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Mount Shasta finance director reports near-balanced budget after allocation adjustments, urges utility rate studies
Summary
Finance Director Melissa presented the quarterly budget update showing reallocated enterprise-fund expenses and one-time revenues that moved the projected deficit toward balance; she recommended sewer and water rate studies and noted insurance and software cost pressures.
Mount Shasta’s finance director reported a quarterly budget update that moves a previously projected deficit toward a near-balanced position after reallocating certain expenses to enterprise funds and accounting for one-time recoveries.
Melissa (Finance Director) presented the report and explained methodological changes to allocations between general and enterprise funds, adjustments to how PERS unfunded liability is allocated, and a revaluation of insurance allocations tied to asset listings. She said a prior projected deficit of roughly $276,000 had been reduced and that including identified one-time revenues would show an excess of approximately $225,000 for the fiscal year — a figure she noted is not yet audited.
Melissa said several drivers affect future budgets: an anticipated 8% insurance increase, 1–3% cost increases on contracted software, and an expected 1–3% cost-of-living adjustment for staff depending on negotiations. She emphasized the need for updated rate studies for sewer (priority) and water (next) because shifting expenses into enterprise funds changes the cost base that those fee-funded services must cover.
Councilmembers and staff discussed timing and scope of rate studies, capital projects already covered by prior rate plans (such as the wastewater plant and interceptor work) and the need to plan for additional capital items that may not have been fully covered. Melissa said some one-time items (for example, recovered legal fees and a partial reimbursement from the fire district) had improved the short-term fund balance but cautioned that long-term rate-setting and regular rate studies are necessary to ensure enterprise funds remain solvent.
Next steps: staff recommended commissioning sewer and then water rate studies (Melissa suggested a five-year cadence for studies), returning to council with proposed budget adjustments if members prefer not to proceed with the new allocation methodology, and completing the audited fund-balance report for FY 2024–25.
