WILLIAMS, CA (MPG) – The Williams City Council is poised to adopt a balanced two-year budget at an upcoming meeting, reversing previously projected structural deficits through wide-ranging financial and staffing reforms.
Finance Director Rex Greenbaum, who presented the proposal at the council’s July 16 meeting, said total revenues are projected to decline by 7.4% – a $456,496 drop – compared to the previous year. This decrease is attributed to a slowdown in the economy and lower gas prices, which have impacted sales tax revenue.
Although property tax collections are forecasted to increase by 7.6% to $1.6 million, sales and use taxes are expected to fall sharply by 18.7%, dropping from $1.97 million to $1.59 million. Local sales tax revenue is also anticipated to decline 10.2%, from $1.1 million last year to $949,682. An optimistic 2% rebound in sales tax collections is projected for 2027, Greenbaum said.
With reduced revenue, the city’s proposed general fund budget for fiscal year 2025/2026 stands at $5.7 million, down from $6.7 million previously. For 2027, the budget is projected at $5.9 million.
To bring the budget into balance, the city renegotiated employee compensation across the board. This includes a 10% pay reduction, achieved through furloughs, and the elimination of the initially planned 3% cost-of-living salary increase for all staff, officials said. To accommodate furloughs, City Hall transition to a four-day workweek with closures on Fridays beginning on July 11.
Staffing adjustments include leaving the public works director position vacant following the departure of Colt Esenwein, who now serves as the county’s public works chief. City Manager Frank Kennedy, who will retire in September, has assumed part of those responsibilities, while two General Fund maintenance workers have been reassigned to sewer operations.
Departmental budgets will reflect the city’s new fiscal priorities. The Police Department is slated to operate on $2.3 million in 2026 and $2.4 million in 2027, a decrease from $2.7 million in 2024 and $2.9 million in 2025.
The City Administration’s budget will be $144,217 in 2026 and $149,514 in 2027, down from $169,953 in 2024 and $178,269 in 2025.
In contrast, the Williams Fire Protection District will see increased funding, with $897,600 allocated for the next two years, up from $632,885 in 2024 and $822,762 in 2025.
The city also anticipates spending less on park but slightly more on recreation.
The City of Williams employs about 40 fulltime workers.
After paying off the city’s total unfunded pension liabilities, Williams officials have opted to temporary suspend planned contributions the next two years.
Greenbaum said going forward, however, the city must resume budgeting for unfunded pension contributions in future years to avoid accumulating new large debts to public employee system (CalPERS).
“Maintaining this commitment will be essential to protecting the city’s long-term financial health and avoiding unpredictable pension costs spikes,” Greenbaum noted.
In addition to general funding challenges, costs to provide water and sewer services to Williams residents have not kept pace with the rates customers pay.
Greenbaum said while the Sewer Enterprise Fund is structurally balanced, the Water Enterprise Fund has projected deficits of $92,937 and $156,476 in 2026 and 2027, respectively.
“Costs have outpaced the annual 2% limit on our revenue increase, resulting in the current shortfalls,” Greenbaum said. “To balance the Water Enterprise Fund, the city will need to either consider a Proposition 218 (tax) measure to increase utility rates or reduce planned expenditures.”
The Williams City Council is expected to deliberate and vote on the proposed budget at their August meeting, as well as begin discussion on a new utility rate structure following the release of a new water rate study that has been conducted, officials said.