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Council briefed on multi‑year budget forecast; transportation benefit district renewal targeted for 2025–2026 ballots
Summary
Finance Director Mike Niddens and city staff told the Shelton City Council at its March 25 study session that a three‑year forecast shows the city using a portion of its unreserved general‑fund balance to cover recurring expenditures and that the practice is unsustainable without new revenues or service reductions.
Finance Director Mike Niddens and city staff told the Shelton City Council at its March 25 study session that a three‑year forecast shows the city using a portion of its unreserved general‑fund balance to cover recurring expenditures and that the practice is unsustainable without new revenues or service reductions.
"I live in it every day. You all don't," Finance Director Mike Niddens said as he reviewed revenue and expenditure trends and stressed the importance of early planning for the 2026 budget cycle.
Niddens said the city budgeted to use unreserved fund balance in 2025. Under a scenario where spending is only partly underspent, staff showed an illustrative use of $943,000 of reserves in 2025 versus a higher estimate of $1,100,000 in a more conservative scenario, with a remaining cushion that would be largely exhausted by 2027 if no corrective actions are taken. He told council that even modest new residential development (an example of 50 occupied homes) would add only roughly $258,000 in combined property, sales and utility tax revenue and would not materially close the 2027 shortfall.
City staff emphasized that about 45% of general fund spending is public safety and that council members were reluctant to cut police staffing. Niddens and other staff presented options to extend or replace existing dedicated revenue, including renewing the city's Transportation Benefit District (TBD) sales tax (currently two‑tenths of 1 percent) when it expires in April 2026, increasing the TBD to three‑tenths of 1 percent (discussed as an option but council signaled preference to keep the existing rate), or pursuing a $20 vehicle license (tab) fee that the city could adopt council‑manically under state law.
Staff said the TBD renewal timeline poses scheduling choices: to place the renewal on the August 5, 2025, ballot the council would need a resolution certified to the county auditor by May 2; placing it on the November ballot would follow a different schedule. Several council members expressed a preference for running a TBD renewal in November rather than August to avoid ballot conflicts and to allow better preparation. Staff said the current TBD collections support paving, chip seal and other street maintenance projects and are used to leverage state grants (Transportation Improvement Board and other grant programs) for larger projects.
Staff also described other revenue tools and constraints discussed in the presentation: the statutory procedure for a $20 vehicle license fee (estimated by staff at about $100,000 annually if roughly 5,000 vehicles are registered in city limits), and the possibility of dedicating recently created enterprise funds to reduce lease and vehicle payments in the general fund. Staff said they will prepare draft resolutions and additional material for council consideration; council directed staff to prepare language and return with an item for council action.
