CITY OF SEBASTOPOL CITY COUNCIL
AGENDA ITEM REPORT FOR MEETING OF: November 4, 2025
=========================================================================================== To: Honorable Mayor and City Councilmembers
From: Ana Kwong – Administrative Services Director
Subject: FY25-26 Quarter 1 (July – September 2025) Financial Update – General Fund =========================================================================================== RECOMMENDATION:
Staff recommends the Sebastopol City Council receive year-to-date financial information for the General Fund.
EXECUTIVE SUMMARY:
Based on the best available information as of September 30, 2025, the city's general fund revenue is currently less than 10% of the budget. Ideally, if all factors were consistent, it should be at 25% by this time of the year. The primary reason for revenue not being at 25% is that major revenue categories, such as property tax and sales tax, do not follow a linear pattern throughout the year.
BACKGROUND:
Revenues are collected on a cash basis for the purpose of this update. Certain revenues, like property taxes, are collected only twice a year, December and April, while sales tax revenues are 2 months behind. These non-linear revenue streams contribute to the current level of the general fund. Therefore, throughout portions of the year those accounts may look to be under budget. Additionally, certain expenditures are not monthly recurring costs.
This may result in each budget account looking over/under budget.
DISCUSSION:
This report provides an overview of the City’s General Fund performance for the first quarter of FY25-26, using the most current financial data available as of September 30, 2025. It presents a detailed accounting of revenues and expenditures recorded during this period, offering a snapshot of the City’s financial position as the fiscal year gets underway.
It’s important to note that first-quarter data can be inherently limited. Revenue collection is not always linear, and certain revenue streams may not be fully captured within the first three months. Timing differences in receipts, accruals, and reporting cycles can result in an incomplete picture of the quarter’s financial activity. Despite these limitations, the report reflects actual transaction activity across all categories, providing a meaningful foundation for assessing fiscal health and performance. It also could potentially help identify early trends, potential risks, and opportunities for course correction as the year progresses.
STAFF ANALYSIS:
General Fund Revenues: The financial report for the first quarter of fiscal year 2025–26, reflecting transactions through September 30, indicates that general fund revenue totals $1.36 million—just 8.7% of the adopted annual budget of $15.69 million. While this may appear low at first glance, it is important to note that first-quarter figures are not a reliable measure of overall fiscal health. Many of the City’s major revenue sources—such as property taxes, sales tax, franchise fees, and permits—are either collected seasonally or begin to materialize in the second and third quarters. In particular, sales tax revenue is consistently delayed by two months due to state reporting and remittance schedules, further skewing early-year data.
Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Given these timing dynamics, the current revenue picture reflects a predictable seasonal lag rather than a shortfall.
Some revenue categories have already exceeded the 25% benchmark for the quarter, while others remain below target due to collection schedules. These fluctuations are expected and do not warrant immediate concern. As such, staff is not recommending any budgetary adjustments at this time. A more comprehensive financial assessment will be conducted at mid-year, when a fuller picture of revenue performance will allow for more informed decisions and potential course corrections.
Additionally, the quarter-to-quarter comparison—this quarter versus the same quarter of the prior year—shows that overall operating revenue performance is generally in line with expectations. While some categories such as Interest & Rents and Licenses & Permits have seen notable increases, others like Transient Occupancy Tax and Franchise Fees have declined. Total revenue is slightly lower than the same period last year, but the variation is modest and consistent with typical early-year trends.
