GALT, CA (MPG) - The City Council unanimously approved Galt’s $110.94 million 2026-2027 fiscal year budget at its June 16 meeting, a budget that has significant changes from previous budgets.

The first of these is the budgeting cycle, which now moves to an annual process instead of a biennial or two-year cycle. Galt Finance Director Leila Menor said the change was a major step for the city.

“Doing this will help us get a more accurate picture on the city’s actual financial condition,” Menor told the council.

The budget reflects increases in revenues as well as expenses over the 2025-2026 budget. General Fund revenue is projected to increase $5.7 million, 21.85% over 2026, to $31.9 million total while expenses increased $8.9 million, 36.73%, to $33.2 million.

Much of the difference between revenues and expenses in the fund comes from a $1.2 million one-time requested appropriation in the Community Development Department to fund the 2050 General Plan update, along with $834,528 for citywide operating capital projects and $234,000 for capital improvement projects that include the annual pavement rehabilitation and municipal service center rehabilitation projects. Payroll and Operation & Management expenses take up the largest section of the General Fund pie with payroll at $19.3 million, 58%, and Operations & Maintenance at $9.9 million, 29.9%.

The Police Department continues to be the largest expense among departments using the General Fund at $13.5 million, almost 41% of spending, proposed this budget. It’s followed by Public Works at $5.38 million, 16.22%, Administration at $3.92 million, 11.82% and Community Development at $3.44 million, 10.38%.

General Fund revenues are projected to grow by 21.84%, led by property and sales taxes, which account for over 45% of fund revenues and are projected to increase by 3.75% to $14.5 million, mainly because of increased property values from planned residential construction. Charges for services are projected to grow by 33.12%, $2.51 million, while licenses and permits are projected to increase from $1.29 million to $1.37 million.

One of the biggest increases in General Fund revenue comes from the “Refunds” category, jumping 3,759.20% from $161,382 to almost $6.23 million. The category is confusing in that its name and function are part of the outdated system the city is transitioning from.

In an email, Menor explained that historically, budgets from department such as Public Works Engineering, Police and Landscape Maintenance within Parks and Recreation were spread across multiple funds, with salary and operating costs for one position often divided among 12 different funds. To improve transparency and align with budgeting and accounting best practices, the new system moves those costs into the General Fund or Parks and Recreation Fund so that now departments are reimbursing just two funds instead of several.

The result is a one-time, large increase in the “Refunds” line item representing these reimbursements.

“This change is net neutral,” Menor said. “While the revenues appear higher, they simply offset the corresponding increase in expenditures.”

The affected departments now show a decrease due to the shift, but have net budget increases resulting from staffing changes, reclassifications and higher benefit costs, she added.

“In total we moved about $4.5 million in expenses to the General Fund and $1.78 million to the Parks and Recreation Fund,” Menor said.

Expenditures for all other departments that are key to city operations such as Public Works, Parks and Recreation and capital projects total $77.8 million, reflecting an overall increase from 2026 of 2.2% with some departments seeing larger increases due to planned projects and personnel additions. Revenues from the city’s two tax measures, Measure R for public safety and Measure Q, are expected to increase in 2027, with Measure R seeing a 2.45% bump to just over $2.56 million while Measure Q for essential city services will jump 8.67% to $5.025 million.

Citywide payroll increased by $8.26 million over the current fiscal year budget, a figure that includes $2.9 million in cost-of-living adjustment in labor bargaining groups agreements and the $4.5 million shift in Refunds changes. The city is proposing to create eight new positions, six in the General Fund and two in utility funds with a combined expense of $812,516 that includes one-time equipment expenses along with $164,838 in reclassification and salary adjustments from promotions or changed work requirements among 23 positions.

The 2026-2027 adopted budget also includes $4.5 million for 32 new funding requests across all funds. Just over $3.2 million of these are funded through the General Fund, the largest of which is $1.45 million in Community Development, consisting of $1.2 million for General Plan updates and $250,000 for software upgrades.

The budget includes $24 million for 17 proposed capital projects, largest of which is a $5 million water main replacement in Old Town. Also included are storm and water main replacements at $4.5 million each, $3.21 million for Carillion Boulevard safety improvements and $2 million for the Deadman Gulch improvement project.

Project expenses are covered through several sources including reserve funds generated through developer impact fees. In response to several councilmember concerns about the number of projects, Deputy Finance Director Carlos Solorio said they were “a good use of fund balances.”

“We’ve collected it for a specific purpose and we’re now keeping our promise,” Solorio added.

Going forward, staff foresees the city’s revenues and expenses remaining fairly stable. Revenues are projected to increase based on known development projects in the pipeline, Solorio told the council, with expenses increasing annually with inflation.

Solorio added they are projecting healthy reserves and ending fund balances over the next five years, including a requirement to maintain a 25% operating reserves for the General Fund.

In adopting the budget, council also approved the five-year Capital Improvement Plan, the fiscal year California Constitutional Appropriations Limit and the city’s master fee schedule by “adjusting the amount of user fees and regulatory fees for public services.”