Follow The
Clucking Money

A citizen inquiry into Petaluma’s finances

How does the City of Petaluma spend money, and where does it get that money? Eight Petaluma citizens from Petaluma Urban Chat set out to explore these questions. Below we break down the city’s 2026–2027 budget (approved in May 2026) into pieces, from big picture to smaller details. Use the budget-year menu in the navigation bar to switch between fiscal years.

Community Stats

A snapshot of the community behind the budget.

Population

58,800

20102023

Source: U.S. Census Bureau PEP

City Area

13.8 sq mi

Source: City of Petaluma budget documents

Median Household Income

$115,430

Source: ACS 2020–2024

Median Home Sale Price

$925,000

Single-family home sales, Dec 2024 – Dec 2025 · Source: Sonoma County Assessor

Unemployment Rate

4.2%

Dec 2025 · BLS / FRED, Sonoma County (Santa Rosa–Petaluma MSA; BLS does not publish Petaluma city-level rates)

Property Tax Revenue Growth

+3.0%

FY 2026–27 approved vs FY 2025–26 revised

Follow the Money

How $400M reaches city services

Revenue sources on the left flow through category groupings to the funds that spend them. Tap on chart items for more detail.

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FY 2026–27 Approved Budget, Sources and Uses of Funds. Values displayed in millions, rounded; computed from full-precision budget data ($400,359,470 total). Bond Proceeds (~$76.5M) reflect planned infrastructure bond issues funding the Public Safety Building and the new sewer force main. Fund Reserves ($23.1M gross) reflects draws by individual funds; the citywide net is $20.7M after $2.4M in surpluses from the Enterprise, Internal Service and Successor Agency funds.

City Spending

Expenditures — $400.4 Million

Where the city’s money goes, broken down by fund. View a more detailed explainer on these funds.

★ = Unrestricted funds; City Council can direct spending · FY 2026–27 Approved Budget, All Funds Budget Summary. Figures are rounded.

Council Spending Restrictions

How much of the budget can City Council direct?

Unrestricted = General Fund only. Everything else is restricted by law, voter mandate (Measure U and Measure H), or rate-payer agreements. Figures are rounded.

The General Fund

The General Fund is the City’s primary operating fund, supporting core services including police, fire, parks, and public works. It is funded by local taxes, fees, intergovernmental revenues, and transfers from the Measure U local sales tax fund.

General Fund Revenue

$85,080,281

Where the money comes from.

General Fund Expenditures

$85,351,379

What it’s spent on.

City Employees by Function

What city employees do. Total: 419.0 full-time equivalents.

Full-time equivalents (FTEs), FY 2026–27 (approved).

Capital Improvement Projects

$132.0 Million

What the city is building and fixing this budget period (July 2026 – June 2027).

Capital Improvement Projects, Total: $132.0 million. Figures are rounded. This is the project-level CIP budget (what gets built); the Capital Project Funds total of $133.3M elsewhere on this page includes non-project costs and fund balance uses.

Where Your Taxes Go

Property taxes and sales taxes are the General Fund’s largest revenue sources. Here’s how those taxes flow to different purposes.

Sales Tax per $1 Purchase

Total: 10.25¢ per dollar

Property Tax breakdown per $1 paid

Prop 13 base rate + Special Assessments

About This Page

Please send comments and questions to followthemoney@urbanchat.org.

Compiled in 2026 from the adopted FY 2025–2026 budget, the FY 2026–2027 budget (approved May 2026), and additional data sources. Use the budget-year menu in the navigation bar to switch every chart and note between the two fiscal years.

Petaluma Urban Chat logo

This page was created as a citizen project, through Petaluma Urban Chat, to make Petaluma’s budget more accessible. It is not an official City of Petaluma publication.

City of Petaluma Expenditure Funds Explained

A plain-language guide to every fund in the City of Petaluma’s FY 2026–2027 budget (approved May 2026). Think of each “fund” as a separate bank account with its own rules about where the money comes from and what it can be spent on.

Source: FY 2026–2027 City of Petaluma Operating and Capital Improvement Budget (approved May 2026), pages 17–44, 70–104, and CIP section.

Summary

Fund Name Amount % of Total Spending Rules
Capital Project Funds $133.3M 33.3% Restricted
General Fund $85.4M 21.3% Unrestricted
Utility Funds $75.3M 18.8% Restricted
Special Revenue Funds $41.4M 10.3% Restricted
Measure U Sales Tax Fund $18.9M 4.7% Voter-directed
Enterprise Funds $16.4M 4.1% Restricted
Internal Service Funds $14.9M 3.7% Restricted
Measure H Sales Tax Fund $6.6M 1.6% Restricted
Debt Funds $4.1M 1.0% Restricted
Successor Agency Funds $4.1M 1.0% Restricted
Trust Funds <$0.1M 0.0% Restricted

Unrestricted — No legal constraints on how the money is spent. City Council decides. In government accounting terms (GASB Statement 54), this corresponds to Unassigned and Assigned fund balances.

Voter-directed — No legal spending limits, but the City has made public commitments to spend on voter-approved priorities, with independent oversight. In GASB terms, this falls under Committed.

Restricted — State law, federal rules, bond covenants, or local ordinances legally limit what the money can be spent on. In GASB terms, constraints imposed by external parties that the City cannot unilaterally remove.

What changed from FY 2025–26: total appropriations jump from $348.1M to $400.4M, almost entirely because of a once-in-a-generation capital program — the new Public Safety Building ($33.4M this year) and the Petaluma Independent Pump Station (PIPS) parallel sewer force main ($45.3M this year), both financed largely by planned infrastructure bonds. New debt service on the Public Safety Building (~$4.1M/yr) begins this year. On the operating side, the City closed a 2–3% structural gap by freezing or eliminating vacant positions (staffing falls from 423 to 419), scaling back select programs, and limiting cost-of-living increases.

