Town of Yountville
Staff Report
6550 Yount Street
Yountville, CA 94599
Agenda Item #: 11B
Yountville Town Council Staff Report
DATE: February 3, 2026
TO: Mayor and Town Council
FROM: Kyle Batista, Financial Analyst; Celia King, Administrative Service Director PREPARED BY: Kyle Batista, Financial Analyst; Celia King, Administrative Service Director
RECOMMENDATION
Receive a preview of the Proposed Fiscal Year 2026/2027 and 2027/2028 Biennial Budget from staff and discuss.
DISCUSSION/BACKGROUND
This report provides the Town Council and community with an initial preview of the upcoming proposed Biennial Budget for Fiscal Years 2026/2027 and 2027/2028. The biennial budget reflects the Town’s commitment to fiscal responsibility while advancing council-adopted priorities, maintaining core services, and investing in long-term sustainability. This preview is intended to support early discussion, re-establish areas of focus, and help prepare the Council and the community for the budget workshop scheduled for April 2026.
Budget development begins with determining projections for future revenues and expenditures. Staff work to balance anticipated resources with the need for providing ongoing services, public safety, infrastructure, community services, major maintenance, and capital improvement projects while maintaining appropriate reserves in accordance with Town Financial Policies.
Fiscal Health
The Town of Yountville Fund Balance Policy establishes a minimum reserve level of 35% of General Fund expenditures. In the current fiscal year, the reserve level is at 40% of budgeted General Fund expenditures, which exceeds the policy minimum. Each budget is crafted with the goal of maintaining the minimum reserve level.
The Town has two Section 115 Trusts, one for pension obligations and one for other post-employment benefits (OPEB). The money in these trusts can only be used for these purposes. Proposed budgets include both contributions to the trust, as well as utilization of the trusts to pay for the annual CalPERS Unfunded Actuarially Accrued Liability (UAAL) and monthly retiree medical premiums.
Service Delivery
As a small local government agency, the Town of Yountville provides services to the community through a combination of internal staff and external consultants. Yountville currently has a staff of thirty-five full-time employees and roughly sixty part-time and seasonal staff. Combining the skills of internal staff along with contracting out for services that require more specialized expertise allows the Town to meet the needs of citizens in an efficient and sustainable manner.
All but one of the thirty-six approved full-time positions are currently filled, and all existing positions will be included in the proposed biennial budget. Management sees no need for any additional positions at this time.
The annual Cost of Living Adjustment (COLA) in accordance with the Memorandum of Understanding (MOU) with the Town’s employee bargaining units will also be included.
Town Council Priorities
Having a two-year budget allows the Town Council to focus on goal setting in the off year. During the April 29, 2025, goal setting session the Town Council re-established priorities such as moving forward with the Yountville Commons Project, enhancing Town vibrancy, and promoting sustainability. Alignment with Town Council priorities guides the development of proposed budgets and as this is not a goal setting year, the focus will remain on existing goals that are already in the works.
Budget Highlights
Below are some key items that will be presented in the Proposed Biennial Budget for Fiscal Years 2026/2027 and 2027/2028:
• General Fund top three revenues
o Transient Occupancy Tax – this tax makes up 57% of General Fund revenues each year. No growth in this revenue was estimated in the current year's budget. o Property Tax – the Town usually assumes a 2% increase to this revenue source, which is the maximum increase allowed by the State of California.
o Sales Tax – HdL, the Town’s sales tax auditing firm, provides estimates for this revenue. Their initial projections show increases between 2.6% and 3% in the upcoming fiscal years. • MOU considerations for salaries/benefits
o In mid-February, the Consumer Price Index (CPI) that drives the annual COLA will be released.
This will determine the increase in salary costs.
o Salary and benefits comprise 46% of the General Fund expenditure budget. • Contract services – consultants and public safety
o Most General Fund departments include a Contract Services expenditure line item where budget is included for consultants who provide specialized expertise. o The General Fund also includes expenditures for contracted law enforcement services and contracted fire and emergency medical services. The current law enforcement agreement is in effect until June 2028. The fire and emergency medical services agreement will be renewed prior to June 30, 2026, with an assumed increase in cost.
• Implementation of cost allocation plan
o Staff worked with a consultant to develop a model for determining funding needs for the Town’s repair and replacement funds and calculating annual allocations to operating departments to meet those funding needs.
o Fiscal Year 2026/2027 will be the first year of implementing these annual allocations. Allocations will then be revised during the Fiscal Year 2027/2028 Mid-Cycle Update. This will now be a part of the budget process each year.
o Staff are re-examining upcoming projects to determine if they qualify as true capital projects, or major maintenance which could be included in the operating department or repair and replacement fund budgets.
• Existing Debt
o The proposed budget will include debt service payments per the amortization schedules for the Town’s three outstanding obligations:
▪ 2017 Lease Revenue Bond for the Community Center Project. The General Fund supports this annual payment of about $550,000. This debt matures in November 2039. ▪ 2020 Direct Placement Financing for the Town Hall and Madison/Yount Projects. The General Fund also supports the majority of this annual payment of about $350,000, and the Wastewater Utility Collection Capital Improvement fund also contributes towards the debt portion related to the sewer lateral replacement. This debt matures in June 2027. ▪ State Water Resources Control Board low interest loan for wastewater system improvements. This is budgeted in the Wastewater Utility Treatment Capital Recovery fund. The Town will make its final payment due of $131,331.19 and this loan will be paid off in November 2026.
• Capital projects
o Capital Projects Fund 50 will focus the majority of available funding on the Yountville Commons Project.
o Measure U funds will continue to be used to maintain and improve streets. o Water and wastewater capital projects funds will budget for items outlined in the current FiveYear Capital Improvement Program. Major projects include:
▪ Wastewater Reclamation Facility Office Modernization
▪ Recycled Water Transmission Main Repair
▪ 1MG Water Tank, Water Main, Design & Construction - Town staff will request to move this current FY2025/2026 project cost and the approved funding from the Drought Water Reserve Fund 57 and Utility Enterprise Capital Projects Restricted Fund 06 into next Fiscal Year 2026/2027.
• Utility Funds
o The proposed budget will include estimates for utility service revenues along with operating expenditures such as personnel costs, supplies and materials, and necessary contract services. o The water and wastewater operating departments will share the cost of a utility rate study in 2027 to develop the next five-year rate schedule.
New Initiatives
This introduction to the upcoming budget also provides an opportunity for the Town Council to discuss potential budget items as a group and receive community input. Staff seek direction if there are requests that the Town Council collectively agree should be included in the budget.
ENVIRONMENTAL REVIEW
Exempt per California Environmental Act (CEQA) Guideline, Section 15061(b)(3).
FISCAL IMPACT
Is there a Fiscal Impact? No
Is it Currently Budgeted? N/A
Where is it Budgeted? N/A
Is it Mandatory or Discretionary? Mandatory
Is there a Staff Resource Impact? Nominal