Ukiah council adopts fiscal 2025–26 budget, updates five-year CIP and approves Gann limit and sanitation district budget agreement
June 18, 2025 | Ukiah City, Mendocino County, California
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The Ukiah City Council on June 18 adopted the fiscal year 2025–26 city budget, approved an updated five-year capital improvement program and adopted the Gann appropriations limit resolution. The council also authorized the city manager to finalize a budget agreement with the Ukiah Valley Sanitation District, with final cost-share percentages to be confirmed by a third-party consultant.
A staff presenter identified in the record as "Mr. Buffalo" delivered the budget presentation and noted minor adjustments and appendices additions requested by the mayor, including clarifications of full-time equivalent (FTE) counts and cost-allocation note language. Council members questioned technical items including the Gann (appropriations) limit calculations and the city’s treatment of tax proceeds versus grants.
Staff explained the Gann limit (the state appropriations limit) calculation is based on inflation and population factors and that the city’s budgeted tax proceeds subject to the limit represent roughly 32% of the calculated allowable appropriations, meaning the city is well below the cap. Staff clarified that many grant revenues and certain intergovernmental transfers are typically not included in the appropriations-limit calculation.
On the budget agreement with the Ukiah Valley Sanitation District, staff said the city and district agreed to use a third-party consultant to calculate the district’s percentage share of operations and debt service; staff expected those final numbers within a few weeks (staff said July) and said the methodology is already agreed. Staff and council discussed the prior settlement that split debt associated with past sewer-plant upgrades and noted the district has roughly half of its customer base inside city limits, which factors into cost-sharing calculations.
Council took separate roll-call votes to adopt the budget resolution, adopt the five-year CIP and adopt the Gann limit resolution; each motion passed with the members present voting yes. The council also voted to authorize the city manager to sign the budget agreement with the Ukiah Valley Sanitation District in substantial form, subject to final cost-share numbers from the consultant.
Why it matters: adoption of the budget and CIP sets spending priorities and capital projects for the next fiscal year; the budget agreement with the sanitation district determines how operation and debt service costs shared between the city and the district will be apportioned.
A staff presenter identified in the record as "Mr. Buffalo" delivered the budget presentation and noted minor adjustments and appendices additions requested by the mayor, including clarifications of full-time equivalent (FTE) counts and cost-allocation note language. Council members questioned technical items including the Gann (appropriations) limit calculations and the city’s treatment of tax proceeds versus grants.
Staff explained the Gann limit (the state appropriations limit) calculation is based on inflation and population factors and that the city’s budgeted tax proceeds subject to the limit represent roughly 32% of the calculated allowable appropriations, meaning the city is well below the cap. Staff clarified that many grant revenues and certain intergovernmental transfers are typically not included in the appropriations-limit calculation.
On the budget agreement with the Ukiah Valley Sanitation District, staff said the city and district agreed to use a third-party consultant to calculate the district’s percentage share of operations and debt service; staff expected those final numbers within a few weeks (staff said July) and said the methodology is already agreed. Staff and council discussed the prior settlement that split debt associated with past sewer-plant upgrades and noted the district has roughly half of its customer base inside city limits, which factors into cost-sharing calculations.
Council took separate roll-call votes to adopt the budget resolution, adopt the five-year CIP and adopt the Gann limit resolution; each motion passed with the members present voting yes. The council also voted to authorize the city manager to sign the budget agreement with the Ukiah Valley Sanitation District in substantial form, subject to final cost-share numbers from the consultant.
Why it matters: adoption of the budget and CIP sets spending priorities and capital projects for the next fiscal year; the budget agreement with the sanitation district determines how operation and debt service costs shared between the city and the district will be apportioned.
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