Woodland leaders set 10% reduction target, form subcommittee after staff warns of $4.6M FY27 shortfall

Woodland city officials on April 14 heard a five‑year budget forecast that projects a $4.6 million deficit for fiscal year 2027 and identified an ongoing structural shortfall that could grow to nearly $7 million by 2031 if no action is taken.

“we continue to be faced with a structural deficit,” City Manager Ken Voorhees told the council as he introduced the spring budget workshop and the priorities staff will use to build the FY27 budget. Finance presenter Kim McKinney said the city is “forecasting a $4,600,000 deficit for fiscal year 27.”

Why it matters: staff said a mix of nonrecurring revenue in the current year, declines in baseline sales tax, rising personnel costs and higher insurance and retirement contributions are driving the shortfall. Kim McKinney cautioned that one‑time receipts — including roughly $7.4 million tied to the waste‑management franchise in FY25–26 — will not recur and therefore accentuate the drop in baseline revenues.

Key facts from staff: - Property tax is the city’s largest single general fund revenue (about $19.2 million under the baseline assumption), with growth expected to slow as major developments like Spring Lake are largely built out. - Sales taxes have declined from the 2021–23 highs and are expected to provide only moderate growth in the five‑year outlook. Cannabis receipts currently bring in slightly more than $1 million annually, staff said. - Roughly 70% of general fund spending is personnel; staff used a 3% annual salary inflation assumption and noted retirement costs from CalPERS and related benefits add materially to overall payroll costs. McKinney described CalPERS contributions as amounting to about $0.58 for each dollar in salary in the current forecast. - The city’s actuarial estimate for other post‑employment benefits (OPEB) is about $45.2 million; the city expects to have roughly $20 million set aside in an OPEB trust at the end of the fiscal year and currently contributes about $1 million annually to that trust in addition to retiree premiums.

Proposed tools and tradeoffs: staff presented a menu of near‑term and mid‑term options that include tightening utility and procurement practices, expanding recycled water to reduce irrigation costs, reducing overtime through greater use of reserve personnel, delaying filling non‑public‑safety vacancies, pursuing cost‑recovery on fees and continuing labor negotiations. Mid‑term options could include attrition‑based position eliminations, service‑level reductions in recreation and library hours and reorganizations if further action is required.

“We’ll be bringing that forward to the council,” Ken Voorhees said about revenue options, including revisiting a previously unsuccessful sales‑tax measure. He noted the council could seek direction on placing a sales measure on the November ballot as part of the FY27 process.

Council reaction: members praised the clarity of the presentation and pressed staff on implementation. One councilmember asked how directors are being engaged; Voorhees said staff has already worked with department heads and will bring department‑level targets and options forward. Another councilmember urged more public communication; staff said the city will expand information graphics, a budget‑in‑brief insert and social media outreach.

Outcome and next steps: after discussion the council coalesced around a working target to pursue roughly a 10% reduction in the near term and agreed two councilmembers will form a subcommittee to work with staff and department heads on options and timelines. Mayor and Councilmember David agreed to serve as that subcommittee and will bring recommendations back to the council in May. No formal vote was recorded; the direction is to develop a package of options — balancing core public‑safety services with discretionary programs — for council consideration.

What remains unresolved: staff emphasized that many difficult tradeoffs would be needed if revenues do not improve, and that reductions could affect parks, library programs and youth services. The council did not make final decisions on specific cuts, nor did it adopt new fees or a ballot measure at the meeting.

The council adjourned after requesting further work from staff and scheduling subcommittee meetings to refine the proposed reductions and revenue options.