HomeMy WebLinkAbout021726-10.2ADMINISTRATI STAF VE F REPORT10.2
TO: Mayor and Town Council February 17, 2026
SUBJECT: Resolution No. 17-2026, accepting the mid-year Financial Report, approving
mid-year adjustments to the Fiscal Year 2025/26 Operating Budget and Capital
Improvement Program
BACKGROUND
The Operating Budget is the Town’s annual plan for service delivery. The budget focuses on
services, programs and activities that are prioritized by the Town Council to meet the Town’s
mission, which is “To provide superior municipal services that make people’s lives better.”
The Capital Improvement Program (CIP) is the Town’s capital budget. The CIP identifies high
priority current and future capital needs and identifies potential sources of funding.
On June 17, 2025, the Town Council adopted Resolution 42-2025, approving the 2025/26
Operating Budget and setting the 2025/26 Appropriation Limit; and Resolution 45-2025,
approving the 2025/26 through 2029/30 Capital Improvement Program. The purpose of the
mid-year update is to review actual mid-year revenues and expenditures in comparison to the
adopted budget and CIP and make any necessary mid-year adjustments.
Overall mid-year revenues are on track to exceed the budgeted forecast with expenditures on
track to finish the fiscal year less than the total budget appropriation of $41.5 million. In
addition, the Annual Comprehensive Financial Report for fiscal year 2024/25 reflected a
positive fund balance of $9.22 million for the prior year.
DISCUSSION
At mid-year, total revenues are positive to the budget forecast and total expenditures are
within budget. Overall fiscal condition remains strong, with the fiscal year expected to end
positive to budget forecasts.
As of December 31, 2025, revenues are tracking ahead of the approved budget forecast, while
overall expenditures are on track to finish the fiscal year within budget. The Town’s overall
fiscal condition remains strong, and the Town expects to finish the fiscal year on a positive
note.
OPERATING BUDGET
Revenues
Total revenues of $45.0 million were forecast for 2025/26, a 6.9% increase from 2024/25.
Mid-year Financial Report & Adjustments
To FY 2025/26 2 February 17, 2026
General Fund
General Fund revenues are tracking positively compared to budget.
Property Tax – The budget forecast is $18,900,000. Property tax is projected to account for
57.8% of General Fund revenues. Actual prior year revenues totaled $20,132,054 for 2023/24
and $20,180,481 for 2024/25. Mid-year receipts indicate that revenue is expected to exceed the
budget forecast.
Sales Tax – The budget forecast is $6,400,000. Sales tax is projected to account for 19.6% of
General Fund revenues. Sales tax revenues have declined steadily since the fourth quarter of
2022. Actual revenues of $6,672,729 in 2023/24 and $6,815,062 in 2024/25 were attributable to
state reconciliation adjustments and increases in the county pool rather than a reversal of an
underlying trend. Revenues are expected to decline further from 2025/26. Mid-year receipts
indicate that revenue is expected to meet the budget forecast.
Property Transfer Tax – The budget forecast for 2025/26 is $465,662. Although local property
values have held steady, interest rates have dampened sales. As a result, revenues have
declined from a high of $1,013,688 in 2021/22 to $584,804 in 2024/25. Mid-year receipts indicate
that revenue is expected to meet the budget forecast.
Business License Tax – The budget forecast for 2025/26 is $350,000. Business license payments
are due by August 1. Mid-year receipts indicate that revenue is expected to meet the budget
forecast.
Franchise Fees – The budget forecast for 2025/26 is $2,573,592. Franchise fees for Cable, Solid
Waste and Gas and Electric are received at various times throughout the year (from monthly
to annually). Mid-year receipts indicate that revenue is expected to meet the budget forecast.
Interest Income – The budget forecast for 2025/26 is $550,000. At mid-year, the Town has
realized $741,931, well in excess of the forecast. This is attributable to higher yields realized
with the Town’s invested funds and significantly exceeds mid-year income for most recent
prior years. Mid-year receipts indicate that revenue is expected to exceed the budget forecast.
