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Sunset City Council eyes $700,000 transfer to cover $677,000 budget shortfall
Summary
Facing a roughly $677,000 General Fund gap, the Sunset City Council agreed to pursue a transfer from Public Works capital reserves rather than enact an immediate tax increase. Council also removed a proposed elected-official pay raise and debated employee COLA and vacation cash-out liabilities.
Sunset — The Sunset City Council on April 15 shifted toward using capital reserves to balance an unexpectedly large General Fund deficit rather than immediately raising taxes, council members said at a special work session.
Recorder Nicole Supp told council members the city's prior budget presentation had unintentionally shown a transfer from fund balance and that, after correction, the projected ending General Fund balance would drop to about 22.63% of the statutory requirement, leaving approximately $500,987 on hand. If FY2027 carried forward as currently presented, Supp said the balance could fall to about 6.9 percent.
That shortfall translated to a roughly $677,027 funding gap, the staff-revised summary showed. Mayor Scott Wiggill proposed transferring about $700,000 from the Public Works capital project fund to cover the current-year deficit while preserving funds for future capital needs; Recorder Supp and Public Works Director Jason Monroe said the Public Works capital fund held more than $2 million in reserves and would remain financially healthy after a transfer.
Why it matters: The move avoids triggering a Truth in Taxation process this year but shifts the onus of balancing to one-time reserves rather than recurring revenue, potentially shifting pressure to future budgets.
Council decisions and pay discussions: The council removed a proposed 5% increase for elected officials after members expressed concern about affordability (Council Member Nancy Smalling recommended removing it; Council Member Katherine Hunter had earlier suggested a mayoral-only increase but agreed to defer given the shortfall). The body also debated a proposed 5% cost-of-living adjustment (COLA) for employees: Council Member Carlson urged caution; Council Member Smalling argued employees rely on wages as primary livelihood; Hunter proposed a 4% compromise, and Thompson suggested postponing a final decision until revised numbers were prepared.
Recorder Supp also warned that vacation cash-out obligations contributed materially to the problem. She said most of the budget changes were related to vacation cash-outs citywide, totaling about $32,962, and that accrued liabilities would eventually be paid out unless policy changes were made.
Next steps: Director Monroe was asked to provide revised salary and title numbers tied to several proposed Public Works staffing changes so council members could finalize the COLA and other compensation decisions. Council members indicated a preference to use the transfer for the current year and revisit broader tax or policy changes during the next budget cycle.
Formal actions: The council moved into a special work session at the meeting start and later voted unanimously to enter a closed session before adjourning; no final vote adopting the FY2027 budget was recorded at the April 15 session.
