Statistical information that indicates the demands for services within a given department or division. Workload indicators are a type of performance measure utilized by departments or divisions to assess its level of service.

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ACCOUNTING STRUCTURE
City Government Services
The City provides the following municipal services directly:
• Building Permit/Plan Approval
• Planning, Zoning and Land Use
• Engineering
• Public Safety (Fire provided by Lakeport Fire Protection District) • Street Maintenance
• Economic Development
• Housing Services
• Water and Sewer Utilities
• Solid Waste Management (Waste collection handled by franchise trash hauler, Lakeport Disposal) Accounting System and Budgetary Control
In developing and evaluating the City’s accounting system, consideration is given to the adequacy of internal accounting controls, managerial reporting, purchasing, and budgetary control. Controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability.

The concept of reasonable assurance recognizes that the cost of a specific control feature should not exceed the benefits likely to be derived and the evaluation of costs and benefits require estimates and judgments by management. The City’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.

Basis of Accounting
The budgets of all governmental fund types are prepared on a modified accrual basis. Under the modified accrual basis, revenue is recognized when it becomes measurable and available. “Measurable” means the amount can be determined and “available” means collectible within the current period or soon enough thereafter to pay current liabilities. This is generally within sixty (60) days after the end of the fiscal year. Expenditures are recognized when the related fund liability is incurred.

The budgets of proprietary funds (water and sewer enterprise funds), as well as fiduciary funds (OPEB trust fund), are prepared on a full accrual basis. Under this method, revenue is recognized when earned and expenses are recognized at the time the liability is incurred.

GASB 34
Beginning with the fiscal year ending on June 30, 2011, the City implemented the provisions of GASB 34 with the publication of our Annual Financial Report. The Annual Comprehensive Financial Report (ACFR) presents the status of the City’s finances on the basis of Generally Accepted Accounting Principles (GAAP). In most cases, this conforms to the way the City prepares its budget with the following exceptions:
• Compensated absences liabilities that are expected to be liquidated with expendable available financial resources are accrued as earned by employees (GAAP) as opposed to being expended when paid (budget). • Principal payments on long-term debt within the enterprise funds are applied to the outstanding liability on a GAAP basis as opposed to being expended on a budget basis. • Capital outlays within the enterprise funds are recorded as assets on a GAAP basis and expended on a budget basis.

Inventory for governmental activities is recorded as an expenditure at the time it is purchased. For business-type activities, inventory us expensed when used.

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FINANCIAL/BUDGET POLICIES
Policy
The City Manager shall submit a proposed budget to the City Council each year for sufficient time to review and debate the budget before adoption. The proposed budget is balanced either through the matching of ongoing revenues with proposed expenditures or the use of existing reserves.

Budget Basis
The budgets of general government type funds (for example, the general fund or gas tax funds) are prepared on a modified accrual basis. Briefly, this means that obligations of the City are budgeted as expenditures, but revenues are recognized only when measurable and available.

The Annual Comprehensive Financial Report (ACFR) shows the status of the City’s finances on the basis of Generally Accepted Accounting Principles (GAAP). In most cases, this conforms to the way the City prepares the budget.

Responsibility
The departments are responsible for preparing their budgets in accordance with the guidelines provided by the City Manager and Finance Director. The Finance Department provides cost data related to staffing and other committed obligations. Departments provide cost information related to program and capital projects. The Finance Director prepares all revenue, debt service and reserve estimates.

Operating Budget
Ongoing operating costs should be supported by ongoing, stable revenue sources. This protects the City from fluctuating services levels and avoids crises when one-time revenues are reduced or removed. Listed below are some corollaries to this policy:
• Fund balances or contingency accounts should be used only for one-time expenditures, such as capital equipment and capital improvements.
• Ongoing maintenance costs, such as street resurfacing and other infrastructure improvements, should be financed through recurring operating revenues rather than through bond issuance. • Fluctuating federal grants should not be used to fund ongoing programs.

Budget Review
During the budget review phase, the City Manager’s Office, in conjunction with the Finance Department and Human Resources, analyzes new positions, operating and capital budget requests. This information is compiled, and the City Manager and Finance Director hold meetings with each department to review their estimated expenditures for the current fiscal year and the proposed baseline requests and enhancements for the proposed budget year.