Recreation Fees and Charges - The budget forecast for 2025/26 is $2,758,085. Recreation fees
and charges have experienced a progressive pandemic recovery. 2025/26 revenues were
forecast to increase by 7.2% from the prior year. Actual prior year revenues totaled $2,500,772
for 2023/24 and $2,666,938 for 2024/25. Mid-year adjustments are recommended to increase
the Recreation, Arts and Community Services budget by $110,082 through additional class
offerings and a new theater production.
Donations – No donation revenue was budgeted for 2025/26.
Special Purpose Revenue
Special Purpose revenues exceed the budget forecast at mid-year.
Mid-year Financial Report & Adjustments
To FY 2025/26 3 February 17, 2026
Building and Planning – The budget forecast for 2025/26 is $2,440,744. Actual prior year
revenues totaled $3,559,487 for 2023/24 and $3,148,037 for 2024/25. At mid-year, revenues
collected represent 70.4% of the budget forecast. Mid-year receipts indicate that revenue is
expected to meet the budget forecast.
Gas Tax - The budget forecast for 2025/26 is $1,943,276. Actual prior year revenues totaled
$2,413,988 for 2023/24 and $2,565,570 for 2024/25. Mid-year revenue represents 51.3% of the
budget forecast. Mid-year receipts indicate that revenue is expected to meet the budget
forecast.
Measure J Return to Source (RTS) – The budget forecast for 2025/26 is $878,476. RTS revenue
comes from the countywide half cent sales tax for transportation and is largely received at the
end of the fiscal year. Actual prior year revenues totaled $1,024,094 for 2023/24 and $1,071,472
for 2024/25. Mid-year receipts indicate that revenue is expected to meet the budget forecast.
Solid Waste Vehicle Impact Fees (VIF) – The budget forecast for 2025/26 is $1,256,361. Solid
Waste VIF is collected from the Town’s solid waste and recycling haulers to offset impacts of
collecting vehicles upon Town streets. Solid Waste VIF was increased as part of the 2025 rate
setting process, meaning that actual revenues for the year will exceed the forecast. Actual prior
year revenues totaled $911,401 for 2023/24 and $1,077,562 for 2024/25. Mid-year receipts
indicate that revenue is expected to exceed the budget forecast.
Lighting and Landscape Assessment District – The budget forecast for 2025/26 is $4,568,731.
LLAD revenues come from assessments levied on property to partially fund the cost to
maintain Town parks, roadside landscaping, and street lighting. 100% of assessment revenue
is devoted to these maintenance activities. Assessment rates were increased in 2025 for the
first time in more than 20 years, reducing the dependence of the LLAD upon subsidies from
the General Fund. Mid-year receipts indicate that revenue is expected to meet the budget
forecast.
Successor Agency
Real Property Tax Trust Fund (RPTTF) revenue is budgeted at $1,830,677, inclusive of Town
re-payment under the Re-stated Cooperation Loan Agreement with the former CDA. RPTTF
revenues fund debt service payments for the 2001 and 2005 Certificates of Participation, the
2001 Taxable Revenue Bonds, and reimbursement of allowed administrative costs. Mid-year
receipts indicate that revenue is expected to meet the budget forecast.
Revenue Summary
Through December 31, 2025, the Town Council has approved one budget adjustment:
• Resolution No. 54-2025, authorizing receipt of $111,521.14 from the California Highway
Patrol for the Cannabis Tax Fund Grant Program.
Mid-year Financial Report & Adjustments
To FY 2025/26 4 February 17, 2026
Recommended Mid-Year Revenue Adjustments
Mid-year adjustments are recommended to:
• Increase Recreation, Arts and Community Services by $110,082, for the following
programs (General Fund):
Adult Services: $25,000
Seniors Services: $8,333
Cultural Arts: $76,749
At mid-year, there are significant positive variances to the budget forecast for Property Tax
and Interest Income. As a result, total 2025/26 revenues are projected to exceed the budget
forecast. Due to the anticipated positive variance, no further mid-year revenue adjustments
are recommended.