Description
2023-24
Actual
2024-25
Preliminary
Actual
2025-26
Adopted
Budget
Y-T-D
Actual
9/30/24
Y-T-D
Actual
9/30/25
% of
Adopted
Budget
OPERATING REVENUE
Property Tax 3,443,916 3,642,556 3,639,105 -0 -0 0.0%
Real Property Transfer Tax 36,506 62,203 50,000 6,338 5,808 11.6% Sales Taxes 4,626,788 5,015,507 6,130,700 399,845 395,350 6.4% User Taxes 871,287 925,705 962,050 144,464 145,653 15.1% Transient Occupancy Tax 519,452 480,263 534,500 101,134 62,602 11.7% Franchise Fees 489,591 490,118 530,000 51,404 28,163 5.3% Licenses & Permits 498,057 676,253 1,244,000 105,478 122,592 9.9% Fines & Special Assessments 70,560 70,935 77,300 31,311 28,884 37.4% Intergovernmental Revenues 438,560 27,724 20,200 -0 -0 0.0% Interest & Rents 159,790 180,925 157,450 29,354 79,610 50.6% Charges for Services 158,110 182,374 162,300 36,481 28,063 17.3% Miscellaneous Revenue 89,505 397,229 110,790 24,243 15,589 14.1% Cost Allocation Plan 2,476,141 1,761,797 1,796,323 440,449 449,081 25.0% Transfers In 102,000 209,622 275,000 -0 -0 0.0%
TOTAL REVENUES 13,980,263 14,123,212 15,689,718 1,370,501 1,361,392 8.7% General Fund Expenditures:
General Fund expenditures for the first quarter of fiscal year 2025–26 reflect expected seasonal patterns, with several departments approaching or slightly exceeding the 25% benchmark. The quarter-to-quarter comparison shows an overall increase of 8.8% in expenditures is due to the City’s annual unfunded pension payment, which was made in full in July to take advantage of a 3% discount. While this payment issubstantial, it is a planned expense and does not signal any budgetary concern.
Beyond this one-time payment, departmentalspending is generally tracking within expected ranges. Any line items exceeding the quarterly threshold have been reviewed, and at this time, staff is not recommending any budget adjustments. Expenditures will continue to be monitored closely as the fiscal year progresses.
Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Description
2023-24
Actual
2024-25
Preliminary
Actual
2025-26
Adopted
Budget
Y-T-D
Actual
9/30/24
Y-T-D
Actual
9/30/25
% of
Adopted
Budget
OPERATING EXPENDITURE - By Department
City Council 202,385 176,804 183,214 30,119 33,121 18.1% City Manager 518,664 827,312 581,282 172,144 88,785 15.3% City Attorney 759,058 646,785 643,750 158,317 58,487 9.1% Assistant City Manaer | City Clerk 366,405 457,159 470,818 100,638 161,421 34.3% Administrative Services (Finance) 1,314,441 1,385,796 1,466,539 358,150 397,926 27.1% Planning 532,564 657,815 701,666 120,716 202,457 28.9%
Building 214,977 303,081 437,909 58,676 61,197 14.0%
Fire & Prevention 1,230,393 1,492,276 1,247,640 219,179 91,409 7.3% Police 4,995,733 5,123,538 5,767,329 1,244,384 1,833,867 31.8% Senior Center 72,703 42,620 47,650 7,775 6,229 13.1%
Public Works 2,154,659 2,298,835 2,650,318 412,187 593,688 22.4% Community Center 279,473 172,309 164,202 53,845 33,042 20.1% Ives Pool 249,957 212,031 225,761 26,422 28,572 12.7%
Non Departmental 210,838 97,126 146,940 5,856 27,703 18.9% Debt Service Payments 300,407 269,979 150,755 356,512 - 0.0% Transfers Out 864,763 300,000 800,000 - - 0.0%
TOTAL EXPENDITURES 14,267,418 14,463,465 15,685,773 3,324,920 3,617,905 23.1%
Debt Service Payments: There’s no debt service payment in the first quarter. The debt service payment is anticipated for the second quarter.
Transfer-out: The $800,000 transfer out from the General Fund is primarily designated for capital improvement projects, in alignment with the City Council’s adopted policy for the use of Measure U funds. This policy prioritizes investments in essential infrastructure such as roads,streets, drainage systems, and parks—key components of the City of Sebastopol’s long-term goals and priorities.
Planned Measure U Projects Include:
1. Various Street Paving Projects - $500,000
2. Emergency Operations Center (EOC) Generator - $500,000
3. Fueling Station Upgrade – $85,000
4. Unallocated Reserve – $15,000
These projects reflect the City’s commitment to responsibly managing voter-approved Measure U funds while addressing high-priority infrastructure needs.
BUDGET COMMITTEE REVIEW
This item was reviewed by the Budget Committee at its meeting on October 14, 2025.
