Date: March 17, 2026
To: Mayor and City Council
From: Anissa Leung, Finance Director
Jim Schaad, City Manager
Subject: Budget Amendments to FY 2025-26 Adopted General Fund Budget Recommendation:
Pass a Motion to amend the FY 2025-26 adopted General Fund, Street Fund, and Wastewater Fund budgets with the proposed adjustments to revenue and expenditures as stated below.
Rationale for Recommendation:
Annually, staff commences a mid-year review of revenues and expenditures to ensure the continued accuracy of the adopted budget. It also allows the City Council to achieve a more accurate budget for the current fiscal year, resulting in greater budget transparency, and to help shape the development of next year’s budget.
Background:
The City Council adopted the FY 2025-26 budget on June 26, 2025, and is required to maintain a balanced budget. City staff continually strives to ensure that the City is not spending in deficit. Therefore, sales tax (projected with the help of HdL), permits, and cannabis business tax forecasts were used to provide conservative financial projections given the continuing potential volatility of the economy.
During the mid-year review, staff found that property taxes and permits have continued to increase above original projections by approximately 12.8% and Bradley Burns sales tax projections have declined by
2.1% compared to initial forecasts. However, Measure G, or Voter Initiative tax measure is projected to increase by 2.7%.
Additionally, the City anticipates an increase in Cannabis Business Tax revenue (Measure F). In aggregate and state-wide, cannabis taxes have declined, but in the Yuba-Sutter region, Marysville’s cannabis tax continues to increase year over year for the last three years.
Therefore, staff recommends that City Council authorizes the amendment to the Adopted Municipal Budget for FY 2025-26 to incorporate an additional $3,734,353 in projected revenues. Of these additional revenues, $3,316,189 are one-time revenues and $418,164 are expected to be on-going in nature.
Per review of current expenditures, an additional overall appropriation of $3,322,114 is recommended.
Of this amount, the entire amount is one-time in nature, and zero dollars are expected to be on-going. The details and justification for these proposed changes are explained in Attachment #1.
Discussion & Analysis:
City staff recommends adding revenue budget adjustments of $3,734,353 to increase General Fund revenues and supplemental appropriations of $3,322,114 to increase General Fund expenditures. The summary below gives an overview of the changes, and the attachment presents further detail on the amounts and a brief description of why the budget amendments are being requested.
Revenue
Adopted On-Going Budget (less one-time revenues) 15,256,469 $ General Fund Reserve Drawdown (Ellis Lake & B Street) 1,900,000 One-time Non-Recuring Revenue (ARPA) 741,189 Deferred Inflow of Resources (Prop 64) 675,000 Total Adopted Budget - Revenue 12-31-25 18,572,658
Requested On-Going Revenue Increases 156,275 $
Revised Total Revenues as of 12-31-25 18,728,933 $
Expenditures
Adopted Operational Budget (less one-time expenditures) 15,392,126 $ One-time Expenditures: 3,322,114
Ellis Lake - Clean California Local Match (1,200,000)
B Street Property Development (700,000)
City Hall Capital Improvements (741,189)
Prop 64 - Yuba County Office of Ed. Disbursement (250,000) Outside Building & Planning Consultants (120,000)
Employee Accrued Leave Payouts (All Departments) (110,716) Special Litigation for CalOSHA Appeal (100,000)
Police Department Body Worn Camera - Loan Payment (50,000) Yuba County Dispatch Services (25,209)
Public Works Equipment: Grinder Attachment (25,000)
Total Adopted Budget - On-Going Expenditures 18,714,240 $ Summary
Proposed Revised On-Going Revenues as of 12-31-25 15,412,744 $ Proposed Revised One-Time Revenues as of 12-31-25 3,316,189 $ Total Revised Revenue Budget FY 25-26 $ 18,728,933
Proposed Revised On-Going Expenditures as of 12-31-25 15,392,126 $ Proposed Revised One-Time Expenditures as of 12-31-25 3,322,114 $ Total Revised Expenditure Budget FY 25-26 $ 18,714,240
Total Revised Budget Net On-Going Revenues 20,618 $
Total Revised Budget Net One-Time Revenues Over Expenditures (5,925) $ Net Revised Budget Deficit of One-Time Funds for Projects $ 14,693
The recommended changes to the Street Fund and Enterprise Fund are outlined in the attached detailed budget adjustment sheets.
Alignment with City Council Goal(s):
This Agenda Item aligns with current Council Goals as it updates the City’s fiscal projections to be more accurate and represents current fiscal expectations for FY 2025-26.