Capital Project Funds — $133.3M (33.3% of budget)

The biggest piece of the FY 2026–27 budget — nearly triple last year’s revised capital spending. These funds account for the construction and renovation projects that keep Petaluma functional for decades. Funded by infrastructure bond proceeds, impact fees, utility rates, grants, Measure U and Measure H. The project-level CIP budget is $132.0M, broken into categories:

  • Wastewater CIP ($52.1M) — Dominated by the $45.3M PIPS Parallel Force Main, plus sewer main replacements (Howard St, D St, I St), manhole rehabilitation, and Ellis Creek facility upgrades.
  • Facilities CIP ($40.0M) — The Fire Station No. 4 / Public Safety Building ($33.4M), Fire Station 1 seismic retrofit and improvements ($6.0M), and library facility improvements.
  • Public Works CIP ($19.7M) — Pavement restoration on Caulfield Lane ($4.2M), Howard Street, Rainier Avenue and D Street; Caulfield Bridge Crosstown Connector design ($3.2M); North SMART Station access improvements ($2.7M); Safe Streets quick builds; crosswalk and signal improvements; downtown ADA improvements; Petaluma River Trail undercrossings.
  • Water CIP ($9.1M) — La Cresta tank replacement ($3.9M), water main replacements on Howard Street and various locations ($3.9M), SCADA upgrades.
  • Airport CIP ($4.2M) — Taxiway A rehabilitation ($2.6M) and South Taxilane B rehabilitation ($1.1M), largely FAA-funded.
  • Parks CIP ($3.3M) — Lucchesi Skate Park ($2.2M) and the Lynch Creek Trail / Crosstown Connector ($1.1M).
  • Recycled Water CIP ($1.8M) — Agricultural and urban recycled water system expansions.
  • Transit CIP ($1.6M) — Transit fleet charging infrastructure, funded by grants.
  • Surface Water CIP ($0.2M) — Stormwater pump station and water quality work.

Spending rules: Restricted. Each dollar is tied to a specific approved project, and each funding source (bonds, impact fees, grants, utility rates) carries its own legal restrictions. Changes require City Council approval.

General Fund — $85.4M (21.3% of budget)

The City’s main checking account, paying for police, fire, parks, public works, and the administrative departments that keep everything running. About 80% of it is salaries and benefits for the City’s General Fund-funded workforce (242 of the City’s 419 full-time positions).

Where the money comes from: Property tax ($16.1M — now the single largest source), sales tax ($15.8M), transfers from Measure U ($14.6M), charges for services, intergovernmental revenue, franchise fees, and hotel-tax transfers.

What it pays for: Police ($31.7M) and Fire ($25.8M) alone account for about 67% of General Fund spending; the rest covers general government, parks and recreation, public works, and community development.

Spending rules: Unrestricted. The City Council has broad discretion over how General Fund dollars are spent — this is the most flexible money the City has.

Utility Funds — $75.3M (18.8% of budget)

Enterprise-style funds supported entirely by user rates (your water and sewer bills), not general taxes.

Wastewater (Sewer) Utility Fund — $38.0M

Pays for collecting and treating wastewater at the Ellis Creek Water Recycling Facility, including $7.8M transferred to capital projects this year toward the PIPS force main and sewer main replacements.

Spending rules: Restricted. Sewer rate revenue can only be spent on the wastewater system under Proposition 218.

Water Utility Fund — $35.6M

Pays for delivering drinking water — wells, treatment, mains, tanks, pumping, conservation programs. Up $9.4M from last year, almost entirely increased transfers to capital projects (La Cresta tank, water main replacements).

Spending rules: Restricted. Water rate revenue can only be spent on the water system (Proposition 218).

Storm Water Utility Fund — $1.7M

Maintains the storm drain system — drainage waterways, inlets, manholes, culverts — and regulatory compliance. Most operating costs are funded by a transfer from the General Fund.

Spending rules: Restricted. Must be spent on storm water system operations and maintenance.

Special Revenue Funds — $41.4M (10.3% of budget)

Funds where the money comes with strings attached — it can only be used for a specific purpose:

Street Funds — $14.3M

Gas Tax ($3.4M, state gas tax legally required to go to streets) and Street Maintenance ($10.8M, garbage franchise fees, Go Sonoma funding and Measure U transfers). Roughly half passes through to road CIP projects — this is a big year for paving, with Caulfield Lane, Howard Street, Rainier Avenue and D Street all underway. The deferred road maintenance backlog still exceeds $100 million.

Spending rules: Restricted to streets and transportation work.

Grant Funds — $9.2M

State, federal, and regional grants awarded to city departments — up $4.4M from last year. Public Works Grants ($6.9M) fund Safe Streets quick builds, crosswalk and signal improvements, Caulfield Lane pavement restoration, and the Petaluma River Trail undercrossings. Police Grants ($1.4M) fund the SAFE mobile crisis team, traffic safety and equipment; Community Development Grants ($0.9M) fund housing and homelessness programs.

Spending rules: Restricted. Grant funds must be spent exactly as specified by the granting agency.

Development Impact Fee Funds — $6.0M

One-time fees paid by new development to cover its strain on infrastructure. The big mover this year is Traffic Mitigation fees ($5.5M, mostly transferred to road projects); the rest covers city facilities, storm drainage, parkland, public art and administration.

Spending rules: Restricted. The state Mitigation Fee Act requires each fee type to be spent only on the infrastructure category it was collected for.