CITY COUNCIL GOALS/PRIORITIES/AND OR GENERAL PLAN CONSISTENCY:
Goal 5 – Long Term Financial Sustainability
Achieving Greater Fiscal Resilience and Long Term Fiscal Sustainability Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Action Plan 2 – Quarterly Financial Report
General Fund: A quarterly update is an essential tool for monitoring and managing the financial health of an organization. It provides a snapshot of the financial performance over the past three months, allowing City Council to assess progress, identify trends, and make informed decisions.
FISCAL IMPACT:
There is no fiscal impact in receiving this informational financial update.
PUBLIC COMMENT:
As of the writing of this staff report, the City has not received any public comment on this item. However, if staff receives public comment from interested parties following the publication and distribution of this staff report,such comments will be provided to the City Council as supplemental materials before or at the meeting.
COMMUNITY OUTREACH:
This item has been noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date.
RESTATED RECOMMENDATION:
That the City Council receive year-to-date financial information.
CITY COUNCIL OPTION(S):
There are no options to consider.
ATTACHMENTS:
First Quarter Financial Reports
APPROVALS:
Department Head Approval: Approval Date: __10/8/2025____ CEQA Determination (Planning): Approval Date: ___N/A_______ The proposed action is / is not exempt from the requirements of the California Environmental Quality Act (CEQA) Administrative Services/Financial Approval: Approval Date: ___10/8/2025___ Costs authorized in City Approved Budget: ☐ Yes ☐ No N/A Account Code (f applicable) ___________________________ City Attorney Approval: Approval Date: __ ________
City Manager Approval: Approval Date: ___________
Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Description
2023-24
Actual
2024-25
Preliminary
Actual
2025-26
Adopted
Budget
Y-T-D
Actual
9/30/24
Y-T-D
Actual
9/30/25
% of
Adopted
Budget
OPERATING REVENUE
Property Tax 3,443,916 3,642,556 3,639,105 -0 -0 0.0%
Real Property Transfer Tax 36,506 62,203 50,000 6,338 5,808 11.6% Sales Taxes 4,626,788 5,015,507 6,130,700 399,845 395,350 6.4% User Taxes 871,287 925,705 962,050 144,464 145,653 15.1% Transient Occupancy Tax 519,452 480,263 534,500 101,134 62,602 11.7% Franchise Fees 489,591 490,118 530,000 51,404 28,163 5.3% Licenses & Permits 498,057 676,253 1,244,000 105,478 122,592 9.9% Fines & Special Assessments 70,560 70,935 77,300 31,311 28,884 37.4% Intergovernmental Revenues 438,560 27,724 20,200 -0 -0 0.0% Interest & Rents 159,790 180,925 157,450 29,354 79,610 50.6% Charges for Services 158,110 182,374 162,300 36,481 28,063 17.3% Miscellaneous Revenue 89,505 397,229 110,790 24,243 15,589 14.1% Cost Allocation Plan 2,476,141 1,761,797 1,796,323 440,449 449,081 25.0% Transfers In 102,000 209,622 275,000 -0 -0 0.0%
TOTAL REVENUES 13,980,263 14,123,212 15,689,718 1,370,501 1,361,392 8.7% OPERATING EXPENDITURE - By Department