Fiscal Analysis:
The recommended adjustments to both General Fund revenue and expenditure budgets for FY 2025-26 allow for a continued balanced budget. One-time expenditures were primarily for grant-related expenditures or major capital improvements to City-owned property or land. including deferred maintenance of City facilities. At this time, there are no recommendations or adjustments to be made to the Street Fund as budgeted revenues and expenditures are all within operational capacities. The Enterprise Fund is proposed to have an increase of $168,336 in net expenditures after reviewing all accounts to appropriate funds for unanticipated expenses and to purchase a new vehicle.
Attachments:
1. Detailed Recommended Budget Adjustments for the General Fund
2. Detailed Recommended Budget Adjustments for the Enterprise Fund
3. FY 2025-26 Mid-Year Financial Report
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
10-4001 PROPERTY TAX-SECURED 1,575,578 1,575,578 - (1,575,578) 0.0% 201,006 1,776,584 Received updated numbers from County of Yuba showing projected increase in collection.
10-4005 PROPERTY TAX-UNSECURED 52,253 52,253 - (52,253) 0.0% 10,870 63,123 Received updated numbers from County of Yuba showing projected increase in collection.
10-4010 PROPERTY TAX SUPPLEMENTAL 50,000 - - - 0.0% (50,000) (50,000) Received updated numbers from County of Yuba showing projected increase in collection.
10-4015 PROPERTY TAX IN LIEU OF VLF 1,398,250 1,398,250 - (1,398,250) 0.0% 12,845 1,411,095 Received updated numbers from County of Yuba showing projected increase in collection.
10-4017 PROPERTY TAX-AB8 50,000 50,000 - (50,000) 0.0% (50,000) - Received updated numbers from County of Yuba showing projected increase in collection.
10-4020 SALES & USE TAX 2,597,160 2,597,160 1,145,838 (1,451,322) 44.1% (52,691) 2,544,469 HDL's projections show a decline primarily due to fuel sale declines in price due to economic factors.
10-4025 TRANSACTIONS & USE TAXMEASURE G 3,723,870 3,723,870 1,279,762 (2,444,108) 34.4% 99,954 3,823,824 HDL's projections show an increase in e-commerce and auto purchases. 10-4027 CANNABIS BUSINESS TAX
MEASURE F 900,000 900,000 447,711 (452,289) 49.7% 75,000 975,000 Current tend has shown an increase in monthly taxes from original projections. 10-4030 PROP 172 PUBLIC SAFETY
AUGMENTATION 212,480 212,480 70,819 (141,661) 33.3% (130) 212,350 HDL's projections show a minor decline is anticipated in this revenue. 10-4101 BUSINESS LICENSES 150,000 150,000 133,875 (16,125) 89.3% 30,000 180,000 Staff anticipates an increase in this revenue based on two quarters of receipts through mid-February
10-4120 MEDICAL MARIJUANA LICENSE
FEES 20,000 20,000 4,065 (15,935) 20.3% (10,000) 10,000 Staff anticipates a decrease in this revenue based on receipts through the end of February 2025. 10-4135 CONSTRUCTION PERMITS 285,000 285,000 180,882 (104,118) 63.5% 25,000 310,000 Department staff anticipate an increase in this revenue based on anticipated incoming projects.
10-4145 TRANSPORTATION PERMITS 2,500 2,500 10,295 7,795 411.8% 7,500 10,000 Department staff anticipate an increase in this revenue based on anticipated incoming projects.
10-4180 TECHNOLOGY FEES 20,000 20,000 16,362 (3,638) 81.8% 10,000 30,000 Staff anticipates an increase in this revenue based on two quarters of receipts through the end of February.
10-4401 INTEREST EARNINGS 380,000 380,000 23,779 (356,221) 6.3% (80,000) 300,000 Staff anticipates a decrease in interest earnings given market volatility and conservative investment approaches.
10-4425 PARKING PERMITS & METER
COLLECTIONS 2,000 2,000 2,520 520 126.0% 500 2,500 Staff anticipates an increase in this revenue based on two quarters of receipts through the end of February. 10-4432 HIGH WHEELERS TICKET REVENUE
AGREEMENT 12,000 12,000 - (12,000) 0.0% (3,800) 8,200 Received confirmation from High Wheelers of ticket sales and associated amount to be remitted to Marysville for the 2025 baseball Season. 10-4501 VEHICLE IN LIEU FEES - - 12,680 12,680 N/A 12,680 12,680 Staff anticipates an increase in this revenue based on two quarters of receipts through the end of February.