Transient Occupancy Tax (TOT) Fund — $4.5M

The hotel tax. Expected to bring in about $4.1M in FY 2026–27. Most of it ($3.7M) is transferred to the General Fund to support tourism-related city services — a noticeably bigger transfer than last year’s $2.35M; the rest supports community events and the fairgrounds.

Spending rules: Restricted by City ordinance guidelines, with some Council discretion.

Housing Funds — $2.6M

Affordable-housing money: Housing In-Lieu fees ($1.0M, including a transfer to housing projects), the Housing Successor Agency ($0.9M), CDBG federal grants ($0.3M), PLHA state funds, Commercial Linkage fees, and the Mobile Home Rent Stabilization program. Down about $1.6M from last year as fewer in-lieu-funded projects are programmed.

Spending rules: Restricted. Each housing sub-fund has its own federal, state, or local legal requirements; none can be redirected to non-housing purposes.

Fairgrounds Fund — $2.4M

Runs the 55-acre fairgrounds property the City took back in January 2024 — the annual fair, building and grounds maintenance, and events. Spending ($2.4M) is budgeted ahead of revenues ($2.1M) as the City invests in deferred maintenance.

Spending rules: Restricted to fairgrounds operations, events, and property management.

Police Grants Fund — $1.4M

Grant funding for specific police programs, including the SAFE Team mobile crisis intervention program (newly supported in part by opioid settlement revenue).

Spending rules: Restricted to each grant’s specified purpose.

Measure M Parks Fund — $0.8M

Petaluma’s share of the countywide 1/8-cent parks sales tax — about $877K/year — funding park maintenance staffing, aquatics programs, landscape maintenance, and park improvements.

Spending rules: Restricted to parks.

Landscape Assessment Districts — $0.6M

Property assessments that fund maintenance of shared landscaped areas within each district.

Spending rules: Restricted to landscape maintenance within the district where collected.

Tourism Improvement District — $0.3M

A lodging assessment that promotes tourism and benefits the downtown area.

Spending rules: Restricted per the district’s management plan.

Donations and Trust Funds — <$0.1M

Small funds for donations and trust bequests (Wickersham Park, Child Care, Thomas Lee Charity trusts), each restricted to the donor’s specified purpose.

Spending rules: Restricted by donor or trust agreement.

Measure U Sales Tax Fund — $18.9M (4.7% of budget)

The 1-cent local sales tax Petaluma voters approved in 2020, tracked separately so the public Oversight Committee can verify it’s spent as promised. Revenues are estimated at $16.7M (+3%); this year’s $18.9M budget also draws $1.6M of designated road reserves and the $0.5M carried-over balance to accelerate paving.

What it pays for: Every dollar transfers to other funds: $14.6M to the General Fund for workforce stabilization and essential services (police, fire, parks); $4.1M to infrastructure — pavement restoration at Caulfield Lane and D Street — plus ongoing debt service on the $20M road bond; and $0.18M to continue fare-free public transit.

Spending rules: Voter-directed. A general-purpose tax with no legal spending limits, but the Council committed to voter-approved priorities and the independent Oversight Committee (which reviewed this budget on April 29, 2026) reviews all spending annually.

Enterprise Funds — $16.4M (4.1% of budget)

Small businesses within the city — supposed to pay for themselves through user fees, not tax dollars:

Transit Fund — $6.7M

Runs Petaluma Transit and Paratransit, funded by fares, state/federal transit grants, and advertising — plus $1.4M transferred to fleet-charging capital projects. The fare-free pilot continues with Measure U support.

Spending rules: Restricted to transit operations; grants carry additional compliance rules.

Airport Fund — $6.2M

Runs the Petaluma Municipal Airport on hangar rents, fuel sales, and landing fees. This year’s budget is dominated by $4.3M transferred to the taxiway rehabilitation projects, which are largely FAA grant-funded.

Spending rules: Restricted to airport operations; FAA grant funds carry federal restrictions.

Development Services (Building) Fund — $3.1M

Building inspection and plan review services — permit fees pay for the inspectors and plan reviewers who make sure construction is safe.

Spending rules: Restricted. Permit fees must fund the building program.

Marina Fund — $0.4M

Operates the Petaluma Marina on slip rentals and fees. The marina carries a long-term operating deficit that the City covers with a designated General Fund reserve.

Spending rules: Restricted to marina operations and maintenance.

Internal Service Funds — $14.9M (3.7% of budget)

The City’s shared services — internal departments that pool resources and charge other departments:

Risk Management — $4.5M

Liability and property insurance and claims management. Up this year as premium costs rise and charges to departments are reinstated after a rate holiday.

Spending rules: Restricted to insurance, claims, and actuarial reserves.

Information Technology — $4.3M

Computers, software, networks, cybersecurity, and IT staff — slightly down as contract costs were trimmed in the budget-balancing effort.

Spending rules: Restricted to IT operations and infrastructure.

Workers’ Compensation — $3.9M

On-the-job injury claims, with departments contributing based on risk levels.

Spending rules: Restricted to claims and state-required reserves.

Employee Benefits — $1.2M

Health, dental, vision, and other benefit program administration.

Spending rules: Restricted to employee benefits.

Vehicle and Equipment Replacement — $0.8M

The savings account for replacing city vehicles and equipment, including the transition to an electric fleet.

Spending rules: Restricted to vehicle and equipment purchases and leases.

General Services — $0.2M

Shared facility costs like building maintenance.

Spending rules: Restricted to shared facility services.

Measure H Sales Tax Fund — $6.6M (1.6% of budget)

The countywide half-cent fire sales tax Sonoma County voters approved in March 2024. Petaluma’s share is estimated at $4.6M in revenue for FY 2026–27, and this year’s budget also draws $1.9M of accumulated Measure H balance.

