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Oroville prelim budget shows $2.5 million shortfall; officials plan five‑year forecast
Summary
City staff presented a preliminary FY 2026–27 budget with an approximately $2.5 million deficit, proposing one‑time use of pension trust and fund balance while promising a five‑year forecast and further strategies to close the gap.
City staff told the Oroville City Council that the preliminary budget for fiscal year 2026–27 carries an approximate $2.5 million deficit and outlined short‑term steps to avoid immediate cuts.
"You have before you tonight the preliminary budget. . . this budget that we are presenting to you is about 2 and 1/2 million dollars deficit," Ruth said, describing work to shrink a larger projected shortfall and the stopgap measures proposed.
The staff presentation said the city will use $1.2 million from a pension trust and about $1.3 million from excess district tax fund balance to cover the gap. Officials attributed the shortfall primarily to a decline in sales tax revenue — characterized during the meeting as a 10%–12% downturn compared with prior projections — and the end of a Camp Fire grant that previously funded several positions.
Ruth said staff had reduced the initial gap through hiring freezes and department cuts but warned that tapping pension trust funds and fund balance are not sustainable long‑term solutions. She said the city would prepare a five‑year forecast and additional strategies to address ongoing structural shortfalls.
Council members asked questions and did not take immediate action beyond receiving the report. Staff plans to return with the multi‑year forecast and options for deeper structural changes, including potential adjustments to service levels, staffing, or revenue strategies.
The meeting record shows the item was presented for information; no final budget adoption occurred at this session. The council will consider next steps as staff develops the five‑year forecast and follow‑up recommendations.
