Photo courtesy of Yuba City

YUBA CITY, CA (MPG) – The Yuba City Council adopted a $126 million budget for the 2026-27 fiscal year last week, reducing a projected $7.8 million structural deficit to about $2.2 million through spending reductions, staffing cuts and the use of one-time funding sources.

City Manager Robert Bendorf said the city entered the budget process facing growing pension obligations, rising healthcare costs, inflation and increasing operational expenses that have outpaced revenue growth.

"There was one creative idea after another," Bendorf said. "To make Yuba City healthier from a fiscal perspective, we needed to look at everything."

The adopted budget includes approximately $62 million in General Fund spending, supported by about $60.1 million in projected General Fund revenue. Property taxes are expected to generate roughly $19.4 million, while sales taxes account for about $16.9 million. Franchise fees are projected at $2.2 million and business license revenue at about $1.45 million.

Bendorf said the city reduced the structural deficit by about 66 percent compared with the current fiscal year through a combination of expenditure reductions and one-time funding sources.

The balancing plan includes approximately $784,000 in projected carryover funds from the current fiscal year, $900,000 from the city's pension stabilization fund and $500,000 in interest earnings generated from federal American Rescue Plan Act funds.

The budget document notes that General Fund revenues have grown modestly while expenditure continues to rise. Bendorf said discretionary revenue has increased by about $900,000 over the past four years, while inflation and operating costs have climbed substantially.

To align spending with available revenue, the city reduced authorized staffing from approximately 350 positions to 330. About 34.6 positions were eliminated or left unfunded, while some employees were reassigned to existing vacancies.

"This isn't a pretty sight," Bendorf said. "You have limited resources and no money to really restore positions. But we are getting as creative as we can."

Public safety remains the city's largest budget priority. The spending plan allocates roughly $22 million to police services and about $17.6 million to fire services. Community Services, which oversees parks, recreation programs, aquatics and senior services, is budgeted at approximately $3.7 million.

Bendorf said 81.5 percent of discretionary General Fund revenue is dedicated to police and fire services.

Mayor Marc Boomgaarden said his review of economic data showed the cost of living has increased about 24 percent over the past five years, creating financial pressures that local governments cannot fully offset through existing revenue sources.

"Cities up and down the state are having to face the same thing we are," Boomgaarden said.

He added that local governments continue to absorb the costs of new state requirements without corresponding funding, placing additional pressure on already strained municipal budgets.

Councilmember Wade Kirchner said those challenges are reflected in the city's infrastructure obligations. He pointed to the wastewater outfall diffuser project, noting that the state-required improvement now carries a $62 million price tag, roughly double the estimate first presented to the council.

"It's not a want, it's a need because this is the state of California saying you got to have this," Kirchner said.

Council members generally agreed that maintaining public safety services and critical infrastructure while addressing long-term financial obligations will remain a challenge in future budget cycles.

Bendorf said the adopted budget does not eliminate all of the city's fiscal pressures but moves the organization significantly closer to balancing ongoing revenues and expenditures.

The council unanimously approved the operating budget and the city's capital improvement plan, which outlines major infrastructure projects and spending for the coming fiscal year.