Table 1 summarizes the adopted budget forecast, prior amendments and recommended mid-
year adjustments.
Table 1
Mid-Year Revenue Summary
Adopted Prior Mid-Year
Budget Amendments Revised
TOTAL $ 46,857,943 $ 46,969,464 $ 47,079,546
General Fund $ 32,723,274 $ 32,758,095 $ 32,868,177
Special Revenue $ 12,303,992 $ 12,380,692 $ 12,380,692
Successor Agency $ 1,830,677 $ 1,830,677 $ 1,830,677
Expenditures
The 2025/26 Operating Budget includes total operating expenditures of $41.46 million, a 4.3%
increase from 2024/25.
General Government – The budget for 2025/26 is $3,424,706. All programs are on track to
finish the fiscal year within budget. Additional appropriations are recommended in City Clerk
- $10,000 to cover increased Granicus costs; and Economic Development – $30,000 to conduct
a feasibility study for a Downtown Conference Venue initiative. Mid-year adjustments are
recommended to increase the City Clerk budget by $10,000 and increase the Economic
Development budget by $30,000. All other contract and direct costs are tracking within budget.
Police Services – The budget for 2025/26 is $12,257,068. Costs are tracking within budget and
no mid-year adjustments are recommended.
Mid-year Financial Report & Adjustments
To FY 2025/26 5 February 17, 2026
Administrative Services – The budget for 2025/26 is $5,704,403. Costs are tracking within
budget and no mid-year adjustments are recommended.
Development Services – The budget for 2025/26 is $5,416,686. All programs are on track to
finish the fiscal year within budget. Additional appropriations are recommended in
Transportation - $59,000 for Town-wide Traffic Signal Maintenance due to increased contract
services costs from Contra Costa County; and $60,000 for a parking study service. Two mid-
year adjustments are recommended to increase the Transportation budget by $119,000. All
other contract and direct costs are tracking within budget.
Maintenance Services – The budget for 2025/26 is $9,775,455. Costs are tracking within budget
and no mid-year adjustments are recommended.
Recreation, Arts and Community Services – The budget for 2025/26 is $4,172,030. Mid-year
adjustments are recommended to increase the Recreation, Arts and Community Services
budget by $106,950 in anticipation of additional contracted services to deliver additional
classes and newly secured theater production. Mid-year adjustments are recommended to
increase General fund expenditure in the following program budgets:
• Adult Services - $15,000 to fund additional instructor fees.
• Senior Services - $5,000 to fund additional instructor fees.
• Cultural Arts - $86,950 to fund additional instructor fees, contracted services, ticket
split, administration, and materials and supplies.
All other contract and direct costs are tracking within budget.
Successor Agency
For 2025/26, Successor Agency operating expenditures total $1,171,276 for debt service and
administrative costs. The final payment on the outstanding balance owed under the former
CDA/Town loan is $659,401. All other 2025/26 Successor Agency expenditures remain
unchanged. No mid-year adjustments are recommended.
Expenditure Summary
Through December 31, 2025, the Town Council has approved one budget adjustment totaling
$174,241.
• Resolution No. 66-2025, appropriating $174,241 from contingency funds to authorize the
purchase of a backhoe for the Maintenance Services Department.