10-4510 HOMEOWNER PROPERTY TAX
RELIEF 5,000 5,000 6,914 1,914 138.3% 7,655 12,655 Received updated numbers from County of Yuba showing projected increase in collection. 10-4543 PROP 64 COHORT 3
REIMBURSEMENT - - - - N/A 675,000 675,000 Grant revenue received after FY 2025 that is now recorded as a deferred inflow resource for FY 2026. 10-4580 DEPT OF JUSTICE BODY VEST
PROGRAM 15,000 15,000 - (15,000) 0.0% (15,000) - Due to federal funding constraints, the City will not anticipate funds to cover the cost of new ballistic vests. 10-4581 DEPARTMENT OF HOMELAND
SECURITY 4,500 4,500 35,000 30,500 777.8% 30,500 35,000 Revenue realized was more than budgeted and the full amount has been received as of 12/31/2025. 10-0001 PRIOR YEAR LAPSED
APPROPRIATIONS RESERVE - - - - N/A 897,464 897,464 To carryforward prior year lapsed appropration reserves for FY 2026. 10-0000 CASH & CASH INVESTMENTS - - - - N/A 1,900,000 1,900,000 To drawdown $1.9m from reserve for Ellis Lake project and B Street Development.
Total Proposed Revenue Changes 3,734,353
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
10-100-5010 SALARIES-ELECTED 30,000 30,000 7,500 (22,500) 25.0% (15,000) 15,000 Recommended to transfer anticipated unused funds to other City uses. 10-100-5025 AUTO ALLOWANCE 18,000 18,000 - (18,000) 0.0% (13,500) 4,500 Recommended to transfer anticipated unused funds to other City uses. 10-100-5115 DUES & SUBSCRIPTIONS 24,000 24,000 5,101 (18,899) 21.3% (12,000) 12,000 Recommended to transfer anticipated unused funds to other City uses. 10-100-5170 PROFESSIONAL DEVELOPMENT 18,000 18,000 - (18,000) 0.0% (8,000) 10,000 Recommended to transfer anticipated unused funds to other City uses. 10-100-5235 TRAVEL, LODGING & MEALS 13,000 13,000 - (13,000) 0.0% (5,000) 8,000 Recommended to transfer anticipated unused funds to other City uses. (53,500)
10-105-5001 SALARIES-PERMANENT 249,938 249,938 122,437 (127,501) 49.0% 35,062 285,000 To adjust for contractual increase. 10-105-5030 ACCRUED LEAVE PAYOUT - - 8,683 8,683 N/A 9,000 9,000 To adjust for accrued leave payout benefit. 10-105-5035 MEDICARE 2,034 2,034 1,941 (93) 95.4% 1,966 4,000 To adjust for contractual increase, which includes fringe benefits. 10-105-5050 HEALTH INSURANCE 14,319 14,319 8,571 (5,748) 59.9% 981 15,300 To adjust for contractual increase, which includes fringe benefits. 10-105-5051 DENTAL INSURANCE 1,810 1,810 1,513 (297) 83.6% 690 2,500 To adjust for contractual increase, which includes fringe benefits. 10-105-5052 VISION INSURANCE 263 263 219 (44) 83.3% 137 400 To adjust for contractual increase, which includes fringe benefits. 10-105-5055 LIFE & DISABILITY INSURANCE 2,051 2,051 1,037 (1,014) 50.6% 449 2,500 To adjust for contractual increase, which includes fringe benefits. 10-105-5115 DUES & SUBSCRIPTIONS 1,500 1,500 - (1,500) 0.0% (500) 1,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-105-5165 PROFESSIONAL & SPECIALIZED
SERVICES 12,000 12,000 6,000 (6,000) 50.0% (2,000) 10,000 Decrease line item to return aniticipated unspent funds to general fund bottom line. 10-105-5170 PROFESSIONAL DEVELOPMENT 8,000 8,000 975 (7,025) 12.2% (3,000) 5,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-105-5230 SPECIAL DEPARTMENTAL EXPENSE 20,000 20,000 - (20,000) 0.0% (10,000) 10,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-105-5250 COMMUNITY FUNCTIONS &
PROMOTIONS - - 211 211 N/A 500 500 Decrease line item to return aniticipated unspent funds to general fund bottom line. 33,285
10-110-5165 PROFESSIONAL & SPECIALIZED
SERVICES 55,000 55,000 500 (54,500) 0.9% (30,000) 25,000 Decrease line item due to Measure G ballot research and marketing no longer needed. (30,000)
10-111-5169 CAL/OSHA - - 33,873 33,873 N/A 100,000 100,000 To include supplemental authorization and anticipate future legal costs associated with the CalOSHA appeal process.
100,000
Proposed City Council Adjustment
Proposed City Manager Adjustment
Proposed Economic Sustainability Adjustment
Proposed General Legal Adjustment
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
10-112-5045 WORKERS COMPENSATION
INSURANCE - - 195,160 195,160 N/A 200,000 200,000 Budget adjustment to appropriate funds for Worker's Compensation coverage. 10-112-5067 RETIREMENT--PERS UNFUNDED
LIABILITY 155,049 155,049 314,398 159,349 100.0% 159,349 314,398 Budget adjustment to authorize the additional costs for Marysville's Unfunded Pension Liability. 359,349
10-115-5001 SALARIES-PERMANENT 313,627 313,627 143,414 (170,213) 45.7% (28,627) 285,000 Staffing reorganization within department caused a decrease in employee costs.
