Town of Yountville
Staff Report
6550 Yount Street
Yountville, CA 94599
Agenda Item #: 11A
Yountville Town Council Staff Report
DATE: May 19, 2026
TO: Mayor and Town Council
FROM: Ken MacNab, Interim Town Manager; Celia King, Administrative Service Director PREPARED BY: Celia King, Administrative Service Director
RECOMMENDATION
Adopt Resolution Number 26-4414 adopting and approving the Biennial Budget for Fiscal Year 2026/2027 and 2027/2028, appropriations (Gann) limit for fiscal year 2026/2027, approving salary ranges and reaffirming existing policies (General Financial Policy, Investment Policy, Use of Long-Term Debt Policy, OPEB Funding Policy, OPEB Trust Investment Policy, Utility Enterprise Rate Policy, Use of Drought Water Reserve Policy, Use of Water and Wastewater Utility Enterprise Capital Projects Restricted Fund Policy, and Fund Balance Policy).
DISCUSSION/BACKGROUND
The Town’s Management Team began working on the budget in December 2025 with budget planning and discussions, preparing salary/benefit projections, developing preliminary revenue and expenditure estimates, and entering budget requests into the Town’s OpenGov budgeting software.
On February 3, 2026, a budget preview was introduced to the Town Council for feedback and direction. As staff continued to work on developing and compiling the proposed budget, each department submitted their budget requests to the Town Manager for review and approval before presentation to the Town Council.
Staff presented the proposed Biennial Budget for Town Council to review and discuss at two budget workshops which were open to the public. Budget Workshop #1 held on April 7, 2026, included General Fund revenues, all General Fund department expenditures, contributions to the OPEB and PERS UAAL Trusts, as well as expenditures for Non-Capital Special Revenue Funds, Custodial Fund, and Debt Service funds. Budget Workshop #2 was conducted on April 21, 2026, and focused on fiscal policies, the Water and Wastewater Utility Enterprise Funds, and all Capital Projects Funds.
In the Biennial Budget, the General Fund maintains established core levels of service with a focus on initiatives identified at the April 25, 2025, Town Council Goal Setting Session. The General Fund also accommodates contractual cost increases for public safety and animal shelter services, continues the Town’s investment in technology and infrastructure, and maintains reserves.
The following are a few of the notable outcomes of the Town’s Biennial Budget with a focus on FY 2026/2027:
General Fund:
The General Fund budget is balanced in both fiscal years of the biennial budget, without the use of reserves. This means that expected revenues will cover the anticipated expenditures. There is no planned usage of the General Fund Reserve in either fiscal year.
Total General Fund Revenue for FY 2026/2027 projected at: $15,744,795 with the following three sources as the most significant to the Town’s ability to provide services.
Transient Occupancy Tax (TOT), 57% of the General Fund Revenue, is projected at $8,961,312. This estimate assumes a 2% increase over the budgeted amount for the current fiscal year.
Sales Tax, 12% of General Fund revenue, is projected at $1,815,478. Approximately 70% of the Town’s sales tax revenue is derived from the many successful restaurants and tasting rooms in Yountville. This estimate is based on revenue estimates received in January 2026 from HdL, the Town’s sales tax auditing firm.
Property Tax, 18% of General Fund revenue, is projected at $2,893,264 based on a growth factor of 2% over the budgeted amount for the current fiscal year, which is the maximum inflation allowed per the State Board of Equalization Property Tax Division.
Total General Fund Expenditures for FY 2026/2027 (not including transfers) projected at: $14,646,788. Of this amount, 65% is attributed to costs in Public Safety, Public Works, Parks and Recreation and the remaining 35% is attributed to the following General Government departments: Town Council; Non- Departmental; Information Technology; Community Promotion; Town Manager; Administrative Services (Finance and Human Resources); Risk Management; Town Attorney; Town Clerk and Communications; and Planning and Building.
Along with other routine operating costs, the Town’s Biennial Budget includes:
o 7% estimated increase for medical benefits.
o Funding for 36 full-time positions as well as seasonal/part-time positions. o $1,075,313 for PERS Normal Costs and Unfunded Actuarially Accrued Liability. o Worker’s Compensation ($176,006), Property ($178,534), and Liability ($452,456) Insurance premiums allocated to departments.
The General Fund budget includes the following fund balance allocations:
o Committed for Insurance & Claims Retention (minimum requirement $30,000): $50,000 o Assigned for Budget and Legal Contingencies: $732,340 (5% of budgeted General Fund expenditures)
o Assigned for Leave Buyout: $100,000
o Assigned for Workers Compensation Self Insured Retention: $20,000 General Fund Reserve Fund Balance at the end of FY 2026/2027 is estimated to be $5,779,105. o This balance represents 39% of Fiscal Year 2026/2027 estimated General Fund expenditures. o Of the total balance in this fund, $3,294,090 is categorized as available for emergency use as defined in the Yountville Municipal Code.
o The remaining $2,485,015 balance in the fund is categorized as available for contingency use.
Enterprise Funds:
The Water and Wastewater Utility Enterprise Fund budgets account for revenues collected for providing services as well as expenditures related to operating and capital projects.
The Water Utility Operations Fund (61) is projected to end FY 2026/2027 with a fund balance of $776,994. This estimation is contingent upon the annual water purchase and wastewater treatment cost true-up conducted with the Veterans Home at the close of the current fiscal year.