Recommended Mid-Year Expenditure Adjustments
The following mid-year adjustments are recommended:
Mid-year Financial Report & Adjustments
To FY 2025/26 6 February 17, 2026
•General Government – City Clerk – Increase Contracted Services budget by $10,000
(PEG Fund) and Economic Development – Increase Contracted Services budget by
$30,000 (General Fund)
•Recreation, Arts and Community Services – Adults Services – Increase Contracted
Services budget by $15,000 (General Fund) – Senior Services – Increase Contracted
Services budget by $5,000 (General Fund) – Cultural Arts – Increase Contracted Services,
Ticket Split, Administration and Material and Supplies budget by $86,950 (General
Fund)
•Development Services – Transportation – Increase Contracted Services budget by
$119,000 ($59,000 from Gas Tax Fund, and $60,000 from Measure J Fund)
Staffing and Employee Costs
Employee costs are budgeted at $14,990,823. As of mid-year, approximately 44 percent of the
budget has been expended, and total costs are projected finish the fiscal year within budget.
One classification change is recommended to reclassify the Communications & Economic
Development Manager position to a Director level classification, restoring the Director
classification for the position that existed through May 2023. Sufficient funds are available in
the Employee Expense budget to accommodate this reclassification.
Table 2 illustrates 2025/26 expenditures, including the adopted budget forecast, prior
amendments and recommended mid-year adjustments.
Table 2
Mid-Year Expenditure Summary
Adopted Prior Mid-Year
Budget Amendments Revised
TOTAL $ 42,631,494 $ 42,805,735 $ 43,071,685
General Fund $ 29,796,914 $ 29,971,155 $ 30,108,105
Special Revenue $ 11,663,304 $ 11,663,304 $ 11,792,304
Successor Agency $ 1,171,276 $ 1,171,276 $ 1,171,276
Transfers and Designations
The 2025/26 budget includes General Fund transfers of $3,883,314, for the following purposes:
•$1,600,000 for LLAD operations
•$500,000 for CIP - Pavement Management
•$50,000 for Asset Replacement
•$1,733,314 for CIP – General Purpose
On December 16, 2025, the Town Council adopted Resolution No. 80-2025, approving the
2024/25 ACFR and transferring a total of $4,772,589 from the General Fund into the Capital
Mid-year Financial Report & Adjustments
To FY 2025/26 7 February 17, 2026
Improvement General Purpose Fund. This increased the total 2025/26 transfers and
designations to $8,655,903.
Mid-Year Budget Summary
The Town’s overall financial condition remains positive with overall revenues exceeding the
budget forecast and expenditures tracking closely with the approved 2025/26 Operating
Budget. Mid-year adjustments are recommended to increase expenditures by 0.6%.
CAPITAL IMPROVEMENT PROGRAM
The 2025/26 CIP included appropriations of $12,031,300 to fund 43 separate projects.
Recommended Mid-Year Adjustments
•A-330 – Town-wide Storm Drain System Management: Appropriate $500,000 from Capital
Improvement General Purpose Fund to A-330 – Storm Drain Management Systems to
repair storm drain pipes along San Ramon Valley Boulevard and Hill Meadow Place.
•C-621 - Transportation Development Act Grant: Accept and appropriate $75,000 TDA grant
to capital improvement project C-621. The funds will be used to install Rectangular Rapid
Flashing Beacons (RRFB) at Iron Horse Trail intersections.
•C-418 - Energy Efficiency Conservation Block Grant (EECBG): Accept and appropriate
$76,480 to capital improvement project C-418. The funds will be used to replace
incandescent yellow bulbs on signal heads with LED fixtures.
•C-610 – Pavement Management: Transfer $102,123 from Lawrence Road Benefit District
fund to capital improvement project C-610. The funds will be used to fund pavement slurry
seal service.
•Appropriate $1,000,000 from SCC Regional Fund for ongoing landscape maintenance
expenditures associated with the I-680 auxiliary lanes project.
PUBLIC CONTACT
Posting of the meeting agenda serves as notice to the general public.
RECOMMENDATION
Adopt Resolution No. 17-2026, accepting the mid-year Financial Report, approving mid-year
adjustments to the Fiscal Year 2025/26 Operating Budget and Capital Improvement Program.