10-115-5035 MEDICARE 4,599 4,599 2,036 (2,563) 44.3% (599) 4,000 Staffing reorganization within department caused a decrease in employee costs.
10-115-5060 RETIREMENT-PERS CITY 28,478 28,478 13,016 (15,462) 45.7% (1,478) 27,000 Staffing reorganization within department caused a decrease in employee costs.
10-115-5165 PROFESSIONAL & SPECIALIZED
SERVICES 80,000 80,000 61,801 (18,199) 77.3% 30,000 110,000 To request additional accounting support as per audit recommendations. 10-115-5210 PRINTING & BINDING 500 500 1,040 540 208.1% 600 1,100 To appropriate additional funds relating to paper procurement. (104)
10-116-5165 PROFESSIONAL & SPECIALIZED
SERVICES 95,000 95,000 15,028 (79,973) 15.8% (45,000) 50,000 Decrease line item to return aniticipated unspent funds to general fund bottom line. 10-116-5175 RENT & LEASES-VEHICLE & EQUIP. 50,000 50,000 27,277 (22,723) 54.6% (5,000) 45,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-116-5220 INFORMATION TECHNOLOGY
EQUIPMENT 100,000 100,000 113,803 13,803 113.8% 50,000 150,000 To request additional technology equipment to continue modernizing City operations. - -
10-120-5140 INSURANCE-CASUALTY &
LIABILITY 802,440 802,440 813,650 11,210 101.4% 11,210 813,650 To appropriate additional funds to cover the added costs for general liability insurance. 10-120-5145 INSURANCE-VEHICLE 52,785 52,785 46,451 (6,334) 88.0% (6,334) 46,451 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-120-5165 PROFESSIONAL & SPECIALIZED
SERVICES 45,000 45,000 8,815 (36,185) 19.6% (20,000) 25,000 Decrease line item to return aniticipated unspent funds to general fund bottom line. 10-120-5325 PROPERTY TAXES & ASSESSMENTS 15,000 15,000 449 (14,551) 3.0% (5,000) 10,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-120-5340 PAYMENTS & CONTRIBUTIONS TO
OTHER AGENCIES 75,000 75,000 81,383 6,383 108.5% 6,383 81,383 To appropriate additional funds to cover the added costs for Marysville's contribution to LAFCO. (13,741)
10-122-5279 PROP 64 COHORT 3 CONTRACT
SERVICES - - 125,962 125,962 N/A 250,000 250,000 Prop 64 Cohort 3 grant funds disbursed to Yuba County Office of Education. 250,000
Proposed Human Resources Adjustment
Proposed Finance Department Adjustment
Proposed Information Technology Adjustment
Proposed Non-Departmental Adjustment
Proposed Grant Accounting Adjustment
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
10-130-5015 SALARIES-OVERTIME 256,000 256,000 160,432 (95,568) 62.7% 104,000 360,000 To appropriate additional funds in anticipation of increase police department overtime.
10-130-5030 ACCRUED LEAVE PAYOUT - - 89,130 89,130 N/A 100,000 100,000 To adjust for accrued leave payout benefit. 10-130-5120 FUEL & OIL 82,000 82,000 35,106 (46,894) 42.8% (12,000) 70,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-130-5190 REPAIR & MAINTENANCEVEHICLES & EQUIPMENT 25,000 25,000 30,522 5,522 122.1% 25,000 50,000 To appropriate additional funds in anticipation of increased vehicle liability. 10-130-5215 SMALL TOOLS & INSTRUMENTS 50,000 50,000 23,362 (26,638) 46.7% 50,000 100,000 To adjust for unbudgeted expenditures in the police department. 267,000
10-145-5001 SALARIES-PERMANENT 1,435,547 1,435,547 504,973 (930,574) 35.2% (135,547) 1,300,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-145-5015 SALARIES-OVERTIME 200,000 200,000 123,063 (76,937) 61.5% 65,000 265,000 To appropriate additional funds in anticipation of increase fire department overtime.
10-145-5190 REPAIR & MAINTENANCEVEHICLES & EQUIPMENT 90,000 90,000 20,926 (69,074) 23.3% (15,000) 75,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-145-5401 VEHICLES & HEAVY EQUIPMENT 50,209 50,209 437 (49,772) 0.9% (25,209) 25,000 Prorated cost of Yuba County Dispatch Services. (110,756)
10-150-5001 SALARIES-PERMANENT 271,006 271,006 110,990 (160,016) 41.0% (1,006) 270,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-150-5050 HEALTH INSURANCE 40,120 40,120 13,790 (26,330) 34.4% (2,120) 38,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-150-5071 RETIREMENT-APPLE CITY 777 777 7 (770) 0.9% (577) 200 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-150-5165 PROFESSIONAL & SPECIALIZED
SERVICES 300,000 300,000 111,792 (188,208) 37.3% (85,000) 215,000 Professional services are being allocated and charged to grants and general fund burden has decreased. 10-150-5190 REPAIR & MAINTENANCEVEHICLES & EQUIPMENT - - 105 105 N/A 200 200 To adjust for unbudgeted expenditures in the community and economic development department.