At the completion of these meetings, the Finance Director again compiles all the financial data and presents the proposed budget to the City Manager for review.

Budget Adoption
The City Manager presents - via publicly noticed workshops - the budget to the City Council. Public hearings are held, and after modifications and revisions, the budget is adopted by resolution.

Budget Implementation
A budgetary control system is maintained to ensure compliance with the budget. The Finance Department is responsible for setting up the budget for tracking purposes and is charged with ensuring fund availability during the year to cover expenditures and appropriations. Reports comparing the budget with expenditures are generated and sent to departments on a monthly basis.

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Budget Revision
Actual expenditures may not exceed budgeted appropriations at the fund level. The City Manager or his/her designee is authorized to transfer budgeted amounts at the department and object (account) level. The City has the following programs accounted for through its governmental funds: City Council, Administration, City Attorney, Finance, Community Development, Police, Public Works and Non-Departmental. Use of unappropriated reserves must be specifically approved by the City Council.

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FINANCIAL MANAGEMENT POLICIES
General Policies
• All current operating expenditures will be paid for with current revenues, unless the use of reserves is approved by the City Council.
• Budgetary emphasis will focus on providing high quality municipal services, recognizing the fundamental importance to the citizens of public safety and properly maintained infrastructure. • The budget will strive to provide sufficient funding for adequate maintenance and orderly replacement of capital facilities and equipment.
• Future maintenance needs for all new capital facilities will be identified with the inclusion of the capital project. • Encouraging cost savings and promoting efficiencies is an ongoing commitment. • Strong customer service and productivity improvements with a focus on cost savings remain important budgetary goals.

Revenue Policies
• A diversified and stable revenue system will be maintained to shelter the City from temporary or one-time fluctuations in any single revenue source.
• Revenues will be conservatively estimated.
• Intergovernmental assistance in the form of grants and loans will be used to finance only:
o Those capital improvements which can be maintained and operated over time; or o Operating programs that can either be sustained over time or have a limited horizon. • In general, one-time revenues will be used only to support capital or other non-recurring expenditures. Onetime revenues may be used for operating programs only after an examination determines if they are subsidizing an imbalance between operating revenues and expenditures; and then only if a long-term forecast shows that the operating deficit will not continue.
• Development process costs and related administrative expenses will be offset by development fees. • The City will identify basic tax-provided services and will establish user fees and charges for services provided in excess of basic services and/or to non-taxpaying users.

Reserve Policies
• The City is committed to maintaining a prudent level of financial resources to protect against the need to reduce service levels because of temporary revenue shortfalls or unpredicted expenditures. The City’s General Reserve is made up several components as follows:

Operating Reserve – 15% (approximately two months of operating cash) Reserve for Economic Uncertainties and Disaster – 20% (amount is approximately $1,000,000) Total General Reserve – 35%
• Balances are reflected as a percentage of annual operating expenditures. Budgeted use of General Reserve components must be approved by the Council. If balances should fall below the amounts above, any amount of revenue above expenditures or surplus will be used first to replenish general fund reserves to required levels in the priority listed above. If reserve levels are met surplus amount will be considered for additional reserve funding or other discretionary purposes. Under no circumstances should the general reserve balance drop below the operating reserve amount of 15%The City Council has discretion on budgeting the use of fund balances which exceed the calculated general fund reserve.

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• The General Fund is primarily responsible for improving and maintaining the City’s local streets and roads.

Cost estimates to bring the city-wide Pavement Management Index score to 100 are $50 million. From timeto-time road improvement and maintenance projects get postponed as a result of unforeseen circumstances or rising costs. Road improvement and maintenance projects are expensive and oftentimes exceed the City’s ability to budget will current resources in a single year. The RIMF would allow for resources previously budgeted for road improvement and maintenance projects to be accumulated and expended specifically to benefit the City’s road improvement and maintenance fund. Contributions to the RIMF will be equal to the difference between budgeted one-time road department expenditures and actual one-time road department expenditures for a given fiscal year. RIMF funds may be used towards improving and maintaining City local streets and roads.
• Upon the issuance of a Pension Obligation Bond (POB) a Pension and OPEB Reserve Fund (PORF) will be established in the amount of $600,000 initially. This amount represents approximately the annual contribution amounts for unfunded OPEB and Pension Liabilities.
• In the event that multiple fund balance types are available for an expenditure, the expenditure will be made from the most restricted resource available at the time. Implementation of this policy requires Restricted funds to be expended before Committed Funds and Committed Funds to be expended before Assigned Funds.

