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St. Helena council hears $1.9M shortfall in draft 2025–27 budget; businesses urge restoring tourism funding
Summary
City staff presented a draft two-year budget that would withdraw roughly $1.7 million from reserves in year one and about $3 million over two years if current proposals remain. Council and the public pressed for clearer plans on cuts and potential revenue options; business leaders urged preserving funding for destination marketing.
St. Helena City Manager Carmelo and Administrative Director Mandy Kellogg presented the city's proposed fiscal 2025'—26 and 2026'—27 operating budget on May 13, outlining staff-recommended reductions and the need to draw on reserves to balance operations.
The administration said revenues are growing slowly (about 4.4% projected) while expenses'particularly pension and other fixed costs'are increasing faster. Staff identified roughly $1,940,000 in potential reductions and estimated the draft budget would still require about $1,700,000 to be withdrawn from reserves in the first year and about $3,000,000 over two years if no additional revenue measures are adopted.
Kellogg and Finance Manager Martin Beltran told council the draft includes no cuts to library, parks and recreation, emergency services or the paving program, but that the proposed reductions and a hiring freeze for certain executive positions will reduce service capacity. The presentation highlighted a roughly $70 million five-year capital improvement program and stressed that delayed maintenance raises future costs.
The budget discussion became focused on a proposed reduction to the city's destination marketing agreement with the St. Helena Chamber of Commerce and on smaller nonprofit grants. Chamber CEO Amy Caravas Salazar told council the city's contract funds visitor marketing and the downtown welcome center and warned that a proposed cut would reduce tourist visits that generate transient occupancy tax (TOT). Multiple local business leaders'including Kristen Cropper of Louis Martini Winery, Carl Dean (hospitality/business owner), Christopher Costow (restaurant owner), Aaron Trumbull (Sportigo) and Rick Kaufman (Harvest Inn)'appeared during public comment and urged restoring or maintaining chamber funding, citing examples of increased visitation tied to chamber programs.
Councilmembers and finance committee members said they want a clearer presentation of recurring versus one-time costs, a prioritized list of cuts, and more work on revenue options. Staff said the finance committee has recommended (but not included in the draft) one-time contributions such as $500,000 to a Section 115 trust to prefund pension liabilities and smaller prefunding for building and equipment replacement; those items would raise the amount needed from reserves if adopted.
Council also discussed continuing three nonprofit grants (previously $30,000 each to three organizations) at a reduced total level; staff said the draft would fund the three organizations at a combined $75,000 rather than the prior combined $90,000 requested. Council asked staff to report back with more detail and directed the city manager to meet with the chamber to explore options for the destination-marketing contract.
City staff said they will return a revised budget for formal adoption at the June 10 meeting. Staff also said they will prepare contingency scenarios and a plan of potential further reductions and report on recommended revenue options in coming months.
Ending: Councilmembers praised staff work on a difficult draft and directed more analysis on cuts and revenue options. No final budget vote was taken on May 13; the council scheduled additional review and a June 10 adoption hearing.