10-150-5205 ADVERTISING & LEGAL NOTICES 2,575 2,575 105 (2,470) 4.1% (1,075) 1,500 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-150-5230 SPECIAL DEPARTMENTAL EXPENSE - - 6,763 6,763 N/A 15,000 15,000 To adjust for unbudgeted expenditures in the community and economic development department.
10-150-XXXX COMMUNITY PROMOTIONS - - - - N/A 5,000 5,000 To adjust for unbudgeted expenditures in the community and economic development department.
(69,578)
Proposed Fire Department Adjustment
Proposed Police Department Adjustment
Proposed Community & Economic Development Adjustment
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
10-155-5001 SALARIES-PERMANENT 61,145 61,145 19,922 (41,223) 32.6% 6,855 68,000 To appropriate additional funds to cover building inspector's salary. 10-155-5035 MEDICARE 959 959 301 (658) 31.4% 41 1,000 To appropriate additional funds to cover building inspector's fringe benefits. 10-155-5050 HEALTH INSURANCE 17,453 17,453 550 (16,903) 3.2% (6,453) 11,000 To appropriate additional funds to cover building inspector's fringe benefits. 10-155-5060 RETIREMENT-PERS CITY 4,800 4,800 1,565 (3,235) 32.6% 400 5,200 To appropriate additional funds to cover building inspector's fringe benefits. 10-155-5165 PROFESSIONAL & SPECIALIZED
SERVICES 93,459 93,459 108,023 14,564 115.6% 71,541 165,000 To appropriate additional funds due to increased costs in outside plan check and inspection services. 72,384
10-157-5001 SALARIES-PERMANENT 63,588 63,588 57,295 (6,293) 90.1% 26,412 90,000 To adjust for salary costs relating to the increases. 10-157-5030 ACCRUED LEAVE PAYOUT - - 1,716 1,716 N/A 1,716 1,716 To adjust for accrued leave payout benefit. 10-157-5165 PROFESSIONAL & SPECIALIZED
SERVICES 115,000 115,000 13,535 (101,465) 11.8% (65,000) 50,000 Decrease line item to return aniticipated unspent funds to general fund bottom line. (36,872)
10-160-5215 SMALL TOOLS & INSTRUMENTS 1,000 1,000 - (1,000) 0.0% 24,000 25,000 To request a sweeper attachment for parks and street maintenance. 10-160-5240 UTILITIES-WATER SERVICE 150,000 150,000 50,221 (99,779) 33.5% (55,000) 95,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
(31,000)
10-170-5001 SALARIES-PERMANENT 152,966 152,966 38,379 (114,587) 25.1% (24,966) 128,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-170-5050 HEALTH INSURANCE 19,928 19,928 1,444 (18,484) 7.2% (16,928) 3,000 To appropriate additional funds to cover employee fringe benefits. 10-170-5060 RETIREMENT-PERS CITY 12,008 12,008 2,960 (9,048) 24.6% (2,008) 10,000 To appropriate additional funds to cover employee fringe benefits. 10-170-5190 REPAIR & MAINTENANCEVEHICLES & EQUIPMENT 45,000 45,000 3,501 (41,499) 7.8% (25,000) 20,000 Decrease line item to return aniticipated unspent funds to general fund bottom line.
10-170-5192 PARTS-OUTSIDE SERVICES - - 16,326 16,326 N/A 25,000 25,000 To adjust for unbudgeted expenditures in fleet management department. (43,902)
10-999-9999 CAPITAL OUTLAY - - - - N/A 2,641,189 2,641,189 To authorize supplemental appropriations for Ellis Lake, B Street Development, and various City Hall Improvements.
2,641,189
3,333,754
Proposed Capital Improvement and Projects Adjustment
Total Proposed Expenditure adjustments (all departments) Proposed Building Department Adjustment
Proposed Public Works Management Adjustment
Proposed Public Works Adjustment
Proposed Fleet Management Adjustment
General Fund Adopted
Budget
Amended
Budget
YTD
Activity
(Cash Basis)
Variance % Activity
Earned / Used
Proposed
Changes
Proposed
Revised Budget Notes
50-500-5067 RETIREMENT--PERS UNFUNDED
LIABILITY 13,500 13,500 20,336 6,836 150.6% 6,836 20,336 To adjust for Sewer Enterprise Fund's unfunded pension liability. 50-500-5115 DUES & SUBSCRIPTIONS 7,000 7,000 8,137 1,137 116.2% 3,000 10,000 To appropriate additional funds to this budget line item for additional employee development.