Unassigned funds should, therefore, only be used when all other available resources have been exhausted. • For purposes of this policy the City maintains two Operating and Maintenance Funds for Water and Wastewater. Unique to these funds is the responsibility to quickly repair the water and wastewater infrastructure in the event of a failure.
• The City is committed to maintaining a prudent level of financial resources to protect against the need to reduce service levels because of temporary revenue shortfalls or unpredicted expenditures. The City’s Water and Wastewater Enterprise Reserves are made up several components as follows:

Operating Reserve – 33% (approximately 120 days of operating cash) Reserve for unexpected infrastructure failure – 25%
Reserve for Economic Uncertainties and Disaster – 20% (amount is approximately $400,000) Unfunded Liability Reserve – 12% (approximately the annual contribution amounts for unfunded OPEB and Pension Liabilities)
Total Enterprise Reserve – 90%
• Balances are reflected as a percentage of annual operating expenditures. Budgeted use of Enterprise Reserves must be approved by the Council. If balances should fall below the amounts above any amount of revenue above expenditures or surplus will be used first to replenish reserves to required levels in the priority listed above. If reserve levels are met surplus amount will be considered for one-time expenditures. Under no circumstances should the enterprise reserve balance drop below the operating reserve amount of 33%. • For more information regarding reserve policy see “Reserve and Pension Policy”.

Cash Management
• Investments and cash management will be the responsibility of the Finance Director. • In accordance with Section 53646 of the Government Code, the City Council will review and update annually an investment policy. The primary purpose of this policy is to set forth the City’s investment philosophy and objectives. The City’s investment objectives are, in order of priority: safety; compliance with federal, state and local laws; liquidity; and yield. The policy also specifically outlines authorized investments, the maximum maturities allowed for each investment instrument, and the criteria used to determine qualified depositories and/or dealers.
• The City invests all idle cash as determined by analysis of anticipated cash flow needs. Specific emphasis will be placed on future cash requirements when selecting maturity dates to avoid forced liquidation and the potential corresponding loss of investment earnings.
• In order to maximize yields from the overall portfolio, the City will consolidate cash balances from all funds for investment purposes and will allocate investment earnings to each fund that has a positive cash balance.

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• The City will maintain the investment portfolio under the “Prudent Person Standard.” The “Prudent Person Standard” is as follows: Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The investment officer, acting in accordance with written procedures and the investment policy and exercising due diligence, shall be relieved of personal responsibility for the credit risk of an individual security or market price changes, provided deviations from expectations are reported within 30 days and appropriate action is taken to control adverse developments. • To protect against potential losses by collapse of individual securities and/or dealers, and to enhance access to securities, interest payments and maturity proceeds, all securities owned by the City will be held in safekeeping by a third party bank trust department, acting as the City’s agent. • The Finance Director will generate a quarterly report to the City Council in accordance with all state laws and City investment policy requirements.

Debt Policy
• It is the intent of the City of Lakeport to issue debt in a manner that adheres to state and federal laws, existing bond covenants and prudent financial management.
• The General Fund currently does not have any general obligation bonds and does not anticipate issuing such debt.
• When the City finances capital projects by issuing bonds, it will pay back the bonds within a period that is consistent with the useful life of the project.
• The City will not use long-term debt financing for any recurring purpose such as current operating and maintenance expenditures. Short-term debt instruments such as revenue tax or bond anticipation notes shall be excluded from this limitation.
• The City will generally conduct debt financing on a competitive basis. However, negotiated issues may be used due to market volatility or the use of an unusual or complex financing or security structure. • The City will diligently monitor its compliance with bond covenants and ensure its adherence to federal arbitrage regulations.
• The City will operate under the provisions of Proposition 13, the California Constitutional Amendment that limits the incurrence of “general obligation” debt. To incur this debt, the City must receive a two-thirds (2/3) vote of the voters at a general election.
• For more information regarding debt policy see “Debt Management Policy”.

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Cost Allocation
• The City may establish internal service funds. These funds would be utilized to accumulate resources for specified needs and to fund those needs as they arise via transfers in and out to/from the General Fund. • Allocable costs which benefit multiple departments or funds are direct budgeted and charged to the applicable department or fund. Percentage of payroll is a commonly used method of allocation.

