Placerville staff cut $1.2 million in requests but general fund still shows $860,527 deficit; council moves to closed session

Placerville — City finance staff told the Placerville City Council on May 21 that a series of department adjustments and interfund transfers reduced a projected general fund shortfall from about $2.1 million to $860,527, but the council moved into closed session to consider additional options and labor negotiations.

"This team has worked very hard to get us a budget that we feel comfortable presenting to you," Interim City Manager Joe Wren said as he introduced the finance director’s presentation. Finance Director Lauren Casa said the status‑quo general fund deficit was roughly $974,452 and that April 30 requests from departments added about $1,190,000, creating a combined gap of about $2.1 million. After meetings with department heads on May 6 and May 13, Casa said, staff cut and revised requests and narrowed the shortfall to $860,527: "we were able to reduce the deficit from 2,100,000 to 860,527," she said.

Why the gap remains: Casa said revenue is essentially flat year over year (a projected increase of about $86,000) while expenditures are forecast to rise about $643,000. Major upward pressure comes from police and parks programs; she noted Measure J, an add‑on sales tax, is projected to bring in about $1.4 million but that Measure J‑eligible program costs exceed that revenue, requiring transfers from the general fund.

What was cut or deferred: Staff said roughly $651,000 will be transferred from the gas tax fund (SB 1 / fund 210) into the general fund and that many CIP and capital outlay requests presented on April 30 were scratched. Casa said the capital outlay list was pared back and one change moves cannabis community benefit funding to pay for four or five public water fountains rather than park benches. A truck for investigations was retained; Casa said two‑thirds of that replacement cost would be covered by the cannabis community benefit fund.

Personnel and service adjustments: The council packet lists one recommended alternative service level (ASL) that would net a roughly $30,538 cost for creating a deputy public works director position (largely charged to water and sewer rates). Staff also recommended deferring a number of computer equipment purchases this year (requests this year total about $32,566, roughly $16,000 to the general fund) while flagging a larger equipment need forecast near $189,000 for next year.

Department‑level changes: Staff said police line‑item cuts reduced police operating expenditures by about $45,800 across patrol, investigations, records and dispatch, while development services increased primarily because of a $19,500 annual contract for a permit software package (Clarity) and a required seventh‑cycle housing element estimated at about $216,000 spread over three fiscal cycles. Carol Kendrick, who spoke for development services, said staff is pursuing possible CDBG funds, monitoring AB 2002 and exploring a pro‑housing designation to help pay for the housing element. Public works reported about $13,535 in reductions across maintenance lines, and community services cut roughly $107,356—largely by trimming overtime. Casa summarized that roughly $57,982 in added revenue plus $178,000 in expenditure reductions produced $236,000 in adjustments that together with fund transfers produced the $860,527 shortfall remaining.

Next steps and closed session: Casa told the public that staff will present additional deficit‑reduction scenarios and recommendations in closed session and warned that program delivery could be affected if certain adjustments are approved. The council then adjourned to closed session for Item 5.1, "Labor negotiations," naming Patrick Clark, Joe Redd and Natalie Tornikoska and citing Government Code section 54957.6.

No formal budget adoption or final votes on the FY 2026–27 operating or CIP budgets occurred in open session; the council approved the meeting agenda at the start of the session. The council’s next procedural steps and any final votes will be set after closed‑session direction is returned to the public record.