50-500-5220 INFORMATION TECHNOLOGY
EQUIPMENT 5,000 5,000 22,018 17,018 440.4% 25,000 30,000 To appropriate additional funds to continue modernizing technology in the Sewer Department. 50-500-5230 SPECIAL DEPARTMENTAL EXPENSE 2,500 2,500 50,805 48,305 2032.2% 133,500 136,000 To appropriate unantic expenditures for annual compliance licenses and authorize the purchase of a vehicle for the department.
Proposed Sewer Department Adjustment 168,336
Attachment 4
FY 2025-26 Financial Report
For the Six Months Ending December 31, 2025
March 17, 2026
OVERVIEW
This report summarizes the City’s financial position for the fiscal year through the second quarter ending December 31, 2025, for the General Fund, Street Fund, and Enterprise Fund. This report aims to provide the City Council, City Management, and the Marysville community with an update on the City’s fiscal status based on the most recent financial information available. This report is prepared on a cash basis; therefore, revenue is recognized at the same time revenues are received, and expenditures are recognized at the time the payments are made.
GENERAL FUND
The General Fund is the City's primary operating fund. With 50% of the year completed, General Fund revenues are 29.4% of budgeted amounts, and expenditures are 49.7%. FY 2025-26 adopted revenue and operating expenditures budget are $14.91 million and $15.38 million, respectively. In this report, revenues are reviewed by classification of the type of revenue and expenditures are shown by department.
Revenues
Revenues are below the 50 percent mark halfway through the fiscal year. This is expected for the second quarter and consistent with the mid-year results of prior years. This can be attributed to not receiving the first installment of property taxes from the County until the end of January, a two-month lag in sales tax distribution from the State and other significant revenue sources, such as reimbursable grant funds and certain franchise tax revenues not received until later in the fiscal year. In addition, several revenue items received in July and August are related to prior year activity and are therefore accrued back. It is important to note that the City operates on a modified accrual basis, and at the end of every fiscal year, there is a 90-day accrual period to the prior fiscal year.
Property tax, sales tax, franchise fees, and cannabis taxes are the City’s significant tax revenues. They account for approximately 72.5% of the total General Fund revenues.
Source Budget YTD Actual % Received
Property Taxes 3,126,081 $ - $ 0.0%
Sales and Use Taxes 6,321,030 $ 2,425,600 $ 38.4%
Cannabis Tax 900,000 $ 447,711 $ 49.7%
Other Taxes 332,480 $ 98,255 $ 29.6%
Franchises 628,500 $ 20,287 $ 3.2%
Licenses and Permits 1,088,700 $ 651,012 $ 59.8%
Fines and Forfeitures 88,000 $ 52,679 $ 59.9%
Use of Money and Property 581,500 $ 105,573 $ 18.2%
Intergovernmental Revenues 179,600 $ 79,211 $ 44.1%
Service Charges 534,500 $ 158,355 $ 29.6%
Other Revenues 1,214,189 $ 370,825 $ 30.5%
Total 14,994,580 $ 4,409,506 $ 29.4%
Attachment 4
Property Taxes. The first apportionment of FY 2025-26 property taxes and property taxes in lieu of vehicle license fees occurred in January 2026. Property Taxes are usually received in two primary installments in December (but were much later this year) and May each year. Based on total assessed valuations as of January 1, Finance staff expect that by the end of FY 2025-26, total revenues for property taxes will trend slightly higher than initially budgeted revenues per updated projections provided by the County of Yuba. Sales and Use Tax. The City receives two advance payments and a true-up payment for each quarter of sales tax revenue. However, there is a lag between the end of the quarter revenues and when income is received.
For example, the City receives advance payments for the 4th quarter (October through December) of 2025 in December and January, with the true-up payment in mid-February. Therefore, the year-to-date amount received only covers cash receipts for the first four months of the fiscal year.
Excluding reporting anomalies, actual sales were down 2.1%. Fuel-service stations were down for several reasons: prices at the pump were lower than the prior year comparable quarter and a local pump station relocated, which decreased sales and gas taxes. Shoppers spent 14.1% less at general consumer goods retailer, however restaurant and hotel market 2.8%. The largest increase is in the building and construction at 10.8%, which is attributed to the amount of construction and development occurring within City limits. Measure G was impacted by the slowing mentioned above, but the decline was neutralized and stimulated by locals purchasing more new motor vehicles and an increase in online merchandise being shipped into the City.
In summary, the City’s sales tax projections are projected to decline by 2.1% for FY 2025-26 while Measure G is projected to increase by 2.65%.