Risk Management
• The City maintains a comprehensive risk assessment program and annual hazard survey to identify areas that may pose liability issues.
• The City has a policy of vigorously defending claims filed against the City of Lakeport and continues to maintain an excellent loss history.

Annual Audit
• Sound accounting practices dictate that the performance of an annual audit is a prudent business decision.

It promotes accountability, transparency, and compliance with the adopted budget and the will of the citizens of Lakeport.
• The City requires an annual audit of the books of account, financial records, inventories and reports of all City officers and employees involved in the handling of financial matters by a qualified independent auditor. • The independent auditing firm will be selected by the City based on a competitive proposal process. It is the policy of the City that the most qualified firm is selected and therefore the “lowest cost” approach is not the defining method of selecting an auditing firm.
• The City shall issue a Request for Proposal for audit services at least every five years.

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BUDGET SCHEDULE
Fiscal Year: 2026-27
Activity Tasks Date
Completion
Date
Begin Budget Prep for FY
26-27
• Schedule budget meetings with Departments
• Distribute budget instructions.
• Distribute budget workbooks
February
2025-26
Accomplishments and
2026-27 Goals
• Meeting to discuss 2/20/26
CIP Update • Review and update 5-year Capital
Improvement Project list 3/2/26
2025-26
Accomplishments and
2026-27 Goals
• Due to CM for preparation of the 4/7 Agenda
Item 3/20/26
Operating budget
deadline
• All operating accounts updated.
• Capital budgets zeroed out 3/27/26
Preliminary Budget
Meetings
• CM meets with individual department heads
for initial budget requests and discussion
4/6/26 -
4/10/26
City Manager review of
budget requests
• Review appropriation requests
• Meet with Finance for discussion/analysis 4/13/26
City Council budget
priority/goal setting
workshop
• Receive council/community communication.
• Discuss priorities for the fiscal year.
• Discuss capital projects.
• Discuss goals and objectives
• AB2651 Compliance
4/21/26
Reconciled Budget
Meetings with City
Manager
• Department head meetings with CM
• Discussion of appropriation requests
• Finalize initial appropriation requests
4/27/26 –
5/1/26
Receipt of supplemental
appropriation requests
• Last opportunity for DHs to make
appropriation request changes prior to
Council hearings
5/7/26
Finalize Draft Budget
Document
• Finalize revenue estimates.
• Complete special revenue funds and
trust/agency funds
• Circulate for review/edits
5/21/26
First Budget Hearing with
Council (special
meeting/workshop)
• Presentation of budget proposal
• Discussion of changes from prior year
• Take questions and requests from Council
6/16/26
Final Budget workshop
and hearing, if necessary
• Final Q&A
• Final revisions
• Adoption
6/30/26
Meeting Date: 06/30/2026 Page 1 Agenda Item # 4.0

CITY OF LAKEPORT
City Council ☒
City of Lakeport Municipal Sewer District ☐
Lakeport Industrial Development Authority ☐
Municipal Financing Agency of Lakeport ☐

STAFF REPORT
RE: Gann (Appropriations) Limit Review and Resolution Establishing the Fiscal Year 2026-27 Appropriations Limit
MEETING DATE: 6/30/2026
SUBMITTED BY: Danielle Dizon, Finance Director
PURPOSE OF REPORT: ☐Information only ☐ Discussion ☒Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

The City Council is being asked to review and approve the annual appropriations limit for the City of Lakeport and adopt the associated resolution.

BACKGROUND/DISCUSSION:

The Gann Spending Limitation Initiative (Article XIII B of the California Constitution) adopted as Proposition 4 in June 1979 (and subsequently modified by Proposition 111 in June 1990) requires the City to annually adopt a resolution setting an “appropriation limit” for the upcoming fiscal year. The Gann Spending Limitation was intended to provide citizen control of government spending and taxation. The City’s Fiscal Year 2026-27 Budget was approved by the City Council on June 30, 2026.

California Government Code, Section 7910 (a) "each year the governing body of each local jurisdiction shall, by resolution, establish its appropriations limit and make other necessary determinations for the following fiscal year pursuant to Article XIII B of the California Constitution at a regularly scheduled meeting or noticed special meeting ...."
California Constitution, Article XIIIB. Sec. 1 "The total annual appropriations subject to limitation of the State and of each local government shall not exceed the appropriations limit of the entity of government for the prior year adjusted for the change in the cost of living and the change in population, except as otherwise provided in this article.

