NEVADA CITY, Calif. June 25, 2026 – Nevada City’s City Council adopted its fiscal year 2026-27 budget Wednesday evening, approving a $15.8 million spending plan that holds the line on most costs.
Finance Manager Brittnie Neundorfer presented the budget to the council, noting that total citywide revenues of $15.8 million slightly exceed projected expenses of $15.6 million. The general fund, which covers core city operations, has a narrower margin: revenues of $6.6 million against expenditures of $6.7 million, with the gap covered by a one-time fund balance drawdown for a capital improvement project.
On the revenue side
Property tax is expected to grow roughly 2%, or about $33,000, while sales tax is projected to increase 1.7%, adding about $25,000. Transient occupancy tax – the hotel bed tax – is expected to fall about 6.7%, a drop of roughly $41,000. City Manager Carrie Wright attributed the decline in part to a recalibration of projections based on actual collections rather than a sign of declining tourism.
Rising costs
On the expenditure side, the budget anticipates rising utility and fuel costs, a 3% cost-of-living adjustment for city personnel effective July 1, a 3% escalator in the city’s fire services contract taking effect in October, and a 10% increase in health benefits projected for early 2027. The city’s unfunded pension liability payment will increase 5.2%, though the city plans to prepay at the start of the fiscal year to capture a 5% discount – a strategy Wright said will be reassessed depending on returns from the city’s investment portfolio.
Three positions will remain unfilled pending a mid-year review: a police officer, a water/wastewater operator in training, and an administrative services manager/deputy city clerk. No layoffs are planned, the city retains the same 51 positions as in the prior fiscal year.
$3.4 million capital improvement plan
The council also approved a five-year capital improvement plan (CIP) totaling $3.41 million. The bulk of the spending goes to roads, streets and sidewalks, followed by parks and buildings. New projects include sidewalks on Railroad Avenue and Searles Avenue, work on the Pioneer Park house at 425 Nimrod, rehabilitation at the Miners Foundry, a Prop 64 project, and a SCADA technology upgrade at the water and wastewater plants. General fund CIP projects — totaling $155,000 — include Clark Street parking, a facility at 424 Broad Street in Pioneer Park, and swimming pool improvements.
The budget comes as the city faces the longer-term challenge of aging water and wastewater infrastructure, a topic that has come before the council in several public meetings. Wright told YubaNet that ratepayers can expect more information soon: “Water and wastewater rate studies and information will be coming back to Council for review in July.”
Fee changes
The fee schedule overhaul prompted some discussion by councilmembers. The city is eliminating 16 fees identified as redundant or no longer needed, reducing two – the cannabis permit renewal fee, which Wright said is now faster to process, and the public art application fee, reduced to $225 effective July 1 – and adding three new fees: an hourly planning rate for projects exceeding standard cost recovery, a special event parking fee for high-volume event days, and a new fee for solar plan reviews on projects larger than 5,000 square feet.
The most visible change for most residents will be parking meters, which are doubling from 50 cents to $1 per hour. “The parking fee increase will need to be coupled with an implementation plan,” Wright told YubaNet. “More information on parking strategy and the results of the parking pilot program will be presented to Council at the July 8th meeting. I plan to meet with several stakeholder groups to discuss implementation in July.”
Pool party fees are also increasing, reflecting actual costs to staff and run those events.
Vice Mayor Lou Ceci raised a point for the public’s awareness during the fee discussion: fees must be set to recover administrative costs, not to discourage applicants. City Manager Wright confirmed that fees are legally required to reflect cost recovery based on staff time and resources, and that using fees to penalize unwanted applications would not be permissible.
Flat revenues are a mounting concern
Councilmember Gary Peterson, who said he had spent several days reviewing the budget, offered his assessment of the city’s fiscal trajectory.
“This is about the fifth year in a row that we’ve seen revenues flat,” Peterson said. “We’re not growing revenues. And as we look at not filling positions, we’re right at the edge – because when you stop filling positions, you start eroding services.”
Peterson tied the revenue problem to what he called “artificial constraints” in the community, arguing that years of limiting growth had prevented the city from expanding its tax base while costs continued to rise. “How do you preserve a city that you’re financially strangling?” he said. “You’ve got to pay for the place.”
Councilmember Daniela Fernández echoed the concern, saying the council would need to tackle revenue growth in the coming years.
The budget, capital plan, fee schedule, compensation plan and appropriations limit were all adopted 4-0, with Council Member Doug Fleming absent.