To: Honorable Mayor and Members of City Council
From: Rajneil Prasad, Finance Director
Prepared By: Seth Anderson, Budget Officer
TITLE:
Title
City of Napa Operating Budget Workshop for FY 2025/26 and FY 2026/27
LABEL
RECOMMENDED ACTION:
Recommendation
1. Provide input to staff regarding any amendments to the Proposed Budget;
2. Provide direction to staff to schedule public hearings on June 3, 2025 and June 17, 2025 to receive public comment on the Fiscal Year 2025/26 and 2026/27 Proposed Budget.
Body
DISCUSSION:
In preparation of the adoption of the City of Napa Budget for Fiscal Year 2025/26 and 2026/27, the City holds a series of workshops with the Council and the community to discuss the City’s financial position and the City Manager’s budget recommendations. The annual City Council workshop was held on January 30. Changing past practices, the Capital Improvement Program Budget Workshop will be held in tandem with the City’s Operating Budget Workshop. The Operating Budget Workshop will discuss the current baseline operating budget for the General Fund, Nonrecurring General Fund, the Enterprise Funds, and Measure G, as well as the proposed Budget Packages for the upcoming budget cycle. On June 3th, the City will hold the first of two public hearings to discuss and adopt the final budget, which will incorporate the new CIP budgets and approved Budget Packages.
The City Council focus areas discussed in the January 30st public workshop were a key consideration during development of these two one-year budgets. The Proposed Budget reflects the following City Council Focus Areas:
• Climate Action
• Road & Traffic Safety
• Economic Resilience
• Parks & Community Spaces
• Community Engagement
• Housing
The proposed General Fund baseline operating budget totals $135.0 million in Fiscal Year 2025/26 and represents a 2.1% increase in spending compared to the current Fiscal Year 2024/25 budget after adjusting to exclude prior year unassigned fund balance appropriations. The General Fund operating budget for FY 2025/26 has been balanced using $3.5 million of Excess ERAF revenue. For FY 2026/27, the General Fund baseline operating budget totals $139.7 million, an increase of 3.5%. In FY 2026/27, the budget has been balanced using $3.5 million of Excess ERAF revenue. For both fiscal years, larger increases in salaries, wages, benefits, and internal services have been offset by limiting increases to external services and materials/supplies budgets.
The proposed Measure G baseline operating budget includes consultant provided projected revenue amounts, totaling $22.4 million in FY 2025/26 and $23.1 million in FY 2026/27, as the baseline revenue budget. Proposed expenditures within the Measure G Fund include transfers out for current core services and additional appropriations for a Council approved project, totaling $5.0 million in FY 2025/26 and $7.1 million in FY 2026/27. All other proposed expenditures will be requested through Budget Packages and the FY 2025/26 - FY 2029/30 5-year Capital Improvement Program budget.
Budget Packages for new or changed programs and position requests for the General Fund total $1,371,279 FY 2025/26 and would add $63,000 of revenue to the budget. For FY 2026/27, General Fund Budget Packages total $1,255,280 and add additional revenue of $25,000.
Budget Packages for new or changed programs and position requests for Measure G total $4,493,155 for FY 2025/26. For FY 2026/27, Measure G Budget Packages total $4,688,755.
There are also Budget Packages for the Non-Recurring General Fund ($837,985 in FY 2025/26 & $592,768 in FY 2026/27), Workers Compensation Internal Service Fund ($10,000 in FY 2025/26), General Liability Internal Service Fund ($109,912 in FY 2025/26 & $110,431 in FY 2026/27), Parking Fund ($142,175 in FY 2025/26 & $57,828 in FY 2026/27), and the Fleet Fund ($186,502 in FY 2025/26 and $181,461 in FY 2026/27). The baseline budgets have sufficient surplus or fund balance to accommodate the requests. The recommended budget packages will be discussed during this budget workshop.
The budget packages include the addition of 10 FTE to the Staffing Plan: 3 FTE and 1 Limited-Term for the General Fund, 3 for the Measure G Fund, 1 for the General Liability Internal Service Fund, 1 Limited-Term for the Parking Fund, and 1 FTE for the Fleet Fund. There is also 4 FTE addition/deletion for the Staffing Plan and 1 reclassification (net impact of 0 FTE), as well as 2 additional Fleet vehicles.
FINANCIAL IMPACTS:
None by this action. The purpose of the Budget Workshop is to provide the City Council with an overview of the General Fund, Enterprise Fund, and Measure G Baseline Budgets, a discussion of proposed budget package items, and an opportunity to request changes prior to the upcoming public hearings in June.
CEQA:
The Finance Director 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 - Baseline Budget for FY 2025/26 and FY 2026/27 General Fund, Enterprise Funds, and Measure G only
ATCH 2 - Recommended Budget Packages for FY 2025/26 and FY 2026/27
NOTIFICATION:
Legal ad published in the Napa Valley Register on Thursday, April 17, 2025.