Corte Madera staff present two-year budget, council asks for clarifications on reserves, sales tax and parks funding

Corte Madera, Calif. — Corte Madera officials presented a two-year operating budget for fiscal years 2025–26 and 2026–27 on June 17 as the town begins a two‑meeting review process ahead of a possible July 1 vote.

Finance Director Chris Petlock and Town Manager Adam led the presentation, showing staff projections that assume flat overall revenues next year with a modest 1–1.5% increase the following year. “We’ve really tried to be very conservative in our outlook at each line item,” Petlock told the council as he described sales‑ and property‑tax reliance and plans to build the general fund reserve from 20% to 25% of operating expenditures.

The budget shows an estimated general fund surplus of about $1.9 million in 2025–26 and a smaller surplus the year after; staff proposed moving portions of those surplus amounts into a town capital fund and an equipment and technology fund to pay for infrastructure and replacements. Petlock said the town expects to spend roughly $12–13 million on capital and related non‑capital community initiatives in the first two years of the plan.

Why it matters: Corte Madera’s budget shapes which parks, flood‑control, and climate adaptation projects the town can advance—and how aggressively it builds reserves to weather potential economic downturns. Council members repeatedly pressed staff for clearer explanations of revenue assumptions, fund structures and program‑level performance.

Council questions and staff responses

- Sales tax and TOT: Council members asked whether store closures and national tourism shifts would materially reduce sales tax and transient occupancy tax (TOT) receipts. Petlock said the town uses consultant HDL to forecast sales tax and flagged that some recent spikes reflected one‑time corrections; staff intentionally pulled estimates back for prudence. On TOT he said the town is modeling a potential decline tied to local hotel changes and longer‑term shifts in San Francisco overflow demand.

- Reserves and long‑range planning: Council member Andrews noted the projected decline in ending fund balance by year three if trends continue and asked for a clearer definition of what the reserve must cover. Petlock said staff will refine what the reserve is intended to replace (payroll, contracted services, time to pivot after a revenue shock) and bring a clearer policy back to council.

- Parks & Recreation finances: Several members pressed for more program‑level detail after staff said recent sports registration produced an unexpected surplus this year but that the department projects operating deficits in coming years. Petlock said he will break out recreation and parks program performance — registration, childcare, preschool and other programs — by line item and return recommendations on pricing and subsidy options.

- Capital planning and fund structure: Council members asked which funds are “real” and whether low‑balance funds should be consolidated. Petlock said he will review the town’s fund architecture (including creation of a separate debt service fund) and bring recommendations for consolidation or closure where appropriate.

- Shoreline/parking and other minor funds: Council members asked about the shoreline parking fund and several small or zero‑balance funds not currently visible in the main budget PDF. Petlock said staff would add clarifying labels and include those funds in future documents.

Next steps

The budget was presented for review and will return to council on July 1 for formal consideration. Petlock told the council the two‑year adoption is a starting point: “Even if the council moves forward and approves this on July 1, this gets looked at again every six months,” he said, describing routine mid‑year adjustments as revenue and expense information is updated.

What staff will deliver: council members requested (1) a clearer worksheet showing which projects are covered by each fund, (2) a program‑level profitability and subsidy analysis for Parks & Recreation, (3) a plain‑language memo on the purpose and allowable uses of the affordable housing fund, and (4) a proposal to reorganize or close obsolete funds.

Ending: Council members praised the work done so far but emphasized caution: several said Corte Madera is in a relatively strong fiscal position compared with some Bay Area peers but urged conservative planning given uncertain economic conditions. Petlock and the town manager will return with revisions and additional detail ahead of the July 1 meeting.