City finance director warns of structural deficit; May 5 retreat will examine service levels

Shelton’s finance staff presented the city’s monthly financial report for February at the April 15 meeting and told the council the city is forecasting to use roughly $916,243 of its ending fund balance in 2025, leaving a projected unreserved balance of about $1.2 million by year-end if current trends hold.

The presenter, identified in the meeting as Mike, said sales-tax collections are down compared with January–February 2024 and noted sales tax in the general fund typically runs between $275,000 and $300,000 per month for the city’s primary sales-tax category. The presenter said expenses were currently forecast to be favorable by about $255,435 but that overall revenue and expense trends point to drawing from reserves unless service-level changes are discussed. “At this time we're estimating that expenses will exceed revenue by that $916,243 amount,” the presenter said.

Staff urged the council to use the May 5 council retreat to discuss service levels and budget priorities rather than make immediate cuts. The report included a multi-year comparison showing expenditures increasing (from about $14.6 million to over $17 million in the current year), a note that wages and benefits account for roughly 50% of general-fund expenditures, and that some savings were being realized in the Central Mason Fire contract due to higher-than-expected assessed values within city limits.

The finance presentation also summarized fund-by-fund balances and noted the street fund is expected to draw on its ending balance to support an aggressive project year. Staff briefed the council on filling several open positions since February and said quarterly grant and payroll reports are in process. Council members listened and asked that the May 5 retreat focus on service levels and longer-term sustainability.