What it pays for: $1.1M directly funds fire positions and related costs, and $5.5M transfers to fire facility capital projects — principally the Fire Station 1 seismic retrofit and the new Public Safety Building / Fire Station No. 4.

Spending rules: Restricted. Legally dedicated to fire response services and disaster/hazard mitigation only.

Debt Funds — $4.1M (1.0% of budget)

Makes payments on the City’s general government debts. The big change this year: debt service jumps from $0.9M to $4.1M as payments begin on the financing for the new Public Safety Building.

Spending rules: Restricted. Debt payments are legal obligations — zero discretion.

Successor Agency Funds — $4.1M (1.0% of budget)

Winding down the former redevelopment agency’s obligations — $4.0M in debt payments plus administration, funded by a dedicated share of property tax. This fund goes away once the old debts are paid off.

Spending rules: Restricted by state dissolution law, overseen by a state-mandated oversight board.

City of Petaluma Expenditure Funds Explained

A plain-language guide to every fund in the City of Petaluma’s FY 2025–2026 budget. Think of each “fund” as a separate bank account with its own rules about where the money comes from and what it can be spent on.

Source: FY 2025–2026 City of Petaluma Adopted Operating and Capital Improvement Budget, pages 1–15, 65–96.

Summary

Fund Name Amount % of Total Spending Rules
Utility Funds $88.5M 25.4% Restricted
General Fund $80.4M 23.1% Unrestricted
Capital Project Funds $77.0M 22.1% Restricted
Special Revenue Funds $44.1M 12.7% Restricted
Enterprise Funds $18.9M 5.4% Restricted
Measure U Sales Tax Fund $15.7M 4.5% Voter-directed
Internal Service Funds $14.7M 4.2% Restricted
Successor Agency Funds $4.1M 1.2% Restricted
Measure H Sales Tax Fund $3.9M 1.1% Restricted
Debt Funds $0.9M 0.3% Restricted

Unrestricted — No legal constraints on how the money is spent. City Council decides. In government accounting terms (GASB Statement 54), this corresponds to Unassigned and Assigned fund balances.

Voter-directed — No legal spending limits, but the City has made public commitments to spend on voter-approved priorities, with independent oversight. In GASB terms, this falls under Committed — the governing body has designated the funds for a purpose, but could change that designation through formal action.

Restricted — State law, federal rules, bond covenants, or local ordinances legally limit what the money can be spent on. See individual fund descriptions for the specific legal mechanism. In GASB terms, this corresponds to Restricted — constraints imposed by external parties (grantors, creditors, other governments, or laws/regulations) that the City cannot unilaterally remove.

Utility Funds — $88.5M (25.4% of budget)

The largest chunk of the budget by fund type. These are also enterprise-style funds supported entirely by user rates (your water and sewer bills), not general taxes.

Wastewater (Sewer) Utility Fund — $57.6M

Pays for collecting and treating wastewater at the Ellis Creek Water Recycling Facility. This covers the sewer mains, pump stations, treatment plant, recycled water system, and the staff to run it all. Major current investments include sewer main replacements, the tertiary filtration system expansion, and recycled water pipeline extensions for agriculture and urban irrigation.

Spending rules: Restricted. Same as Water — sewer rate revenue can only be spent on the wastewater system under Proposition 218.

Water Utility Fund — $29.1M

Pays for delivering clean drinking water to Petaluma homes and businesses. This covers the wells, treatment, water mains, storage tanks, pumping stations, and staff needed to keep water flowing. Also includes water conservation programs and the Advanced Metering Infrastructure (smart meter) project.

Spending rules: Restricted. Water rate revenue can only be spent on the water system. State law (Proposition 218) requires that utility rates be proportional to the cost of providing the service.

Storm Water Utility Fund — $1.4M

Pays for maintaining the City’s storm drain system — drainage waterways, inlets, manholes, and culverts — and for regulatory compliance. Most operating costs are funded by a transfer from the General Fund.

Spending rules: Restricted. Must be spent on storm water system operations and maintenance.

General Fund — $80.4M (23.1% of budget)

The City’s main checking account. This pays for the core services most people think of when they think “city government”: police, fire, parks, public works, and the administrative departments that keep everything running (city manager, finance, city clerk, city attorney, human resources).

Where the money comes from: Sales tax, property tax, business licenses, permits, fees, and fines — all locally controlled revenue.

What it pays for: Salaries and benefits for 242 full-time positions, plus the supplies, equipment, and contracts needed to deliver day-to-day city services. Police and fire alone account for about 69% of General Fund spending.

Spending rules: Unrestricted. The City Council has broad discretion over how General Fund dollars are spent — this is the most flexible money the City has.

Capital Project Funds — $77.0M (22.1% of budget)

This is the City’s investment in physical infrastructure — the big construction and renovation projects that keep Petaluma functional for decades to come. Funded by a mix of impact fees, utility rates, grants, Measure U, and bonds. Broken into categories:

  • Wastewater CIP ($28.4M) — Sewer main replacements, pump and chemical system upgrades, the PIPS force main, tertiary filtration expansion, recycled water system growth.
  • Facilities CIP ($18.8M) — Fire station renovations, the new Public Safety Building, Library Enhancement, Keller Street Garage improvements, HVAC upgrades, electric vehicle chargers, emergency power backup.
  • Public Works CIP ($16.2M) — Street repaving (Howard St, Rainier Ave, and more), North SMART Station access, Caulfield Bridge, streetlights, storm water projects, safe streets quick builds.
  • Parks and Rec CIP ($5.7M) — Lucchesi Skate Park, turf field replacement, river dredging, Lynch Creek Trail connector, Kenilworth Park revitalization.
  • Water CIP ($4.8M) — Water main replacements, advanced metering, aquifer storage and recovery planning.
  • Airport CIP ($2.8M) — Taxiway A and B rehabilitation (largely FAA-funded).
  • Transit CIP ($0.1M) — Bus stop improvements and fleet charging infrastructure.

