_{Thumbnail photo: Crescent City Manager Eric Wier told councilors last week that the city doesn’t have the staff to keep its Val Polyanin art exhibit open. | File photo by Amanda Dockter}

Eric Wier warned councilors to brace for difficult decisions as they and staff look to make Crescent City’s 2026-27 budget and general fund work amid stagnant revenues and increased costs.

At a 3-hour and 18-minute budget workshop on Wednesday, the city manager and his staff recommended holding off on filling several vacancies within the public works, police and fire departments.

Councilors and staff discussed whether the city could contribute funding for airport projects, if sending planning commissioners to League of California Cities training was feasible and whether other funding could be found to avoid skipping special events and swim camps at the pool this fiscal year.

They also weighed whether or not the city could afford increasing its annual contribution to the Crescent City-Del Norte County Chamber of Commerce by $8,000. Councilor Jason Greenough argued for granting the chamber’s request for an additional $5,000 to cover increased costs for the 4th of July fireworks.

Wier also asked councilors to think about the old Bank of America building on H Street. The city purchased the building in 2017 to replace its current City Hall at 4th and J streets. It now houses the Val Polyanin art exhibit.

“We don’t have the staff to keep it open,” Wier said. “We should come up with a plan of attack so that if we don’t move City Hall in, maybe there’s a tenant that wants to come in and we can start to gain revenue on that.”

Crescent City’s overall budget includes its general fund, water and sewer enterprise funds, Lighthouse Cove RV Park and the Crescent City Housing Authority.

Councilors and staff spent about an hour and a half discussing the general fund, which pays for the police department, public works, parks and recreation and community development. Crescent City’s general fund also partially pays for Crescent City Fire & Rescue with the Crescent Fire Protection District sharing in the costs. 

The city’s workshop comes as it’s seeking a new fire chief, police officer, police sergeant as well as an account clerk and utility billing specialist. The city has also extended an offer to a candidate for building inspector, Wier said.

Overall, the city’s recommended 2026-27 budget includes a 3% cost of living adjustment for staff, Finance Director Linda Leaver told councilors. At about $11.3 million, wages and benefits are expected to be nearly the same as the current fiscal year due to staff vacancies, she said.

The recommended budget also accounts for a 9.4% increase in the city’s obligation to the California Public Employees Retirement System this year as well as increased insurance premiums and utility costs, Leaver said. 

The finance director pointed out that the city will also be subject to the same rate increases as its water and sewer customers should a Proposition 218 protest fail next month.

“All the water and sewer that’s used for city facilities — city parks, public bathrooms, the pool, city hall, everything — we’ve included those assumed increases in our budget as well,” she said.

Crescent City expects to see about $10.5 million in revenue in its general fund during the 2026-27 fiscal year, Leaver told councilors. Sales and transiency occupancy taxes make up roughly two-thirds of that revenue. That revenue source includes Measure S, the 1% sales tax that partially funds police, fire, street repairs and the swimming pool, Leaver said.

There are other taxes, including the vehicle registration tax, as well as grants, interest, rents, fines and penalties that account for that revenue source, Leaver said.

Leaver echoed Wier when she said that overall sales tax revenue has been flat for a few years. There have been increases in transiency occupancy taxes from visitors staying at local lodging facilities, but they have been small, she said.

Meanwhile, the current budget accounts for about $11.6 million in general fund expenditures with the largest expense being wages and benefits, according to Leaver. Breaking spending by department, public safety accounts for about half the total expenditures in the general fund, according to Leaver. The next largest expense is streets “which is in line with what their priorities are.”

“If you look at fire, police, streets and the pool, you can see the impact of Measure S and how much we’re able to invest in those departments because of Measure S,” she said.

Leaver also emphasized the city’s shared expenses with the Crescent Fire Protection District as well as its partnership with the volunteer firefighters.

Since the Measure S Oversight Committee’s goal is to use the extra revenue the way the public and City Council has said they want them spent, they generally don’t build up a large reserve, Leaver said. She projected that the Measure S fund balance would be in the negative during fiscal year 2028-29 and 2029-30 if every single dollar gets spent, however that has historically not happened.

“If you assume a pretty conservative 2.5% budget-to-actual savings, the balance stays positive through the four years,” Leaver said. “This is something the committee reviews typically twice a year. If the trend is in the wrong direction, they can make any changes needed.”

This year, the Measure S Oversight Committee has recommended a total of $2.3 million in expenses. Purchases include volunteer stipends and overnight staffing at fire stations, three new police officers and a bump in pay for a detective, continuing street repairs and costs associated with the swimming pool.

Leaver said the stagnant revenues and increased costs will also show up in a reduced ending fund balance estimated for the 2025-26 fiscal year and projected for the 2026-27 fiscal year.

Currently, if the city spends every dollar in the 2025-26 budget, it will have about $2.9 million left over, the finance director said. But that almost never happens due to projects coming in under budget, delays and staffing turnover and vacancies. 

As a result, Leaver said she’s estimating an 2025-26 ending fund balance of $3.6 million, which is less than the $4.5 million ending fund balance from 2024-25.

For fiscal year 2026-27 Leaver is estimating a $3.1 million ending fund balance with about $452,266 in Measure S dollars and $2.6 million in the city’s general fund reserve. As a result, Leaver said she’s estimating $62,559 in unallocated general fund dollars at the end of fiscal year 2026-27.

“In a budget this size, that’s basically nothing,” she said. “That’s why we said we are presenting a budget that is very difficult.”

During its deliberations, councilors asked staff to look for alternative funding for the Halloween carnival, swim camps and other activities at the pool. Greenough suggested asking for a donation from the Del Norte Healthcare District, which already offers funding for swimming lessons and swim passes for senior citizens, while Mayor Isaiah Wright suggested researching Klamath Promise Neighborhood grant funding.

When it came to increased costs for July 4th fireworks, which chamber executive director Cindy Vosburg attributed to increased tariffs, Greenough noted that crowds come to Crescent City to see the show.

“If we see a huge drop in attendance we may have some really tough decisions to make next year with budgeting,” Greenough said.

Greenough also responded to a proposed ad-hoc committee tasked with determining whether fees associated with community development are too low. However, Wier said the city wasn’t recouping its full costs.

“If someone comes through and they want to build a house in the Coastal Zone, we are charging well below what other communities are (charging) and well below what it actually costs us to get them through the process,” he said. “And it could be the Council comes back and says, ‘You know, we looked at it and we don’t want to be that barrier and we understand the cost to run that application through is going to be more than what we recover and we’re OK with that because the end of all that development is going to result in higher revenues overall.”

Other proposed ad-hoc committees include a committee to look at current fees associated with city parks as well as the fee structure at the pool.

The Crescent City Council is expected to vote on a final budget on June 15. Wier said the city will have a better idea of what the exact dollar amounts will be in October.