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Willows City Council adopts midyear budget update, projects modest $317,000 surplus
Summary
After a presentation by financial consultant Andy Heath, the Willows City Council approved midyear revisions to the FY 2025–26 budget, updating revenues and appropriations and preserving roughly $317,000 to reserves while directing staff to reconcile several grant and reimbursement items.
Financial consultant Andy Heath presented Willows City’s fiscal year 2025–26 midyear budget review on March 23, showing a modest improvement to the city’s outlook and a council vote to adopt the staff-recommended adjustments.
Heath told the council the updated general fund forecast projects roughly $8.3 million in revenue and just over $8.0 million in expenditures for 2025–26, producing an estimated $317,000 surplus that would flow to reserves if current projections hold. “It’s likely that you will have a surplus to reserves … about $317,000,” Heath said during the presentation.
The presentation enumerated revenue adjustments that together add about $664,000 to the forecast — including the first full-year receipts from Measure I, proceeds from a recent property sale, and increased grant and strike-team reimbursements — and recommended about $666,000 in additional appropriations for capital and operating needs such as a library roof replacement and a property purchase adjacent to the fire station. Heath also reviewed the city’s enterprise and special funds, noting that the sewer fund remains capital-heavy and that forecasts assume all currently authorized positions remain filled.
Council members pressed staff for details on several line items. One member asked how much of the roughly $296,931 in strike-team reimbursements is bankable year to year; Heath said staff will reconcile reimbursements, overtime and equipment allocations with the fire chief and new finance director to determine the net general-fund benefit. A later exchange confirmed Arbuckle sewer-load receipts to date are approximately $23,000, and staff said they would confirm loan repayment timing for the Sycamore Park apartments.
Council member Hansen, while praising staff for conservative management, urged a higher reserve target for a city the size of Willows and criticized the CalPERS pension cost trajectory. Hansen said council goals in past years aimed for roughly 25% reserves and noted the forecast shows reserves climbing toward the 30% range over several years under the model’s assumptions.
Staff said insurance paperwork for the library roof repair has been submitted and that an initial payment of $39,000 has been received; final coverage determinations are expected within about 30 days. The council also discussed moving a small, legacy mall maintenance fund into the general fund where those costs are now incurred and agreed staff would return with reconciliation options and potential designations for downtown maintenance or EV-charging work.
After questions and brief discussion, a council member moved to adopt the resolution approving the midyear budget recommendations for fiscal year 2025–26; the motion was seconded and adopted by roll call vote of the four members present (Council members Hansen, Busby, Pride and Vice Mayor Thomas). Mayor Hudson was absent.
The council directed staff to complete reconciliations on strike-team reimbursements, apparatus/equipment reimbursements, and CDBG/project fund balances and to return with any necessary adjustments during the annual budget process. The meeting adjourned at approximately 6:35 p.m.
