Yuba City council adopts 2025–26 operating and capital budgets, taps reserves to close $6.2 million gap

The Yuba City Council voted 4–1 to adopt the city's fiscal year 2025'26 operating budget, capital improvement program (CIP) and the city's appropriations limit, approving a plan that draws on reserves and one-time funds to close an estimated $6.2 million shortfall.

City managers and department staff presented a multi-part plan that relies primarily on roughly $5 million from reserves and discretionary funds, plus $489,000 from internal workers'compensation reserves, a proposed $75,000 revenue lift from a credit-card processing fee, and about $600,000 in projected interest earnings on ARPA monies to narrow the shortfall.

The budget matters because it covers core services including public safety (about 63% of the General Fund), water and wastewater operations, and a multi-million dollar CIP for streets, parks, water and wastewater projects. Council members and staff warned that the plan is a near-term approach: departments will face hiring freezes and service redesign work this year while longer-term revenue and structural solutions are developed.

City manager Robert Bindorf and finance director Diana Pope led a detailed presentation that showed estimated discretionary General Fund revenues of roughly $56.4 million for 2025'26 and total proposed expenditures in the mid-$60 millions range. Bindorf told the council that staff had already identified roughly $2.34 million in reductions earlier in the current year and credited department leaders with further line-by-line cuts. "They all have the city's best interests at…