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McFarland adopts midyear budget adjustments, projects 24% general fund balance
Summary
Finance Director Diego Villamontes presented midyear adjustments for FY 2025-26, reporting a projected unassigned general fund balance of 24% (below a 35% target) and proposed net general fund increases offset by new revenues and grants; the council approved the adjustments.
Finance Director Diego Villamontes presented the city’s midyear budget review for FY 2025–26. He said the projected unassigned general fund balance at year-end is now 24% of operating expenditures—an improvement from initial projections but below the 35% reserve target—and described revenue and expenditure adjustments the city proposes to carry through the rest of the year.
"The projected unassigned fund balance at the end of the fiscal year, is now at 24% of our operating expenditures," Villamontes said. He outlined projected tax increases (net $228,007.69), increased permit-related service revenue ($147,119), grant/intergovernmental increases tied in part to a Fentanyl Task Force ($159,006.13) and a net general fund increase of approximately $237,008.31 after offsets.
Villamontes explained enterprise impacts on the water and sewer funds, noted past emergency costs (reverse-osmosis system costs approaching $1.2 million and a sewer lagoon repair that used approximately $500,000 in reserves), and listed department-by-department midyear adjustments. Council members praised the presentation and the council adopted the midyear budget adjustments by unanimous roll-call vote (resolution 2026-11).
