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Waterford approves midyear budget adjustments, adds capital projects and flags water fund covenant shortfall
Summary
The council approved Resolution 2026-18 to adopt midyear adjustments for FY2025-26, increasing projected revenues by $118,431 (largely an insurance refund) and expenditures by $171,752, while noting a bond covenant shortfall in water funds and several capital projects including pickleball courts and demolition of the old police facility.
The Waterford City Council unanimously approved midyear budget adjustments for fiscal year 2025–26, hearing a line-by-line summary from Finance Director Miss Embia and asking staff to incorporate council priorities as the draft next-year budget is prepared.
Miss Embia told the council the general fund’s beginning balance was revised upward after the prior year closed, producing an adjusted opening balance of approximately $3.659 million. The midyear changes increase projected revenues by $118,431 and expenditures by $171,752, with the net effect leaving an ending general fund projection of about $3,499,526 (roughly a 66% reserve, above the 50% target).
Key revenue changes include a $111,458 insurance premium refund from the Central San Joaquin Valley RMA and another $40,000 increase in sales tax. On the expense side, payroll adjustments, added planning costs (including housing element completion work), demolition of the old police facility (an added $31,390), and increased capital purchases account for most of the $171,752 increase.
Miss Embia also reviewed other governmental and enterprise funds: capital projects total roughly $5.6 million and include street work and the Country Gardens Cape Seal project funded in part by Measure L and a REAP 2 grant. In the water funds, staff noted a recent rate increase took effect March 1 as part of a multi-year plan; however, the water bond covenant was not met this year and the city has until March 31, 2027 to return to compliance.
Council discussed possible uses of midyear surpluses for parks improvements and asked staff to include the council’s workshop direction ($200,000 in general-fund dollars for parks improvements) when preparing the draft budget for April. The council adopted Resolution 2026-18 on a 4-0 vote.
Why this matters: the midyear adjustments clarify available resources for near-term capital projects, staffing and one-time items, and highlight a water fund covenant issue that prompted a recent rate increase and further monitoring.
