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City finance advisor warns Oroville reserves will be exhausted in 4–5 years without action
Summary
The council received a fiscal sustainability presentation showing the city’s total reserves at about $19 million and a projected multi‑year structural operating deficit driven by slow revenue growth and rising costs, including a CalPERS unfunded liability.
The city’s municipal finance adviser told councilors the City of Oroville has built sizable reserves but faces a looming operating shortfall that could deplete those reserves within four to five years if no corrective action is taken.
Eric Scriven of the city’s municipal advisor firm told the council that the city’s general fund policy reserve is about $9 million (roughly 30% of policy target) and total assigned and unassigned reserves were estimated at $19 million at fiscal‑year end. However, a five‑year forecast showed annual operating deficits that increase in the mid‑range from about $2 million to $8 million per year absent changes. Scriven attributed the projection to slowing sales‑tax growth and accelerating expense pressures, specifically rising pension (CalPERS) payments and new service contracts.
Scriven identified a $14 million CalPERS unfunded liability on the city’s balance sheet and outlined how usage of a Section 115 trust could smooth a sharply rising pension payment schedule. He also highlighted capital needs, noting the city’s pavement management plan shows deferred pavement needs as high as $155 million over several years and urged the council to match asset useful life to financing tools rather than deplete one‑time reserves for long‑lived capital.
Council members asked about timing, potential revenue options and use of reserves. Several members said they were optimistic about near‑term economic development prospects that could help revenues — including the developer presentation earlier in the meeting — but agreed staff should prepare a menu of cost‑containment, revenue and capital‑funding options for policy decisions.
Scriven said staff and advisors would return with more detailed scenarios, including potential use of reserves, targeted cost reductions and capital‑funding strategies.
