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Willows reviews FY 2026–27 preliminary budget, flags police contract and pension pressures
Summary
City staff presented a preliminary FY 2026–27 budget showing projected general fund revenues of about $7.86M, expenditures of about $7.48M and a $384,000 base surplus. Council discussion highlighted police contract uncertainty, CalPERS pension liabilities, and the move to bring sewer billing in‑house using the Tyler module.
City Finance Director Joey Harrison led a preliminary budget workshop May 12 covering the City of Willows’ general fund and sewer enterprise fund for FY 2026–27. Staff presented base assumptions — a 3% CPI escalation for forecasting, conservative 2% property tax growth, and no recurring CalFire grant — that produced projected general fund revenues of about $7.86 million, expenditures of about $7.48 million, and an estimated operating surplus of roughly $384,000 to be added to reserves.
Harrison outlined one‑time items excluded from base forecasts (library roof, sale of city property) and noted ongoing uncertainties, most prominently police contract costs. The budget packages a 3% CPI assumption and included programming a $2.4M police services contract with the Glenn County Sheriff’s Office as part of long‑term forecasting; even modest increases in that contract were shown to materially affect reserves.
Council members focused follow‑up discussion on several fiscal risks. Members raised concerns about CalPERS unfunded actuarial liability (UAL) increases and how pension benchmarks and market performance can increase annual city payments. Council member Busby and others described the recent increase in the city’s UAL payments and urged continued analysis of long‑term exposure.
A sustained discussion addressed bringing sewer utility billing in‑house using the Tyler utility‑billing module. Staff said the city has purchased a module (~$17,500 already incurred) and intends to go live with monthly billings in August with first commercial billings in September; projected ongoing staffing costs for a part‑time billing position were discussed (~$22,700/year), along with the risk of turnover and possible $9,000/year recurring module fees (staff to verify). Several council members urged caution, noting that Cal Water has signaled it intends to discontinue billing for some customers and that making the service in‑house trades vendor cost for increased staff and implementation risk.
Council directed staff to use feedback from the workshop to refine the budget and to provide any requested changes by May 29 for the June 9 adoption meeting. Staff also outlined opportunities to pursue grant funding and cost‑recovery measures to strengthen long‑term reserves.
Next steps: staff will refine assumptions, confirm recurring module costs and Cal Water transition details, and return a final budget for council adoption in June.
