How to resolve AdBlock issue? LAKE COUNTY, Calif. — The Clearlake City Council on Thursday wrapped up work on the new fiscal year budget, the largest in the city’s 45-year history.
The council held a 2025-26 budget workshop Thursday evening, just ahead of its regular meeting, to go over the numbers with staff.
The budget the council eventually approved included $83,149,510 in expenses and $81,034,188 in revenue.
City Manager Alan Flora told Lake County News that the 2025-26 budget is the largest in the city’s history, and is significantly larger than in past years.
Compare this year’s budget, at nearly $84 million in appropriations, to last year’s, at $50 million.
“Our General Fund has not really increased, this is the result of grant funds for various projects,” said Flora.
For this new fiscal year, Flora said the city budget includes more than $45 million in grant funds to support the Clearlake Apartments project near Adventist Health Clear Lake Hospital.
“The state has provided these grant funds to the city to pass through to the housing developer,” Flora said.
Despite being the largest budget Clearlake has had to date, Flora said in his budget message on the city’s Open Gov page that, “Revenue constraints require us to take a more conservative approach to spending, prioritizing essential services and carefully evaluating discretionary expenditures.”
The city is prioritizing core services such as public safety, road maintenance and essential municipal operations, all of which Flora said remain fully funded.
The city is taking a strategic approach to spending reductions by identifying efficiencies across departments to minimize costs while maintaining service quality, Flora said in his message.
Meantime, the city remains committed to key infrastructure projects — which Flora said include road rehabilitation and downtown revitalization efforts — while maximizing grand funding from state and federal sources.
During the workshop, staff outlined the main capital projects for the coming year, which total approximately $15,783,013.
They include:
• Arrowhead Burns Valley Road Rehabilitation Project: $5,483,774.
• Burns Valley Sports Complex: $9,116,279.
• Dam Road roundabout: $483,925.
• Austin Park Skate Park: $400,000.
• Clearlake Police Department radio/communication infrastructure: $210,675.
• Airport Road Project, $88,360.
“While fiscal prudence is necessary, our guiding principle remains progress and stability for Clearlake’s residents. Through careful planning and resourceful decision-making, we will continue improving our city’s livability while ensuring long-term financial sustainability,” Flora wrote.
Matt Pressey, the city’s acting finance director, told the council that the state has seen strong growth over the past five years, including steady growth in its revenues. He referred to California surpassing Japan last year to become the world's fourth-largest economy. However, there is now limited economic growth.
On the city level, Pressey reported that the economy is stable but not growing. Property tax revenues are seeing a slight increase while sales tax revenues are dropping slightly. Population growth is on a stable trend.
Flora told the council that the budget is not “structurally sound,” which means that they are using one-time funding for ongoing expenses.
He said that’s not where they want to be, explaining that the city is relying heavily on using other funding sources to support expenses in the general fund which they wouldn’t have to do if they hadn’t a healthier economy.
As a result, he’s implemented a general fund hiring freeze for jobs not in the background check process.
The city has had significant increases in retirement and insurance costs this year. In spite of those increases, Flora said the budget still shows reductions in all general fund budget units.
During the regular meeting, which lasted just under 45 minutes, the council unanimously approved the new fiscal year budget with no additional discussion.
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