City Council 202,385 176,804 183,214 30,119 33,121 18.1% City Manager 518,664 827,312 581,282 172,144 88,785 15.3% City Attorney 759,058 646,785 643,750 158,317 58,487 9.1% Assistant City Manaer | City Clerk 366,405 457,159 470,818 100,638 161,421 34.3% Administrative Services (Finance) 1,314,441 1,385,796 1,466,539 358,150 397,926 27.1% Planning 532,564 657,815 701,666 120,716 202,457 28.9%
Building 214,977 303,081 437,909 58,676 61,197 14.0%
Fire & Prevention 1,230,393 1,492,276 1,247,640 219,179 91,409 7.3% Police 4,995,733 5,123,538 5,767,329 1,244,384 1,833,867 31.8% Senior Center 72,703 42,620 47,650 7,775 6,229 13.1%
Public Works 2,154,659 2,298,835 2,650,318 485,268 593,688 22.4% Community Center 279,473 172,309 164,202 53,845 33,042 20.1% Ives Pool 249,957 212,031 225,761 26,422 28,572 12.7%
Non Departmental 210,838 97,126 146,940 5,856 27,703 18.9% Debt Service Payments 300,407 269,979 150,755 356,512 - 0.0% Transfers Out 864,763 300,000 800,000 - - 0.0%
TOTAL EXPENDITURES 14,267,418 14,463,465 15,685,773 3,398,001 3,617,905 23.1% Net Surplus/(Deficit) (287,155) (340,252) 3,945 (2,027,500) (2,256,513)
GENERAL FUND
JULY - SEPTEMBER 2025
QUARTER 1 REPORTING
Agenda Item Number 8 Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Revenue Categories
2023-24
Actual
2024-25
Preliminary
Actual
2025-26
Adopted
Budget
Y-T-D
Actual
9/30/24
Y-T-D
Actual
9/30/25
% of
Adopted
Budget
3000 - Property Tax Secured / Unsecured 2,487,900 2,650,054 2,626,755 -0 -0 0.0% 3002 - Real Property Transfer Tax 36,506 62,203 50,000 6,338 5,808 11.6% 3004 - Property Tax in Lieu of VLF 956,016 992,502 1,012,350 -0 -0 0.0% Property Tax 3,480,422 3,704,759 3,689,105 6,338 5,808 0.2% 3010 - Sales Tax-Bradley Burn 2,199,730 2,248,299 2,212,000 191,282 158,203 7.2% 3011 - Sales Tax-1/4 cent (T) 770,928 763,260 772,000 65,376 56,280 7.3% 3012 - Sales Tax-1/2 cent (Q) 1,550,631 1,529,446 1,544,000 124,808 112,469 7.3% 3018 - Sales Tax-1/2 cent (U) -0 370,737 1,500,000 18,379 50,055 3.3% 3014 - Sales Tax-Prop 172 105,500 103,766 102,700 -0 18,343 17.9% Sales Taxes 4,626,788 5,015,507 6,130,700 399,845 395,350 6.4% 3020 - Transient Occupancy Tax 519,452 480,263 534,500 101,134 62,602 11.7% 3050 - Garbage Franchise 296,817 302,261 330,000 51,404 28,163 8.5% 3051 - PG&E Franchise 121,383 121,902 125,000 -0 -0 0.0% 3052 - Cable TV Franchise 71,390 65,955 75,000 -0 -0 0.0% Franchise Fees 489,591 490,118 530,000 51,404 28,163 5.3% 3055 - Vehicle in lieu Tax 9,291 11,862 12,500 -0 11,502 92.0% 3056 - UUT PG&E 429,651 488,518 494,100 71,481 71,837 14.5% 3057 - UUT Sonoma Clean Power 128,152 122,164 129,150 22,984 19,575 15.2% 3058 - UUT Garbage 96,555 98,326 108,200 16,722 9,161 8.5% 3059 - UUT Cable 72,492 71,201 77,000 11,831 11,734 15.2% 3060 - UUT Misc 135,059 132,562 140,600 21,446 21,843 15.5% 3061 - UUT (AB-1717) 88 1,072 500 -0 -0 0.0%
