Crescent City councilors approved a budget that will have an unallocated fund balance of about $55,000 when the 2026-27 fiscal year closes.

Their decision comes about a month after Finance Director Linda Leaver said that the estimated unallocated general fund balance at the end of 2026-27 would be “basically nothing” at $62,559. 

On Monday, the budget Leaver presented to councilors reflected the changes they called for at that three-hour workshop on May 20. It also reflects water and sewer rate increases the City Council approved on June 1 following an unsuccessful Proposition 218 protest effort. Those increases are expected to stabilize both the water and sewer funds, Leaver said.

“The (sewer) fund was projected to run out of money in a few years,” she said. “With the new rates, we do see a decrease at first as we get capital improvements underway, but then it stabilizes and we begin to build our reserves to what was recommended.”

The water fund is very similar, Leaver said. 

Leaver’s presentation followed a vacancy and jobs report from Crescent City Human Resources Manager Sara Barbour. In her report, Barbour said that the city had just filled a building inspector/code enforcement officer position and is still seeking a fire chief and an aquatic supervisor. 

A full-time senior building and parks maintenance worker position is vacant as is a records specialist, an economic development and recreational assistant and an office technician. According to Barbour, however, the city is not recruiting for those positions.

City Manager Eric Wier told Councilors that the city is proposing to create a part-time community services officer out of the records specialist position for the police department. This person will assist with code enforcement.

The economic development and recreation assistant is also needed, but because of budget constraints recruiting for it is paused currently, Wier said.

“When we have more information about our budget, hopefully in October, we’ll come back to the Council,” he said.

As for the office technician, Wier said that person assisted the city’s public works maintenance manager with requisitions and ordering supplies at the corporation yard. Public Works staff think funding for that position would be better used for seasonal workers and other allocations, the city manager told councilors.

The vacancy rates for the city’s bargaining units are currently less than 20%, Barbour said.

Crescent City’s 2026-27 budget includes a general fund that has projected revenues of $10.6 million and projected expenditures of about $11.6 million, which Leaver said was similar to the fiscal year that ends June 30.

If everything in the general fund budget was spent, Crescent City’s fund balance at the end of the 2026-27 fiscal year would be about $2.6 million, though Leaver said that because her office tries to use “conservative, but realistic estimates,” the city’s expenditures are usually less than what’s in the adopted budget.

“Our policy is to assume that 5% of the budget will not be spent,” she said. “Typically our budget-to-actual savings is greater than that, but to be conservative we only assume 5%, which would put the fund balance at just over $3.1 million.”
Of that $3.1 million, about $450,000 is related to Measure S — the voter-approved 1% sales tax that goes to the police and fire departments, street repairs and swimming pool. Crescent City also sets 25% of its ending fund balance aside for reserves, which is $2.62 million, Leaver said.

At the Council’s direction at the May 20 workshop, the recreation director was able to secure about $3,000 in sponsorships to host a swim camp. The City Council also agreed to contribute $5,000 to the Chamber of Commerce to offset an increased cost for July Fourth fireworks. Priorities also include community events such as the Kamome and Forest Moon festivals, continuing developing a master plan for the downtown area and Cultural Center feasibility study and repairs to the Cultural Center elevator, Leaver said.

General fund expenditures also include a 3% cost of living adjustment for staff in the city’s employee bargaining units, the finance director said. The budget also reflects projected cost increases for benefits, though it’s not yet certain what health insurance costs will be for next calendar year.

Leaver said she included the increased revenue from the new water and sewer rates in their respective funds.

In the sewer fund, operating revenues for next year are budgeted at $6.9 million, Leaver said. Crescent City also received a $1.1 million California State Water Quality Control Board grant to fund the design of a project to ensure the city’s sewer plant meets National Pollutant Discharge Elimination System permit regulations.

According to Leaver, the sewer system’s $2.4 million capital improvement budget includes the grant-funded design project. Other projects involve the boiler, the city’s sewer mains as well as a rebuild of the influent pump.

The sewer budget also includes the city’s annual loan payment of $1.6 million to the Water Board.

In the city’s water fund, revenues are budgeted at $4.1 million. The city also received $695,122 in grant revenue. The grants will provide partial funding for two capital improvement projects, which includes the surge protection project and a ground well near the water system’s source at the Smith River aquifer.

The system’s operating expenses are just under $3.5 million and its capital improvement plan is $2.7 million. According to Leaver, other major projects include design on the rehabilitated Amador and Washington tanks as well as a generator at the chlorination plant. 

The city’s tight budget prompted concern from resident Cate Classen who asked if the community can sustain the projects and amenities it is receiving grant dollars for. She said she was worried that Crescent City was “growing beyond its means.”