Mid-year Financial Report & Adjustments
To FY 2025/26 8 February 17, 2026
Prepared by:
Lani Ha
Finance Director/Treasurer
Reviewed by:
Tai Williams
Town Manager
Attachment: Resolution No. 17-2026 A -
RESOLUTION NO. 17-2026
ACCEPTING THE MID-YEAR FINANCIAL REPORT, APPROVING MID-YEAR
ADJUSTMENTS TO THE FISCAL YEAR 2025/26 OPERATING BUDGET
AND CAPITAL IMPROVEMENT PROGRAM
WHEREAS, all revenue and expenditure projections, which were made in preparing the
Fiscal Year 2025/26 Operating Budget have been reviewed; and
WHEREAS, the following mid-year adjustments to the Fiscal Year 2025/26 Operating
Budget are recommended to reflect increased expenditure needs:
General Fund – Revenues
•Recreation, Arts and Community Services – Increase Adult Services by $25,000, Seniors
Services by $8,333 for additional class offerings, and Cultural Arts for $76,749, for a
new theater production.
Total General Fund revenues increased from $32,758,095 to $32,868,177.
General Fund – Expenditures
•General Government – Economic Development - Increase by $30,000 to conduct a
feasibility study for a Downtown Conference Venue initiative.
•Recreation, Arts and Community Services – Increase Adult Services by $15,000 for
Contract Services, Seniors Services by $5,000 for Contract Services to deliver
additional class, and Cultural Arts by $86,950 to secure a new theater production.
Total General Fund expenditure increased from $29,971,155 to $30,108,105.
Special (Restricted) Revenue – Expenditures
•General Government – City Clerk - Increase $10,000 (PEG Fee) to cover Granicus costs.
•Development Services – Transportation – Increase by $59,000 (Gas Tax Fund) for Town-
wide Traffic Signal Maintenance, and $60,000 (Measure J Fund) for a parking study
service.
Total Special Revenue expenditures increased from $11,663,304 to $11,792,304.
WHEREAS, one classification change is recommended to reclassify the Communications
& Economic Development Manager position to a Director level classification, restoring
the Director classification for the position that existed through May 2023.
WHEREAS, the following mid-year adjustments to the Fiscal Year 2025/26 Capital
Improvement program are recommended:
•A-330 - Town-wide Storm Drain System Management: Appropriate $500,000 from Capital
Improvement General Purpose Fund to project A-330 – Storm Drain Management
Docusign Envelope ID: 2487470D-C387-400B-AE2B-7FDC65877CAF
ATTACHMENT A
PAGE 2 OF RESOLUTION NO. 17-2026
Systems to repair storm drain pipes along San Ramon Valley Boulevard and Hill
Meadow Place.
•C-621 - Transportation Development Act (TDA) Grant: Accept and appropriate $75,000
TDA grant to capital improvement project C-621 to install Rectangular Rapid Flashing
Beacons (RRFB) at Iron Horse Trail intersections.
•C-418 - Energy Efficiency Conservation Block Grant (EECBG): Accept and appropriate
$76,480 to capital improvement project C-418 to replace incandescent yellow bulbs on
signal heads with LED fixtures.
•C-610 – Pavement Management: Transfer $102,123 from Lawrence Road Benefit District
fund to capital improvement project C-610. The funds will be used to fund pavement
slurry seal service.
•Appropriate $1,000,000 from SCC Regional Fund for ongoing landscape maintenance
expenditures associated with the I-680 auxiliary lanes project.
WHEREAS, sufficient funding is available in the Town’s funds; now, therefore, be it
RESOLVED, that the Danville Town Council hereby approves the mid-year adjustments
to the Fiscal Year 2025/26 Operating Budget.
APPROVED, by the Danville Town Council at a regular meeting held on February 17,
2026, by the following vote:
AYES:
NOES:
ABSTAINED:
ABSENT:
_________________________________
MAYOR
APPROVED AS TO FORM: ATTEST:
________________________________ _________________________________
CITY ATTORNEY CITY CLERK
Docusign Envelope ID: 2487470D-C387-400B-AE2B-7FDC65877CAF