Yuba City council reviews proposed FY25‑26 budget, warns against rapid cuts to personnel

Yuba City held a special budget workshop to review the proposed fiscal 2025‑26 operating and capital improvement budgets and to brief the council on steps to address a continuing structural deficit.

Interim City Manager Robert Bendorf told the council “you have a structural deficit,” and said the gap built up over several years and was compounded by rising costs such as pensions, utilities and other operating expenses. Bendorf recommended using a mix of one‑time funds and targeted, time‑limited measures while pursuing longer‑term options to restore fiscal balance.

The discussion centered on several themes: the scale of the deficit, limits to cutting discretionary services without harming core operations, available one‑time resources and reserves, and the need to pursue revenue enhancements and operational redesigns. Bendorf said the council previously used reserves and midyear reductions that reduced pressure going into FY25‑26, but cautioned that “you didn't get here overnight” and that a rapid, across‑the‑board approach would risk service disruptions.

Why it matters: council members and the ad hoc budget committee said the city has already trimmed expenditures substantially and that further large cuts would fall hardest on personnel and core public safety services. The council emphasized protecting institutional knowledge and frontline services while staff pursues revenue options and efficiency gains.

Most important facts - Bendorf described a multimillion‑dollar structural deficit and outlined assumptions used in the FY25‑26 draft. He said prior actions in FY24‑25 included roughly $2.34 million in reductions and use of reserves to manage a larger deficit. - The city holds roughly $25 million in “one‑time” funds across multiple accounts (vehicle/equipment replacement, debt service, PARS/OPEB trusts, ARPA remnants and other designated reserves). Bendorf cautioned against “burning through” these funds, noting effects on credit ratings and capacity to respond to emergencies. - Staff recommended holding new general‑fund contributions to capital projects for FY25‑26 (no additional CIP contribution) and proceeding only with currently approved projects after a comprehensive review. - The ad hoc committee and multiple council members urged focusing on revenue options, not only expense reductions. “The revenue side is something that we need to be looking at really close,” said an ad hoc committee member (identified in the transcript as Mike). - Personnel: council members repeatedly stressed avoiding deep staff layoffs. Bendorf and the ad hoc said departments have already cut deeply; further immediate cuts risk losing institutional knowledge and increasing long‑term costs for recruitment and training.

Specific recommendations and administrative directions discussed (not formal votes) - Implement quarterly budget reviews and a midyear review process to monitor revenues and expenditures and to bring adjustments to council as needed. - Maintain a hiring freeze with a limited exception: allow police officer and firefighter positions to be filled effective July 1, 2025; other new hires would require city manager and council approval. - Reduce community sponsorship and event contributions by approximately 50% and eliminate the city’s funding for the film commission (the draft reduced that request of about $12,500). - Use a limited amount of PARS trust funds (proposed $500,000 in the presentation) and a modest draw from OPEB as part of the one‑time funding strategy. - Hold additional general‑fund contributions to the capital improvement program for FY25‑26 and review older CIP projects for reprioritization or deferral.

Council and staff perspectives Council members and the ad hoc budget committee praised staff and department heads for major expenditure reductions in prior years and urged a cautious, multiyear approach. Multiple council members said they want to protect public safety staffing and avoid “nuclear” options such as mass layoffs. The council’s ad hoc emphasized revenue generation as a key focus going forward rather than relying solely on deeper cuts.

Fire department guidance When asked whether temporarily closing a fire station would yield immediate savings, the Fire Chief explained the department’s staffing and grant constraints: “We're currently under a SAFER grant, which does not allow us to drop below 51 personnel operational.” He described that a combination of holding specific positions vacant, adjusting staffing on certain apparatus, and a temporary station closure were modeled to reach a hypothetical 10% departmental reduction, but noted grant rules and operational minimums limit simple station‑closure savings.

Next steps and timeline Staff will incorporate council feedback and bring the proposed FY25‑26 budget back to the council on June 17 for formal consideration. Bendorf and Finance staff will provide departmental budgets and more detailed cost‑reduction and revenue options in advance of that meeting so the council can make policy decisions on priorities, reserve use and any proposed revenue measures.

Ending Council members signaled general support for the staff’s approach while emphasizing that the coming year will require close collaboration between council and staff to develop stable, long‑term solutions that protect services and retain experienced employees.