Franchise Fees. The City receives franchise fees from AT&T, Comcast, PG&E, and Recology based on a percentage of the franchisee’s revenue. The receipts for the second quarter are not received until January, and PG&E pays theirs annually in April. Therefore, we would not expect franchise fees to be near the 50% mark during the first two quarters of the fiscal year.
Cannabis Tax (Measure F). The City has two cannabis dispensaries that allow both medical and adult use.
As we have continued to monitor this somewhat unpredictable and volatile industry, we have seen revenues begin to increase over the past three years. This will be reflected in our mid-year review and future financial projections.
Intergovernmental Revenues. Most of the revenues under this source are from cost-reimbursable grants.
Payments are recorded once the grantor agency has been billed, and the revenues are received. Depending on the grant, the reimbursement may take one to four months to be received. The current year to date shows a negative in this section due to revenue recorded in the last fiscal year that has yet to be received in this current year. This is typical of the City’s grant revenues.
Miscellaneous Revenue. The City has numerous income avenues that do not fall under the other categories listed above. The most notable sources include insurance reimbursements from City owned property, recurring contributions from the Hard Rock Café per a Memorandum of Agreement signed in August, 2005, and Right of Way agreements with other agencies. In addition, this category includes funds various small settlement agreements and prior fiscal years’ worth of refunds.
Attachment 4
Expenditures
The majority of operating costs are within budgetary expectations. However, some departments have exceeded 50% of the amount budgeted halfway through the year, primarily due to one-time expenses paid for in full at the beginning of each fiscal year or unanticipated employee overtime expenses. These costs will be summarized and explained in more detail below.
Human Resources. The most significant expenditure is for current unfunded liability payments for retirement benefits through CalPERS and our Pension Obligation Bond (POB) for past retirement benefit liability. With biannual payments due on the POB, the principal and subsequent interest payments are made in the second half of the year. The second largest expenditure is Workers' Compensation, for which the first two of four installments have been paid. The overall departmental budget will remain on track after the reclassification of POB principal and interest to the City’s debt service line item, which is where the debt was initially budgeted.
General Services. Roughly 81% of this budget consists of expenditures for the City’s general liability insurance, vehicle insurance, and fidelity insurance. Rates are expected to increase 10-20% in the subsequent fiscal year.
General Debt. All payments have been made according to the appropriate amortization schedules due dates accessed when the debt was issued.
Police. Expenditures to date are closely tracking with the budget. Salaries, which comprise approximately
60.6% of the department’s budget, are below average due to vacancies but are offset by increases in overtime to provide continual police coverage to the citizens. Service and supplies expenditures are consistent with that which was budgeted. $100,000 in additional funding for accrued leave payouts for leave balances cashed Expenditures Budget YTD Actual % Expended
City Council 60,054 $ 15,376 $ 25.6%
City Administration 392,956 168,348 $ 42.8%
City Attorney 342,000 132,134 $ 38.6%
Human Resources 768,554 1,435,284 186.8%
Finance 481,125 262,280 54.5%
Information Technology 515,000 315,708 61.3%
General Services (Non-Departmental) 1,070,685 1,157,568 108.1% Economic Sustainability 138,295 43,823 31.7%
Grants 275,000 125,962 45.8%
General Debt 2,171,014 735,297 33.9%
Capital Outlay 2,641,189 - 0.0%
Community Sponsorship 5,000 7,150 143.0%
Homeless Services 12,500 12,500 100.0%
Police 4,055,936 1,659,821 40.9%
Public Safety Dispatch 604,095 (74,425) -12.3%
Animal Services 103,334 50,389 48.8%
Fire 2,643,228 1,039,557 39.3%
Planning & Zoning 593,188 267,299 45.1%
Building 257,784 131,553 51.0%
Public Works Admin/Engineering 162,856 90,115 55.3%
Facilities & Parks 1,157,433 552,914 47.8%
Fleet Management 263,014 95,463 36.3%
Total 18,714,240.00 $ 8,224,115 $ 43.9%
Attachment 4
out or pay-off of leave banks upon termination of City service has been requested as well as $104,000 to anticipate increased overtime costs.
Public Safety Dispatch. Within this budget is an intrafund transfer from the Police and Fire Departments of $604,095 to cover the internal cost of dispatching functions. This transfer has no impact on the total expenditure in the General Fund and is transferred at the six-month mark and the end of the fiscal year, therefore showing a negative expenditure amount through six months. The remaining budgeted expenditures are in line with this review.
