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Mount Shasta finance director reports projected general‑fund shortfall; warns of service cuts without new revenue
Summary
Finance Director Melissa presented unaudited year‑end projections showing a projected general‑fund deficit (roughly $295,000) and warned cash‑flow timing and rising liabilities (insurance, PERS) strain the budget; staff noted sales tax collections are down and longer‑term structural gaps remain.
Melissa, the city’s finance director, presented unaudited fiscal‑year results and an updated projection for 2024–25 and 2025–26, telling council that the city faces a projected general‑fund deficit and a structural revenue shortfall if no new revenue is secured.
Melissa said the city receives about $6.2 million in general‑fund revenue and that roughly $1.06 million goes immediately to fixed obligations including insurance, PERS unfunded actuarial liabilities and debt service paid early in the fiscal year. She projected a roughly $295,000 deficit for the prior year that would reduce the fund balance to about $1.2 million (unaudited) and showed a projection that the adopted 2025–26 budget could shift toward a $200,000 shortfall after adjustments.
She flagged that sales tax receipts collected to date are down and that the city’s cash flow can be negative at the end of the year because of early large payments. “We really need to keep an eye on that and make sure that we're able to get that cash back into the positive,” Melissa said, noting the city began monthly collection of a utility tax (POT) that helps cash flow but not necessarily structural revenues.
Councilmembers raised the implication for staffing and services. One council member summarized the fiscal trajectory: “Structurally, we're losing about $600,000 a year...we desperately need that [1% sales‑tax measure] money structurally or we'll have to face significant service reductions.” Council discussion mentioned the previously adopted policy on addressing PERS liabilities and that staff will bring related documents back in coming weeks.
No budgetary action was adopted at this meeting beyond receiving the report; council members asked staff to continue monitoring revenues and to return with options, including a potential local revenue measure in the coming year.
