Willows council reviews FY2025–26 preliminary budget, debates bringing sewer billing in-house

City staff presented the Willows City Council with a preliminary fiscal year 2025–26 budget for the general fund and the sewer enterprise fund and outlined several proposed new positions, capital items and revenue assumptions.

Finance presenter Joanne Moore said the general fund projection assumes a 2% growth in property tax and continued sales and transient occupancy tax collections and that, “our revenues were greater than our expenditures for the general fund budget, meaning we did not need to dip into any reserves for this coming fiscal year.” Moore said the estimate includes negotiated salary increases and known inflationary pressures on health insurance and pension liabilities.

The presentation listed proposed expenditures already discussed at an April 22 workshop: a municipal code update (approx. $60,000), replacement of expired computers ($31,000 quote), a website update ($10,000), council‑chamber AV replacement ($11,100) and a partial general‑fund share of a public‑works pickup ($42,000 total cost, $46,000 to general fund net of insurance and CCSIF). Moore said the budget funds a half‑year community development/admin analyst (start Jan. 1, 2026) and a finance/HR specialist beginning April 1, 2026 (three months budgeted in 25–26).

On forecasts, staff projected a $338,000 operating margin for the sewer fund (excluding capital) and a projected general‑fund surplus of about $555,000 in 2025–26, “if everything goes as planned,” Moore said. The sewer enterprise budget shows $2.3 million in operating revenue and $4.9 million in expenditures driven by bond‑funded capital work; staff said bond money already sits in the sewer account and is being used for projects delayed from the prior year.

Sewer billing and Prop 218 study

A substantial portion of council discussion focused on moving residential and commercial sewer billing into the city’s Tyler system rather than continuing to rely on Cal Water and county property tax roll processes. Moore said a Tyler utility billing module quote is a one‑time $17,500 startup cost and roughly $9,000 annually thereafter; the Prop 218 rate study was estimated at about $50,000.

Vice Mayor Thomas raised concerns that converting residential sewer charges from the county property‑tax roll to a periodic paper bill could increase delinquency: “if they get a bill and they have to see it every month or every quarter… I would imagine we would have a lot of delinquent payments,” he said, urging staff to check what the county currently charges for the residential roll service and the practical implications of moving billing in‑house.

City Manager Marty Brown said the county has indicated it will not administer volumetric commercial billing but will accept flat residential charges; Cal Water performs volumetric calculations now and has erred in recent years, Brown said, which partly motivates exploring alternatives. Brown added the Tyler module and bringing billing in house could reduce reliance on consultants and create sufficient recurring workload to justify additional in‑house finance staffing.

Council direction and next steps

Council members asked for additional detail before final approval of the budget schedules. Questions included: a separation of general fund vs. sewer fund impacts; a clear schedule showing when bond proceeds must be expended; the county’s fee to include sewer on the property‑tax roll; and projected collection costs if billing is mailed. Brown offered to remove the Tyler module from the budget for further due diligence and return in two to three months if members preferred; several council members preferred leaving the module in the preliminary budget while staff obtains additional information.

Staff emphasized the sewer billing implementation would likely take 6–18 months to build and deploy, providing lead time for community education should the council approve moving forward.

Ending

Council did not take a final vote on the preliminary budget at the meeting. Staff said full department budget schedules and the detailed staff report will be posted later in the week; council members asked staff to include the Prop 218 timeline, bond sunset/expiry dates and an itemized comparison of outsourcing vs. in‑house billing before final adoption.