Spending rules: Restricted. Each dollar is tied to a specific approved project. Funding sources (impact fees, grants, utility rates, bonds) each carry their own legal restrictions on what they can build. Changes to the CIP require City Council approval.

Special Revenue Funds — $44.1M (12.7% of budget)

These are funds where the money comes with strings attached — it can only be used for a specific purpose. The City has several:

Street Funds — $13.3M

Two sub-funds that pay for street maintenance and transportation projects:

  • Gas Tax (HUT) Fund — Petaluma’s share of state gas tax revenue, legally required to be spent on streets and roads. Includes SB 1 transportation funds.
  • Street Maintenance Fund — Receives revenue from garbage franchise fees, Go Sonoma funding, and other sources for road upkeep, bridge work, and pavement projects.

These funds address Petaluma’s deferred road maintenance backlog, which the City estimates at more than $100 million.

Spending rules: Restricted. State gas tax revenue is legally required to be spent on streets and transportation. The Street Maintenance Fund has more local flexibility but is still designated for road-related work.

Development Impact Fee Funds — $13.1M

When someone builds something new in Petaluma (a house, a store, etc.), they pay one-time fees to help cover the strain that new development puts on city infrastructure. There are separate funds for different types of impact:

  • Traffic Mitigation Impact Fees — Pays for road and intersection improvements needed because of new development.
  • City Facilities Impact Fees — Pays for expanding or improving city buildings and facilities to serve a growing population.
  • Storm Drain Impact Fees — Pays for expanding the storm water drainage system.
  • Parkland Impact Fees — Pays for building new parks and recreation facilities in growing areas.

By law, these fees can only be spent on the specific type of infrastructure they were collected for, and they’re mostly transferred to Capital Improvement Projects.

Spending rules: Restricted. State law (the Mitigation Fee Act) requires each fee type to be spent only on the specific infrastructure category it was collected for. Traffic fees can’t fix parks, park fees can’t fix roads, etc.

Grant Funds — $7.0M

Tracks state, federal, and other grant funding awarded to city departments for specific programs and projects. Includes grants for fire services, parks and recreation, public works, community development, and general government operations.

Spending rules: Restricted. Grant funds must be spent exactly as specified by the granting agency, with reporting and compliance requirements.

Transient Occupancy Tax (TOT) Fund — $3.8M

A tax collected from travelers who stay at hotels and other lodging in Petaluma (like a “hotel tax”). Estimated to bring in about $3.7M in FY 2026.

What it pays for: About $2.3M is transferred to the General Fund to support city services related to tourism. The remaining $1.1M goes to capital projects and community events like Butter and Eggs and Veterans’ Parade.

Spending rules: Restricted. The City’s ordinance establishes guidelines for how TOT revenue is to be used, but the Council has some discretion within those guidelines.

Housing Funds — $2.9M

A group of funds dedicated to affordable housing, each with its own funding source:

  • Commercial Linkage Fees — Fees from commercial development used to fund affordable housing via the Housing Land Trust.
  • Housing-in-Lieu Fees — Fees paid by developers who don’t build required affordable units on-site. Used for fair housing programs and rental assistance.
  • Community Development Block Grant (CDBG) — Federal money for housing and community development programs.
  • Permanent Local Housing Authority (PHLA) — State “Home First” funding for housing programs.
  • HOME/Begin Grants — Federal grants specifically for building affordable housing.
  • Successor Agency Housing — Leftover redevelopment agency housing funds that must still be used for affordable housing.
  • Mobile Home Rent Stabilization — A small fund that helps manage the City’s mobile home rent stabilization program.

Spending rules: Restricted. Each housing sub-fund has its own legal requirements — federal grants (CDBG, HOME) come with federal rules, impact fees are governed by state law, and successor agency housing funds must follow dissolution rules. None of this money can be redirected to non-housing purposes.

Fairgrounds Fund — $1.6M

As of January 2024, the City took back control of the 55-acre Petaluma fairgrounds after a 50-year state lease expired. This fund tracks all the revenue and expenses for running the property.

What it pays for: The annual fair ($1M), building and grounds maintenance ($0.5M), and special events ($0.1M). Revenue comes from fair fees, lease tenants, and event fees.

Spending rules: Restricted. Revenue and expenditures must relate to fairgrounds operations, events, and property management.

Police Grants Fund — ~$1.4M

Tracks grant funding awarded for specific police programs and projects, including the SAFE Team mobile crisis intervention program.

Spending rules: Restricted. Grant funds must be spent exactly as specified by the granting agency, with reporting requirements.

Measure M Parks Fund — $0.9M

Petaluma’s share of the countywide Measure M parks sales tax (1/8 cent), approved by Sonoma County voters in 2018. Brings in about $876K/year for park maintenance, trail improvements, playground upgrades, swim center work, and enhanced maintenance like animal grazing and weed abatement.

Spending rules: Restricted. Must be spent on parks, with spending categories reviewed by the Recreation, Music and Parks Commission.

Landscape Assessment Districts — $0.7M

Property owners within designated landscape districts pay assessments that fund the maintenance of shared landscaped areas (medians, streetscapes, common areas) within their district.

Spending rules: Restricted. Assessments can only be spent on landscape maintenance within the district where they were collected.

Tourism Improvement District — $0.3M

The Petaluma Downtown Tourism Improvement District collects an additional assessment from hotels and lodging establishments in the district. The revenue is used to promote tourism and benefit the downtown area.

