A midyear financial update from Susan Scarlett, Portola’s finance officer, revealed balance and stability overall in Portola’s fiscal operations. Roughly halfway through the fiscal year, the city is “very stable all the way across,” Scarlett reported at the Portola City Council meeting Feb. 11. “That’s a reflection of the council’s trying to make sure we have a balanced budget and the staff trying to keep costs down,” she said.
The spreadsheets, tables and figures Scarlett referenced during her presentation were attached to the council’s agenda packet, starting on Page 32.
Cash and receivables report
Scarlett explained that the cash and receivables report reflects the cash balances in different funds. “The general fund looks good,” she said. It contains about $2.5 million now, which is about the same amount recorded June 30 of the past four years.
She noted that a $2.8 million loan to Eastern Plumas Health Care District — approved by the Rural Community Assistance Corporation in 2018 — has been paid down every year, and that it is close to being paid off, with only $44,000 remaining.
Two funds, those for streets and snow removal, are always going to have negative values at this time of year, said Scarlett. This is because the city uses gas tax funds to cover those costs, with any additional funds coming out of the general fund. The gas tax funds don’t come in until May.
The Road Maintenance and Repair Act fund includes $146,000, which Scarlett said will allow the city manager and public works department to tackle several projects.
Enterprise funds
Scarlett identified water, sewer and solid waste as the city’s three enterprise funds. “They don’t borrow from each other, they don’t commingle. Each one is like a little mini business,” she said.
Each has a healthy cash balance:
- $2.8 million in water
- $2.2 million in sewer
- $1.1 million in solid waste
Scarlett said the public works department is currently working on the sewer system and that the council can decide in the future whether to use reserve funds for those projects. She pointed out that the funds must also be maintained to cover “big emergencies” and repairs, as well as provide match monies for grants, all without raising rates for customers.
Portola has an obligation to the state to partially cover the costs incurred if the city’s landfill needs to be redone or closed, said Scarlett. The solid waste fund provides that coverage.
Scarlett lauded the council members for their decision to “attack … issues head-on,” meaning the city does not have to borrow from the general fund for its enterprise funds. This was a situation the city faced in the past, with a loan going to solid waste for landfill closure expenses, she said.
Utility billing and fees
Scarlett told the council that she and staff have been investigating issues related to utility billing. Quite a few years ago, the city changed the rules for utility billing from billing in tenants’ names to billing in landlords’ names, she said. According to its fee schedule effective July 1, 2023, the city has also implemented an availability charge, which helps support the cost of maintaining infrastructure availability even if services are turned off.
These two factors have resulted in some “sky high” bills when customers turn off their water and “just let the bill continue to accrue,” including the availability charge, interest and penalties, said Scarlett. One bill she mentioned totaled $30,000.
The city has attached “quite a few” liens to properties as a result of very large bills, said Scarlett. Staff will also be coming to the council in the future to request a review of the penalty policies.
Mayor Pro Tem Mikki Battaglia clarified with Scarlett that the availability charge is assessed monthly. Council Member Jim Murphy asked whether the availability charge is assessed for lots. Scarlett clarified that the charge only applies to current water customers, not owners of vacant lots.
Other expenses
For street lighting, the city has budgeted $110,000 and spent $41,000 so far. For years the city paid $25,000 to $30,000 for street lighting, said Scarlett. After a dry year meant that the city’s electricity provider, Liberty Utilities, didn’t receive its guaranteed profit as set by the California Public Utilities Commission, the cost rose to $65,000 per year, she said.
Scarlett asked Portola City Attorney Steve Gross, who attended the meeting remotely, to chime in.
“Those rates are out of our hands, unfortunately,” Gross said.
Scarlett’s report includes $30,000 for snow removal contractors, in case snow levels exceed what can be dealt with by the public works department.
She explained a $150,000 item called “water purchase” as the cost of purchasing the city’s allocated water from Lake Davis. “We haven’t given up any water rights,” she said. “Don’t anybody get upset.”
Because the flood control district has sold water downstream and the city gets a part of that, Portola now has a credit and won’t have a water charge next year, she said. The council will discuss the situation at its budget goal-setting session, said Scarlett.
Scarlett announced that Director of Public Works Todd Roberts had purchased a sewer bypass pump, which was reflected as a $110,000 expense.
The city has not yet paid its annual contract with the Plumas County Sheriff’s Office — totaling $130,000 — because the contract is still under review, said Scarlett.
2026-2027 budget
The general fund revenue shows $720,000 year to date, which Scarlett called “a little misleading.” She said that funds from the county aren’t reflected in the total because the city has not yet received its first property tax check. However, funds to cover about $400,000 of expenses from the prior year are still on the books because the money didn’t arrive in time to post back for last year’s budget.
Scarlett said she used an estimate of $172,000 in secured property taxes from Plumas County Auditor-Controller Martee Nieman in her report. Mayor Bill Powers asked whether that total would go up. Scarlett said she hopes it will. In the past, property taxes have totaled:
- $287,766 in 2022-2023
- $327,792 in 2023-2024
- $321,162 in 2024-2025
Sales tax income is on track to be higher this year — Scarlett has budgeted $310,000 — and transient occupancy tax is “about where we thought it would be,” said Scarlett.
“There are some good things that you’ll see when we get into the budget,” Scarlett told the council members.
The council’s initial goal-setting budget meeting is set for March 4, with public comment periods scheduled for March 25 and April 8. A public hearing will be held June 10, followed by formal adoption of the 2026-2027 budget set for June 24.