Atwater Council Adopts FY 2025–26 Budget, Acknowledges Structural Gap and Reserve Policy

The Atwater City Council on a 3–1 vote adopted the cityFY 2025–26 budget, accepting a spending plan that includes a $16.3 million capital improvement program and a general fund projection that shows $20,640,000 in revenues against $21,860,000 in expenditures.

Finance Director Nicholas said staff used a hybrid budgeting approach and applied a consumer-price-index adjustment of about 2.128% to allowable fees. "The proposed miscellaneous fee schedule reflects this percentage increase in each fee where applicable," he told the council while laying out revenue and expenditure estimates and one-time costs included for the coming year.

Nicholas also presented a breakdown of one-time spending items that leave a structural deficit of about $410,482 after removing nonrecurring costs. "Of that $1.2 million, the one-time spending of $108,109 leaves a general fund structural deficit of $410,482," he said, noting the city still meets its reserve policies and a statutory reserve requirement cited in the staff report.

The budget document includes an updated salary schedule effective June 19 and several staffing changes: two part-time community services officers, two water systems operators, conversion of a part-time building maintenance position to full time, and other reorganizations across departments. It also budgets for the final payment on a new type 1 fire engine and $125,000 for fire station building repairs.

Several council members asked questions and offered context. Council member Kalisa Rochester urged caution on increasing sewer rates until new flows from the Castle interceptor can be measured. Council member Kale thanked staff for the work on the budget and welcomed the emphasis on strategic planning.

Public comment covered ARPA expenditures and requests for more detail on specific line items, but no speakers objected to adoption. The council approved the budget after a motion and roll-call vote: Kale, Ambreese and Nelson voted yes; Rochester voted no.

Council and staff said the city will monitor revenue and expenses, pursue strategies to close the structural deficit, and conduct a midyear review to evaluate outcomes and possible adjustments. The council also signaled continued work on a master fee schedule that will be returned for review when available.

The budget adoption allows staff to begin operating under the FY 2025–26 spending plan effective July 1 and triggers planned midyear reviews and subsequent amendments if necessary.