Crescent City council reviews tight FY 2026–27 budget as costs outpace revenues

City staff presented the proposed fiscal year 2026–27 budget at a council workshop on May 20, warning that stagnant revenues and rising costs will force difficult trade‑offs.

“Revenues have stayed pretty much the same for the last three years and our expenses have not,” the staff presenter told the council, saying the administration aims to return a balanced budget for adoption in June if no additional direction requires a special meeting.

Why it matters: The general fund shows disappearing unallocated reserves under the proposed budget. Staff estimated fiscal‑year‑end fund balances would drop to roughly $3.1 million with a conservative 5% budget‑to‑actual savings assumption, leaving about $60,000 unallocated beyond the council’s 25% reserve policy.

What staff proposed: To hold the line, the budget presented assumes a 3% cost‑of‑living adjustment for represented employees, freezes several long‑standing vacant part‑time positions and repurposes some vacancies to promote internally. Staff described a public works reorganization that uses internal promotions and reduces seasonal hires from three to two after October unless the council directs otherwise.

Key cost drivers: Finance Director Linda Lever highlighted major increases that squeezed the plan: higher CalPERS liability payments (an annual payment roughly 9% above last year’s), medical and benefit cost growth, and insurance premium estimates from GSRMA that staff said are roughly $250,000 higher than the prior year. Staff also included an assumed Pacific Power rate increase and projected water/sewer pass‑throughs in service budgets.

Measure S and spending plans: Measure S revenues (a 1% local tax approved in 2020) continue to fund fire, police, streets and the pool. Staff presented a rolling five‑year Measure S spending plan developed with the oversight committee and noted the plan could run negative in out years if every planned expenditure occurs; committee recommendations include continuing staffing and equipment priorities while maintaining flexibility for future adjustments.

Items not included: The proposed budget does not add several new positions or large one‑time wants this year—examples cited included a full‑time community service officer (estimated $25,000), certain pool events and a highway banner replacement estimated at $20,000. The council signaled it would revisit some items in October if revenues improve.

Next steps: Council members asked staff to return items for formal direction as needed. The administration said it expects to bring the final budget to the June 15 regular meeting for adoption unless the council requests additional work sessions.