Fire. The fire department has been operating well within budget and has decreased costs in both salary and fringe as well as supplies and services. With the Yuba County Dispatch Services contract executed after midyear, $25,000 will be requested as an intrafund transfer to public safety to offset increased costs in aggregate. Economic Sustainability. Most of this budget contains marketing grants for small businesses and consulting services to assist with community support assessment, public engagement, community outreach, and messaging materials for ballot measure preparation. With projects to be expended during the first half of this budget, the overall expenditures require minor revisions. Planning and Zoning. Expenditures are expected to meet budget expectations at the end of the year. Building. Expenditures are expected to meet budget expectations at the end of the year. City Attorney. City Attorney expenditures are projected to be higher than the originally budgeted amount due to increased activity related to Caltrans Litigation, Legal Counsel related to “B” Street Development and the Hotel Marysville Remediation project, and higher than normal personnel related legal support required. Facilities and Parks. Overall expenditures remain on track within the approved budget. The two exceptions are costs incurred for unanticipated repairs including a water line repair at the Fire Station and a pump repair at Ellis Lake.
GAS TAX FUND
The following summarizes the year-to-date revenue and expenditures for the Gas Tax Fund, also known as the Street Fund.
The Gas Tax Fund is a special fund that the State requires for the expenditure of gas tax revenues for streets and road purposes in compliance with the Streets and Highways Code. The City is to be accountable for the efficient and transparent use of the apportioned funds and is subject to an annual audit by the State Controller’s Office.
Operating revenues are below the 50 percent mark through the first half of the fiscal year. This is common and consistent with previous years, as the Road Maintenance and Rehabilitation Program (RMRA) has a two-month timing lag. However, even with fuel consumption varying, scheduled rate increases stipulated in SB1 are estimated to keep the current projections on track. Staff included a revenue budget adjustment for insurance proceeds received during the first half of the year.
Budget YTD Actual %
Highway User Tax (HUTA) 363,000 $ 129,175 $ 35.6%
RMRA (SB 1) 335,000 154,131 $ 46.0%
Other Revenues 141,000 7,899 $ 5.6%
Total Revenues 839,000 $ 291,205 $ 34.7%
Salaries and Benefits 431,875 $ 155,810 $ 36.1%
Services and Supplies 405,200 312,937 $ 77.2%
Capital Outlay - $ 0.0% -
Net Transfers (289,769) (144,924) $ 50.0%
Total Expenses 547,306 $ 323,823 $ 59.2%
Attachment 4
Current operating expenditures are on track overall for six months with the exception of overtime. Overtime utilized exceeded budgeted amounts due to the effort required for Hotel Marysville Remediation and the closing of Highway 70. Any funds not expended will stay within the fund and roll into the next fiscal year for future use.
ENTERPRISE FUND
The following summarizes the year-to-date revenue and expenditures for the Enterprise Fund, also known as the Wastewater Fund.
The Enterprise Fund accounts for all revenues and expenditures for operating, maintaining, and capital improvement funding of the Marysville wastewater facilities and collection system. Costs are financed or recovered primarily through user charges.
Operating revenues collected through sewer service fees are 77.8% of the budget. They are on track with budget projections at the end of the fiscal year due. Sewer service fees collected through assessments are received in December (this year not until February) and May each year, with property tax receipt collections through the County of Yuba. In addition, about half of the first payment received for services in July is accrued back to June when the revenue was earned. Achieving targeted revenues is a fiscal priority as the City’s bond covenants require the City to raise rates to continue meeting a 1.2% debt coverage ratio for as long as the bond debt is outstanding.
Operating expenditures are at 34.4% at the mid-point of the fiscal year. This category remains in line with the principal payment for the 2021 Sewer Bonds being paid in the first half of the year as amortized. The first two quarterly payments due to Linda County Water District (LCWD) for our connection agreement will be paid in March as LCWD works to finalize the annual billing amounts to the City. This delay is the basis for services and supplies being well under budget. Staff expect these billings to catch up by the end of the fiscal year. Any unused funds will stay within the fund and roll into the next fiscal year for future use.
Additionally, there was a $120,000 increase from FY 2025 to FY 2026 for LCWD as the Capital Repair and Replacement Plan (CRRP) was increased to reflect Marysville’s portion of the cost of improvements to the facilities. The increase was originally budgeted in June 2025.
Furthermore, the enterprise fund is requesting a budget adjustment in the amount of $168,336 for technological modernizations, the purchase of a new vehicle, and appropriate additional funds for the unfunded pension liability.
Budget YTD Actual %
Sewer Service Fees 4,205,000 $ 2,157,686 $ 51.3%
Other Revenues 1,200,000 1,309,908 109.2%
Total Revenues 5,405,000 $ 3,467,594 $ 64.2%
Salaries and Benefits 650,449 $ 258,181 $ 39.7%
Services and Supplies 2,687,300 446,529 16.6%
Capital Outlay - 0.0%
Debt, Cont. & Other Charges 991,358 782,709 79.0%
Net Transfers 18,000 9,000 50.0%
Total Expenses 4,347,107 $ 1,496,419 $ 34.4%