Activity in the Water Utility Capital Improvements Fund (60) for FY 2026/2027 includes $3,000,000 budgeted for the 1 Million Gallon Water Storage Tank Project, $100,000 to replace a pump on Finnell Road for the out-of-town connection, and $100,000 for rebuilding the CalVet out of town water meter and installing a backflow device. Total project costs for this fund are estimated to be $3,425,500. This fund is supported by transfers in from the Water Utility Operations Fund (61). In FY 2026/2027 this fund will also receive a transfer in from the Utility Enterprise Capital Projects Restricted Fund (06) in the amount of $1,100,000, and a transfer in from the Drought Water Reserve Fund (57) in the amount of $2,000,000 to support the 1 Million Gallon Water Storage Tank Project.
The Wastewater Utility Operating Fund is projected to end with a positive fund balance of $1,130,481 at the end of FY 2026/2027, after accommodating transfers and covering operating expenses. This estimation is also contingent upon the annual water purchase and wastewater treatment cost true-up conducted with the Veterans Home at the close of the current fiscal year. In FY 2026/2027, the Wastewater funds will make final payments for the State Water Resources Loan, and its portion of the 2020 Direct Placement Financing related to the Madison & Yount Sewer Replacement Project.
In FY 2026/2027, the Wastewater Treatment Capital Fund 63 includes costs for the continuation of two large projects, the Wastewater Reclamation Facility (WRF) Office Modernization ($1,850,000), and the Emergency Recycled Water Transmission Main Repair ($1,574,000). Other large projects include $300,000 for sludge dewatering evaluation and installation and $460,000 in various treatment plant maintenance and improvement projects.
In January 2026, the Town implemented the fourth year of the five-year utility rate schedule adopted in 2022. It is expected that the rate schedule will eliminate the gap between expenditures over revenues and ensure that utility operations are able to remain self-sustaining. It is an adopted Town Council policy that the General Fund does not subsidize the cost of water and wastewater utility service. As the next utility rate study will begin in Fiscal Year 2026/2027, staff will bring back a review of the impacts of the current five-year utility rate schedule, to better inform the Town Council about future revenue and expenditure projections.
Capital Projects:
The Town continues its commitment to invest in capital infrastructure and maintenance for streets, parks, pathways, facilities, and flood control. All capital projects for the fiscal year are listed in the Capital Improvement Program section of the budget and have been included in the Capital Projects Fund, Gas Tax Fund, Water Capital Fund, Wastewater Collection System Capital Fund, Wastewater Treatment Capital Fund, SB1 Fund, and Measure U Fund.
The Town’s Capital Improvement Program for FY 2026/2027 includes costs totaling $14,852,345 for projects. Of this amount, $3,425,500 is applicable to Water Utility Enterprise projects, $4,763,500 is for Wastewater Utility Enterprise projects, and the remaining $6,663,345 is related to General Fund and Special Revenue supported projects.
Town staff will continue to pursue grant opportunities to help support Capital Projects Fund 50, as well as focus on infrastructure project grants for the water and wastewater utility capital funds to reduce potential rate payer costs.
Total Expenditure Budget for FY 2026/2027 including General Fund, Enterprise Funds, Special Revenue Funds, Capital Projects, and Debt Service: $37,170,678.
Summary of changes from budget workshops:
o Reduced the budget for Regional Climate Action and Adaptation Plan (RCAAP) implementation by $56,892 based on updated cost proposal received from Napa County in March, as discussed at Budget Workshop #1.
o Created new project to separate $225,000 of funding from Yountville Commons Project (CF-0046) to be used for Commons Enhancements (CF-0055) such as restroom refurbishment and other improvements to the existing facilities.
Additional Town Council discussions:
During the budget workshops, the Town Council discussed a few items of interest that are not included in the proposed Biennial Budget. Staff will bring back for future discussion and direction in the upcoming fiscal year.
These items include:
• Continuing to increase the number and quality of electric vehicle (EV) charging stations in town, including more superchargers.
• Continuing to identify opportunities for promoting business and economic development.
Gann Limit:
In concert with the annual budget adoption process the Gann Limit calculations have been completed to ensure the Town is in compliance with and not exceeding the limit including its’ voter approved override. For Fiscal Year 2026/2027, the Town is under the limit by 31.11%. It is not typical that the Town is under the limit by this high of a percentage. The upcoming fiscal year is unique due to the large amount of capital projects expenditures included in the budget, which are excluded from the Gann Limit calculation. Because this limit is driven by legislation governing the use of tax proceeds, staff have reviewed Article XIII B, California Constitution Government Spending Limit, and the League of California Cities 1991 Revenue Manual, to ensure all calculations were properly included.
Budget Completion:
On or before July 1, the final adopted budget document will be available on the Town’s website on the Budget Information page. The Town will offer an Online Budget Book, a PDF version of the budget document on the Town’s website, and a printed budget document that will be made available to Council Members and Management Team staff. A physical public copy of the budget document will be kept at Town Hall and the Yountville Library.
Please follow the link below to view the Town of Yountville Online Budget Book.
Town of Yountville Biennial Budget Fiscal Years 2026/2027 and 2027/2028
ENVIRONMENTAL REVIEW
Exempt per California Environmental Act (CEQA) Guideline, Section 15061(b)(3).
FISCAL IMPACT
Is there a Fiscal Impact? Yes
Is it Currently Budgeted? No
Where is it Budgeted? N/A
Is it Mandatory or Discretionary? Mandatory
Is there a Staff Resource Impact? No
ATTACHMENTS
1. Resolution No 26-4414
2. Biennial Budget for Fiscal Years 2026/2027 and 2027/2028