Spending rules: Restricted. Must be spent on tourism promotion and district improvements as defined by the district’s management plan.

Donations and Trust Funds — <$0.1M

Small funds that account for miscellaneous donations and trust bequests to the City, each restricted to the donor’s or trust’s specified purpose.

Spending rules: Restricted. Must be used for the purposes specified by the donor or trust agreement.

Public Art Fund

When new development happens, a small fee is collected to fund public art installations around the city. This celebrates Petaluma’s history, environment, and community character through art in public places. (The budget groups Public Art with Impact Fee Funds in its summary tables, so there is no separately stated amount — it’s a small portion of the $13.1M above.)

Spending rules: Restricted. Can only be spent on public art.

Enterprise Funds — $18.9M (5.4% of budget)

Enterprise funds work like small businesses within the city — they’re supposed to pay for themselves through user fees, not tax dollars. The City has four:

Transit Fund — $10.3M

Runs Petaluma Transit (the city bus system) and Petaluma Paratransit. Revenue comes from fares, state/federal transit grants, and advertising. The City is currently investing in electric buses and charging infrastructure, and has been piloting a fare-free transit program.

Spending rules: Restricted. Transit funds must support transit operations. State and federal transit grants come with additional compliance requirements.

Airport Fund — $5.2M

Runs the Petaluma Municipal Airport. Revenue comes from hangar rentals, fuel sales, and landing fees paid by pilots and aircraft owners. Currently includes a large capital project for taxiway rehabilitation ($2.8M in CIP).

Spending rules: Restricted. Airport revenue must be spent on airport operations. FAA grant funds have additional federal restrictions.

Building Fund — $3.0M

Covers the building inspection and plan review services within Community Development. When you pull a building permit, those fees go here to pay for the inspectors and plan reviewers who make sure construction is safe.

Spending rules: Restricted. Permit fees must fund the building inspection and plan review program.

Marina Fund — $0.4M

Operates the Petaluma Marina on the river. Revenue comes from slip rentals and fees paid by boat owners.

Spending rules: Restricted. Marina fees must be spent on marina operations and maintenance.

Measure U Sales Tax Fund — $15.7M (4.5% of budget)

In 2020, Petaluma voters approved Measure U, a 1-cent local sales tax. This fund tracks that revenue separately so the public Measure U Oversight Committee can verify it’s being spent as promised.

Why it exists: Before Measure U, the City faced deep service cuts, understaffing, and crumbling infrastructure. This tax was meant to restore and maintain essential services.

What it pays for: The money is transferred to other funds (mainly the General Fund) to support police, fire, road repair, parks, homelessness programs, emergency preparedness, and infrastructure investment. Without Measure U, the City says it would have to lay off employees and drastically cut services.

Spending rules: Voter-directed. It’s a general-purpose tax so there are no legal spending limits, but the City Council committed to the voter-approved priorities (public safety, roads, homelessness, etc.) and an independent Oversight Committee reviews all spending annually.

Internal Service Funds — $14.7M (4.2% of budget)

These are the City’s “shared services” — internal departments that support all other departments. Instead of each department buying its own insurance or computers, these funds pool resources and charge other departments for the services. Think of them as the behind-the-scenes operations:

Information Technology — $4.7M

Pays for the City’s computers, software, networks, cybersecurity, and IT staff. All departments chip in based on their usage.

Spending rules: Restricted. Department contributions must fund IT operations and infrastructure.

Risk Management — $4.3M

The City’s insurance program — covers liability insurance, property insurance, and manages claims filed against the City. Maintains adequate reserves so the City can handle lawsuits and accidents.

Spending rules: Restricted. Must fund insurance premiums, claims, and adequate actuarial reserves.

Workers’ Compensation — $3.7M

Pays for on-the-job injury claims for city employees. All departments contribute based on their risk levels (police and fire pay more because their jobs are more physically dangerous).

Spending rules: Restricted. Must fund workers’ compensation claims and maintain state-required reserves.

Employee Benefits — $1.1M

Manages health insurance, dental, vision, and other employee benefit programs across all city departments.

Spending rules: Restricted. Funds collected from departments for employee benefits must be used for that purpose.

Vehicle and Equipment Replacement — $0.6M

A savings account for replacing city vehicles and heavy equipment when they wear out. Departments pay into this fund over time so the City can afford replacements without huge one-time budget hits. The City is transitioning its fleet to electric vehicles, with a goal of 100% zero-emission by 2030.

Spending rules: Restricted. Must be used for vehicle and equipment purchases and leases.

General Services — $0.2M

Covers shared facility costs like building maintenance and custodial services for city buildings.

Spending rules: Restricted. Charges collected from departments must fund shared facility services.

Successor Agency Funds — $4.1M (1.2% of budget)

When California dissolved all city redevelopment agencies in 2012, the City of Petaluma became the “successor agency” responsible for winding down the old agency’s obligations. This fund exists solely to make the remaining debt payments and handle the administrative costs of that wind-down. Revenue comes from a dedicated share of property tax. This fund will eventually go away once all the old debts are paid off.

Spending rules: Restricted. State dissolution law dictates exactly how these funds are used — debt payments and approved administrative costs only, overseen by a state-mandated oversight board.

Measure H Sales Tax Fund — $3.9M (1.1% of budget)

A newer fund created after Sonoma County voters approved Measure H in March 2024 — a countywide half-cent sales tax dedicated to fire response services and disaster/hazard mitigation.

What it pays for: Petaluma’s share (about $4.5M in revenue for FY 2025-26) helps fund construction of a new fire station, nine additional firefighters to staff it, equipment upgrades, and emergency medical services staff.

