Oroville oversight committee hears report of $800,000 shortfall, staff urges spending restraint

Oroville — Finance staff reported to the Oroville oversight committee that the city recorded roughly $6.8 million in sales-tax revenue for the prior fiscal year and about $7.6 million in expenditures, leaving a net shortfall of nearly $800,000 and an ending fund balance of about $3.5 million.

"We took in $6,800,000 last year, and we spent roughly 7,600,000.0 in expenditures. So we had a net, deficit of almost 800,000," the finance presenter said, summarizing the year-end figures and explaining that the gap was partly absorbed by previously accumulated fund balance the city had not intended to keep as a surplus.

The presenter said the first-quarter report through Sept. 30, 2025 showed the fund starting the year at roughly $3.5 million, with one month of revenue in September of $756,000. For the current fiscal year staff said the budgeted expenditures total $9.4 million while anticipated sales-tax receipts are about $6.5 million, reflecting a continuing downturn in retail-based revenues.

"We've budgeted $9,400,000 when we're expecting about 6.5," staff said, warning that continuing to spend to the budgeted level while receipts fall would further erode reserves. Committee members pressed staff on when the city would 'pull the brakes' on spending; staff described steps already taken to delay capital transfers and to re-evaluate project timing.

Committee discussion noted a recently completed 20-year plan for a city facility that estimated $3.5 million for the building alone and up to $4.7 million including yard improvements. Members said the council had agreed to defer nonessential work and adhere to budget limits while staff refines how much can be done within current funding.

Staff also told the committee that some capital equipment purchases are funded separately: an earlier pumper remains in a prepaid asset account until it is delivered, and an ordered ladder truck — a $2.9 million apparatus, staff said — is fully funded by a grant. The finance presenter said the city placed the ladder truck order but noted multi-year vehicle delivery timelines and uncertainty about when units become operational.

Members and staff discussed other ways to reduce net costs or generate operating revenue, including leasing surplus shop space for federal evidence storage, sharing a fuel station at the new courtyard with other entities, and pursuing transportation and infrastructure grants. Public works staff reported that a Washington Boulevard corridor project scored 92 in a state grant round and that a $35 million application missed funding by only a few points, positioning the city well for the next cycle.

Staff also reported that two local employers — identified in the meeting as OralFlex and CBS — had recently notified the city of layoffs. Officials said those job losses are among factors contributing to weaker local sales-tax receipts.

The committee received the reports, directed staff to reissue updated budget handouts with corrected percentages before posting them publicly, and agreed to continue evaluating capital spending priorities as revenue estimates are refined.

The meeting closed after an administrative update that an executive committee recommended three additional appointments to the oversight board, which staff said should ease future quorum issues.