Presented by Ana Kwong June 2025
Presentation to City Council
City of Sebastopol Budget
July 1, 2025 - June 30, 2026
Meeting 1
City of Sebastopol Budget July 1, 2025 - June 30, 2026
What we'll cover today:
•Where the city gets money (revenue)
•Where the city spends money (expenses)
•Keeping the budget balanced, How we plan for the future •Financial Forecast Overview ( Baker Tilly)
•All fund overviews
•General Fund Revenues &Expenses
•Staffing
•Enterprise Funds
•Special Revenue Funds
•Insurance Fund
•Public / Council questions and feedback
Budget Committee: Councilmembers Maurer & Carter, City Manager Mary Gourley, Administrative Services Director Ana Kwong
Total City Budget
Where money comes from: $31.8 Million
• Property taxes from homes and businesses
• Sales taxes from stores and restaurants
• Water and sewer bills
• Building permits and fees
• State and federal grants
The Big Picture - All City Money
Where money goes: $28.9 Million
• Police and fire protection
• Roads and infrastructure
• Parks and recreation
• City staff salaries
• Water and sewer services
What This Budget Accomplishes
• A balanced budget ( income ≥ expense )
• Maintains current city staffing levels
• Improves services, accommodates annual goals
• Invests min $300K annually (starting FY27) in fixing roads, buildings, and equipment • Prepares for economic uncertainty ( forecasted late 2026 recession) & responsible revenue projections
• New $1.1M annual payment to Gold Ridge Fire District
Key Highlights
• Financial Health & Reserves: General Fund at 27.3%
• Property tax growth: 3.75% average, includes new construction and Prop 13 (max 2%) • Sales tax growth: 2.44% average
• Measure U revenue @ .25% until legislation passage
• Pension costs based on CalPERS investment assumptions • Employee raises: 5% plus annual merit increases
• $1.1M wastewater loan gets repaid to city (FY28-32)
• Hotel Barlow to impact beginning ’25-26 budget
• The term Cost Allocation Plan -> a fair way to divide shared cost by distributing general fund costs of staff or resource by time or usage to enterprise funds.
GOAL 1 – COMMUNITY VITALITY
GOAL 2 – PUBLIC SAFETY
GOAL 3 – INFRASTRUCTURE
GOAL 4 – HIGH PERFORMANCE ORGANIZATION
GOAL 5 – LONG TERM FINANCIAL SUSTAINABILITY
GOAL 6 – ECONOMIC DEVELOPMENT
Sebastopol City Goals
FY 2026-34 FUND BALANCE FORECAST
• Baker Tilly ( 3/25 )
• Assumes savings starting FY27
and ending FY34, to bolster
unassigned General Fund
balance
• Shortfall requires $500K
expense reduction starting
FY27 (-2.5%), or comparable
new revenue, to correct
❖ Note not updated to reflect new tax increase or Barlow Hotel impact FY 2025-26 Revenue | Expenditures Overview
0.00 M 4.00 M 8.00 M 12.00 M 16.00 M
General Fund
General Fund Reserves
Non-Governmental Funds
Water Fund
Wastewater Fund
Special Revenue Fund
Assessment District
$15,162,718
$665,000
$119,900
$4,006,748
$5,657,903
$5,973,412
$140,658
$15,091,469
$575,500
$225,100
$2,980,007
$4,469,823
$5,333,199
$139,278
Revenue Expenses
FY 2025-26 Revenue Sources %
FY 2025-26 Expenditures By Department
'- 1,750,000 3,500,000 5,250,000 7,000,000
Police
Public Works | Engineering
Administrative Services
Fire
Community Development
City Attorney
City Manager
Assistant Cty Mgr | City Clerk
Building
Transfers Out
Ives Pool
City Council
Community Center
Debt Service
Non Departmental
Senior Center
$5,762,328
$2,496,015
$1,466,539
$1,237,640
$701,666
$643,750
$581,282
$470,818
$437,909
$375,000
$225,761
$183,214
$164,202
$150,755
$146,940
$47,650
City Personnel
• 53 Full-Time Equivalent
positions
• FY 25 26 Budget Includes
COLA or step increases
• Maintains current staffing
levels (other than Fire
personnel who have merged
with Gold Ridge Fire
Department)
• 2 Positions Remains Frozen
(Laborer & Police Officer)
• No layoffs or furloughs
proposed for FY 25 26
22 15
5 4
3 2
11 05 10 15 20 25
Police
Public Works |
Engineering
City Council
Administrative
Services
Community
Development
Building
Assistant City
Manager | City
Clerk
City Manager
Water Fund, Revenue by Category
FY 2025-26 Proposed Budget
Single Family,
$1.76 M, 51% Commerical, $1.51
M, 43%
Water Tower, $.05
M, 2%
Others *, $.15 M,
4%
*Others: interest income, new water service fee, penalties Water Fund, Expenses by Category
FY 2025-26 Proposed Budget
Salaries &
Benefits, $.62 M,
21%
Professional
Services & Others,
$.45 M, 16%
Utilities, $.32 M,
11%
Cost Allocation
Plan, $.85 M, 30%
All Others, $.63 M,
22%
Wastewater Fund, Revenue by Category
FY 2025-26 Proposed Budget
Single Family,
$2.54M, 49%
Commerical,
$2.64M, 50%
Others *, $.04M,
1%
*Others: interest income, penalties
Wastewater Fund, Expenses by Category
FY 2025-26 Proposed Budget
Salaries &
Benefits, $.54M,
13% Professional
Services &
Others, $.31M,
7%
Subregional,
$1.95M, 46%
Cost Allocation
Plan, $.95M, 22%
All Others,
$.52M, 12%
Special Revenue Funds
FY 2025-26 Proposed Budget
• Money that comes with rules about how it can be spent, like having separate piggy banks for different purposes. For instance:
• Gas Tax income can only fix roads
• Park Fees can only improve parks
• Supports ongoing capital projects
• We keep 24 different funds to follow these rules
• Each of these fund can be found on pages 139-173
Insurance Fund
FY 2025-26 Proposed Budget
• The City is part of a joint powers authority (JPA) risk pool. • Insurance Budget - pages 174-175
• Each year, the California Intergovernmental Risk Authority (CIRA) determines the premiums for various types of insurance, and the City budgets and distributes those costs accordingly. • Workers’ compensation premium and deductible costs are paid from the insurance fund, then proportionally allocated to all departments based on their total salary • General liability premium and deductible costs are paid from the insurance fund, then distributed proportionally across all departments based on prior year expenditures Open Public Hearing to Receive Comments from
the Public
Additional City Council Questions of Staff
Council Discussion/Deliberations
Budget Discussion continues to the next scheduled meeting for June 17, 2025 Council discussion/deliberations/action will be conducted at a future city council meeting