Placerville council reviews $1.19 million in adjustments to balance FY 2025–26 budget

Placerville — City staff presented a draft fiscal year 2025–26 budget to the Placerville City Council on May 20, outlining a $1,029,000 shortfall in the general fund and recommending $1,193,001.80 in adjustments to close that gap.

The proposed adjustments include a mixture of revenue measures, spending cuts and one‑time transfers. “So the last time we met, we shared our wish list with you. And today, we're going to share how we can afford some of those wish lists or wish items,” said Dave Warren, a staff member leading the presentation, who walked council through general fund assumptions, revenue forecasts and recommended reductions.

Warren told the council that sales tax accounts for roughly 59% of general fund revenue and that consultant HDL forecasts a 3.7% decrease for the 2024–25 year and a 3.6% increase in 2025–26, producing a year‑over‑year sales tax revenue decline of about $226,000. He laid out the math behind the $1,029,000 starting deficit and the $1.19 million in recommended adjustments that, if adopted as proposed, would yield a small surplus on paper.

Nut graf: The review pairs across‑the‑board savings and targeted deferrals with transfers from restricted funds and one‑time reserve uses to reach balance. Council and staff stressed the proposal is a draft and that follow‑up hearings and potential modifications remain before the July 1 adoption deadline.

Most significant items in the draft budget - Personnel and benefits pressures. Staff included projected increases for health insurance (assumed 10%) and a projected CalPERS increase; finance staff said those and other benefit cost increases are major drivers of higher expenditures. Warren outlined estimated increases to pension and insurance costs and noted they are factored into the draft. - Position freezes and reclassifications. The draft recommends freezing several vacant positions across departments (police, development services, others) and reclassifying some roles; staff said they intend to revisit some requests after a water/sewer cost‑of‑service (rate) study is complete. - Program and service reductions. Community services staff proposed shortening the aquatics season (stop when school starts, reduce weekday open‑swim) and scaling back some recreation programs to reduce part‑time personnel costs; staff estimated an $81,234 reduction in aquatic revenues paired with corresponding part‑time expenditure reductions. - Use of restricted funds and transfers. Staff recommended using RMRA and SB1 fuel tax transfers and other one‑time sources (including net position from an older risk JPA) to avoid deeper general fund cuts. The draft also contemplates restoring a prior transfer of $760,000 from the general fund to ARPA to preserve those federal funds. - Capital and equipment. Staff proposed funding a limited computer replacement program of about $45,343, and recommended deferring several CIP items (annual striping, some facility projects) given general fund constraints.

Council and staff next steps Councilmembers and staff agreed on a two‑step schedule: a public hearing at the first June meeting and potential adoption at the second June meeting to meet the July 1 adoption deadline, while allowing further adjustments. Council also directed staff to return with the water/sewer rate study outcomes and any changes required by new fee or rate recommendations.

Ending: Staff emphasized the draft is a starting point for more council discussion. "We want to be transparent and show you all everything we did," Warren said. Public comment at the meeting praised city staff and urged retention and promotion opportunities for long‑tenured employees.