City of Portola Budget Dashboard

📋 Introduction: Where We Stand

The City of Portola remains in a strong financial position. Two significant one-time revenue events, the Lake Davis Settlement (1997) and the Woodbridge Transaction (2004), helped build our General Fund balance. Importantly, the City has not used those funds for recurring expenses, which protects us from a structural deficit.

Audits from previous fiscal years confirm continued stability. The net change in General Fund cash and receivables from 2021 to 2026 was only a decrease of $72,388, a sign of careful, consistent stewardship over five years. The chart below shows how steady that balance has stayed.

The Gulling Street Bridge project poses a significant financial risk. The City's estimated local match for the Caltrans Highway Bridge Program is about 23%, meaning on a multi-million dollar project, Portola's share could be substantial. A healthy fund balance means we can cover this without expensive short-term loans.

📐 How We Budget

Staff budgets conservatively, with revenues estimated on the lower end and expenses on the higher end. This means fewer unpleasant surprises mid-year, and the City Council and public can trust the numbers represent a realistic picture.

The proof shows up when you compare actual spending and income through May 29, 2026 against the budget. On the expense side, departments came in well under budget for the year: general fund spending tracked at about 76% of budget, special revenue funds at 65%, water at 76%, sewer at 80%, and solid waste at just 62%. On the revenue side, most funds met or exceeded expectations, with general fund revenue actually coming in above the conservative estimate. Budgeting this way protects the City against unexpected costs and keeps the fund balance healthy.

💰 Budget Summary

The adopted FY 2026–2027 budget includes:

• Total Revenue: $4,429,138

• Total Expenses: $5,246,127

• Use of General Fund Balance: $264,162 (of which roughly $157,000 is for one-time, non-recurring expenses)

Note on Water & Sewer: Given the trend of increasing use of fund balance in both enterprise funds, staff believes it is prudent to commission a rate study for these funds in the near future.

🏗️ Capital Improvements

Senate Bill 1 (The Road Repair and Accountability Act of 2017) funds our capital improvement program. The projected expense is $171,000, focused on street rehabilitation through the "Dedicated Pavement Crew" program.

The sewer 6-acre bypass project (approved last year) is ongoing and constitutes a capital project within the sewer fund. Upon completion of a new water and sewer master plan, the City will develop a full capital improvement plan for these enterprise funds.

⚠️ Key Risks to Watch

• Gulling Street Bridge, with potential for a large local match requirement

• Ongoing legal expenses, budgeted conservatively

• Receivership Program, newly proposed, with $30,000 allocated

• Portola Community Forest Initial Exploration, with $30,000 allocated

The City remains hopeful that federal and state funding will offset a significant portion of the bridge project cost, and will continue to limit use of one-time funds for recurring expenses.

✅ Conclusion

With a continued focus on responsible financial management through conservative budgeting, staff is confident in the City of Portola's path toward another year of stability and progress. The City will continue to provide the same level of services to residents without pursuing additional revenue sources or modifying service rates at this time.