Napa Must 'Proactively Address Projected Budget Shortfalls': Mayor

Press release from the City of Napa:

NAPA, CA — The City of Napa approved the Fiscal Year (FY) 2024/2025 Mid-Cycle Budget Update at the June 4 City Council meeting. As the second year of the two-year budget approved in 2023, this mid-cycle update allows for a thorough review and adjustment of the city's financial plans based on current performance and emerging needs. It enables the city to realign its priorities, address any revenue shortfalls or surpluses and ensure that resources are effectively allocated to maintain essential services and fund new initiatives.

The approval follows a workshop on May 21 where Council reviewed the current budget performance and engaged with residents regarding priorities.

The mid-cycle update ensures the City’s budget remains balanced through FY 2024/2025. Strategic fiscal management and effective use of one-time funds, such as Educational Revenue Augmentation Funds (ERAF) transfers and funds from the Public Employees’ Retirement System (PERS) 115 Trust, have been key to achieving this balance to allow for continued levels of City service.

“This mid-cycle budget reflects our commitment to prudent financial stewardship and transparency,” said Mayor Scott Sedgley. “However, we must proactively address projected expenditure shortfalls to preserve essential services and critical infrastructure that our community relies on.”

Highlights of the $329.6 million FY 2024/2025 budget include:
• $3.2 million in General Fund revenue redistributed from sources such as property taxes in order to offset decreased revenues in areas like transient occupancy tax.
• $3.9 million increase in General Fund expenditures, including $1.9 million towards PERS Unfunded Accrued Liability (UAL) prepayment
• Use of $2 million in one-time funds from excess ERAF and 500k from the City's PERS 115 Trust to close the projected General Fund gap.
• $11.3 million in revenue adjustments from sources including the Utilities rate increase, Intergovernmental funding for Section 8, interfund transfers for capital projects and more.
• $16.1 million in expenditure adjustments including interfund transfers, Risk Fund adjustments, Section 8 housing payment assistance, fleet replacement schedule adjustments and more.

While the mid-cycle budget update successfully maintains balance for the next fiscal year, the City is also focused on securing long-term, sustainable funding to address rising expenditure costs. At the June 4 meeting, City Council also approved Measure G, a 1-cent sales-tax, to go to the ballot for voter approval in November to address the projected structural deficits in the long term.

“Our efforts to secure grants and other funding sources, combined with strategic use of one-time funds, ensure that we can meet our financial obligations and invest in Napa’s future,” said City Manager Steve Potter. “Our focus remains on developing sustainable revenue streams and managing expenditures to safeguard our core services and meet resident priorities.”

As the City continues to move towards an economically vibrant future, it remains committed to prioritizing public transparency and working towards community-driven economic goals.

For more details on the mid-cycle budget update, please visit cityofnapa.org/154/Budgets-Financial-Reports or contact the City Finance Department at 707-257-9298.

This press release was produced by the City of Napa. The views expressed here are the author’s own.