Item #09
Date: April 21, 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 continuously 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 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 the City’s 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 at a steady rate between 2-3%.
Therefore, staff recommends that City Council authorizes the amendment to the Adopted Municipal Budget for FY 2025-26 to reclassify $3,809,353 of which $2,641,189 is a drawdown of fund balance and $750,000 is an expected grant reimbursement from prior fiscal years. The balance of $418,164 is expected to be on-going in nature with 53.74% allocated to secured property taxes and 17.94% allocated to Measure F.
Per review of current expenditures, an additional overall appropriation of $ 3,358,754 is recommended.
Of this amount, the $3,322,114 is one-time in nature and $36,640 is 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 $3,809,353 to increase General Fund revenues and supplemental appropriations of $3,358,754 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.
The recommended changes to the Street Fund and Enterprise Fund are outlined in the attached detailed budget adjustment sheets.
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) 750,000
Total Adopted Budget - Revenue 12-31-25 18,647,658
Requested On-Going Revenue Increases $ 156,275
Revised Total Revenues as of 12-31-25 $ 18,803,933
Expenditures
Adopted Operational Budget (less one-time expenditures) $ 15,467,126 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)
Revised Total Expenditures as of 12-31-25 $ 18,789,240
Summary
Proposed Revised On-Going Revenues as of 12-31-25 $ 15,412,744 Proposed Revised One-Time Revenues as of 12-31-25 $ 3,391,189 Total Revised Revenue Budget FY 25-26 $ 18,803,933
Proposed Revised On-Going Expenditures as of 12-31-25 $ 15,467,126 Proposed Revised One-Time Expenditures as of 12-31-25 $ 3,322,114 Total Revised Expenditure Budget FY 25-26 $ 18,789,240
Total Revised Budget Net On-Going Revenues $ (54,382)
Total Revised Budget Net One-Time Revenues Over Expenditures $ 69,075 Net Revised Budget Deficit of One-Time Funds for Projects $ 14,693
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