Spending rules: Restricted. This countywide tax is legally dedicated to fire response services and disaster/hazard mitigation only.

Debt Funds — $0.9M (0.3% of budget)

Exactly what it sounds like: this fund exists to make payments on the City’s debts (principal and interest on bonds and other obligations).

Spending rules: Restricted. Debt payments are legal obligations — the City must make them on schedule. There is zero discretion here.

Source Details

# Source URL / Location Date Notes
1 FY 2025-2026 City of Petaluma Adopted Operating and Capital Improvement Budget FY-2025-2026-City-of-Petaluma-ADOPTED-Operating-and-Capital-Improvement-Budget.pdf 2026-02-10 PDF page 33 (City Overview, land area); PDF page 27 (2025-26 All Funds Budget Summary, expenditure fund appropriations totaling $348,117,599).
2 FY 2025-2026 Adopted Budget — Capital Improvement Plan Budget by Project Same PDF, pages CIP-2 and CIP-3 2026-02-10 CIP projects grouped by category. Total CIP Budget: $72,511,000.
3 FY 2025-2026 Adopted Budget — Full Time Positions Appendix Same PDF, pages A-10 through A-16 2026-02-10 Authorized & funded FTE counts by department. Total: 417.40 FTEs for FY 2025-26.
4 Petaluma, CA Population by Year — Neilsberg neilsberg.com 2026-02-10 U.S. Census Bureau Population Estimates Program (PEP), July 1 estimates, 2010–2023.
5 Census Reporter — Petaluma, CA censusreporter.org 2026-02-10 Median household income $115,430 (±$6,370 MOE), ACS 2020-2024 5-Year Estimates.
6 FRED — Unemployment Rate, Santa Rosa-Petaluma MSA fred.stlouisfed.org 2026-02-10 Series SANT206URN. Not seasonally adjusted. December 2025: 4.2%.
7 Sonoma County Assessor — Petaluma parcel records sonomacounty.ca.gov/assessor 2026-04-17 Median sale price of $925,000 computed directly from Sonoma County Assessor parcel records (N=359 single-family arms-length sales recorded Dec 23, 2024 – Dec 22, 2025). Full residential cut (incl. condos, townhomes, PUDs): $917,500 over N=542 sales. Single-month medians bounce between $825K–$1.03M depending on which ~30 homes closed; the 12-month window smooths that noise.
8 FY 2025-2026 Adopted Budget — General Fund Overview Same PDF, pages 67-68 2026-02-10 Property tax revenues budgeted at $15.01M (4.2% increase).
9 FY 2025-2026 Adopted Budget — City Manager Budget Message Same PDF, pages iii-ix 2026-02-10 Lists specific grants funding projects.
10 FY 2025-2026 Adopted Budget — Housing and Homeless Services Same PDF, page 118 2026-02-10 $8.1M Encampment Resolution Program; $840K Pro-Housing Designation grant.
11 FY 2025-2026 Adopted Budget — Police Department Same PDF, page 153 2026-02-10 Over $1.3M in grants for traffic safety, DUI enforcement, SAFE team, and equipment.
12 FY 2025-2026 Adopted Budget — General Fund Long Term Operating Forecast Same PDF, page 69 2026-02-10 Total General Fund Revenues: $80,438,143.
13 FY 2025-2026 Adopted Budget — General Fund by Function Same PDF, page 35 2026-02-10 Total General Fund Appropriations: $80,358,744.
14 California Dept. of Tax and Fee Administration (CDTFA) cdtfa.ca.gov 2026-02-10 Combined sales tax rate 10.25%.
15 Sonoma County Auditor-Controller — District Tax Reporting sonomacounty.ca.gov 2026-02-10 Breakdown of Sonoma County voter-approved district taxes totaling 1.75%.
16 Property Tax Calculations — TRA 003-000 (Sonoma County) property-tax/Property Tax Calculations - TRA 003-000 Calc Example.pdf 2026-02-10 Property tax distribution for TRA 003-000.
17 City of Petaluma — Streets cityofpetaluma.org 2026-02-10 396 lane miles of streets.
18 City of Petaluma Active Transportation Plan (Sept. 2025) PDF (page 37) 2026-02-10 72.2 miles of existing bike lanes.
19 FY 2025-2026 Adopted Budget — Public Works Department Same PDF, page 157 2026-02-10 Nearly 6,000 streetlights and 54 traffic signals maintained.
20 City of Petaluma — Streetlights cityofpetaluma.org 2026-02-10 Over 5,100 streetlights.
21 FY 2025-2026 Adopted Budget — Parks & Recreation Dept. Same PDF, page ~145 2026-02-10 48 developed parks, 28 playgrounds, 720 acres of parkland.
22 Petaluma Parks Map and List (2021) PDF 2026-02-10 556.2 total acres (2021 inventory).
23 FY 2025-2026 Adopted Budget — Police Dept. Performance Measures Same PDF, page 169 2026-02-10 70 FTE sworn police officers. 102.6 total Police FTEs.
24 FY 2025-2026 Adopted Budget — Fire Department Same PDF, page 140 2026-02-10 Over 8,800 calls for service in FY 2023-24.
25 2023 Independent Police Auditor’s Annual Report (Addendum) PDF 2026-02-10 61,753 calls for service in 2023.
26 Petaluma Argus-Courier — Public Art Challenge petalumanews.com 2026-02-10 52 pieces of public art on display.
27 The Press Democrat — Building Blocks of History pressdemocrat.com 2026-02-10 Historic hatchery buildings.
28 Petaluma Signs Project — Katherine J. Rinehart kjrinehart.com 2026-02-10 Historic commercial signage.
