Atwater presents draft FY 2026–27 budget: staff calls it a ‘status-quo’ balanced proposal

The Atwater City Council received a presentation of the draft FY 2026–27 proposed budget on Monday. Finance Director Anna Nicholas said staff considers the draft a status-quo plan that maintains current service levels and meets the city’s reserve goal.

Nicholas framed the draft as informational only, not for adoption. She told the council that the draft package had been published in the agenda packet and that the budget process began in January with department-level proposals, community workshops in February and March, and department meetings through spring. The final city manager–recommended budget will return to council for formal adoption in June for implementation on July 1.

Among the numbers Nicholas presented for the general fund (draft estimates): total revenues and transfers-in of about $21.43 million, expenditures and transfers-out of about $21.32 million, and a projected fund balance of about $17.99 million. Staff said those figures would enable the city to meet its strategic goal of maintaining a 25% reserve (approximately $5.3 million in the draft). Nicholas also noted that fund accounting includes transfers and some capital projects funded by fund balances.

Nicholas identified Fund 5050 (the community facilities district for public safety) as the only fund currently flagged with a potential structural deficit, explaining it may require a year-end general fund transfer if expenses outpace allowable assessment revenue. She also described Measure B (the public safety transaction and use tax fund) as projecting revenues in the mid-$5 million range with a modest increase forecast, and provided a snapshot of enterprise funds (water, sewer, sanitation) that staff will monitor for debt-service and capital needs.

Nicholas emphasized the draft nature of the presentation and listed next steps, including adjustments from the governor’s May revise, any council direction, and the capital improvement plan and miscellaneous fee schedules that will be finalized before the June adoption. She said staff will return with a final city manager–recommended budget in June.

Council members offered suggestions and flagged items they would like staff to research for possible inclusion in the final budget, including repairs to the Blossom home, a small competitive grant program for local nonprofits, and funding for a trap-and-release program for community cats. Nicholas and staff said they would follow up on those requests and provide cost estimates prior to final adoption.

What’s next: Staff will finalize numbers, incorporate council direction and any revisions from the governor’s May revise, and return the city manager–recommended final budget to council in June for adoption ahead of the July 1 fiscal year start.