The Gann Spending Limitation calculation is attached. This calculation used population and per capita personal income statistics provided by the California Department of Finance. The establishment of the Fiscal Year 2026- 27 Appropriations Limit ("Gann Limit") is necessary to comply with Article XIIIB of the State Constitution. The Gann Limit limits the amount of revenue classified as proceeds of taxes that can be appropriated in any fiscal year by a government entity. Certain exclusions are allowed including transfers, capital outlay and payments for debt service. The maximum allowable appropriation of revenues subject to limitations for Fiscal Year 2026-27 is $18,317,730 and the FY 2026-27 Budget with the exclusions, referenced above, is within this limit. This maximum amount increases or decreases each year depending on the percentage change in the per capita personal income (4.95%) and the percentage change in population in the City of Lakeport (-0.38%). The Meeting Date: 06/30/2026 Page 2 Agenda Item # 4.0
California Department of Finance provides these estimates. For Fiscal Year 2026-27 the budgeted revenues subject to limitation total $6,656,934, which is 36.34% of the maximum allowed.

OPTIONS:

1. Review and approve the annual appropriations limit for the City of Lakeport and adopt the associated resolution.

2. Provide alternative direction.

FISCAL IMPACT:
☒ None ☐ $ Budgeted Item? ☐Yes ☐ No
Budget Adjustment Needed? ☐Yes ☐ No If yes, amount of appropriation increase: $ Affected fund(s): ☐ General Fund ☐ Water OM Fund ☐ Sewer OM Fund ☐ Other:

Comments:

COUNCIL PRIORITIES:
☐ Priority #1: Public Safety & Crisis Response
☐ Priority #2: Disaster Resiliency
☒ Priority #3: Good Governance & Fiscal Stability
☐ Priority #4: Capital Infrastructure Improvement
☐ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☐ Priority #6: Economic Development
SUGGESTED MOTIONS:

Move to approve the annual appropriations limit for the City of Lakeport and adopt the associated resolution. ☒ Attachments: 1. Resolution Gann Appropriations Limit

2. Gann Limit Calculation
Resolution No. (2026) Page 1
RESOLUTION NO. XXXX (2026)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKEPORT APPROVING THE FISCAL YEAR 2026-27 APPROPRIATIONS LIMIT

FOR THE CITY OF LAKEPORT
WHEREAS, pursuant to California Government Code Section 7910, the City Council must, by resolution, establish its appropriations limit for each fiscal year.

NOW, THEREFORE, BE IT RESOLVED THAT the appropriations limit for the City of Lakeport for the 2026-27 Fiscal Year shall be Eighteen Million, Three Hundred Seventeen Thousand, Seven Hundred Thirty ($18,317,730).

This resolution was adopted by the City Council of the City of Lakeport at a special meeting thereof on the 30th day of June 2026, by the following vote:

AYES:

NOES:

ABSTAINING:

ABSENT:
______________________________
BRANDON DISNEY, Mayor
ATTEST:
_____________________________
KELLY BUENDIA, City Clerk
Gann Limit Calculation
FY 2026-27
Per Capita Cost of Living Change = 4.95 percent
Population Change (City) = -0.38 percent
Per Capita Cost of Living converted to a ratio: 4.95 + 100 = 1.0495 100
Population converted to a ratio: -0.38 + 100 = 0.9962
100
Calculation of factor for FY 2026-27: 1.0495 x 0.9915 = 1.0455 Appropriations Limit, Fiscal Year 2025-26 17,520,346 $
Appropriations Limit, Fiscal Year 2026-27 18,317,730 $
FY 2026-27 appropriations subject to Gann Limit
Budget Estimates
$ 1,389,800
4,345,000
336,134
150,000
351,000
85,000
$ 6,656,934

36.34%
Business License Taxes
Percentage Use of Appropriations Limit
FISCAL YEAR 2026-27
Property Taxes
Sales Taxes
Special Taxes
State Subventions
Franchise Taxes
City of Lakeport
Finance Department

Lakeport City CouncilJune 30, 2026

Lakeport City Council
June 30, 2026