Placerville forecasts smaller general‑fund deficit in FY25–26 midyear review; building permits bolster revenue

City finance staff presented the FY2025–26 midyear budget to the council on May 10 and reported that updated revenue forecasts and departmental expenditure management have reduced the previously projected general‑fund deficit.

Staff reported Bradley‑Burns sales tax remains the largest general‑fund revenue source and the latest forecast modestly adjusted sales tax expectations. Building permits and engineering fees are supporting a small revenue increase; staff said construction‑related receipts are higher than budgeted and that engineering permit fee structure changes contributed to increased revenue.

Natalie Torasa said the city’s revised revenue forecast is approximately $11.1 million for the general fund, up about $61,000 from the revised budget, while expenditure management (including some vacancies) is expected to keep operating costs under budget, narrowing a revised deficit estimate from about $300,000 to roughly $178,000. Staff cautioned some savings reflect unfilled positions and said prolonged vacancies are not a sustainable long‑term strategy.

Enterprise funds showed differing results: the water fund is forecasted to be near budget and expects Measure L proceeds later in the year; the sewer fund had expenditure savings largely driven by vacant positions and showed improved year‑end balances. Staff noted projected net transfers for insurance and liabilities remain a risk to fund balances.

Councilmembers thanked staff for close budget management and discussed the need to balance short‑term savings from vacancies with long‑term service capacity and staff workload. Staff will return to council with additional budget workshop presentations and recommended adjustments as needed.