To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Seth Anderson, Budget Officer
TITLE:
Title
City of Napa FY 2025/26 and FY 2026/27 Proposed Budget Public Hearing
LABEL
RECOMMENDED ACTION:
Recommendation
Provide direction to staff to finalize the proposed FY 2025/26 and FY 2026/27 Budgets and present that document for final review and approval at the regularly scheduled meeting on June 17, 2025.
Body
DISCUSSION:
On April 28, 2025, the Council received an overview of the FY 2025/26 and FY 2026/27 General Fund, Solid Waste and Recycling Fund, and Water Fund Proposed Budgets, along with proposed budget packages. Additionally, the Council was provided an overview of the proposed list of Capital Improvement Program projects. The full proposed budget is now presented for City Council consideration and public input.
The Proposed City of Napa Budget for Fiscal Years 2025/26 and 2026/27 provides the City of Napa’s financial plan for City activities and programs for the next two years beginning July 1, 2025. The budget identifies the City’s organizational structure, includes program descriptions, provides an overview of the City’s financial condition and summarizes budget priorities and issues.
The Proposed Budget for all City funds totals $392.5 million in Fiscal Year 2025/26 and $398.8 million in FY 2026/27. The goal of this budget is to balance the need to be responsive in providing services to residents, businesses and visitors in our community with the goal to maximize our available resources. The City Council focus areas discussed in the January 2025 public workshop were a key consideration during development of these two annual budgets. The Proposed Budget reflects the following City Council focus areas:
• Climate Action
• Roads & Traffic Safety
• Economic Resilience
• Parks & Community Spaces
• Community Engagement
• Housing
With the inclusion of Measure G, the proposed General Fund operating budget totals $163.2 million in Fiscal Year 2025/26 and represents a 12.9% increase in spending compared to the Fiscal Year 2024/25 budget. The FY 2026/27 budget totals $168.2 million, an increase of 3.1% from FY 2025/26. Sales Tax sees the most significant growth, more than doubling with two full years of revenue generation from Measure G. Property Tax is projected to grow at 4% annually. Transient Occupancy Tax growth has slowed after the FY 2022/23 high with 1% growth in FY 2025/26 and 2% growth in FY 2026/27 projected. In order to balance the budget and to make capacity for the proposed budget packages that will continue and enhance our core services, $4.3 million of Excess ERAF has been budgeted in the General Fund to increase revenue in each fiscal year. Typically, this revenue source is budgeted in the Non-Recurring General Fund to be used for one-time projects. With these adjustments, the General Fund operating budget is balanced with sufficient revenue available to fund budgeted expenditures.
In addition to the General Fund, the Proposed Budget includes a number of other funds including Special Revenue Funds, Capital Project Funds, Proprietary Enterprise Funds and Internal Service Funds. The budget document also includes information on the Housing Authority of the City of Napa.
The Proposed Budget provides funding for 524 full-time positions and 6 limited-term positions in Fiscal Year 2025/26, and 525 full-time positions and 5 limited-term positions in Fiscal Year 2026/27. A detailed listing of current authorized staffing is provided in Appendix A in the Proposed Budget document, and includes the additions/deletions and new positions requested in the budget packages as listed in Appendix D.
The Capital Improvement Program budget includes additional funding for new and active projects totaling $41.1 million in FY 2025/26 and $31.6 million in FY 2026/27.
The Proposed Budget for Fiscal Years 2025/26 and 2026/27 budgets contributions to maintain General Fund and CIP reserves in accordance with City Council policies.
FINANCIAL IMPACTS:
None by this action. The purpose of the Public Hearing is to allow an opportunity for the public to provide input on the proposed FY 2025/26 and FY 2026/27 budgets and for the City Council to offer any changes prior to the presentation of the Budget for final approval at the next City Council meeting.
CEQA:
The City Manager has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Proposed Operating & Capital Budget for Fiscal Years 2025/26 and 2026/27
Hyperlink - Proposed Operating & Capital Budget for Fiscal years FY 2025/26 and FY2026/27 <https://stories.opengov.com/napaca/99225d34-26aa-4f03-bb23-f60da21215ae/published/-30okd7mZ>
NOTIFICATION:
Publication of Legal Ad in the Napa Valley Register on Thursday May 22nd, 2025.