User Taxes 871,287 925,705 962,050 144,464 145,653 15.1% 3101 - Business License 142,770 139,028 140,000 7,039 7,906 5.6% 3102 - Business License-Late Fees 6,388 4,399 4,000 180 90 2.3% 3103 - Building Permits 348,900 532,826 1,100,000 98,259 114,597 10.4% Licenses & Permits 498,057 676,253 1,244,000 105,478 122,592 9.9% 3105 - Vehicle/ Criminal Code Fines 13,906 14,643 12,500 4,077 1,636 13.1% 3106 - Parking Fines 20,760 14,278 18,000 3,270 3,518 19.5% 3107 - RBS Training Fees 11,600 14,200 14,800 1,000 -0 0.0% 3110 - Business License - DSA 70% $1 5,415 5,213 5,500 380 500 9.1% 3202 - State Mandated Cost Reimb 18,880 22,602 26,500 22,584 23,229 87.7% Fines & Special Assessments 70,560 70,935 77,300 31,311 28,884 37.4% 3203 - POST Reimb 2,703 32 -0 -0 -0 0.0%
3204 - Casino Mitigation 24,224 20,192 20,200 -0 -0 0.0% 3206 - County Grant 60,000 7,500 -0 -0 -0 0.0%
3207 - State Grant 351,632 -0 -0 -0 -0 0.0%
GENERAL FUND REVENUES DETAILED
JULY - SEPTEMBER 2025
QUARTER 1 REPORTING
Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025
Revenue Categories
2023-24
Actual
2024-25
Preliminary
Actual
2025-26
Adopted
Budget
Y-T-D
Actual
9/30/24
Y-T-D
Actual
9/30/25
% of
Adopted
Budget
GENERAL FUND REVENUES DETAILED
JULY - SEPTEMBER 2025
QUARTER 1 REPORTING
3209 - Federal Grant -0 -0 -0 -0 -0 0.0%
Intergovernmental Revenues 438,560 27,724 20,200 -0 -0 0.0% 3300 - Interest Income 97,452 118,282 100,000 18,432 66,267 66.3% 3301 - Cell Tower Lease Rental 43,760 43,068 44,300 7,788 8,022 18.1% 3302 - City Property Rental - Little League 2,683 4,396 3,150 1,369 1,326 42.1% 3304 - City Property Rental - Parking Space 420 430 500 40 20 4.0% 3305 - City Property Rental - Palm Ave 2,500 3,500 2,500 -0 750 30.0% 3401 - Plaza and Special Event Fees 12,975 11,250 7,000 1,725 3,225 46.1% Interest & Rents 159,790 180,925 157,450 29,354 79,610 50.6% 3404 - Credit Card Transaction Fee 1,991 1,934 2,000 697 641 32.0% 3405 - Finance Fee 6,902 6,486 7,000 1,170 1,425 20.4%
3425 - Fire Dept Fees 45,248 68,125 40,000 6,096 6,924 17.3% 3426 - Planning Fees 26,457 35,721 38,000 7,761 6,541 17.2% 3441 - Encroachment Permits Fee 38,128 26,540 30,000 10,398 1,361 4.5% 3442 - Grading Permit Fee 2,122 1,130 2,000 1,090 -0 0.0% 3445 - Public Works Services 9,965 2,053 7,500 54 54 0.7% 3502 - Police Services 17,154 25,494 18,000 5,471 7,634 42.4% 3504 - Impounded Vehicle Release Fee 2,070 2,003 1,800 500 326 18.1% 3505 - Police Reports Copy Fee 5,405 1,545 2,000 280 276 13.8% 3506 - Police False Alarms Fee -0 60 -0 -0 -0 0.0%
3507 - Police OT Reimbursement 2,668 2,964 6,000 2,964 1,563 26.1% 3615 - Solar Payback -0 8,320 8,000 -0 1,317 16.5%
Charges for Services 158,110 182,374 162,300 36,481 28,063 17.3% 3801 - Sales of Surplus Equipment -0 870 -0 870 -0 0.0% 3804 - Insurance Claims 450 39,973 500 8,968 -0 0.0%
3805 - Miscellaneous Income 9,151 830 500 590 260 52.0% 3806 - Donations & Contributions 500 253,000 500 -0 -0 0.0% 3807 - Rebates 15,393 21,226 15,300 2,576 3,873 25.3%
3810 - Pool Expense Reimbursement 64,011 81,331 93,990 11,239 11,456 12.2% Miscellaneous Revenue 89,505 397,229 110,790 24,243 15,589 14.1% 3998 - Cost Allocation Plan 2,476,141 1,761,797 1,796,323 440,449 449,081 25.0% 3999 - Transfers In 102,000 209,622 275,000 -0 -0 0.0%
Total Revenue 13,980,263 14,123,212 15,689,718 1,370,501 1,361,392 8.7% Agenda Item Number 8
Agenda Item Number 8
City Council Meeting Packet of November 4, 2025