29 Census Reporter — Petaluma, CA (Age Distribution) censusreporter.org 2026-02-10 Under-18: 10,782 (18.2%); 65+: 13,071 (22.1%).
30 City of Petaluma — Historic Districts cityofpetaluma.org 2026-02-10 96 contributing buildings on ~23 acres.
31 FY 2025-2026 Adopted Budget — Sources and Uses of Funds Same PDF, page 33 2026-03-16 Sources and Uses table broken out by fund type. Total revenues $221.2M + transfers in $85.2M = $306.4M. Total appropriations $348.1M; $41.7M funded from existing fund balances.
32 FY 2025-2026 Adopted Budget — Measure U Fund Overview Same PDF, pages 75-77 and A-2 2026-04-16 The Measure U Fund’s $15.708M appropriation (shown as its own column in the Follow the Money chart) is entirely budgeted as transfers out to other funds. Per Transfers In/Out Summary (p.A-2) the destinations are: General Fund $14,761,329 (incl. $70K sidewalk cost match); 2021 Lease Revenue Bonds debt service $366,671; General Government CIP (ERP/EDEN) $250,000; Parks CIP (Lucchesi Turf Field) $150,000; Transit (Fare-Free Program) $180,000.
33 FY 2026-2027 City of Petaluma Proposed Operating and Capital Improvement Budget — All Funds Budget Summary FY-2026-2027-city-of-petaluma-proposed-operating-and-capital-improvement-budget.pdf (via cityofpetaluma.org/city-budgets), pages 37-38 2026-06-10 Total budgeted appropriations $400,359,470 by fund category (incl. transfers out, consistent with the FY 2025-26 presentation). Estimated revenues $379,650,614.
34 FY 2026-2027 Budget — CIP Budget by Project Same PDF, pages CIP-12 to CIP-14 2026-06-10 Total CIP Budget $132,001,000. Largest projects: PIPS Parallel Force Main $45.3M; Public Safety Building $33.4M; Fire Station 1 seismic $6.0M. Funding sources incl. Infrastructure Bonds (Facility, Utilities, Roads).
35 FY 2026-2027 Budget — Full Time Positions Appendix Same PDF, pages A-10 through A-12 2026-06-10 419.00 authorized & funded FTEs for FY 2026-27 (down from 423.00 revised). Departments reorganized: Finance, IT, HR & Risk consolidated under Administrative Services (39.0).
36 FY 2026-2027 Budget — General Fund Long Term Operating Forecast Same PDF, page 78 2026-06-10 Total General Fund Revenues: $85,080,281 (Budget 2027 column, incl. $550K designated reserves).
37 FY 2026-2027 Budget — General Fund by Function Same PDF, page 44 2026-06-10 Total General Fund Appropriations: $85,351,379 (incl. $2.5M transfers out); Net Cost $79,324,875 after intragovernmental offset.
38 CDTFA Special Notice L-1022 — Rates Effective April 1, 2026 cdtfa.ca.gov 2026-06-10 No Petaluma or Sonoma County rate changes; the 10.25% composition is unchanged for FY 2026-27.
39 FY 2026-2027 Budget — General Fund Overview Same PDF, pages 70-78 2026-06-10 Property tax budgeted at $16.1M (+3.0% vs FY 2025-26 revised); sales tax $15.8M; ~80% of GF budget is salaries & benefits; ~$10.8M emergency reserve (≈14.3%).
40 FY 2026-2027 Budget — City Manager’s Budget Message Same PDF, pages 1-3 (dated May 4, 2026) 2026-06-10 Total budget ~$400.4M; GF revenues ~$85.1M (+2.6%); structural gap 2-3%; staffing 423 → 419; $132M CIP with ~$80M for public safety facilities; road backlog >$100M. Budget approved by the City Council in May 2026.
41 FY 2026-2027 Budget — Citywide Overview (Tables 1-3, fund narratives) Same PDF, pages 17-19, 29-31 2026-06-10 Appropriations and revenues by fund type with year-over-year changes; +$4.4M grants; +$3.2M Public Safety Building debt service; CIP category changes.
42 FY 2026-2027 Budget — Sources and Uses of Funds Same PDF, page 43 2026-06-10 Revenues $300.9M + transfers in $78.7M = $379.7M sources. Expenditures $321.6M + transfers out $78.7M = $400.4M uses. Revenue categories by fund used for the Follow the Money chart; net fund balance draw $20.7M.
43 FY 2026-2027 Budget — Fund Summary FY 2026-2027 Same PDF, pages 40-42 2026-06-10 Per-fund budgeted revenues, transfers, expenditures and balances — source for all sub-fund figures in the funds explainer.
44 FY 2026-2027 Budget — Utility Fund Tables Same PDF, pages 96-98 2026-06-10 Wastewater $38.0M / Water $35.6M / Storm $1.7M expenditures; rate revenues $36.4M wastewater + $29.7M water = $66.1M.
45 FY 2026-2027 Budget — Measure U Fund Overview Same PDF, pages 79-84 2026-06-10 $18.88M budget, all transfers out: General Fund support $14,604,281; infrastructure & debt service $4,095,719 (Caulfield Lane & D Street paving); fare-free transit $180,000. Includes $1.636M reserve draw. Oversight Committee reviewed April 29, 2026.
46 FY 2026-2027 Budget — Police Dept. Performance Measures Same PDF, page 163 2026-06-10 70 FTE sworn police officers (unchanged); FY 2025-26 achieved 0% vacancy.
47 FY 2026-2027 Budget — City Background and department sections Same PDF, pages 5-6, 152, 157 2026-06-10 13.8 sq mi, ~396 lane miles, ~6,000 streetlights, 720 acres of parkland — community stats unchanged from FY 2025-26.